Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS

This SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS, (“Agreement”) is
made and entered into by and between MICHAEL J. BERTHELOT (“Employee”) and
PRO-DEX, INC., a Colorado corporation (the “Company”).

RECITALS

WHEREAS, Employee has been employed by the Company and its subsidiaries in the
positions of Chief Executive Officer and President, has served as a director of
the Company’s subsidiaries, and previously served as a director on the Company’s
Board of Directors;

WHEREAS, Employee and the Company are parties to that certain April 20, 2012
letter agreement (“Employment Letter”) signed by Employee and by William L.
Healey and Harold A. Hurwitz on behalf of the Company;

WHEREAS, the Employment Letter makes reference to certain rights of Employee
under the Company’s July 1, 2010 Employee Severance Policy (“Severance Policy”),
which constitutes the Company’ general severance policy as in effect as of the
Separation Date (as defined below);

WHEREAS, Employee and the Company are parties to that certain April 20, 2012
Change of Control Agreement (“Change of Control Agreement”) signed by Employee
and by Harold A. Hurwitz on behalf of the Company;

WHEREAS, at the Company’s 2012 Annual Meeting of Shareholders held on
January 17, 2013, the Company’s shareholders elected four new directors (of a
total of five) to the Company’s Board of Directors, constituting a Change of
Control (as defined in the Change of Control Agreement) pursuant to subclause
(b) of the definition thereof; and

WHEREAS, Employee’s employment with the Company and each of the Company’s
subsidiaries, as well as Employee’s service as a director of the Company’s
subsidiaries, will separate on February 25, 2013 (the “Separation Date”), and
the Company and Employee mutually desire to settle fully and finally all
obligations to Employee that the Company and its subsidiaries may have of any
nature whatsoever (including, without limitation, under the Employment Letter,
the Severance Policy and the Change of Control Agreement), as well as any
asserted or unasserted claims that Employee may have arising out of his
employment with, or service as a director to, the Company and its subsidiaries
or the separation of that employment and service, all pursuant to and in
accordance with the terms and conditions of this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants
and agreements and the terms and conditions set forth herein and other valuable
consideration, the parties agree as follows:

1. Compensation Through Separation Date. On the Separation Date, Employee will
be paid all unpaid base salary and unpaid bonuses earned (if any), less state
and federal taxes and other required withholding, for the period from the last
regular pay day through the

 

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Separation Date (the “Final Wages Payment”). Employee also will be paid on the
Separation Date for all previously unreimbursed business expenses that have been
submitted in compliance with the Company’s procedures for business expense
reimbursement. Additionally, Employee will also be paid on the Separation Date
the amount of one thousand nine hundred seventy-one dollars and no cents
($1,971.00), less state and federal taxes and other required withholding, as
payment of all amounts due to Employee under the Company’s Long Term Incentive
Plan. The Parties acknowledge and agree that (i) no payment has been earned or
is due under the Company’s Annual Incentive Plan, and (ii) Employee has no
accrual of any paid vacation time and therefore is due no payment upon
separation for accrued but unused vacation time. Employee acknowledges and
agrees that upon the receipt of the Final Wages Payment and the expense
reimbursement payment, the Company will have paid to him all salary, bonuses,
benefits, expense reimbursement, and any other consideration owed to him at any
time and for any reason through the Separation Date. Employee further represents
and agrees that (i) no further sums are or were due and owing Employee either by
the Company, any subsidiary of the Company, or by any other individual or entity
related to the Company in any way, except as provided for in this Agreement; and
(ii) except for the amounts set forth in this Paragraph 1, no other amount is
owed to him in connection with the Company’s Annual Incentive Plan or Long Term
Incentive Plan.

2. Effective Date. The Effective Date of this Agreement shall be the eighth day
after Employee’s dated execution of this Agreement, provided that Employee has
not revoked this Agreement pursuant to Paragraph 13.

3. Special Additional Compensation. In consideration of this Agreement, and
provided that (i) none of the provisions of Paragraph 5 has been violated,
(ii) Employee has completed and signed on the Separation Date the Company’s
“Termination Certificate” (Exhibit C to the Confidentiality, Unfair Competition,
Non-Recruiting and Assignment of Inventions Agreement previously signed by
Employee on April 20, 2012), and (iii) the revocation period referenced in
Paragraph 13 shall have expired without this Agreement having been revoked, the
Company will pay to Employee, within ten (10) calendar days after the Effective
Date, in one lump sum payment, a gross amount equal to one hundred sixty-five
thousand four hundred twenty-three dollars and zero cents ($165,423.00), less
state and federal taxes and other required withholding (the “Separation
Agreement Payment”).

