Exhibit 10 (f)

 

SEVERANCE AGREEMENT AND RELEASE

 

This Severance Agreement and Release (this “Agreement”) is made effective as of
March 15, 2004 by and between Rick A. Beets (“Employee”) and SI Technologies,
Inc. (the “Company”), with reference to the following facts:

 

A. Employee has served as the Chief Executive Officer and in other capacities
for the Company since 1993.

 

B. Employee’s employment for all positions as an officer and employee of the
Company and its subsidiaries terminated effective January 28, 2004 (the Company
and its subsidiaries are referred to in this Agreement as the “Company Group”).

 

C. Employee and the Company desire to enter into this Agreement, which provides,
among other things, for a severance payment to Employee and a release by
Employee of any and all claims related to his employment.

 

In consideration for the mutual promises contained in this Agreement, the
Company and Employee agree as follows:

 

Termination. Employee and the Company confirm that Employee’s employment with
the Company Group terminated effective as of the close of business on January
28, 2004 (“Termination Date”). Employee continues as a director of the Company.

 

Payments and Benefits to Employee. The Company agrees, until the earlier to
occur of July 28, 2004 and the date, if any, that Employee breaches any of his
obligations under Section 0 of this Agreement, to:

 

make to Employee salary continuation payments at a annual rate of $205,000,
payable on the Company’s regular payroll dates;

 

continue to pay the premiums for Company-provided health, dental and other
insurance, and reimburse Employee for medical expenses not covered by insurance,
to the extent the Company was paying such premiums and making such
reimbursements immediately prior to the Termination Date;

 

reimburse Employee up to $500 per month for actual out-of-pocket expenses
incurred by Employee during the period January 29, 2004 through July 28, 2004
for outplacement services, cell phone usage and to lease a furnished
outplacement office that provides a desk, telephone and computer, fax and
Internet connection, provided that Employee delivers proper evidence of such
expenses consistent with the Company’s reimbursement policies;

 

permit Employee to continue use of the Ford Expedition leased and insured by the
Company and which was being used by Employee immediately prior to the
Termination Date, provided that Employee complies with each and all of the
following conditions: (w) Employee must be the primary driver of the automobile;
(x) Employee must comply with the terms and conditions of the lease; (y)
Employee must cause routine and all other necessary maintenance to be performed;
and (z) the automobile must not be driven more miles than the pro rata share of
the annual mileage limitation under the lease except to the extent reasonably
necessary in

 

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connection with his job search activities (which are expected to require
Employee to travel throughout central and southern California). The Company
agrees to reimburse Employee for gasoline and routine maintenance expenses
incurred by Employee in connection with the automobile. Within one business day
of the date Employee’s right to use the Ford Expedition terminates, Employee
agrees to deliver the automobile to the Company at its business offices, in good
and clean condition, personal effects removed but with all keys and manuals and
otherwise in condition to return to the lessor without paying any unreasonable
costs or damages to the lessor. Employee hereby agrees to indemnify and hold the
Company Group, and their respective directors, officers, employees and agents,
harmless from and against any and all claims, damages, losses, liabilities,
costs and expenses (including attorneys fees and court costs) in connection with
the automobile and its use by him, members of his family, and others until he
delivers the automobile back to the Company. The violation of any of these
conditions and agreements regarding the automobile will give the Company the
right to terminate Employee’s use of the automobile upon notice.

 

Reimbursable Expenses. Employee acknowledges that he has submitted for
reimbursement all expenses incurred prior to the Termination Date, and the
Company agrees to reimburse such expenses to the extent reimbursable under the
Company’s standard policies for reimbursement. The Company has no obligation to
reimburse Employee for any reimbursement requests submitted after the date of
this Agreement for expenses incurred prior to the Termination Date.

