Exhibit 10.1

 

SUPPLEMENTAL SALARY CONTINUATION AND NON-COMPETITION AGREEMENT AND RELEASE OF
CLAIMS (“SUPPLEMENTAL AGREEMENT”)

 

Between

 

IEC ELECTRONICS CORP (“IEC” or “Company”)

 

And

 

JEFFERY T. SCHLARBAUM (“Executive”)

 

WHEREAS, Executive and IEC have entered into a Salary Continuation and
Non-Competition Agreement dated and effective as of October 1, 2010 (the
“Agreement”); and

 

WHEREAS, the parties wish to amend and supplement that agreement and to provide
for the release of claims provided for in paragraph 2.3(ii) thereof; now,
therefore

 

IT IS AGREED BY AND BETWEEN EXECUTIVE AND IEC AS FOLLOWS:

 

1.Executive’s employment with IEC and his positions on all committees, boards,
or with any affiliated entities, terminated on February 12, 2013, and all
obligations of IEC to Executive cease as of that date, except as may be provided
for in the Agreement, as modified by this Supplemental Agreement and release of
claims. Executive was terminated without “Cause” as defined in the Agreement.

 

2.Except as modified by this Supplemental Agreement, the parties restate and
reaffirm their duties and obligations under the Agreement of October 1, 2010.

 

3.IEC will pay premiums through February 28, 2014 for coverage of Executive
under IEC’s health, dental and vision benefit plans (or if Executive is not
eligible to participate in such plans, premiums for coverage if Executive elects
to continue coverage under such plans under the terms and conditions of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”)),
in amounts limited to and equal to the portion of premiums IEC contributed while
Executive was an employee and officer of IEC. The employee portion of the
premiums for such insurance plans which Executive previously paid will be
deducted from the salary continuation payments. After February 28, 2014, if
Executive remains unemployed or is not self-employed, IEC will pay the full
premiums for such coverage for a period of up to six (6) months. Executive may
elect to continue coverage after he is no longer eligible to participate in IEC
plans under the terms and conditions of COBRA. In the event that prior to either
February 28, 2014 or during any extended period of coverage as provided above,
Executive becomes employed or is self-employed, he shall give prompt notice of
such employment or self-employment, and IEC’s contributions to premium payments
will cease.

 

 

 

 

 

4.Contemporaneously with this Agreement, IEC and Executive are entering into an
Amendment to the Restricted Stock Award Agreement made between IEC and Executive
dated November 6, 2009.

 

5.IEC agrees that the non-competition provision of the Agreement (section 3.2)
is hereby modified so as to permit Executive to be employed by any entity
(including its parent, subsidiaries and affiliated companies) with gross annual
revenues of less than One Hundred Million Dollars ($100,000,000),
notwithstanding that such employment would have otherwise prohibited under the
Agreement.

 

6.Executive agrees that in addition to his obligations under the
non-solicitation of employees provision of the Agreement (section 3.3), if any
of the persons named in a Schedule initialed by the parties, or any persons
employed as successors to these named individuals, become employed by an entity
which employs Executive during the Restriction Period (as defined in the
Agreement), for whatever reason and even if not caused by Executive, and even if
employment of Executive would not be restricted under either the Agreement or
Supplemental Agreement, it shall result in an immediate forfeiture of the stock
provided for in paragraph 4 above. Executive shall not disclose or cause to be
disclosed the named individuals or this basis for forfeiture without the express
prior written permission of the Company. If Executive is notified by his
employer during the restriction period that it is considering the hiring of one
of the named individuals, he shall so notify the Company and it will grant
Executive permission to advise the employer of the restriction. Executive may
also notify his employer of the general nature of the restriction and request
that he be advised if the employer is considering the hire of any IEC employee
so that Executive may advise employer as to whether a named individual is
involved.

 

7.Regardless of whether or not Executive chooses to exercise his right of
revocation prior to the effective date of this Supplemental Agreement and
release of claims as described in Section 18 of this Supplemental Agreement,
Executive will be entitled to receive: (i) all base salary accrued through
February 12, 2013; (ii) payment for all incurred and unreimbursed business
expenses in accordance with customary IEC policies, and (iii) all vested amounts
in the IEC’s 401(k) savings plan as a roll-over to another tax-deferred account
specified by Executive or otherwise permitted under the IEC’s plan. The
foregoing shall be subject to deductions for such taxes and other amounts as are
required under applicable law to be withheld.

 

8.Release and Waiver of All Claims.

