Exhibit 10.1

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January 4, 2008

Ms. Ellen O. O’Hara

 

Re: Separation Agreement and Release

Dear Ellen:

This letter constitutes the Separation Agreement and Release (the “Agreement”)
between you and EFJohnson Company, and its parent, subsidiary and/or affiliated
companies, (collectively referred to as the “Company”), and sets forth the terms
of your transitional duties and separation from employment with the Company.

1. Separation Date. Today will be the last day of your employment with the
Company (“Separation Date”). You acknowledge and agree that, except as provided
herein, this Agreement terminates the Employment Agreement between you and the
Company which was entered January 6, 2005 (the “Employment Agreement”), and
satisfies all notice requirements under such Employment Agreement.

2. Severance Pay. If you enter into this Agreement and on or within twenty-one
(21) days after the Separation Date you return to the Company this signed
Agreement, and allow it to become effective by not revoking it under paragraph 9
herein, the Company will pay you Severance Pay equal to twelve (12) months base
salary in the total gross amount of $260,000. Such payments will be made on the
Company’s regularly scheduled paydays for twelve months and are subject to
standard payroll deductions and withholdings. These payments will begin on the
first payroll date following the Effective Date of this Agreement and will
continue for twelve (12) months thereafter (the “Severance Period”). You agree
that you are not otherwise entitled to this Severance Pay.

Notwithstanding the foregoing, the Company’s obligation to pay the Severance Pay
shall be offset by any other source of earned income during the Severance
Period, whether through employment, self-employment, barter, consulting or
otherwise. You shall have an affirmative obligation to report any such other
source of earned income to the Company throughout the Severance Period on a
monthly basis to Michael Gamble, VP Administration.

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During the Severance Period, you agree to fully cooperate with the Company in
all matters relating to the transition of your work and responsibilities on
behalf of the Company, including, but not limited to, any business
relationships, and the orderly transfer of your institutional knowledge to such
other persons as may be designated by the Company. You also agree to be
available by telephone during reasonable business hours and will respond within
a reasonable time to any inquiries or requests from the Company.

3. Accrued Salary and Vacation. By signing this Agreement, you agree that the
Company has paid you all accrued salary, benefits or other type of remuneration,
through the Separation Date, subject to standard payroll deductions and
withholdings with the exception of your final paycheck and accrued, unused
vacation pay. You acknowledge that, except as expressly provided in this
Agreement, you will not receive any additional compensation (including any base
salary, bonus or commissions), stock options, severance or benefits after the
Separation Date, with the sole exception of any benefit in which you have a
vested right pursuant to any written ERISA-qualified benefit plan (e.g., 401(k)
plan).

4. Health Insurance. During the Severance Period, you will be provided such
coverage as you had at the time of the Separation Date (with the exception of
Long Term Care, 401(k), Life Insurance, Short Term Disability Insurance and Long
Term Disability Insurance), for yourself and/or any dependents, at the same
premium rate as current employees, and the Company will pay the difference.
Thereafter, you may continue such benefits entirely at your own expense.

5. Expense Reimbursements and Expenses Charged to Company Credit Card(s). You
agree that, within ten (10) days after the Separation Date, you will submit your
final documented expense reimbursement statement reflecting all business
expenses you incurred through the Separation Date, if any, for which you seek
reimbursement. The Company will reimburse you for these business expenses
pursuant to its policies and reasonable business practices. In addition, you
agree that if the Company, following notice to you and opportunity for you to
respond, makes a reasonable, good faith determination that certain of your
charges made on the Company credit card at any time during your use of such
Company credit card were inappropriate, improper, or were not reasonably
incurred on behalf of the Company, then the Company shall offset such amounts
against all compensation you will receive pursuant to this Agreement.

6. Confidential Information/Non-Compete Obligations. You acknowledge and
reaffirm your continuing obligations under Paragraphs 2 and 3 of your Employment
Agreement entered January 6, 2005, including but not limited to your obligation
not to use or disclose any confidential or proprietary information of the
Company and not to compete with the Company or solicit the customers or
suppliers of the Company for a period of 12 months. You are obligated to abide
by the terms of these agreements whether or not you accept this Agreement. You
further acknowledge your obligation under paragraphs 16 and 17 of the Employment
Agreement in advance of accepting any competitive employment. You hereby
acknowledge that you have returned all Company property to the Company and that
you are not in possession of any of the Company’s proprietary materials or
copies thereof, in accordance with paragraph 15 of the Employment Agreement.

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7. Confidentiality. The provisions of this Agreement will be held in strictest
confidence by you and the Company and will not be publicized or disclosed in any
manner whatsoever; provided, however, that: (a) you may disclose this Agreement
in confidence to your immediate family; (b) the parties may disclose this
Agreement in confidence to their respective attorneys, accountants, auditors,
tax preparers, and financial advisors; (c) the Company may disclose this
Agreement to fulfill standard or legally required corporate reporting or
disclosure requirements; and (d) the parties may disclose this Agreement insofar
as such disclosure may be necessary to enforce its terms or as otherwise
required by law. In particular, and without limitation, you agree not to
disclose the terms of this Agreement to any current or former employee or
independent contractor of the Company. You further agree both to immediately
notify the Company upon receipt of any court order, subpoena, or other legal
process that seeks or might require your cooperation or your disclosure or
production of the existence or terms of this Agreement, and to furnish to the
Company, within three (3) business days of its receipt, a copy of such court
order, subpoena or other legal process.

