Exhibit 10.1

 

EXECUTION VERSION

 

SEPARATION AND GENERAL RELEASE AGREEMENT

 

This Separation and General Release Agreement (the “Agreement”) is entered into
between Jeffrey M. Jagid, a New Jersey resident (the “Employee”) and I.D.
Systems, Inc. (“ID Systems”), together with its parent, divisions, affiliates,
and subsidiaries and their respective officers, directors, employees,
shareholders, members, partners, plan administrators, attorneys, and agents, as
well as any predecessors, future successors or assigns or estates of any of the
foregoing with an address at 123 Tice Boulevard, Woodcliff Lake, New Jersey
07677 (the “Released Parties”).

 

1.           Separation of Employment; Resignation from the Board of
Directors.  Employee acknowledges and understands that (A) Employee’s last day
of employment with ID Systems was March 2, 2014 (the “Separation Date”) and (B)
Employee resigned from the Board of Directors of ID Systems on March 21,
2014.  Simultaneous with his execution and delivery of this Agreement, Employee
shall execute and deliver to the Company (i) a letter of resignation in the form
attached as Exhibit A hereto, and (ii) the compliance certificate attached as
Exhibit B hereto. Employee acknowledges and agrees that, except as otherwise
provided in this Agreement, Employee has received all compensation and benefits
to which Employee is entitled as a result of Employee’s employment.  Employee
understands that, except as otherwise provided in this Agreement, Employee is
entitled to nothing further from any of the Released Parties as a result of his
employment with ID Systems, including reinstatement by ID Systems.

 

2.           Employee General Release of Released Parties.  In consideration of
the payments and benefits set forth in Section 4 below, Employee hereby
unconditionally and irrevocably releases, waives, discharges, and gives up, to
the full extent permitted by law, any and all Claims (as defined below) that
Employee may have against any of the Released Parties, arising on or prior to
the date of Employee’s execution and delivery of this Agreement to ID
Systems.  “Claims” means any and all actions, charges, controversies, demands,
causes of action, suits, rights, and/or claims whatsoever for debts, sums of
money, wages, salary, severance pay, commissions, bonuses, unvested stock
options, vacation pay, sick pay, fees and costs, attorneys fees, losses,
penalties, damages, including damages for pain and suffering and emotional harm,
arising, directly or indirectly, out of any promise, agreement, offer letter,
contract, understanding, common law, tort, the laws, statutes, and/or
regulations of the State of New Jersey or any other state and the United States,
including, but not limited to, federal and state whistleblower laws, Title VII
of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay
Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the
Employee Retirement Income Security Act (excluding COBRA), the Vietnam Era
Veterans Readjustment Assistance Act, the Fair Credit Reporting Act, the Age
Discrimination in Employment Act (“ADEA”), the Older Workers’ Benefit Protection
Act, the Occupational Safety and Health Act, the Sarbanes-Oxley Act of 2002, the
New Jersey Law Against Discrimination, the New Jersey Family Leave Act, the New
Jersey Civil Rights Act, and the New Jersey Conscientious Employee Protection
Act, as each may be amended from time to time, whether arising directly or
indirectly from any act or omission, whether intentional or
unintentional.   This Section 2 releases all Claims including those of which
Employee is not aware and those not mentioned in this Agreement.  Employee
specifically releases any and all Claims arising out of Employee’s employment
with ID Systems or separation therefrom.  Employee expressly acknowledges and
agrees that, by entering into this Agreement, Employee is releasing and waiving
any and all Claims, including, without limitation, Claims that Employee may
having arising under ADEA, which have arisen on or before the date of Employee’s
execution and delivery of this Agreement to ID Systems. This release does not
include (i) claims for payments or benefits due under Section 4 of this
Agreement, (ii) any claims or rights Employee may have with respect to
indemnification under the Company’s Restated Certificate of Incorporation, as
amended, or the Company’s Restated By-Laws or under any Company directors’ and
officers’ liability insurance, or (iii) claims that cannot be released by law.

