Exhibit 10.1

 

SEPARATION AGREEMENT AND MUTUAL RELEASE

 

This Separation Agreement and Mutual Release (hereinafter “Agreement”), is made
and entered into by and between Boris Maslov (“Employee”) and Ener-Core, Inc., a
Delaware corporation (the “Company”), with reference to the following:

 

A.      Employee was employed by the Company pursuant to the terms of an
Employment Agreement effective as of December 31, 2012, and Amendment to
Employment Agreement effective as of May 23, 2014 (collectively, the “Employment
Agreement”).

 

B.       Employee and the Company (collectively, the “Parties”) now mutually
desire to end the employment relationship pursuant to the terms of this
Agreement and this Agreement shall be in lieu of any severance payments,
benefits or notice provisions as provided in the Employment Agreement.

 

C.       The Parties further desire to settle, compromise, and resolve fully and
finally any and all claims and disputes, whether known or unknown, which exist
or could exist on Employee’s behalf against the Company, and on the Company’s
behalf against the Employee, from the beginning of time through the date of
execution of this Agreement.

 

NOW, THEREFORE, in consideration of the covenants and promises contained herein,
the Parties hereto agree as follows:

 

1.       Termination of Employment Relationship. The Company and Employee have
mutually agreed to terminate the employment relationship effective on January
31, 2017 (“the Termination Date”). On the Termination Date, Employee shall be
paid for all accrued but unused paid time off (vacation), as well as all salary
earned and unpaid through the Termination Date; Employee shall further be
entitled to any pending reimbursement for Company expenses incurred by Employee
prior to the Termination Date in accordance with Company policies. At the
Termination Date, Employee hereby resigns from (i) all officer positions with
the Company (including without limitation the positions of President, Chief
Operating Officer and Chief Technology Officer of the Company) and any officer,
director or employee positions with its subsidiaries and affiliates and (ii) any
fiduciary, administrative or other committees or powers, including with respect
to any employee benefit plans or bank accounts of the Company. Employee
understands and agrees that he is no longer authorized to act for or on behalf
of the Company in any capacity except as directed and that the terms of his
Employment Agreement will be terminated effective on the Termination Date,
except for those provisions that are specifically intended to survive
termination as indicated in the Employment Agreement or incorporated by
reference in this Agreement. Notwithstanding anything herein, Company and
Employee acknowledge and agree that Sections 7 and 8 of the Employee Agreement
are, by this Agreement, specifically intended not to survive or have any effect
upon the payments being made, and to be made, hereunder. Employee further
understands and agrees that all rights and benefits relating to employment with
the Company shall be forever terminated on the Termination Date and that
Employee is not entitled to receive and will not claim any compensation,
payments or benefits from the Company except for those payments and benefits
that are expressly set forth in this Agreement, and that this Agreement is
expressly intended to supersede and replace any severance pay or benefits that
Employee might otherwise claim pursuant to his Employment Agreement,
specifically including those set forth in Sections 7 and 8 therein. However,
upon termination, Employee shall be entitled to receive any rights and benefits
as a terminated employee with respect to Employee’s participation in the
Company’s health and welfare and/or retirement benefit plans, which shall be
provided pursuant to operation of law and under the terms of those respective
plans. Employee will be provided with COBRA notice in a separate writing after
the Termination Date that sets forth information relating to his entitlement to
COBRA coverage.

 

 

 

 

2.       Severance Payments and Post-Termination Obligations.

 

a.After the Effective Date of this Agreement, and provided that Employee
complies with all of the terms of this Agreement, the Company agrees to pay
Employee as severance pay a total severance amount of $90,000 (the “Severance
Obligation”) to be paid in eighteen (18) equal semi-monthly installments on the
15th day and last day of each month after the Termination Date (commencing
February 15, 2017), less applicable statutory deductions and tax withholdings.
Employee agrees that he shall be solely responsible for any taxes that may be
due and owing as a result of payments made pursuant to this Agreement. The
Company may, in its sole discretion, accelerate the payment of the unpaid
balance of the Severance Obligation at any time, less applicable statutory
deductions and tax withholdings.