8. Release of Claims. Except with respect to obligations undertaken in this
Agreement, in exchange for the consideration under this Agreement to which you
would not otherwise be entitled, you hereby generally and completely release the
Company and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring at any time prior to and including the
date you sign this Agreement. This general release includes, but is not limited
to: (1) all claims arising out of or in any way related to your employment with
the Company or the termination of that employment; (2) all claims related to
your compensation or benefits from the Company, including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe
benefits, partnership interests, or any other ownership interests in the
Company; (3) all claims for breach of contract under any employment agreement,
partnership agreement, or any other agreement whether written or oral, wrongful
termination, and breach of the implied covenant of good faith and fair dealing;
(4) all tort claims, including claims for fraud, defamation, emotional distress,
and discharge in violation of public policy; and (5) all federal, state, and
local statutory claims, including but not limited to claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
Texas Labor Code, the Civil Rights Act of 1964 (as amended), the Americans with
Disabilities Act of 1990, and the Age Discrimination in Employment Act (as
amended) (“ADEA”). Notwithstanding the foregoing, nothing in this paragraph
shall be construed in any way to release the Company from any obligation to
indemnify you pursuant to the articles and bylaws of the Company or applicable
law. You represent that you have no lawsuits, claims or actions pending in your
name, or on behalf of any other person or entity, against the Company or any
other person or entity subject to the release granted in this paragraph.

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9. ADEA Waiver. You acknowledge that you are knowingly and voluntarily waiving
and releasing any rights you may have under the ADEA, and that the consideration
given for the waiver and release is in addition to anything of value to which
you are already entitled. You further acknowledge that you have been advised, as
required by the ADEA, that: (a) your waiver and release do not apply to any
rights or claims that may arise after the date that you sign this Agreement;
(b) you should consult with an attorney prior to signing this Agreement; (c) you
have twenty-one (21) days to consider this Agreement (although you may choose
voluntarily to sign it earlier); (d) you have seven (7) days following the date
you sign this Agreement to revoke the Agreement by providing written notice of
your revocation to Michael Gamble; and (e) this Agreement will not be effective
until the date upon which the revocation period has expired, which will be the
eighth day after the date that this Agreement is signed by you (the “Effective
Date”).

10. Cooperation with the Company. You agree to cooperate fully with the Company
in connection with its actual or contemplated defense, prosecution, or
investigation of any claims, demands, litigation, or other matters, arising from
events, acts, or failures to act that occurred during the time period in which
you were employed by the Company. Cooperation includes, without limitation,
making yourself available upon reasonable notice for interviews, and truthful
and accurate testimony in depositions and trial. The Company will reimburse you
for your reasonable out-of-pocket expenses incurred in connection with any such
cooperation (excluding attorneys’ fees, forgone wages, salary, or other
compensation); no other compensation will be owed to you for such cooperation.

11. Entire Agreement/Survival of Portions of Employment Agreement. This
Agreement constitutes the entire agreement between the parties concerning the
subject matter herein, and supersedes all prior and contemporaneous negotiations
and agreements, oral or written, related thereto, except that paragraphs 2, 3,
4, 6, 15, 16, and 17 of the Employment Agreement between you and the Company
entered January 6, 2005. This Agreement cannot be changed or terminated except
pursuant to a written agreement executed by the parties.

12. Non-Disparagement. You agree that you will refrain from making any
defamatory, libelous, slanderous or disparaging statements (including any
derogatory statements regarding the business or reputation of the Company),
orally or in writing, except for truthful statements required by law or legal
process.

13. Miscellaneous. This Agreement is entered into without reliance on any
promise or representation, written or oral, other than those expressly contained
herein. This Agreement will bind the heirs, personal representatives, successors
and assigns of the parties, and inure to the benefit of the parties, their
heirs, successors and assigns. If any provision of this Agreement is determined
to be invalid or unenforceable, in whole or in part, this determination will not
affect any other provision of this Agreement and the

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provision in question will be modified by the court so as to be rendered
enforceable in a manner consistent with the intent of the parties insofar as
possible. This Agreement will be deemed to have been entered into and will be
construed and enforced in accordance with the laws of the State of Texas as
applied to contracts made and to be performed entirely within Texas. Any
ambiguity in this Agreement shall not be construed against either party as the
drafter. Any waiver of a breach of this Agreement shall be in writing and shall
not be deemed to be a waiver of any successive breach. This Agreement may be
executed in counterparts and facsimile signatures will suffice as original
signatures.

If this Agreement is acceptable to you, please sign below and return the
original to me. We appreciate all of your contributions to the Company and wish
you all the best in your future endeavors.

 

Sincerely, For the Company: By:  

/s/ Michael B. Gamble

  Michael B Gamble   VP Administration

 

UNDERSTOOD AND AGREED:    

/s/ Ellen O. O’Hara

   

January 4, 2008

  Ellen O. O’Hara     Execution Date