 

Options. The Company acknowledges that: (a) Employee may exercise that certain
stock option dated April 14, 1994 for 100,000 shares of Common Stock until 11:59
PM on April 14, 2004; and (b) the following stock options were granted in
Employee’s capacity as a director of the Company, and accordingly do not
terminate as a result of termination of Employee’s employment (and Employee
acknowledges that such options are not “incentive stock options: within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended,
notwithstanding their designation as incentive stock options): (A) stock option
dated January 20, 2000 for 7,500 shares of Common Stock; (B) stock option dated
January 23, 2001 for 10,000 shares of Common Stock; (C) stock option dated
January 17, 2002 for 10,000 shares of Common Stock; (D) stock option dated
December 12, 2002 for 10,000 shares of Common Stock; and (E) stock option dated
December 11, 2003 for 10,000 shares of Common Stock. Employee acknowledes that
all other stock options held by him terminate no later than April 27, 2004 (90
days after the Termination Date).

 

Acknowledgment of Full Payment of Amounts Owned. The parties acknowledge and
agree that except as specifically provided in this Agreement, Employee has been
paid for all compensation due him for his employment, including salary,
reimbursable business expenses and accrued vacation due to him for services
rendered to the Company Group by Employee up to and including the Termination
Date. No further additional vacation or holiday hours or other benefits will
accrue to Employee. In light of the payment by the Company of all alleged wages
due or to become due to Employee, the parties acknowledge and agree that
California Labor Code Section 206.5 is not applicable to the parties hereto.
Section 206.5 provides in pertinent part:

 

No employer shall require the execution of any release of any claim or right on
account of wages due, or to become due, or made as an advance on wages to be
earned, unless payment of such wages has been made.

 

General Release. For and in consideration of the payments and benefits set out
in this Agreement, Employee, on behalf of himself and his agents, heirs,
successors and assigns, finally and unconditionally releases and discharges the
Company, and any and all of its subsidiaries, affiliates and other related
companies, as well as any and all of their officers, directors, agents,
employees, partners, shareholders, attorneys, predecessors, successors and
assigns (the “Released Parties”) from any and all claims, demands, liabilities,
damages, obligations, actions or causes of action of any kind, known or unknown,
past or present, arising out of, relating to, or in connection with his
employment, the termination of his employment or otherwise.

 

The claims released by Employee include, but are not limited to, claims for
defamation, libel, invasion of privacy, intentional or negligent infliction of
emotional distress, wrongful termination, constructive discharge, breach of
contract, breach of the covenant of good faith and fair dealing, breach of
fiduciary duty, and fraud. The claims released by Employee further include
claims under federal, state or local laws prohibiting employment

 

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discrimination and claims under federal and state labor statutes and
regulations, including, but not limited to, the Age Discrimination in Employment
Act, the California Fair Employment and Housing Act, the California Labor Code,
Title VII of the Civil Rights Act of 1964, as amended, and the Fair Labor
Standards Act, as well as any and all claims, demands, debts, and causes of
action of whatsoever kind or nature, whether known or unknown, suspected or
unsuspected, matured or unmatured, which Employee now has or claims to have or
had at any time or claimed to have against the Released Parties in connection
with Employee’s employment or termination from employment.

 

Employee agrees to forever refrain from instituting, initiating, prosecuting,
maintaining or voluntarily participating in any lawsuit, claim or other
proceeding in any jurisdiction or forum relating in any way to his employment or
termination from employment.

 

The Company acknowledges that the release does not cover obligations of the
Company to indemnify the Employee under applicable law or the Bylaws of the
Company.

 

Waiver of Civil Code Section 1542. The release contained herein is intended to
be complete and final and to cover not only claims, demands, liabilities,
damages, actions and causes of action which are known, but also claims, demands,
liabilities, damages, actions and causes of action which are unknown or which
Employee does not suspect to exist in his favor which, if known at the time of
executing this Agreement, might have affected his actions, and therefore he
expressly waives the benefit of the provisions of Section 1542 of the California
Civil Code, which provides:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

 

Employee hereby waives and relinquishes all rights and benefits which he has or
may have had under Section 1542 of the California Civil Code or the law of any
other state, country, or jurisdiction to the same or similar effect to the full
extent that he may lawfully waive such rights.

