Exhibit 10.1
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 ”).
Background
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.
Operative
Terms
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
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;
