Exhibit 10.1
May 1, 2008
Mr. Jon I. Klippel
70 Shannon Hill Road
Basking Ridge, NJ 07920
Dear Jon:
This letter will confirm our discussion about your separation from employment
with Electro-Optical Sciences, Inc. (the “Company”) on mutually agreeable terms
as set forth below. You and the Company agree that this letter agreement (this
“Agreement”) represents the full and complete agreement concerning your
separation from employment with the Company.

1.   Separation: Your employment with the Company will be terminated effective
May 1, 2008 (the “Separation Date”).   2.   Separation Payment: Provided you
execute and do not revoke this Agreement, the Company agrees to pay you a
separation amount of $70,000, less all applicable withholdings (the “Separation
Payment”). You acknowledge and agree that the Company had no previous
contractual obligation to pay you this amount. The Company will pay the
Separation Payment to you as continued salary consistent with the Company’s
regular payroll policies, commencing on the Company’s next regular payroll
following the eighth day after you execute and deliver the Agreement.   3.  
Outplacement Services: EOS will provide you with $5,000 worth of outplacement
services at the outplacement provider of your choice. It is further agreed that
any unused balance of the $5,000 not used for outplacement services will be paid
to you in the form of separation payments as outlined in 2 above.   4.  
Vacation Payment: In addition to the Separation Payment set forth in
Paragraph 2, the Company will pay you for accrued but unused vacation time which
was calculated as of your last day of employment and which will be paid to you
on May 15, 2008.   5.   Employee Benefits: Your employee benefits will terminate
effective May 31, 2008. Under the provisions of the Consolidated Omnibus
Reconciliation Act of 1985

 

--------------------------------------------------------------------------------

 

Mr. Jon I. Klippel
May 1, 2008
Page 2 of 6

    (“COBRA”), as amended, and the requirements and limitations thereof, you may
be entitled to certain rights. Those rights are outlined in the attached COBRA
letter.   6.   Acknowledgment: You acknowledge and agree that other than as
specifically set forth in this Agreement, you will not be due any other
compensation, including, but not limited to, compensation for unpaid salary,
unpaid bonus, severance, or accrued or unused vacation time or vacation pay,
after the Termination Date.   7.   Stock Option: You and EOS acknowledge and
agree that: (i) pursuant to that certain Standard Form Incentive Stock Option
Agreements dated as of December 17, 2004 (the “2004 Option Agreement”), and the
stock option granted there under to purchase up to 45,000 shares of common
stock, par value $0.001 per share, of EOS (the “2004 Option Shares,” which
number of shares reflects the 2-for-1 reverse stock split declared by EOS in
connection with its initial public offering) is exercisable at a per share
exercise price of $0.46 (which exercise price reflects the 2-for-1 reverse stock
split declared by EOS in connection with its initial public offering) in its
entirety as of the Separation Date and shall remain exercisable for ninety
(90) days following the Separation Date in accordance with the terms of the 2004
Option Agreement; and (ii) the 2004 Option Shares have been included in and were
covered under the Registration Statement on Form S-8 that EOS filed with the
Securities and Exchange Commission on July 31, 2006 with respect to shares of
EOS common stock authorized for issuance pursuant to EOS’ stock option plans.  
    In addition, you and EOS acknowledge and agree that: (i) pursuant to the
Standard Form Incentive Stock Option Agreements dated as of May 22, 2006 (the
“2006 Option Agreement”), and the stock option granted there under to purchase
up to 5,000 shares of common stock, par value $0.001 per share, of EOS (the
“2006 Option Shares”), all of the 2006 Option Shares were subject to
performance-based vesting; and (ii) since none of the milestones required for
vesting of the 2006 Option Shares were achieved prior to the Separation Date,
you have forfeited your right to acquire all or any portion of the 2006 Option
Shares.       If you plan to exercise the option granted to you pursuant to the
2004 Option Agreement, a completed stock option exercise form (enclosed) and a
check for the appropriate amount must be received by EOS prior to July 29, 2008.
  8.   Company Property; Confidential Information: You agree that on or before
the Separation Date you will have: (i) returned all personal property provided
to you by EOS in connection with the performance of your duties as an employee
of EOS, including, without limitation, all keys, card keys, identification cards
and credit cards, and all other property of EOS in your possession; and (ii) as
requested by EOS, returned all materials containing confidential information
including, without limitation, all confidential information as defined in the
Standard Confidentiality Agreement between you and EOS