4. Termination of Options. Employee acknowledges and agrees that (i) any and all
unexercised options to purchase common stock of the Company that were granted to
Employee under the Company’s Amended and Restated 2004 Directors’ Stock Option
Plan (or any predecessor of such plan, collectively, the “Directors’ Option
Plan”) have expired pursuant to Section 3(c) of the Directors’ Option Plan and
(ii) the options to purchase 200,000 shares of the Company’s common stock
granted to Employee under the Company’s Second Amended and Restated 2004 Stock
Option Plan (the “Employee Option Plan”), which options are unvested as of the
Separation Date, shall expire in full effective as of the Separation Date
pursuant to Section 6(b)(v) of the Employee Option Plan.

5. Return of Company Property. Employee understands that, except as otherwise
provided by this Paragraph 5, as of the Separation Date he was required to
return to the Company, and Employee represents that he has returned to the
Company, all tangible and

 

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intangible property and information belonging to the Company that is within his
possession or subject to his control, including but not limited to any
equipment, supplies, business cards, credit cards, and office machines, and also
including any electronic or tangible documents or files relating to the Company,
except for such personnel and compensation records provided to Employee during
the course of his employment. In connection with this obligation, Employee
agrees to cooperate with the Company in deleting, and confirming to the
Company’s satisfaction not later than the Separation Date the permanent deletion
and non-retention of, all such Company files and data from Employee’s laptop
computer and any other electronic devices (such as cell phones) within
Employee’s possession or control.

6. Complete Release of Claims by Employee and Company.

A. In consideration for this Agreement, and to the maximum extent permitted by
law, Employee, for himself, and his heirs, assigns, executors, administrators,
agents and successors (collectively, “Employee’s Affiliates”) hereby fully
releases, covenants not to sue and forever discharges the Company and each of
its predecessors, successors, assigns, employees, officers, directors,
shareholders, agents, attorneys, subsidiaries, parent companies, divisions or
affiliated corporations or organizations, whether previously or hereafter
affiliated in any manner (collectively, “Released Parties”), from any and all
claims, demands, actions, causes of action, charges of discrimination,
obligations, damages, attorneys’ fees, costs, expenses, and liabilities of any
nature whatsoever, whether or not now known, suspected or claimed (the
“Claims”), that Employee or Employee’s Affiliates ever had, now have, or may
claim to have as of the date of this Agreement against the Released Parties
(whether directly or indirectly), or any of them, by reason of any act or
omission concerning any matter, cause or thing occurring on or before the date
Employee signs this Agreement. This release includes, without limiting the
generality of the foregoing, the waiver of any claims related to or arising out
of Employee’s employment with the Company and its subsidiaries or the separation
of that employment. In giving this release, Employee waives and releases any and
all rights to employment or re-employment with the Company or its subsidiaries.

B. Without limiting the generality of the foregoing, Employee understands and
agrees that the release provisions of this Paragraph 6 apply to any Claims that
Employee or the Employee’s Affiliates now have, or may ever have had, against
the Company or any of the other Released Parties by reason of any act or
omission concerning any matter, cause or thing occurring on or before the date
Employee signs this Agreement that arise out of or are in any manner related to
Employee’s employment with the Company, its subsidiaries or with any of the
other Released Parties, as well as the separation of that employment, including
without limitation any Claims arising out of or related to violation of any
federal or state employment discrimination laws, including the California Fair
Employment and Housing Act; the California Family Rights Act; the Family and
Medical Leave Act; Title VII of the Civil Rights Act of 1964; the federal Age
Discrimination in Employment Act, as amended; the Americans With Disabilities
Act; the National Labor Relations Act; the Equal Pay Act; the Employee
Retirement Income Security Act of 1974; as well as all Claims arising out of or
related to violations of the provisions of the California Labor Code; the
California Government Code; the California Business & Professions Code,
including Business & Professions Code Section 17200, et

 

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seq.; state and federal wage and hour laws, including the federal Fair Labor
Standards Act; breach of contract; fraud; misrepresentation; common counts;
unfair competition; unfair business practices; negligence; defamation;
infliction of emotional distress; invasion of privacy; assault; battery; false
imprisonment; wrongful termination; and any other state or federal law, rule, or
regulation.