 

Confidentiality. Employee, his attorneys and other agents agree not to disclose
or cause the disclosure of the monetary or other terms of settlement, other than
as required by law or as necessary for the preparation of income tax returns and
other tax-related matters. Any such disclosure shall be considered a breach of
this Agreement resulting in damage to the Company.

 

Tax Consequences. The Company makes no representations or warranties with
respect to the tax consequences of any payment to Employee by the Company under
the terms of this Agreement.

 

Non-Compete and Non-Solicitation. Employee agrees that from January 28, 2004
through January 27, 2005, he will not, directly or indirectly, either alone or
by action in concert with others: (a) induce or attempt to influence any
employee of any member of the Company Group to terminate his or her employment
with any member of the Company Group; (b) employ or offer employment to any
person who was employed by any member of the Company Group at the time of
termination of Employee’s employment with the Company; (c) induce or attempt to
induce any customer, supplier, licensee or other business relationship of any
member of the Company Group to cease or reduce its business with any member of
the Company Group, or in any way interfere with the relationship between any
such customer, supplier, licensee or business relationship and any member of the
Company Group; or (d) either as an employee, employer, consultant, agent,
investor, principal, partner, stockholder (except as the holder of less than 1%
of the issued and outstanding stock of a publicly held corporation), corporate
officer or director, or in any other individual or representative capacity,
engage or participate in any business that is in competition in any manner
whatsoever with the business of the Company Group, as described in Exhibit A to
this Agreement.

 

Proprietary Information. Employee acknowledges that by reason of his employment
he has had access to substantial proprietary information, trade secrets and
confidential information of the Company, including but not limited to, financial
information, marketing plans, business methods, pricing and contracts, customer
lists, prospective customer lists and Company customer information. Employee
covenants and agrees that he will maintain the confidentiality of such
proprietary information and refrain from divulging, disclosing or otherwise
using, either directly or indirectly, any such proprietary information without
the express written authorization of the Company.

 

No Disparagement. Employee and the Company agree that neither will disparage the
other in any manner harmful to the other’s business or personal reputation.

 

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Withholding. The Company may withhold from any amounts payable to Employee under
this Agreement the amount(s) it believes necessary to satisfy its withholding
obligations under applicable law and regulations.

 

Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California. The state courts of California shall
have exclusive jurisdiction over any judicial proceeding relating to any dispute
arising out of the interpretation, performance or breach of this Agreement.

 

Entire Agreement. This Agreement constitutes the entire agreement between
Employee and the Company and supersedes any and all prior agreements, oral or
written, of any kind whatsoever, including the termination of such agreements.
No other promise or inducement has been offered for this Agreement. Any
amendments to this Agreement must be in writing, signed by Employee and duly
authorized representatives of the Company, and must state that the parties
intend to amend the Agreement.

 

Partial Invalidity. The invalidity or unenforceability of any provision of this
Agreement shall in no way affect the validity or enforceability of any other
provision of this Agreement.

 

Voluntary Execution of Agreement. Employee represents that he has carefully read
this entire Agreement and that he knows and understands its contents. Employee
has had the opportunity to receive independent legal advice from attorneys of
his choice with respect to the preparation, review and advisability of executing
this Agreement. Employee further represents and acknowledges that he has freely
and voluntarily executed this Agreement after independent investigation and
without fraud, duress, or undue influence, with a full understanding of the
legal and binding effect of this Agreement. Employee specifically acknowledges
that: (a) the Company has advised him that he has at least 21 days to review
this Agreement, (ii) he has had the opportunity to make counterproposals to the
Agreement, and (iii) the Company has advised him that he has seven days after
signing this Agreement to revoke this Agreement. None of Employee’s severance
benefits under Section 2 of this Agreement shall become payable unless and until
such seven-day period shall have expired with Employee not revoking this
Agreement. If Employee revokes this Agreement within such seven-day period, this
Agreement shall become null and void and of no force and effect and without any
obligation to make any payments or provide any benefits to Employee.

