EXHIBIT 10.2

 

SEPARATION AGREEMENT

 

and

 

GENERAL RELEASE

 

THIS SEPARATION AGREEMENT AND GENERAL RELEASE (hereinafter “Agreement”) is
entered into by and between David M. Orwasher (hereinafter “Employee”), on the
one hand and The Joint Corp., (hereinafter “Employer”) on the other hand.

 

R E C I T A L S:

 

WHEREAS, Employee has been employed by Employer as its President and Chief
Operating Officer since January 2014 until September 2015, and as its Chief
Development and Strategy Officer since September 2015, under the terms and
conditions set forth in an employment agreement dated December 10, 2013
(hereinafter the “Employment Agreement”) which terminates without action of
either party on December 10, 2016;

 

WHEREAS, Employee and Employer have entered into an Agreement of Confidentiality
and Noninterference dated December 10, 2013 (hereinafter the “Confidentiality
Agreement”);

 

WHEREAS, Employee and Employer have entered into an Indemnification Agreement
dated December 12, 2013 (hereinafter the “Indemnification Agreement”); and

 

WHEREAS, Employee and Employer desire to end the employment relationship between
each other and, in the process, settle, compromise and resolve any and all
potential differences and disputes between them without the burden, expense and
delay of litigation, and without any admission of fault or liability by Employer
or Employee.

 

A G R E E M E N T:

 

NOW, THEREFORE, in consideration of the mutual covenants and promises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Employer and Employee voluntarily
and knowingly agree as follows:

 

1. Recitals Incorporated. The foregoing recitals are incorporated as part of
this Agreement by this reference.

 

2. Definitions. For the purposes of this entire Agreement:

 

(a) “Employer” means The Joint Corp., and, to the extent applicable, as direct,
intended and third party beneficiaries hereof, its past, present, and future
officers, employees, directors, representatives, trustees, administrators,
fiduciaries, attorneys, insurers, agents, parent corporations, subsidiaries,
affiliated entities, predecessors, successors, heirs, and assigns, jointly and
severally, in both their personal and official capacities.

 

(b) “Employee” means David M. Orwasher and his heirs and assigns.

 

3. Consideration.

 

(a) To Employee. The parties agree that the following shall be continuing
obligations of Employer, after termination of Employee’s employment, and such
terms shall supersede and govern any contrary terms in the Employment Agreement
or any stock option or restricted stock agreements between Employer and
Employee:

 

 

 

(i) Provided that Employee continues to perform his obligations as set forth in
Section 3(b) of this Agreement, Employer shall:

 

(A) make the payments to Employee set forth in Section 9(a) of the Employment
Agreement for nine (9) consecutive months pursuant to Employer’s regular payroll
schedule beginning on the next regularly scheduled payroll date following the
effective date of this Agreement;

 

(B) for the avoidance of doubt, cause all options to purchase common stock of
Employer, whether granted to Employee pursuant to the Employment Agreement or
pursuant to any subsequent grant of options, and all restricted shares of the
Employer’s stock, whether granted to Employee pursuant to the Employment
Agreement or pursuant to any subsequent grant of restricted shares, to vest as
of the effective date of this Agreement, notwithstanding any provision of the
Employment Agreement or applicable stock option or restricted stock agreements
to the contrary;

 

(C) extend the period in which any vested option to purchase common stock of
Employer held by Employee may be exercised, to expire on December 31, 2017;

 

(D) continue Employee’s participation in Employer’s health and welfare insurance
plans for a period of nine (9) months from the effective date of this Agreement
to the extent and at the level Employee is participating at the time of his
termination of employment;

 

(E) pay Employee all accrued vacation pay and paid time off in a lump sum
payment on the next regularly scheduled payroll date following the effective
date of this Agreement;

 

(F) timely pay the rent and any other costs associated with Employee’s
obligations under the lease for his current residence in Scottsdale, Arizona for
the remainder of its term, commencing on May 05, 2016; and

 

(G) pay all reasonable costs associated with moving Employee’s personal
possessions and contents, as well as shipping Employee’s vehicle, from Arizona
back to Connecticut; and

 

(H) reimburse Employee for all other reasonable incidental expenses associated
with Employee’s move from Arizona back to Connecticut.

 

(ii) Employer acknowledges that the Indemnification Agreement remains in full
force and effect and shall provide indemnification benefits to Employee for
periods following the termination of Employee’s employment with Employer in
accordance with the terms of the Indemnification Agreement.

 

(b) To Employer. The parties agree that the following shall be continuing
obligations of Employee, after the termination of his employment, and such terms
shall supersede and govern any contrary terms in the Employment Agreement or
Confidentiality Agreement:

 

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(i) Confidentiality and Return of Property.