C. Employee acknowledges and represents that he did not suffer any work-related
injuries while working for the Company. Employee acknowledges and represents
that he has no intention of filing any claim for workers’ compensation benefits
of any type against the Company, and that he will not file or attempt to file
any claims for workers’ compensation benefits of any type against the Company.
Employee acknowledges that the Company has relied upon these representations,
and that the Company would not have entered into this Agreement but for these
representations. As a result, Employee agrees, covenants, and represents that
the Company may, but is not obligated to, submit this Agreement to the Workers’
Compensation Appeals Board for approval as a compromise and release as to any
workers’ compensation claim that Employee files at any time against the Company.

D. In exchange for this Agreement, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Company, for itself and its attorneys, agents, successors and assigns
(collectively, “the Company’s Affiliates”), hereby fully, and without
limitation, releases, covenants not to sue and forever discharges Employee and
Employee’s Affiliates (collectively the “Employee Releasees”), both individually
and collectively, from any and all rights, claims, demands, liabilities, actions
and causes of action, whether in law or in equity, suits, damages, losses,
attorneys’ fees, costs, and expenses, of whatever nature whatsoever, known or
unknown, fixed or contingent, suspected or unsuspected, and specifically
including any claim of overpayment of commissions to Employee, that the Company
or the Company’s Affiliates now have, or may ever have had, against any of the
Employee Releasees for any acts or omissions by Employee or any of the other
Employee Releasees occurring prior to and through the date Employee signs this
Agreement.

7. Older Workers Benefit Protection Act. This Agreement is subject to the terms
of the Older Workers Benefit Protection Act of 1990 (the “OWBPA”). The OWBPA
provides that an individual cannot waive a right or claim under the Age
Discrimination in Employment Act (“ADEA”) unless the waiver is knowing and
voluntary. Pursuant to the terms of the OWBPA, Employee acknowledges and agrees
that he has executed this Agreement voluntarily, and with full knowledge of its
consequences. In addition, Employee hereby acknowledges and agrees that:
(a) this Agreement has been written in a manner that is calculated to be
understood, and is understood, by Employee; (b) the release provisions of this
Agreement apply to rights and claims that Employee may have under the ADEA,
including the right to file a lawsuit against the Released Parties for age
discrimination; (c) the release provisions of this Agreement do not apply to any
rights or claims that Employee may have under the ADEA that arise after the date
Employee executes this Agreement; and (d) the Company does not have a
preexisting duty to pay the special additional compensation identified in this
Agreement (except to the extent otherwise provided in the Employment Letter or
the Change of Control Agreement).

 

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8. General Nature of Release; Claims Not Released. The Release by Employee set
forth above in Paragraph 6 of this Agreement is a general release of all claims,
demands, causes of action, obligations, damages, and liabilities of any nature
whatsoever that are described in the Release and is intended to encompass all
known and unknown, foreseen and unforeseen claims that Employee may have against
the Released Parties, or any of them, except for (a) any claims that may arise
from the terms of this Agreement, (b) any claims which may not be released as a
matter of law, (c) any claims under the Indemnification Agreement (as defined
below), or (d) any claims for indemnification and/or reimbursement of expenses
by the Company with respect to which Employee may be eligible by reason of
Employee’s indemnification rights under any applicable statute or provision of
the Company’s charter documents. It is further understood by the Parties that
nothing in this Agreement shall affect any rights Employee may have under any
Pension Plan and/or Savings Plan (i.e., 401(k) plan) provided by the Company as
of the Separation Date, such items to be governed exclusively by the terms of
the applicable plan documents. Employee covenants and agrees never to commence,
aid in any way, prosecute or cause to be commenced or prosecuted any action or
other proceeding based upon any claims, demands, causes of action, obligations,
damages or liabilities which are the subject of this Agreement; provided
however, that Employee does not relinquish any protected rights to file a
charge, testify, assist or participate in any manner in an investigation,
hearing or proceeding conducted by the Equal Employment Opportunity Commission,
the Office of Federal Contract Compliance or any similar state human rights
agency. However, Employee may not recover additional compensation or damages as
a result of any such action.