 

b.Employee acknowledges and agrees that, as of the Termination Date, other than
as explicitly set forth in this Agreement, he is no longer entitled to any other
compensation set forth in his Employment Agreement or pursuant to Company bonus
policies, including without limitation any bonus or incentive compensation, and
that any unvested options Employee holds pursuant to the Company’s incentive
plan(s) are hereby relinquished pursuant to the terms thereof.

 

c.As of the Termination Date, Employee and the Company shall enter into an
advisory services agreement, in the form attached hereto as Exhibit A, pursuant
to which Employee shall provide services to the Company as an advisory board
member as set forth therein.

 

3.       Release of All Claims - Employee. In accordance with the requirements
of the Employment Agreement, and as consideration for the obligations under
Section 2 of this Agreement and the release provided in Section 6 of this
Agreement, to which Employee is not otherwise entitled, Employee agrees as
follows:

 

a.Except for the payments and other benefits expressly set forth in this
Agreement, Employee, on behalf of himself, his heirs, legal representatives,
successors-in-interest, and assigns, does hereby irrevocably and unconditionally
release, acquit, and forever discharge the Company, including all of its past,
present, and future parents, subsidiaries, affiliated companies, and owners and
all of their past, present, and future predecessors, successors, assigns,
agents, directors, officers, employees, representatives, attorneys, and insurers
and all persons acting by, through, under, or in concert with any of them
(collectively. “Company Released Parties”), and each of them, of and from all
claims, complaints, actions, causes of action, rights, demands, debts,
obligations, damages, or accountings of whatever nature, in law or in equity,
whether known or unknown, which Employee may have, in the past may have had, or
in the future may have against Company Released Parties, or any of them,
including but not limited to, any and all claims relating to the Employment
Agreement or any other claims based on any contract, express or implied, or
breach of the covenant of good faith and fair dealing; any claims for stock
options and/or any stock, equity or other ownership interest in the Company; any
claims for wrongful termination, violation of public policy, constructive
discharge, emotional distress, personal injury, invasion of privacy, defamation,
fraud, misrepresentation, breach of fiduciary duty, unfair business practices,
tortious interference, or any other tort or common law claims; any and all
claims for wages, salary, bonuses, commissions, overtime pay, premium pay,
vacation pay, severance pay, benefits, contributions or any other claims for
compensation; any and all claims for damages (including general, special,
compensatory, consequential, liquidated or punitive damages); any and all claims
for costs, expenses, attorneys’ fees, interest, civil or criminal penalties,
waiting time penalties, or any other available remedy; and any and all claims
arising under any federal, state, city and/or other governmental statute, law,
regulation or ordinance relating to employment, including but not limited to (as
amended), Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1991, the Equal Employment Opportunity Act of 1972, the Americans with
Disabilities Act, the Age Discrimination in Employment Act, the Older Worker
Benefit Protection Act, the Family and Medical Leave Act, the Employee
Retirement Income Security Act, the California Labor Code and any applicable
Wage Order, the California Business and Professions Code, the California Family
Rights Act, the California Fair Employment and Housing Act covering
discrimination, harassment and retaliation in employment on any protected basis
as established by law (herein collectively, “Claims”).

 

 2 

 

 

b.Employee is also waiving his right to any monetary recovery if such Claims are
pursued on his behalf. Employee confirms that (to his knowledge) Employee has
suffered no injuries or occupational diseases in connection with his employment
with the Company that may be compensable under any state worker’s compensation
laws. Employee confirms that he does not have any pending claim, charge, or suit
against the Company Released Parties or any of their employees in any federal,
state, or local court or administrative agency.

 

4.       Waiver of Rights Under Section 1542. IT IS FURTHER UNDERSTOOD AND
AGREED BY EMPLOYEE THAT HE HEREBY EXPRESSLY WAIVES AND RELINQUISHES ANY AND ALL
CLAIMS, RIGHTS OR BENEFITS THAT EMPLOYEE MAY HAVE UNDER CALIFORNIA CIVIL CODE
SECTION 1542, WHICH PROVIDES AS FOLLOWS:

 

“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.”