 

Executive, for himself and his agents, representatives, heirs, beneficiaries and
assigns, to the greatest extent permitted by law, knowingly and voluntarily
releases and forever discharges IEC and its directors, officers, agents,
employees and representatives, from any and all claims, demands, rights, actions
or causes of action, liabilities, damages, costs, expenses, losses, obligations,
indemnities, judgments, suits, matters and issues of any kind or nature
whatsoever, including both known and unknown claims, contingent or absolute,
suspected or unsuspected, disclosed or undisclosed, matured or unmatured, of any
nature whatsoever, whether individual, class, direct, derivative, representative
or otherwise, that have been, could have been or in the future could be asserted
against the IEC at any time prior to the date of the execution of this
Supplemental Agreement, including, but not limited to a release of any rights or
claims he may have under:

 

 

 

 

 

i.the Americans with Disabilities Act ("ADA"), which prohibits discrimination on
the basis of disability;

 

ii.the Age Discrimination in Employment Act ("ADEA"), which prohibits age
discrimination in employment;

 

iii.the Older Workers’ Benefit Protection Act;

 

iv.Title VII of the Civil Rights Act of 1964, as amended, which prohibits
retaliation and discrimination in employment based on race, color, national
origin, religion or sex;

 

v.the Family and Medical Leave Act;

 

vi.the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended;

 

vii.the New York Human Rights Law ("NYHRL");

 

viii.the New York Executive Law;

 

ix.the New York Labor Law;

 

x.any other federal, state or local law or regulation prohibiting employment
discrimination;

 

xi.claims for wrongful discharge, whether based on claimed violations of statute
or based on claims in contract or tort, common law or equity;

 

xii.claims for failure to pay wages due or other moneys owed (including claims
for unpaid vacation pay);

 

xiii.claims of fraud, misrepresentation, defamation, interference with
prospective economic advantage;

 

xiv.claims of intentional or negligent infliction of emotional distress; and

 

xv.claimed violations of any other federal, state, civil or human rights law, or
any other alleged violation of any local, state or federal law, regulation or
ordinance, and/or public policy, contract, or tort, or common law having any
bearing whatsoever on the terms and conditions and/or cessation of employment
with IEC, including but not limited to, any allegations for costs, fees or other
expenses, including attorneys' fees, incurred in these matters which he ever
had, now has, or may have as of the date of this release other than the right to
enforce this Agreement.

 

 

 

 

 

Except as provided below, Executive, for himself and his agents,
representatives, heirs, beneficiaries and assigns, promises never to file a
suit, charge, complaint, demand, action, or otherwise assert any claims against
the IEC or its directors, officers, employees, agents or representatives on any
matter arising from his employment with IEC or separation therefrom, including,
but not limited to, the claims referenced above, and Executive represents that
no such claim or demand presently is pending, and that if any action does exist
or is hereafter brought, that he expressly waives any claim to any form of
relief or recovery and agrees to reimburse IEC for all payments provided
hereunder, as well as the reasonable costs and attorneys’ fees incurred in
defending such action.

 

Executive understands that nothing in this Supplemental Agreement shall be
construed to prohibit him from participating in any investigation or proceedings
of any federal or state agency including the Equal Employment Opportunity
Commission ("EEOC") and/or from communicating with EEOC, but only to the extent
such right is protected under the law, provided, however, to the extent any such
proceeding has been or is brought, Executive expressly waives any claim to any
form of monetary or other damages or any other form of recovery or relief in
connection with any such action, or in connection with any action brought by a
third party.

 

9.Company Property. On or before February 25, 2013, Executive will have returned
to IEC’s director of human resources all electronic passes, credit cards, his
Company computer and all other IEC property in the possession of Executive.
Executive must insure all Company information is retained and preserved on the
computer and that he returns all CDs or documents containing Company
information. Executive may retain the phone / pda issued to him, and the Company
will transfer the cell phone number for that phone to him on or after March 14,
2013, provided Executive executes necessary paperwork to assume responsibility
for charges related to that number.

 

10.Termination of Unvested Grants. Except as provided above in section 4 with
respect to 5000 shares of the 2009 stock grant, all unvested stock options
granted to Executive by their terms have been forfeited as of Executive’s
termination of employment on February 12, 2013, and Executive shall have no
rights to or with respect to any equity awards from the Company except for
restricted stock fully vested prior to the date of this Supplemental Agreement.

 

11.Cooperation. During the eighteen month non-competition and non-solicitation
period provided for in the Agreement, Executive will reasonably cooperate with
the IEC, acting through its Board and/or chief financial officer, to provide
information relating to matters concerning which Executive was involved during
his employment. IEC will reimburse Executive for all out-of-pocket expenses
approved in advance and incurred by Executive in providing such cooperation
promptly upon receiving appropriate documentation conforming to the IEC’s
existing documentation requirements.