9. Release of Section 1542 Rights. Employee expressly waives and relinquishes
all rights and benefits he may have under Section 1542 of the California Civil
Code. Section 1542 is intended to protect against an inadvertent release of
unknown or unsuspected claims that would be material to this Agreement. This
Paragraph 9 provides that Employee also is releasing any such unknown or
unsuspected claims. Section 1542 reads as follows:

“Section 1542. [General Release; extent.] A general release does not extend to
claims which the creditor does not know or suspect to exist in his or her favor
at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.”

10. Non-Admission of Liability. Employee and the Company acknowledge and agree
that this Agreement is a settlement agreement and shall not in any way be
construed as an admission by any of the Released Parties of any wrongful act
against, or any liability to, Employee or any other person.

11. Protection of Trade Secrets. Employee agrees to keep in strict confidence at
all times, and that he will not at any time, either directly or indirectly, make
known, reveal, make available or use, any Trade Secrets as defined herein, which
Employee obtained during or by virtue of his employment with the Company. The
parties agree that “Trade Secrets” as used herein means all confidential
information which (i) has been the subject of reasonable efforts by the Company
to maintain as secret and confidential, (ii) pertains in any manner to the
business of the Company, including proprietary information entrusted to the
Company in confidence by its customers or suppliers (except to the extent such
information is generally known or made

 

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available to the public or to the Company’s competitors through lawful means),
and (iii) has independent economic value by virtue of not being generally known
to other persons who could obtain economic value from its disclosure or use.
Employee acknowledges that all Trade Secrets, as well as all other confidential
information or data of the Company, are and remain the exclusive property of the
Company (or, in the case of proprietary information belonging to a customer or
supplier who has entrusted it to the Company, the exclusive property of that
person or entity). Employee and the Company further agree that the following
information constitutes a non-exclusive listing of Trade Secrets coming within
the terms of this Agreement: the customer contacts and business requirements of
the Company’s current customers with respect to the Company’s products; the
supplier contacts and business requirements of the Company’s suppliers with
respect to the Company’s products; the specific nature and amount of business
conducted by the Company with its customers and suppliers; the product
specifications required by the Company’s customers or required by the Company of
its suppliers; customer and supplier pricing information and discount schedules
with respect to the Company’s products or supplies; and the Company’s business
plans and strategies for acquiring new products, customers, or manufacturing
sources or otherwise expanding or improving its product offerings to customers.
Employee further agrees that he shall not directly or indirectly solicit
business from or with respect to any customers or suppliers of the Company
through the use of any Trade Secrets. To the maximum extent permitted by law,
Employee further covenants and agrees to observe and comply with the
Confidentiality, Unfair Competition, Non-Recruiting, and Assignment of
Inventions Agreement referenced in Paragraph 18, except to the extent the terms
thereof are specifically superseded by this Agreement.

12. Twenty-One Day Consideration Period. This Agreement is being given to
Employee on February 21, 2013. Employee acknowledges that he is entitled to take
up to twenty-one (21) calendar days to consider whether to accept this
Agreement, and that if he signs this Agreement before expiration of the 21-day
period, he has done so voluntarily; provided, however, that the Agreement may
not be signed by Employee prior to the Separation Date, and the Company will not
accept the Agreement if signed prior to the Separation Date. Employee agrees
that any modifications, material or otherwise, made to this Agreement do not
restart or affect in any manner the original twenty-one (21) calendar day
consideration period.

13. Seven Day Revocation Period. After signing this Agreement, Employee shall
have a period of seven (7) calendar days to revoke the Agreement by providing
the Company with written notice of his revocation. To be effective, such
revocation must be in writing, must specifically revoke this Agreement, and must
be received by the Company prior to the eighth calendar day following Employee’s
execution of this Agreement. This Agreement shall become effective, enforceable,
and irrevocable on the eighth calendar day following Employee’s execution of
this Agreement. Any revocation of this Agreement, however, shall not affect the
finality of the separation of Employee’s employment with the Company and its
subsidiaries on the Separation Date.

14. Acknowledgment of Being Advised to Consult Legal Counsel. This Agreement is
an important legal document. Employee acknowledges that the Company has advised
him in writing to consult with an attorney of his choice prior to signing this
Agreement, and that he has had the opportunity to consult with an attorney to
the extent he so desires.