 

 

 

 

3.           Representations; Covenant Not to Sue.  Employee hereby represents
and warrants to the Released Parties that Employee has not: (A) filed, caused or
permitted to be filed any pending proceeding (nor has Employee lodged a
complaint with any governmental or quasi-governmental authority) against any of
the Released Parties, nor has Employee agreed to do any of the foregoing; (B)
assigned, transferred, sold, encumbered, pledged, hypothecated, mortgaged,
distributed, or otherwise disposed of or conveyed to any third party any right
or Claim against any of the Released Parties that has been released in this
Agreement; or (C) directly or indirectly assisted any third party in filing,
causing or assisting to be filed, any Claim against any of the Released
Parties.  Except as set forth in Section 11 below, Employee covenants and agrees
that he shall not encourage or solicit or voluntarily assist or participate in
any way in the filing, reporting or prosecution by herself or any third party of
a proceeding or Claim against any of the Released Parties.

 

4.           Payment.  As good consideration for Employee’s execution, delivery,
and non-revocation of this Agreement,

 

(A)         ID Systems shall provide Employee with the payments and benefits set
forth in Section 2 of the Severance Agreement between Employee and ID Systems
dated as of June 29, 2009, payable as set forth therein; except that (i)
one-third of the amount payable under Section 2(a) of the Severance Agreement
shall be paid to Employee on March 31, 2014, (ii) the remaining two-thirds of
the amount payable under Section 2(a) of the Severance Agreement shall be paid
for a period of eighteen (18) months in a series of separate payments in
accordance with the Company’s standard payroll practices commencing with the
first regular payroll date on or immediately following the 60th day after the
Separation Date, and (iii) in lieu of the benefits specified in Section 2(c) of
the Severance Agreement, Employee’s previously granted Company stock options and
restricted stock shall become fully vested and, in the case of stock options,
exercisable on the date on which this Agreement becomes effective and
enforceable; and

 

(B)         Employee’s previously granted Company stock options may be
exercised, in accordance with the terms of the governing option agreements and
plan, for up to four hundred fifty-five (455) days after the Separation Date
(but in no event beyond the stated expiration date of any such stock options),
but shall remain in all other respects subject to the terms of the governing
option agreements and plan.

 

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Employee acknowledges that Employee is not entitled to receive any “Interim
Shares” under Section 2(d) of the Severance Agreement in respect of any
performance share awards previously granted to Employee.

 

Employee acknowledges that Employee is not otherwise entitled to receive the
payments and benefits described in this Section 4 and acknowledges that nothing
in this Agreement shall be deemed to be an admission of liability on the part of
any of the Released Parties.  Employee agrees that Employee will not seek
anything further from any of the Released Parties.

 

ID Systems will, for tax reporting purposes, treat all payments and other
compensation and benefits received under this Agreement as compliant with or
exempt from Section 409A of the Internal Revenue Code of 1986, as amended and
the regulations promulgated thereunder (it being the parties understanding that
no such “additional taxes” are payable with respect thereto); provided that (i)
nothing herein shall be construed as a guarantee that the foregoing amounts will
not be subject to such “additional taxes” and (ii) Employee shall be solely
responsible for any such “additional taxes” imposed on Employee.

 

5.           Who is Bound.  ID Systems and Employee are bound by this
Agreement.  Anyone who succeeds to Employee’s rights and responsibilities, such
as the executors of Employee’s estate, is bound, and anyone who succeeds to ID
Systems’ rights and responsibilities, such as its successors and assigns, is
also bound.

 

6.           Cooperation.    Employee agrees that, within fifteen (15) days of
his execution and delivery of this Agreement, he shall cooperate as reasonably
necessary to effect a transition of his responsibilities.  Employee also agrees
that he will cease from communicating with any current ID Systems employees
(with the exception of the Chief Financial Officer) regarding ID Systems
personnel or other business-related matters.  Employee agrees to reasonably
cooperate in any ID Systems investigations and/or litigation regarding events
that occurred during Employee’s tenure with ID Systems.  ID Systems will
compensate Employee for reasonable expenses Employee incurs in extending such
cooperation regarding investigations and/or litigation, so long as Employee
provides advance written notice of Employee’s request for compensation.