2 

--------------------------------------------------------------------------------

 

Mr. Jon I. Klippel
May 1, 2008
Page 3 of 6

    (the “Confidentiality Agreement”) and all memoranda, books, papers, letters,
customer lists, processes, and computers. You further agree that pursuant to
your Confidentiality Agreement you will continue to owe certain obligations
regarding confidentiality that precludes your use of the Company’s confidential
information (including, without limitation, information that would be material
nonpublic information for federal securities law purposes) for personal gain.  
9.   Insider Trading Policy: You agree that you are deemed to be an “Insider”
for purposes of the Company’s Insider Trading Policy because of the nature of
your responsibilities as an employee of the Company. You agree, as provided for
in the Insider Trading Policy, the Insider Trading Policy continues to apply to
transactions in Company securities by Insiders even after such persons have
terminated employment with or service to the Company. If an Insider is in
possession of material nonpublic information, then upon such termination, such
person may not trade in Company securities until that information has become
public or is no longer material.       In addition to the Company’s Insider
Trading Policy, we remind you that you are subject to federal securities laws
regarding insider trading without regard to your employment status.   10.  
Release: In consideration of the payments and benefits set forth in this
Agreement, you voluntarily, knowingly and willingly release and forever
discharge the Company, its subsidiaries, affiliates and parents, together with
each of those entities’ respective officers, directors, shareholders, employees,
agents, fiduciaries and administrators (collectively, the “Releasees”) from any
and all claims and rights of any nature whatsoever which you now have or in the
future may have against them. This release includes, but is not limited to, any
rights or claims relating in any way to your employment relationship with the
Company or any of the other Releasees or the termination thereof, any contract
claims (express or implied, written or oral), or any rights or claims under any
statute, including, without limitation, the Americans with Disabilities Act, the
Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act,
the Rehabilitation Act of 1973 (including Section 504 thereof), Title VII of the
1964 Civil Rights Act, the Civil Rights Act of 1866 (42 U.S.C. § 1981), the
Civil Rights Act of 1991, the Equal Pay Act, the National Labor Relations Act,
the Worker Adjustment and Retraining Notification Act, the New York State Human
Rights Law, the New York City Human Rights Law, and the Employee Retirement
Income Security Act of 1974, all as amended, and any other federal, state or
local law. This release specifically includes, but is not limited to, any claims
based upon the right to the payment of wages, bonuses, vacation, pension
benefits, 401(k) Plan benefits, stock benefits or any other employee benefits,
or any other rights arising under federal, state or local laws prohibiting
discrimination and/or harassment on the basis of race, color, age, religion,

3 

--------------------------------------------------------------------------------

 

Mr. Jon I. Klippel
May 1, 2008
Page 4 of 6

    sexual orientation, creed, sex, national origin, ancestry, alienage,
citizenship, nationality, mental or physical disability, marital status, gender
identity, genetics, military status, harassment or any other basis prohibited by
law.   11.   No Claims Filed: As a condition of the Company entering into this
Agreement, you represent that you have not filed with any government agency or
court any claim against the Releasees relating to your employment, your
separation from employment, or otherwise. You understand that by signing this
Agreement, you waive your right to any monetary recovery in connection with any
local, state or federal government agency proceeding and you waive your right to
file a claim seeking monetary damages in any court. This Agreement does not (i)
prohibit or restrict you from responding to or otherwise cooperating with any
request by the EEOC or any other government authority with responsibility for
the administration of discriminatory employment practices, or (ii) require you
to notify the Company of such communications or inquiry; provided, however, you
agree not to accept any monetary settlement in connection with such an inquiry
from the EEOC or such other governmental authority.   12.   Cooperation: In
further consideration of the payments and benefits set forth in this Agreement,
you voluntarily agree to cooperate with the Company concerning any of the work
you performed on its behalf through the period you receive the Separation
Payment. You agree, without limitation, that you will meet with the Company’s
employees at reasonable times and on reasonable notice in order to comply with
this Paragraph.   13.   No Admission of Wrongdoing: By entering into this
Agreement, neither you nor the Company, nor any of the Company’s parents or
affiliates, nor any of their respective directors, officers or employees, admit
any wrongdoing or violation of any law.   14.   Confidentiality: You and the
Company agree that the terms of this Agreement are CONFIDENTIAL. You and the
Company therefore agree not to tell anyone about this Agreement and not to
disclose any information contained in this Agreement to anyone, other than to
your lawyers, financial advisors or your immediate family members, as necessary
to administer this Agreement, to enforce this Agreement, or to respond to a
valid subpoena or other legal process. If you do tell your lawyer, financial
advisor or immediate family members about this Agreement or its contents, you
must immediately tell them that they must keep them confidential as well.