 

In connection with such waiver and relinquishment, Employee acknowledges that
Employee may hereafter discover claims or facts in addition to or different from
those which Employee now knows or believes to exist with respect to the matters
released herein, but that Employee expressly agrees to fully, finally and
forever settle and release any and all claims, known or unknown, suspected or
unsuspected, which exist or may exist on Employee’s behalf against the Company
Released Parties at the time of execution of this Agreement, including, but not
limited to, any and all claims relating to or arising from Employee’s employment
with the Company or the termination of that employment.

 

 3 

 

 

5.       ADEA Release and Effective Date. This Agreement includes a release of
claims under the federal Age Discrimination in Employment Act (“ADEA”), 29
U.S.C. § 626, et seq, including the Older Workers Benefit Protection Act, and in
connection with such waiver and release:

 

a.Employee is hereby advised to consult with an attorney of Employee’s choice
(and at Employee’s own cost) prior to signing this Agreement;

 

b.Employee shall have a period of twenty-one (21) days from January 31, 2017,
the date Employee first received this Agreement, in which to review and consider
the terms of this Agreement. Employee understands and agrees that the
subsequently negotiated and agreed revisions to the Agreement do not extend this
initial 21-day period. Employee may execute this Agreement at any time during
the 21-day period;

 

c.Employee may revoke this Agreement in writing at any time during the first
seven (7) days following Employee’s execution of this Agreement (the “Revocation
Period”), and this Agreement shall not be effective or enforceable until the
Revocation Period has expired. If Employee revokes this Agreement by properly
notifying in writing an authorized representative of the Company of its
revocation during the Revocation Period, then this Agreement shall not be
effective or enforceable. Accordingly, the “Effective Date” of this Agreement
shall be on the eighth (8th) day after Employee signs this Agreement and returns
it to the Company, and provided that Employee does not revoke the Agreement
during the Revocation Period.

 

d.Employee acknowledges and agrees that the payments, benefits, further
engagement and releases to be provided to Employee as set forth in this
Agreement are in addition to anything of value that Employee would otherwise be
entitled to receive from the Company upon a mutual separation and constitute
valid consideration in exchange for the release of federal age claims as set
forth in this Agreement.

 

6.       Release of All Claims - Company. As consideration for the releases
provided in Section 3 and 4 of this Agreement, other than the Employee’s
obligations set forth in this Agreement and the advisory services agreement
referenced herein, the Company, on behalf of itself, its subsidiaries,
affiliates, past, present, and future predecessors, successors, assigns, agents,
directors, officers, employees, and other representatives, does hereby
irrevocably and unconditionally release, acquit, and forever discharge the
Employee from all claims, complaints, actions, causes of action, rights,
demands, debts, obligations, damages, or accountings of whatever nature, in law
or in equity, whether known or unknown, which the Company may have, in the past
may have had, or in the future may have against Employee, or any of them,
including but not limited to, any and all claims relating to the Employment
Agreement, the employment relationship and any other relationships between
Company and Employee that are terminated hereby, or any other claims based on
any contract, express or implied, or breach of the covenant of good faith and
fair dealing; any claims for violation of public policy or Company policy;
emotional distress, personal injury, invasion of privacy, defamation, fraud,
misrepresentation, breach of fiduciary duty, unfair business practices, tortious
interference, or any other tort or common law claims; any and all claims for
damages (including general, special, compensatory, consequential, liquidated or
punitive damages); any and all claims for costs, expenses, attorneys’ fees,
interest, civil or criminal penalties, waiting time penalties, or any other
available remedy; and any and all claims arising under any federal, state, city
and/or other governmental statute, law, regulation or ordinance relating to
employment.

 

 4 

 

 

7.       Waiver of Rights Under Section 1542. IT IS FURTHER UNDERSTOOD AND
AGREED BY COMPANY THAT IT HEREBY EXPRESSLY WAIVES AND RELINQUISHES ANY AND ALL
CLAIMS, RIGHTS OR BENEFITS THAT COMPANY MAY HAVE UNDER CALIFORNIA CIVIL CODE
SECTION 1542, WHICH PROVIDES AS FOLLOWS:

 

“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.”