 

7.           Non Disparagement and Confidentiality.  During the eighteen (18)
month period following the date hereof, (i) Employee shall not make any
defamatory or derogatory statements concerning any of the Released Parties and
(ii) ID Systems shall not make any defamatory or derogatory statements
concerning Employee; provided that the foregoing shall not limit either party
from testifying truthfully before any court, tribunal or other legal
proceeding.  Employee acknowledges that ID Systems’ obligations under the
preceding sentence extend only to the ID Systems’ Board of Directors, Chief
Executive Officer and officers that report directly to the Chief Executive
Officer and only for so long as each individual is an employee or director of ID
Systems. Provided inquiries are directed to ID Systems’ Department of Human
Resources, ID Systems shall disclose to prospective employers information
limited to Employee’s dates of employment and last position held by
Employee.  Employee confirms and agrees that Employee shall not, directly or
indirectly, disclose to any person or entity or use for Employee’s own benefit,
any confidential information concerning the business, finances or operations of
ID Systems or its customers; provided, however, that Employee’s obligations
under this Section 7 shall not apply to information generally known in ID
Systems’ industry through no fault of Employee or the disclosure of which is
required by law after reasonable notice has been provided to ID Systems
sufficient to enable ID Systems to contest the disclosure.  Confidential
information shall include, without limitation, trade secrets, customer lists,
details of contracts, pricing policies, operational materials, marketing plans
or strategies, security and safety plans and strategies, project development,
and any other non-public or confidential information of, or relating to, ID
Systems or its affiliates.  Employee also agrees that the amounts paid to
Employee and all of the other terms of this Agreement shall be kept
confidential, unless ID Systems discloses them in a public filing.  Employee
acknowledges that he continues to be bound by the Confidentiality, Assignment of
Contributions and Inventions, Non-Competition and Non-Solicitation Agreement
(the “Covenants Agreement”).

 

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8.           Remedies.  If Employee breaches any material term or condition of
this Agreement or the Covenants Agreement, or any representation made by
Employee in this Agreement was knowingly false when made, it shall constitute a
material breach of this Agreement. In the event of a proven material breach of
this Agreement, Employee agrees to pay all of the Released Parties’ reasonable
attorneys’ fees and other costs associated with enforcing this Agreement.

 

9.           ID Systems Property.  Except with regard to Employee’s cell phone
and computer equipment (which Employee confirms do not contain any confidential
information regarding ID Systems or which Employee will make available to the
Company at Employee’s office in Englewood Cliffs, New Jersey for inspection and
removal of any such confidential information of ID Systems within ten (10)
business days of Employee’s execution of this Agreement), Employee represents
that he has returned all ID Systems property in Employee’s possession, custody
or control, including, but not limited to, all ID Systems equipment, samples,
pass codes, keys, swipe cards, documents or other materials that Employee
received, prepared, or helped prepare.  Employee represents that, to Employee’s
best knowledge after reasonably diligent investigation and inquiry, Employee has
not retained any copies, duplicates, reproductions, computer disks or drives
containing, or stored remotely (either physically or electronically), any
documents or excerpts thereof that are the property of ID Systems.

 

10.         Construction of Agreement.  In the event that one or more of the
provisions contained in this Agreement shall for any reason be held
unenforceable in any respect under the law of any state of the United States or
the United States, such unenforceability shall not affect any other provision of
this Agreement, but this Agreement shall then be construed as if such
unenforceable provision or provisions had never been contained herein or
therein.  If it is ever held that any restriction hereunder is too broad to
permit enforcement of such restriction to its fullest extent, such restriction
shall be enforced to the maximum extent permitted by applicable law.  This
Agreement and any and all matters arising directly or indirectly herefrom or
therefrom shall be governed under the laws of the State of New Jersey, without
reference to choice of law rules.  ID Systems and Employee consent to the sole
jurisdiction of the federal and state courts of New Jersey.  ID SYSTEMS AND
EMPLOYEE HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY IN ANY ACTION
CONCERNING THIS AGREEMENT OR ANY AND ALL MATTERS ARISING DIRECTLY OR INDIRECTLY
HEREFROM AND REPRESENT THAT THEY HAVE CONSULTED WITH COUNSEL OF THEIR CHOICE OR
HAVE CHOSEN VOLUNTARILY NOT TO DO SO SPECIFICALLY WITH RESPECT TO THIS WAIVER.