4 

--------------------------------------------------------------------------------

 

Mr. Jon I. Klippel
May 1, 2008
Page 5 of 6

15.   Non-Compete: By executing this agreement you specifically agree that for a
period of 2 years after May 1st 2008, you will not provide services related to
early melanoma detection, directly or indirectly, either as proprietor, partner,
officer, employee, consultant, independent contractor or otherwise, any person
or entity.   16.   No Negative Statements: You agree not to make, or cause to be
made, any negative or disparaging statements about, or to intentionally do
anything that damages, the Company, or its Releasees, or their respective
services, reputation, financial status, business relationships, directors,
officers or employees. The Company shall use commercially reasonable efforts to
cause all executive officers of the Company and the Company’s Manager, Human
Resources not to make, or cause to be made, any negative or disparaging
statements about, or to intentionally do anything that damages, you or your
respective services, reputation, financial status or business relationships.  
17.   Breach of this Agreement: You promise to abide by the terms and conditions
in this Agreement, and understand that if you do not, the Company shall be
entitled to attorneys’ fees and any other damages incurred due to such breach,
except that this provision will not apply if you file a lawsuit challenging the
validity of this Agreement.   18.   Changes to the Agreement: This Agreement may
not be changed unless the changes are in writing and signed by you and an
authorized representative of the Company.   19.   Governing Law: This Agreement
shall be governed by the laws of New York State, without regard to New York’s
law of conflicts.   20.   Entire Agreement: This Agreement constitutes the
entire agreement between you and the Company and supersedes all other agreements
between you and the Company.   21.   Waiver: By signing this Agreement, you
acknowledge that

  (i)   You have carefully read and understand this Agreement;     (ii)   you
have been given twenty-one (21) days to consider your rights and obligations
under this Agreement and to consult with an attorney about both;     (iii)   the
Company advised you to consult with an attorney and/or any other advisors of
your choice before signing this Agreement;     (iv)   you understand that this
Agreement is LEGALLY BINDING and by signing it you give up certain rights;    
(v)   you have voluntarily chosen to enter into this Agreement and have not been
forced or pressured in any way to sign it;

5 

--------------------------------------------------------------------------------

 

Mr. Jon I. Klippel
May 1, 2008
Page 6 of 6

  (vi)   you acknowledge and agree that the payments and benefits set forth in
Paragraphs 2, 3 and 4 of this Agreement are contingent on your execution of this
Agreement, which releases all of your claims against the Company, and you
KNOWINGLY AND VOLUNTARILY AGREE TO RELEASE the Company and its parents,
subsidiaries, affiliates, shareholders officers, directors, or employees from
any and all claims you may have, known or unknown, in exchange for the benefits
you have obtained by signing, and that these benefits are in addition to any
benefit you would have otherwise received if you did not sign this Agreement;  
  (vii)   you have seven (7) days after you sign this Agreement to revoke it by
notifying the Company in writing. The Agreement will not become effective or
enforceable until the seven (7) day revocation period has expired;     (viii)  
this Agreement includes a WAIVER OF ALL RIGHTS AND CLAIMS you may have under the
Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621 et seq.); and    
(ix)   this Agreement does not waive any rights or claims that may arise after
this Agreement becomes effective, which is seven (7) days after you sign it,
provided that you do not exercise your right to revoke this Agreement.

22.   Return of Signed Agreement: You should return the signed Agreement to me
no later than May 22, 2008.

            Sincerely,
      /s/ Richard I. Steinhart       Richard I. Steinhart      Vice President
and CFO     

Read, Accepted and Agreed to:

                /s/ Jon I. Klippel       Jon I. Klippel            Dated:  
May 1, 2008                

6