 

In connection with such waiver and relinquishment, Company acknowledges that
Company may hereafter discover claims or facts in addition to or different from
those which Company now knows or believes to exist with respect to the matters
released herein, but that Company expressly agrees to fully, finally and forever
settle and release any and all claims, known or unknown, suspected or
unsuspected, which exist or may exist on Company’s behalf against the Employee
at the time of execution of this Agreement, including, but not limited to, any
and all claims relating to or arising from Company’s employment of the Employee
or the termination of that employment.

 

8.       No Filing of Claims. The Parties represent and warrant, that as of the
date of this Agreement, neither Party presently has on file any claims, charges,
grievances, actions, appeals or complaints against the Employee or the Company
Released Parties, as applicable, in or with any administrative, state, federal
or governmental entity, agency, board or court, or before any other tribunal or
panel of arbitrators, public or private, based upon any actions by such Parties
that are alleged to have occurred prior to the date of this Agreement. To the
extent any such claims or actions do exist as of the date of this Agreement,
each Party represents and agrees to dismiss, with prejudice, any and all such
claims and, if such Party does not have the authority or ability to dismiss any
such claims, such Party hereby expressly agrees that he shall not personally
recover or receive any monetary damages or award relating to any such claims,
provided, nothing in this Agreement shall negate, limit or otherwise prohibit
the Employee from exercising his rights communicate with any federal government
agency regarding any potential violation of federal law or regulation, including
without limitation to engage with the U.S. Securities and Exchange Commission
pursuant to Section 21F(h) of the Securities Exchange Act of 1934, as amended,
and the rules promulgated thereunder (“Reserved Rights”). If applicable, the
relevant Party may present this Agreement to any such agency or court as a basis
to seek such dismissal or denial of monetary relief.

 

9.       Ownership of Claims. The Parties represent and warrant that each is the
sole and lawful owner of all rights, title and interest in and to all released
matters, claims and demands as herein contained and that there has been no
assignment or other transfer of any interest of any claim or demand which either
may have against the Employee or the Company Released Parties, as applicable.

 

10.     Non-Admission of Liability. It is expressly understood and agreed by the
Parties that nothing contained in this Agreement shall constitute or be treated
as an admission of any wrongdoing or liability on the part of any Party to this
Agreement. Each Party expressly denies that the Employee or the Company Released
Parties have engaged in any wrongful or unlawful conduct of any kind or in any
violation of law relating to Employee’s employment relationship with the
Company.

 

11.     Confidentiality. Employee acknowledges that he previously agreed to be
bound by the provisions of his Employment Agreement addressing preservation of
Confidential Information and protection of the Company’s intellectual property,
and, as a condition of this Agreement, he acknowledges and confirms that those
terms and conditions of his Employment Agreement shall survive the termination
of the employment relationship and shall remain fully enforceable against
Employee after the Termination Date, pursuant to the terms of the Employment
Agreement, provided, nothing in such provisions shall negate or undermine the
Reserved Rights as set forth in Section 8 above. Employee acknowledges that this
Agreement shall be filed publicly by the Company with the U.S. Securities and
Exchange Commission.

 

 5 

 

 

12.     Return of Company Property. As a condition of receiving the severance
payment set forth in Section 2 above, except as otherwise instructed by the
Company pursuant to the advisory services agreement referenced herein, Employee
agrees to return to the Company on or before the Termination Date all the
Company property, equipment, devices, files, documents and data of any kind,
whether stored in paper, disk, tape or any other electronic form, that Employee
has in his possession or control. Employee further represents and agrees that,
to the extent he subsequently discovers any Company documents or property of any
kind after the Termination Date, he will promptly return the same (and any
copies) to the Company in the same condition that he found them.

 

13.     Attorneys Fees and Costs. If any legal action is brought under this
Agreement for an asserted breach or to enforce any of its terms, the prevailing
party shall be entitled to recover costs and reasonable attorneys fees;
provided, however, that, to the extent the issues raised in any claim or dispute
under this Agreement are based on state or federal statutes that provide for
attorneys fees to the prevailing party, then the basis for awarding such
attorneys fees shall be consistent with the applicable standards for awarding
attorneys fees to the prevailing party under those respective state or federal
statutes and applicable laws.