 

(A) Employee acknowledges that in the course of his employment by the Employer,
he has had access to and become informed of confidential and secret information
that is a competitive asset of Employer (“Confidential Information”), including,
without limitation, (i) the terms of agreements between Employer and its
employees, regional developers, franchisees and suppliers (ii) pricing strategy,
(iii) sales and marketing methods, (iv) product development ideas and
strategies, (v) personnel and franchisee training and development programs, (vi)
financial results, (vii) strategic plans and demographic analyses, (viii)
proprietary computer and systems software and (ix) any non-public information
concerning Employer, its employees, regional developers, franchisees, suppliers
and customers. Regardless of any actual or alleged breach by Employer of this
Agreement, Employee shall keep all Confidential Information in strict confidence
and shall not directly or indirectly make known, divulge, reveal, furnish, make
available or use any Confidential Information until and unless such Confidential
Information becomes, through no fault of Employee, generally known to the public
or Employee is required by law to make disclosure (after giving Employer
reasonable notice and an opportunity to contest such requirement). Employee’s
obligations under this Section 3(b)(i)(a) are in addition to, and not in
limitation or preemption of, all other obligations of confidentiality which
Employee may have to Employer under general legal or equitable principles.

 

(B) Employee has returned to Employer all documents relating to the business of
Employer, all property of Employer, and all Confidential Information which are
in his custody or control. Employee represents that he has not made and shall
never make or cause to be made, any copies, pictures, duplicates, facsimiles or
other reproductions or recordings or any abstracts or summaries including or
reflecting Confidential Information which have not been returned to Employer.
All such documents and other property furnished to Employee by Employer or
otherwise acquired or developed by Employer shall at all times be the property
of Employer.

 

(C) Employer shall reimburse Employee in accordance with Employer policies and
procedures for reasonable travel and related expenses incurred in connection
with this Agreement.

 

(ii) Covenant not to Compete; No Inducement; No Solicitation.

 

(A) for a period of twelve (12) months from the effective date of this
Agreement, Employee shall not, without the prior written consent of Employer
(which consent may be withheld for any reason or no reason), directly or
indirectly or by action in concert with others, own, manage, operate, join,
control, perform consulting services for, be employed by, participate in or be
connected with any business, enterprise or other entity (or the ownership,
management, operation, or control of any such business, enterprise or other
entity) (a “Competing Enterprise”) engaged anywhere in the United States in the
Restricted Business as defined in Section 1(l) in the Employment Agreement
(hereinafter “Restricted Business”).

 

Notwithstanding the foregoing, Employee may make purely passive investments on
behalf of himself, his immediate family or any trust in public companies engaged
in a Competing Enterprise so long as the aggregate interest represented by such
investments does not exceed 1% of any class of the outstanding debt or equity
securities of any Competing Enterprise.

 

(B) for a period of two years from the effective date of this Agreement,
Employee shall not, directly or indirectly, in any capacity, on his own behalf
or on behalf of any other firm, person or entity, induce or attempt to induce
any regional developer, franchisee or clinic manager of Employer to cease doing
business in whole or in part with Employer, solicit the business of any such
person for any Restricted Business or otherwise create any ill will or negative
publicity with respect to Employer.

 

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(C) for a period of two years from the effective date of this Agreement,
Employee shall not, directly or indirectly, in any capacity, on his own behalf
or on behalf of any other firm, person or entity, undertake or assist in the
solicitation of any employee of Employer (including without limitation,
employees of Employer’s franchisees), to terminate his or her employment with
Employer or with a franchisee.

 

(iii) Non Disparagement. From the effective date of this Agreement forward,
Employee and Employer each agrees not to make any statements or take any actions
which:

 

(A) in any way disparage each other; or

 

(B) could foreseeably harm the reputation and/or good will of each other; or

 

(C) knowingly cause, encourage, or condone the making of any actions or
statements prohibited by sections (A) or (B), above, directly or indirectly.

 

(iv) Cooperation. From the date of this Agreement forward, Employee shall:

 

(A)        fully cooperate with and assist Employer in any dispute in which
Employer is involved and in which Employee may have information about or has
been involved. Such cooperation and assistance shall be provided at a time and
manner mutually and reasonably agreeable to Employee and Employer, and shall
include, but not be limited to, providing information, documents, and testimony;
submitting to depositions, and generally cooperating to assist Employer; and

 

(B)        fully cooperate with and assist Employer in the transition in all
areas of Employee’s responsibility for the conduct of Employer’s business to the
officers and employees of Employer who have been assigned by Employer to assume
such duties. In this regard, Employee shall within one week of the effective
date of this Agreement, deliver a transition memorandum to Employer setting
forth in reasonable detail, all material open matters with respect to which
Employee has devoted his attention during the six month period ending on the
effective date of this Agreement, including the status of such matters, the
timeline for completion of such uncompleted matters, key persons within and
outside of the Company who are involved in such matters and their respective
roles, and any other information reasonably necessary or appropriate in order to
effect the transition of responsibility for such matters from Employee to the
persons to whom they have been reassigned.

