SEPARATION AGREEMENT, RELEASE AND COVENANT NOT TO SUE
This is a SEPARATION AGREEMENT, RELEASE AND COVENANT NOT TO SUE (this “ Agreement ”) dated as of February 18, 2011, between OWEN FARREN, and his heirs, assigns, and any person claiming any interest in his employment or employment related compensation or benefits (collectively and individually referred to as “Employee” ) and TECHNOLOGY RESEARCH CORPORATION (the “ Company ”).
Employee was employed by the Company. The Company and the Employee have agreed to end their relationship on terms that are mutually agreeable. Employee is resigning from the Company’s Board of Directors and his positions as Chairman of the Board, Director, President, and Chief Executive Officer of the Company. Employee and the Company agree that Employee’s separation from the Company is effective as of his last day of work, February 14, 2011 (the “ Separation Date ”). The Company will provide Employee with financial benefits and other consideration in return for Employee’s execution of this Agreement and the release Employee is providing under this Agreement.
The Company and the Employee agree as follows:
1. Recitals . The parties agree that the above Recitals are true and correct and are incorporated into this Agreement by reference.
2. Resignation; Severance Compensation . Employee resigns from the Company’s Board of Directors and his positions as Chairman, President, Chief Executive Officer, and Director of the Company, effective February 14, 2011 (the “ Termination Date ”). The Company shall pay to Employee nine months ( “the Severance Period” ) of his current salary in the total gross amount of $202,500 (less ordinary payroll deductions and any outstanding advances or other amounts owed by Employee to the Company) (“ the Severance Compensation ”). The Severance Compensation will be paid on a periodic basis in accordance with the Company’s normal payroll practices. Payment of the Severance Compensation will not commence until the first available payroll date after the Revocation Period referenced in Section 8 of this Agreement has expired, will be distributed by Company check mailed to Employee’s address, and is contingent upon Employee’s satisfactorily performing his obligations under this Agreement, including but not limited to all obligations concerning the return of property in Section 3 of the Agreement and the restrictive covenants in Section 4 of this Agreement. Specifically, if Employee has not satisfactorily performed all of his obligations under this Agreement, Employee will not be entitled to any Severance Compensation and the Company shall not pay the Severance Compensation; or, if such Severance Compensation has already been paid, Employee shall be required to reimburse the Company in the full amounts paid.
3. Return of All Company Property . Employee shall immediately return to the Company all property of the Company in his possession or under his control, including but not limited to all Company records, files, equipment, supplies, keys, confidential or proprietary information, credit card(s), laptop and phone. In addition, Employee shall return to the Company on a computer disk any electronically stored information that is the property of the Company, including but not limited to any data and files Employee has stored on his home or other computer or on a portable storage device; Employee shall also permanently and completely delete and remove such electronically stored information from wherever it is stored and provide written verification of doing so.
4. Restrictive Covenants . Employee covenants and agrees that:
(a) Non-Competition : Employee shall not compete with the Company at any time during employment with the Company and for twelve (12) months after Employee’s termination of employment or resignation. To “compete” means (i) to directly or indirectly establish or aid in establishing, or have effective control over any business competitive with the Company’s business; or (ii) to become associated with or render services as an employee, independent contractor, consultant or otherwise, to any person, firm, corporation or other entity engaged in any business competitive with the Company’s business. Mere ownership of less than one percent (1%) of the outstanding common stock of a corporation competitive with the Company’s business whose stock is traded on any major United States stock exchange or on the over-the-counter market shall not be considered as a violation of this Agreement. For purpose of this Section 4(a), “any business competitive with the Company’s business” shall mean a business that provides power distribution or power management solutions for military or commercial customers.
(b) Non-Solicitation : For twenty-four (24) months after the termination of Employee’s employment or Employee’s resignation, Employee shall not solicit the business of any of the persons, firms, corporations or other entities who are the Company’s customers, for or on behalf of Employee (if Employee is competing with the Company) or any person, firm, corporation or other entity that is in competition for the Company’s business. For purpose of this Section 4(b), “any business competitive with the Company’s business” shall mean a business that provides power distribution or power management solutions for military or commercial customers.
(c) Non-Inducement : At all times during Employee’s employment and for twenty-four (24) months after the termination of Employee’s employment or Employee’s resignation, the Employee shall not, directly or indirectly, induce or attempt to induce any present or former employee of the Company to gain or seek employment with any person or business, or hire any such person.
(d) Non-Disclosure : At all times during Employee’s employment and after the termination of Employee’s employment or Employee’s resignation, Employee shall protect and guard the Company’s Confidential Information. Employee shall not at any time, directly or indirectly, disclose to any person, firm, corporation or other entity, or use for Employee’s own purposes any Confidential Information, regardless of how it is acquired, except as Employee’s use of the Confidential Information may be authorized by the Company; provided, however, that if Employee is required to disclose any Confidential Information by legal process, including a subpoena to testify or produce documents, Employee shall satisfy his obligations under this Section 4(d) by promptly giving notice to the Company of the demand for disclosure and cooperating with the Company to contest the disclosure (if the Company so elects) and obtain confidential treatment for any Confidential Information which is disclosed.