 

14.     California Law Applies. This Agreement, in all respects, shall be
interpreted, enforced and governed by and under the laws of the State of
California.

 

15.     Successors and Assigns. It is expressly understood and agreed by the
Parties that this Agreement and all of its terms shall be binding upon the
Parties’ respective representatives, heirs, executors, administrators,
successors and assigns. This Agreement and the releases from the Parties
contained herein shall inure to the benefit of the Employee or Company Released
Parties, as applicable.

 

16.     Severability. In the event any provision of this Agreement shall be
found by a court of competent jurisdiction to be void, invalid or unenforceable,
the provision shall be deemed modified to the fullest extent permitted by law to
cure the invalid or unenforceable provision consistent with the intent of the
Parties, and if that is not possible, then the void, invalid or unenforceable
provision shall be deleted and severed from this Agreement but only to the
extent that it does not materially change the terms of this Agreement or alter
the intent of the Parties, and all other provisions of this Agreement shall
remain in full force and effect.

 

17.     Integration; Modification. This Agreement, the Employment Agreement and
the advisory services agreement attached hereto to Exhibit A, constitute a
single, integrated, written contract expressing the entire agreement between the
Parties regarding the termination of Employee’s employment and they supersede
and replace all prior agreements or understandings between the Parties relating
to the subject matter of this Agreement, whether written, oral or implied. Each
Party represents and warrants to the other that such Party is not relying on any
promises, representations or inducements of any kind which do not appear written
herein. Each Party further agrees that this Agreement can be amended or modified
only by a written agreement, signed by all Parties.

 

18.     Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all counterparts so
executed shall constitute one agreement binding on all of the Parties hereto,
notwithstanding that all of the Parties are not signatory to the same
counterpart. This Agreement may be executed and transmitted either by original,
facsimile, or electronic delivery, each of which will be equally binding as an
original upon receipt by the other Party.

 

 6 

 

 

19.     Understanding and Voluntary Agreement. By signing below, Employee
confirms that he is competent to execute this Agreement. Employee understands
and agrees that he may be waiving significant legal rights by signing this
Agreement. Employee represents and agrees that he has entered into this
Agreement voluntarily, with a full understanding of and in agreement with all of
its terms, and after having had the opportunity to consult with an attorney of
his choice. By signing below, Company confirms that its entry into this
Agreement has been authorized by the Company’s board of directors and that the
Company’s signatory was specifically authorized to execute and deliver this
Agreement on behalf of the Company.

 

20.     Section 409A. This Agreement is intended to comply, to the extent
applicable, with the provisions of Section 409A of the Internal Revenue Code of
1986, as amended (“Section 409A”), and shall, to the extent practicable, be
construed in accordance with such section. For purposes of this Agreement, each
amount to be paid or benefit to be provided will be construed as a separate
identified payment for purposes of Section 409A, and any payments that are due
within the “short term deferral period” as defined in Section 409A will not be
treated as deferred compensation unless applicable law requires otherwise.
Notwithstanding anything contained herein to the contrary, to the extent
required in order to avoid accelerated taxation and/or additional taxes under
Section 409A, amounts reimbursable to Employee under this Agreement shall be
paid to Employee on or before the last day of the year following the year in
which the expense was incurred and the amount of expenses eligible for
reimbursement (and in-kind benefits provided to Employee) during any one year
may not effect amounts reimbursable or provided in any subsequent year.

 

21.     Interpretation. This Agreement is to be interpreted in accordance with
its fair meaning and not strictly for or against any Party. This Agreement will
not be construed more strictly against one Party than against the other merely
by virtue of the fact that it may have been prepared by counsel for one of the
Parties, it being recognized that all Parties have contributed substantially and
materially to the preparation of this Agreement.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Separation Agreement
and Mutual Release on the dates indicated below.

 

Dated: February 1, 2017 BORIS MASLOV       /s/ Boris A. Maslov

 

Dated: February 1, 2017 ENER-CORE, INC.         By: /s/ Domonic J. Carney   Its:
CFO

 

 7 

 

 

EXHIBIT A

 

Advisory Services Agreement

 

[Omitted]