 

4. Release.

 

(a) Employee. Employer hereby irrevocably and unconditionally releases and
forever discharges Employee from any and all claims, whether currently known or
unknown, liabilities, costs, expenses, fees, attorneys’ fees, demands, liens,
agreements, covenants, actions, suits at law or equity, obligations, debts,
damages, judgments, liabilities, expenses of whatever kind, known or unknown,
suspected or unsuspected and damages of any nature whatsoever in connection with
Employee’s employment, application for employment and discontinuation of
employment with Employer, including but not limited to any contract or tort
claims, which it had or now or may believe that it has against Employee based on
any matter or thing occurring prior to its execution of this Agreement.

 

4

 

Employer understands and acknowledges that this release forever bars it from
suing or otherwise asserting a claim against Employee on the basis of any event
occurring through its execution of this Agreement, whether the facts are now
known or unknown, and whether the legal theory upon which such claim might be
based is now known or unknown.

 

(b) Employer. Employee hereby irrevocably and unconditionally releases Employer
and all other Released Parties from any and all claims, whether currently known
or unknown, demands, liens, agreements, covenants, actions, suits at law or
equity, obligations, debts, damages, judgments, liabilities, attorneys’ fees,
costs, and expenses of whatever kind, known or unknown, suspected or
unsuspected, which he had or has based on any matter or thing occurring prior to
his execution of this Agreement, including but not limited to claims that arise
from or relate to Employee’s employment with Employer. The released claims
include any claims arising under the Age Discrimination in Employment Act, the
Arizona Civil Rights Act, the Arizona Wage Payment Act, or Title VII of the
Civil Rights Act of 1964. The released claims further include, but are not
limited to, all claims for breach of contract, wrongful discharge or layoff,
constructive discharge, retaliatory discharge, impairment of economic
opportunity, intentional or negligent infliction of emotional harm, distress, or
any other tort, including but not limited to defamation, invasion of privacy,
intentional interference with contract or prospective advantage, violation of
any constitutional right, sex discrimination, race discrimination, disability
discrimination, age discrimination or any other form of employment
discrimination or retaliation, and any and all claims arising from any alleged
violations by or on behalf of Employer or any other Released Party under every
applicable federal, state or local law, rule, regulation, ordinance, public
policy or common law, including under the Arizona Employment Protection Act, the
Civil Rights Act of 1991, the Equal Pay Act, the Americans with Disabilities
Act, or the Family and Medical Leave Act.

 

Employee understands and acknowledges that this release forever bars him from
suing or otherwise asserting a claim against Employer or any of the other
Released Parties on the basis of any event occurring through his execution of
this Agreement, whether the facts are now known or unknown, and whether the
legal theory upon which such claim might be based is now known or unknown.
Employee further agrees and acknowledges that the Released Parties are intended
third party beneficiaries of this release of claims.

 

Except as prohibited by law, should any charge or complaint be filed relating to
Employee’s employment with Employer, Employee agrees that he will not accept any
relief or recovery therefrom, and it shall be dismissed with prejudice upon
presentation of this Agreement.

 

5. Acknowledgement of Full Payment. Employee acknowledges and agrees that upon
Employer’s delivery of the entire consideration outlined in Section 3 of this
Agreement, he will have received payment in full by Employer for all wages,
overtime, accrued vacation and paid time off pay, bonuses, or other forms of
compensation to which he was entitled as a result of his Employment with
Employer. Employee agrees that this representation is a material term that has
induced Employer to enter into this Agreement.

 

6. Provision for Unknown Claims. Employee and Employer each warrant that he/it
does not have any claim or charge pending against Employer or any of the other
Released Parties/ Employee with any court, tribunal, administrative agency,
governmental agency, or other such body.

 

7. Waiver of Right to Recovery and No Inducement. Employee waives any right to
monetary recovery should any administrative agency pursue any released claim on
his behalf. To the extent permitted by law, and/or unless required by law,
Employee agrees that he will not induce, aid, or abet anyone in instituting or
prosecuting any pending or future claim against Employer or any other Released
Party in any court, arbitral tribunal, or administrative agency. However,
nothing in this provision shall be construed as prohibiting Employee from
communicating with any government agency regarding any matter within such
agency’s jurisdiction.

 

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8. Consultation with Legal Counsel. Employee acknowledges that this Agreement
constitutes written notice from Employer that it advises him to seek legal
counsel before signing this Agreement.