5. Remedy at Law Insufficient . Employee acknowledges that damages at law will be an insufficient remedy if Employee violates the terms of Section 4, and that the Company would suffer a decrease in value and irreparable damage as a result of such violation. Accordingly, on a violation of any of those covenants, the Company, without excluding or limiting any other available remedy, shall be entitled to the following remedies:
5.1. Upon posting a bond of up to $10,000 and filing with a court of competent jurisdiction an appropriate pleading and affidavit specifying each obligation breached by Employee, automatic entry by a court having jurisdiction of an order granting an injunction or specific performance compelling Employee to comply with that obligation, without proof of monetary damage or an inadequate remedy at law; and
5.2. The recovery from Employee of all profit, remuneration, or other consideration that Employee gains from breaching the covenant and all damages that the Company suffers as a result of the breach; and
The foregoing remedies are cumulative to all other remedies afforded by law or in equity, and the Company may exercise any such remedy concurrently, independently, or successively.
6. Miscellaneous .
6.1. Effective as of the Separation Date, Employee agrees that he shall have no authority to and shall not enter or attempt to enter into any agreements with third-parties on behalf of or purportedly on behalf of the Company. Employee shall also not represent himself as being employed by or associated with the Company.
6.2. Employee shall refrain from making any disparaging statements, written or oral, in any forum or media, regarding the Company or its executives, managers, employees, policies, products, processes, operations, or facilities. The Company agrees not to permit any executive officer of the Company to make any disparaging statements about Executive after the termination of Executive’s employment or Executive’s resignation; provided, however, that it shall not be considered a breach of this section for (i) any executive officer of the Company to make disparaging statements to another executive officer about Executive and/or his performance in their capacity in operating the business or (ii) the Company to make a factual statement regarding the circumstances of Executive’s departure if required by law or for a business purpose, with such confidentiality protections as are reasonably practicable.
6.3. Employee acknowledges and agrees that he has completely disclosed to Company management, in writing, any and all incidents, events, procedures, practices or occurrences, that he is aware of, which have the potential of exposing the Company to any federal, state, or local civil monetary penalty or exclusion claim or any other claim that Employee believes may have resulted in a violation of any other federal, state, or local statutes, rules, regulations or guidelines.
6.4. Employee further acknowledges that he is not aware of any unreported work related illness or injury that he has suffered that would entitle his to Workers’ Compensation benefits.
6.5. In the event Employee’s testimony or court appearance is required concerning any litigation the Company is now or may be involved in, or if in the Company’s opinion, his appearance or testimony would be beneficial to the Company’s position, Employee agrees to make himself reasonably available to the Company and its counsel. The Company shall reimburse Employee for his expenses and, after the expiration of the Severance Period, pay Employee a reasonable per diem for his time spent in litigation support activities.
6.6. Employee acknowledges and agrees that he owns the stock and option rights set forth in Schedule A , that he does not own any other equity or option rights with respect to the Company, that his unvested stock options have expired. The Company shall extend from 90 days to 180 days from the Separation Date the time period within which Employee may exercise vested options Employee acknowledges that any vested options not so exercised will expire 180 days after the Separation Date. As of the date of this Agreement, Employee will no longer be eligible to participate in any other benefit programs offered to employees by the Company, including but not limited to, vacation, 401(k) plan, and short-term and long-term disability.
7. Release and Covenant Not to Sue .
7.1. Employee, for himself and his heirs, successors, and assigns, and anyone claiming by or through them (collectively, the “ Releasing Parties ”), irrevocably and unconditionally releases, waives, and forever discharges TECHNOLOGY RESEARCH CORPORATION, its parent, subsidiaries and affiliates, and each of their respective directors, agents, attorneys, present and former employees, partners, investors, shareholders, insurers, predecessors, successors, assigns, and representatives (the “ Released Parties ”), from any and all actual or potential claims, complaints, liabilities, obligations, promises, actions, causes of action, liabilities, agreements, damages, costs, debts, and expenses of any kind, whether known or unknown, that the Releasing Parties have ever had or now have from the beginning of time through the date Employee executes this agreement (collectively, the “ Released Claims ”). Without limitation, the Released Claims include all claims arising out of, related to or connected with Employee’s employment, the termination of his employment, or the payment of wages, salary, or any other benefit Employee received or claims he should have received in connection with his employment; all claims under Title VII of the Civil Rights Act of 1964, as amended; (42 U.S. C. § 2000e, et seq.); the Civil Rights Acts of 1866, 1871 and 1991, all as amended; 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993, as amended (29 U.S.C. § 2601, et seq.); the Americans With Disabilities Act, as amended (42 U.S.C. § 12101, et seq.); the Rehabilitation Act of 1973, as amended (29 U.S.C. § 793-94); the Fair Labor Standards Act, as amended (29 U.S.C. § 201, et. seq.); the Equal Pay Act of 1963, as amended (29 U.S.C. § 206); the Employee Retirement Income Security Act, as amended (29 U.S.C. § 1001, et seq.); the Consolidated Omnibus Budget Reconciliation Act of 1985 (29 U.S.C. § 1161, et seq.); the Age Discrimination in Employment Act (29 U.S.C. § 621 et seq.); the Older Workers Benefit Protection Act of 1990 (29 U.S.C. § 623); the National Labor Relations Act (NLRA); the Occupational Safety and Health Act (OSHA); and any other federal or state whistle-blower statute or regulation; Chapter 760 of the Florida Civil Rights Act of 1992, as amended; any provision of Chapters 250, 440, 443, 447, 448, and 760 of Florida Statutes; the Florida General Labor Regulations, as amended; any other state law, rule or regulation of any other state; any local ordinance;