 

Attorneys’ Fees. If any action or proceeding is brought to enforce or interpret
any provision of this Agreement, the prevailing party shall be entitled to
recover as an element of its costs, and not its damages, reasonable attorneys’
fees to be fixed by the court. The prevailing party is the party who is entitled
to recover the costs of its action or proceeding, whether or not such action or
proceeding proceeds to final judgment. A party not entitled to recover its costs
of suit may not recover attorneys’ fees. No sum for attorneys’ fees shall be
counted in calculating the amount of a judgment for purposes of determining
whether a party is entitled to recover its costs or attorneys’ fees.

 

Counterparts/Fax Signatures. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement. The parties hereto agree that a
facsimile signature shall be as valid and binding as an original signature.

 

March 15, 2004

     

Rick A. Beets

                 

March 15, 2004

     

SI Technologies, Inc.

            By:                

Name:

               

Its:

   

 

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EXHIBIT A

 

to

 

Severance Agreement and Release

 

The listed Weigh / Force Products listed below are for clarification. The Weigh
/ Force Products and Markets in the Comments Section are considered to be
related to SI’s Past and Present Strategic Business and therefore subject to the
non-compete covenant.

 

Products

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Geographical Markets or Customers

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On-board Scales

   All Worldwide Markets Included in Non-Compete Agreement

Bucket Loader Scales

   All Worldwide Markets Included in Non-Compete Agreement

Axle Scales

   All Worldwide Markets Included in Non-Compete Agreement

Wheel Load Weigher Scales

   All Worldwide Markets Included in Non-Compete Agreement

Lift Truck Scales

   All Worldwide Markets Included in Non-Compete Agreement

Palletweighers

   All Worldwide Markets Included in Non-Compete Agreement

Standard Light Duty Crane Scales

   All Worldwide Markets Included in Non-Compete Agreement

Heavy Duty Crane Scales

   All Worldwide Markets Included in Non-Compete Agreement

Aircraft Weighing Systems

   All Worldwide Markets Included in Non-Compete Agreement

Aircraft Wheel Load Weighers

   All Worldwide Markets Included in Non-Compete Agreement

All NTEP / OIML Load Cells

   All Worldwide Markets Included in Non-Compete Agreement

All Non-NTEP / OIML Load Cells

   All Worldwide Markets Included in Non-Compete Agreement

Bonded Strain Gauge Weight Sensors

   All Worldwide Markets Included in Non-Compete Agreement

Truck Scales

   All Worldwide Markets Included in Non-Compete Agreement

Platform / Floor Scales

   All Worldwide Markets Included in Non-Compete Agreement

Bench Scales

   Not Included in Non-Compete Agreement

Counting Scales

   Not Included in Non-Compete Agreement

Pricing Scales

   Not Included in Non-Compete Agreement

Postal Scales

   Not Included in Non-Compete Agreement

Livestock Scales

   Not Included in Non-Compete Agreement

Conveyor Scales

   Not Included in Non-Compete Agreement

NTEP / OIML Scales Meters

   Not Included in Non-Compete Agreement

Strain Gauge Sales

   Not Included in Non-Compete Agreement

Fill by Weight Equipment

   All Worldwide Markets Included in Non-Compete Agreement

High Speed Check Weighers

   All Worldwide Markets Included in Non-Compete Agreement

Tension Measurement Devices

   Not Included in Non-Compete Agreement

Torque Measurement Devices

   Not Included in Non-Compete Agreement

Load Cell Calibration Software

   Not Included in Non-Compete Agreement

Race Car Scale Kits

   All Worldwide Markets Included in Non-Compete Agreement

All Other Weighing Equipment

   Not Included in Non-Compete Agreement

End

    

 

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