 

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11.         Acknowledgments.  ID Systems and Employee acknowledge and agree
that:

 

(A)  By entering into this Agreement, Employee does not waive any rights or
Claims that may arise after the date that Employee executes and delivers this
Agreement to ID Systems;

 

(B)  This Agreement shall not affect the rights and responsibilities of the
Equal Employment Opportunity Commission (the “EEOC”) to enforce the ADEA and
other laws, and further acknowledge and agree that this Agreement shall not be
used to justify interfering with Employee’s protected right to file a charge or
participate in an investigation or proceeding conducted by the
EEOC.  Accordingly, nothing in this Agreement shall preclude Employee from
filing a charge with, or participating in any manner in an investigation,
hearing or proceeding conducted by, the EEOC, but Employee hereby waives any and
all rights to recover under, or by virtue of, any such investigation, hearing or
proceeding;

 

(C)  Notwithstanding anything set forth in this Agreement to the contrary,
nothing in this Agreement shall affect or be used to interfere with Employee’s
protected right to test in any court, under the Older Workers’ Benefit
Protection Act, or like statute or regulation, the validity of the waiver of
rights under ADEA set forth in this Agreement; and

 

(D)   Nothing in this Agreement shall preclude Employee from: exercising
Employee’s rights, if any (i) under Section 601-608 of the Employee Retirement
Income Security Act of 1974, as amended, popularly known as COBRA, or (ii) ID
Systems’ pension plan or 401(k) plan, if applicable.

 

12.         Opportunity For Review.

 

(A) Employee represents and warrants that Employee: (i) has had sufficient
opportunity to consider this Agreement; (ii) has read this Agreement; (iii)
understands all the terms and conditions hereof; (iv) is not incompetent or had
a guardian, conservator or trustee appointed for Employee; (v) has entered into
this Agreement of Employee’s own free will and volition; (vi) has duly executed
and delivered this Agreement; (vii) understands that Employee is responsible for
Employee’s own attorney’s fees and costs; (viii) has had the opportunity to
review this Agreement with counsel of Employee’s choice or has chosen
voluntarily not to do so; (ix) understands the Employee has been given
twenty-one (21) days to review this Agreement before signing this Agreement and
understands that he is free to use as much or as little of the 21-day period as
he wishes or considers necessary before deciding to sign this Agreement; (x)
understands that if Employee does not sign and return this Agreement to ID
Systems within 21 days of his receipt, ID Systems shall have no obligation to
enter into this Agreement, Employee shall not be entitled to the payments and
benefits set forth in Section 4 of this Agreement, and the Separation Date shall
be unaltered; and (xi) this Agreement is valid, binding and enforceable against
the parties to this Agreement in accordance with its terms.

 

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(B) This Agreement shall be effective and enforceable on the eighth (8th) day
after execution and delivery to ID Systems by Employee.  The parties to this
Agreement understand and agree that Employee may revoke this Agreement after
having executed and delivered it to ID Systems by so advising ID Systems in
writing no later than 11:59 p.m. on the seventh (7th) day after Employee’s
execution and delivery of this Agreement to ID Systems.  If Employee revokes
this Agreement, it shall not be effective or enforceable, Employee shall not be
entitled to the payments and benefits set forth in Section 4 of this Agreement,
and the Separation Date shall be unaltered.

 

13.         Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.

 

Agreed to and accepted on this 21st day of March, 2014.

 

Witness:     EMPLOYEE:         /s/ Troy Gregory     /s/ Jeffery M. Jagid      
Jeffrey M. Jagid         Agreed to and accepted on this 21st day of March, 2014
              I.D. SYSTEMS, INC.               /s/ Kenneth S. Ehrman       Name:
Kenneth S. Ehrman       Title: President

 

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[SIGNATURE PAGE TO SEPARATION AND GENERAL RELEASE AGREEMENT]

 

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