 

12.Representations. Each party represents and warrants that this Supplemental
Agreement has been duly authorized, executed and delivered by such party, and is
a valid and binding obligation of such party, enforceable in accordance with its
terms. Each of IEC and Executive represent that they have been represented by
counsel in connection with this Supplemental Agreement and that it is the joint
drafting product of both parties and should not be construed against either
party as drafter.

 

 

 

 

 

13.Notices. Any notice under this Agreement shall be given in writing delivered
in person, by certified or registered letter with return receipt requested, or
by nationally recognized overnight delivery service; and shall be deemed given
when received by personal delivery and certified or registered letter or on the
next business day when sent first business day overnight delivery, as set forth
below or to such other person and/or address as may be directed by a party on
notice given as provided herein:

 

If to the Company:

 

IEC Electronics Corp.

105 Norton Street

Newark, NY 14513

Attn. Chairman and Chief Executive Officer

 

with a copy to:

 

Harris Beach PLLC

99 Garnsey Road

Pittsford, NY 14534

Attn. Beth Ela Wilkens

 

If to Executive:

 

Jeffery T. Schlarbaum

14 Cobble Creek Drive

Victor, New York 14564

 

with a copy to:

 

Paul Keneally, Esq.

Underberg & Kessler LLP

300 Bausch &Lomb Place

Rochester, New York 14604

 

14.Severability. The provisions of this Supplemental Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Supplemental Agreement, or the application thereof to any
person or any circumstance, is invalid or unenforceable, a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and the remainder of this Supplemental Agreement and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability.

 

 

 

 

 

15.Modifications. No modification, amendment or waiver of any of the provisions
contained in this Supplemental Agreement, or any future representation, promise
or condition in connection with the subject matter of this Supplemental
Agreement, shall be binding upon any party hereto unless made in writing and
signed by Executive or approved by the Board and signed by a duly authorized
officer of IEC.

 

16.Successors; Survival. This Supplemental Agreement shall inure to the benefit
of and be enforceable by, and shall be binding upon, IEC and its successors and
assigns, and shall inure to the benefit of and be enforceable by, and be binding
upon, Executive’s heirs, distributes, executors, administrators, and personal or
legal representatives. All covenants, agreements, representations and warranties
made by IEC and Executive herein shall be considered to have been relied upon by
the other party hereto in making this Supplemental Agreement.

 

17.Jurisdiction. The parties agree that this Supplemental Agreement shall be
governed and interpreted by the laws of the State of New York, without regard to
conflict of laws doctrines. The parties irrevocably consent to jurisdiction and
venue of any action or proceeding brought to enforce any rights, duties or
obligations under this Agreement in the Supreme Court of the State of New York
for the County of Monroe or in the United States District Court for the Western
District in Rochester, New York.

 

18.Counterparts. This Supplemental Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single agreement.

 

19.Consultation and Revocation Periods. Executive acknowledges that he has been
advised to seek the advice of legal counsel in connection with his consideration
of this Supplemental Agreement and the release of claims contained herein and
that he has had the advice of counsel with respect to this Supplemental
Agreement and release of claims. He further acknowledges that, in light of the
releases and waivers set forth in this Supplemental Agreement, he has twenty-one
(21) days to consider this Supplemental Agreement and release of claims and that
he may use as much of such period as he chooses or waive any part of such
twenty-one (21) day period. Executive, by his signature to this Supplemental
Agreement prior to the expiration of such period, after consultation with
counsel of his choosing concerning the terms of this Supplemental Agreement,
waives the balance of such twenty-one (21) day period. This Supplemental
Agreement and release of claims will become effective, enforceable and
irrevocable upon the expiration of seven (7) calendar days following the date of
Executive’s signature. If Executive determines to revoke this Supplemental
Agreement, he will deliver a written notice of revocation to IEC as provided in
Section 11, within seven (7) calendar days after he signs the Supplemental
Agreement; provided that in the case of such revocation notice, it must be
actually received by IEC prior to the close of business at the end of the seven
(7) day revocation period. In the event that an effective revocation of this
Supplemental Agreement is made by Executive, the provisions hereof shall be of
no force and effect.

 

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of February 25, 2013.

 

IEC ELECTRONICS CORP.       By: /s/ W. Barry Gilbert /s/ Jeffrey T. Schlarbaum
W. Barry Gilbert JEFFREY T. SCHLARBAUM Chairman and Chief Executive Officer