 

9. Notice of Time for Reflection and Waiver. Employee acknowledges that he has
fully discussed all aspects of this Agreement with his attorney to the extent he
wishes to do so. Employee agrees that he has carefully read and fully
understands all of the provisions of this Agreement and that he is voluntarily
entering into this Agreement. Employee agrees that, as part of this Agreement,
he will be provided with consideration in addition to anything of value to which
he is already entitled. Employee is advised that, prior to waiving claims he may
have under the Age Discrimination in Employment Act, he may take up to
twenty-one (21) calendar days to consider this Agreement before signing, and he
may revoke this Agreement within seven (7) calendar days after he signs the
Agreement. If Employee wishes to revoke the Agreement, he must do so by
delivering written notification of the revocation before the expiration of the
revocation period to [INSERT NAME OF PERSON TO RECEIVE NOTICE]. In the event
this Agreement is signed prior to the expiration of 21 days, Employee
acknowledges that he has voluntarily and knowingly agreed to waive his
entitlement to take 21 days to consider this Agreement before signing for the
purpose of expediting the settlement.

 

10. Effective Date of Agreement. This Agreement will be effective upon execution
by both parties and the expiration of the seven-day revocation period outlined
in Section 9 above, if applicable.

 

11. Representations and Warranties regarding Medicare. Employee hereby warrants
that he is not, and has never been, a beneficiary of Medicare as of the
effective date of this Agreement. Employee further acknowledges and agrees that
he has not incurred medical expenses for any physical or emotional injuries that
were allegedly caused by Employer or any other Released Party for which coverage
or reimbursement has been provided by Medicare.

 

12. Full Consideration. Employee agrees that payment by Employer of the
consideration stated in Section 3(a) as well as compliance with the above
described terms constitutes full and sufficient legal consideration for the
promises and covenants set forth in this Agreement.

 

13. No Admission of Wrongdoing. The parties each agree that nothing in this
Agreement shall be construed as an admission by either of them of any wrongdoing
or violation of any applicable law, and that nothing in this Agreement shall be
so construed by any other person.

 

14. Bar. Employee and Employer specifically agree that this Agreement may be
pled by Employee, Employer or any of the other Released Parties as an absolute
bar to any released claim.

 

15. Complete Agreement. Unless as otherwise stated herein, this Agreement sets
forth all of the terms and conditions of the agreement between the parties
regarding the subject matter hereof and shall be considered and understood to be
a contractual commitment and not a mere recital. This Agreement shall be binding
upon Employer and its successors and assigns and upon Employee and his
respective agents, heirs, executors, representatives, and assigns.

 

16. Fees and Costs. Each party shall bear and pay his or its own costs and
attorneys’ fees with regard to this Agreement and any matters covered herein.
However, in an action to enforce any term or terms of this Agreement or to seek
damages for breach of this Agreement, the prevailing party in that action shall
be entitled to recover reasonable attorneys’ fees.

 

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17. Waiver and Amendment. A waiver of any right under this Agreement must be in
writing to be effective. This Agreement may be amended only by a writing signed
by the parties. Any oral representation or modification concerning this
Agreement shall be of no force or effect.

 

18. Severability. If any portion of this Agreement is held invalid by operation
of law, the remaining terms of this Agreement shall not be affected, provided,
however, that if the release in paragraph 4(b) of this Agreement is held
invalid, Employer shall have the right to seek rescission of this Agreement.

 

19. Choice of Law. The language of all parts of this Agreement shall in all
cases be construed as a whole, according to its fair meaning, and not strictly
for or against either of the parties. This Agreement shall be governed by and
construed in accordance with the laws of the State of Arizona, except to the
extent that federal laws apply.

 

20. Acknowledgement. Employee acknowledges that in executing this Agreement, he
does not rely on any inducements, promises or representations made by Employer
other than those expressly stated herein. Further, Employee declares that he has
read this Agreement and fully understands its terms and contents, including his
rights and obligations hereunder, and freely, voluntarily and without coercion
enters into this Agreement. Employee agrees and acknowledges that the waiver and
release of all rights or claims he may have under any local state or federal law
is knowing and voluntary.

 

21. No Re-Employment. Employee agrees that he is ineligible and will not apply
for or accept future employment with Employer, and that if he should make such
an application, he acknowledges that Employer is under no obligation to consider
it. Notwithstanding the same, Employer and Employee acknowledge that they have
agreed to enter into discussions regarding a separate consulting agreement
following Employee’s termination of employment under which Employee will provide
specified limited services to Employer for an agreed upon compensation and
duration to which this Section 21 shall not apply.

 

22. Section Headings. The section headings in this Agreement are solely for
convenience of reference and shall not, in any way, affect the interpretation of
this Agreement.

 

 

The Joint Corp.           By /s/ John B. Richards   DAVID M. ORWASHER   Its:  
CEO   /s/ David M. Orwasher   Dated:   4/29/16   Dated:   4/29/16

 

 

 

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