 

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15. Confidentiality. As a material inducement to the Company to enter into this
Agreement, Employee promises and agrees to maintain confidentiality regarding
this Agreement to the extent permitted by applicable law, except to the extent
the Company publicly discloses its terms in accordance with public company
disclosure requirements. Therefore, except to the extent of any public
disclosure by the Company, Employee promises and covenants not to disclose,
publicize, or cause to be publicized any of the terms and conditions of this
Agreement except to his immediate family, and to his attorney or accountant to
the extent reasonably necessary to obtain professional advice with respect to
the parties’ rights and obligations as stated herein, to the extent necessary to
enforce this Agreement, or otherwise as permitted by law. Employee further
promises and covenants to use his best efforts to prevent any further disclosure
of this Agreement by any such persons to whom he does make disclosure.

16. Ambiguities. Employee and the Company agree that the general rule that
ambiguities shall be construed against the drafting party shall not apply to any
interpretation of this Agreement.

17. Interpretation. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be valid and effective under applicable law.
If any provision of this Agreement shall be unlawful, void or for any reason
unenforceable, it shall be deemed separable from, and shall in no way affect the
validity or enforceability of, the remaining provisions of this Agreement, and
the rights and obligations of the parties shall be enforced to the fullest
extent possible. All captions are for convenience of reference only and shall be
disregarded in interpreting this Agreement.

18. Entire Agreement. Employee acknowledges that he is not relying, and has not
relied, on any representation or statement by the Company with regard to the
subject matter or terms of this Agreement, except to the extent set forth fully
in this Agreement. This Agreement constitutes the entire agreement between
Employee and the Company with respect to the subject matter of this Agreement,
and supersedes any and all other agreements, understandings or discussions
between Employee and the Company with respect to the subject matter of this
Agreement (specifically including, without limiting the generality of the
foregoing, the Employment Letter, the Severance Policy and the Change of Control
Agreement), other than (a) the Confidentiality, Unfair Competition,
Non-Recruiting and Assignment of Inventions Agreement signed by Employee on
April 20, 2012, and (b) the most recent Indemnification Agreement between the
Company and Employee (the “Indemnification Agreement”), each of which agreements
or rights shall, except to the extent specifically superseded by this Agreement,
survive the execution of this Agreement and the separation of Employee’s
employment.

19. Risk of New or Different Facts. Employee acknowledges that he may discover
new information different from or inconsistent with facts he presently believes
to be true, and expressly agrees to assume the risk of such new or different
information.

20. Non-Disparagement. Employee agrees that, for a period of five years from the
Effective Date, Employee shall not (i) disparage or demean the services,
products, policies, personnel, business ethics or conduct of the Company; or
(ii) otherwise make comments or statements detrimental to the interests of the
Company other than in the course of lawful competition with the Company or as
otherwise permitted by law. The Company agrees that, for

 

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a period of five years from the Effective Date, it shall direct its officers and
directors that, either on behalf of the Company or in their personal capacity,
they shall not make (i) any public statement that disparages or demeans the
services, ability, business ethics or conduct of Employee; or (ii) any public
comments or statements detrimental to the interests of Employee other than in
the course of lawful competition with Employee or as otherwise permitted by law.

21. Modification. This Agreement cannot be modified or terminated, except by a
writing signed by the party against whom enforcement of the modification or
termination is sought.

22. Voluntary Agreement. This Agreement in all respects has been voluntarily and
knowingly executed by the parties hereto. Employee specifically represents that
he has carefully read and fully understands all of the provisions of this
Agreement, and that he is voluntarily entering into this Agreement.

23. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

24. Governing Law. The validity and effect of this Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of
California, without giving effect to conflicts of laws principles.

IN WITNESS WHEREOF, the parties hereto have executed this Separation Agreement
and General Release of All Claims, and have initialed each page hereof (other
than this signature page), on the dates set forth below.

 

Dated: February 25, 2013    

/s/ Michael J. Berthelot

   

Michael J. Berthelot

   

Employee

    PRO-DEX, INC. Dated: February 24, 2013    

/s/ Nicholas J. Swenson

   

By: Nicholas J. Swenson

   

Its: Chairman of Board of Directors

Dated: February 25, 2013    

/s/ Harold A. Hurwitz

   

By: Harold A. Hurwitz

   

Its: Chief Financial Officer

 

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