Exhibit 10.1


 


SEVERENCE AGREEMENT FOR


KENNETH F. STERN


 


This Settlement
and Release Agreement (the “Agreement”) is entered into this 13th day of
July 2004 (the “Effective Date”) between Axsys Technologies, Inc. (the
“Company”) and Kenneth F. Stern (the “Employee”).


 


NOW, THEREFORE, in
consideration of the promises and covenants contained herein, the Company and
the Employee, hereby agree as follows:


 


1.               Termination of
Employment.  The Employee’s
employment with the Company and its Affiliates (as hereinafter defined) was
terminated on July 13, 2004, (the “Termination Date”).  The Employee hereby resigns, as applicable,
from all of his positions as an employee, officer and director of the Company
and/or its Affiliates.


 


2.            Payments
and Benefits.


 


(a)          On
the Effective Date, the Company shall pay to the Employee his accrued but
unpaid base salary as well as any earned unused vacation as of the Termination
Date.  The Company shall also make a
prorated bonus payment to the Employee of approximately $55,000, based on 100%
successful completion of specific objectives and EBAIT performance to budget,
based on actual YTD results as of July 13, 2004.  Bonus payout will be made within (30) thirty
days of the Termination Date.


 


(b)         During
the period commencing on the Termination Date and ending on the earlier of (i)
the first anniversary of the Termination Date or (ii) the Employee’s
commencement of full-time employment with a subsequent employer (the
“Continuation Period”), the Company shall continue to pay the Employee his base
salary at the rate in effect on the Termination Date, provided however that the
amount of salary payments to be made to you shall be reduced dollar for dollar
by any salary (including any deferred portion thereof) you receive or earn from
any other employer during the Continuation Period.  Such base salary will be paid in accordance
with the Company’s normal payroll practice. The term “employer” shall include
any person or entity from whom the Employee or Veritas Consulting Group, LLC
receives more than $10,000 of income, during the Continuation Period.  The Company shall also continue at its
expense to provide the same group medical and dental coverage (except for
coverage under the Company’s Executive Supplement Plan) that it then provides
to similarly situated active employees of the Company during the Continuation
Period.  This Company-paid coverage is
conditioned on neither the Employee, his spouse, nor his dependents electing
COBRA continuation coverage (“continuation coverage”
within the meaning of Section 602 of the Employee Retirement Income
Security Act of 1974, as amended) under the Company’s Executive Supplement
Plan, and if any of them waive such coverage, not revoking such waiver within
the election period provided by the Company for electing coverage.  The Employee shall promptly notify the
Company upon his commencement of any subsequent employment.


 


(c)          The
Company shall amend the Employee’s outstanding stock options to accelerate the
exercisability of all non-vested options so that the Employee will have 88,800
stock options vested and exercisable as of the Termination Date.  The Company will also extend the exercise
period of such options to the end of business on the date (90) ninety days
following the expiration of the Continuation Period.


 


All applicable
withholdings will be made for the payments provided for in this Section 2.


 


3.               Release.  In consideration of the benefits set forth in
Section 2 of this Agreement, the sufficiency of which is hereby
acknowledged by the Employee, the Employee, with the intention of binding
himself and his heirs, executors, administrators and assigns, does hereby
release, remise, acquit and forever discharge the Company, its Affiliates and
their respective present and former officers, directors, executives,
shareholders, agents, attorneys and employees, (collectively the “Released
Parties”), of and from any and all claims, actions, causes of action, demands,
rights, damages, debts, sums of money, accounts, financial obligations, suits,
expenses, attorneys’ fees and liabilities of whatever kind or nature in law,
equity or otherwise, including, without limitation, arising under the laws of
any jurisdiction, whether accrued, absolute, contingent, unliquidated or
otherwise and whether now known or unknown, suspected or unsuspected, which the
Employee, individually or as a member of a class, now has, owns or holds, may
hereafter have, own or hold or has at any time heretofore had, owned or held,
against any Released Party arising out of any act or omission occurring, or
state of facts existing, on or prior to the time of execution of this Agreement


 


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including, without limitation, (i) any claims in any way connected
with the Employee’s employment relationship with the Company and/or its
Affiliates, or the termination thereof, and (ii) any claims for severance
or vacation or other benefits, unpaid wages, salary or incentive payment,
breach of contract, wrongful discharge, impairment of economic opportunity, defamation,
intentional infliction of emotional harm or other tort, or employment
discrimination under any applicable federal, state or local statute, provision,
order, rule, regulation or other law of any jurisdiction, excepting only those
obligations of the Company to the Employee set forth in Section 2 of this
Agreement.  For purposes of this
Agreement, “Affiliates” shall mean the Company’s subsidiaries and any other
entity, directly or indirectly, controlled by, controlling or under common
control with the Company.


 


This release is
for any relief no matter how called, including but not limited to, wages, back
pay, front pay, compensatory damages, liquidated damages, punitive damages,
damages for pain or suffering, costs, attorneys fees and expenses and claims to
be reinstated to employment with the Company.


 


The Employee
acknowledges and agrees that this Agreement is not to be construed in any way
as an admission of any liability whatsoever by any Released Party under any
federal or state statute or the principals of common law or any other law, rule
or regulation of any jurisdiction, any such liability having been expressly
denied.


 


The Employee
acknowledges and agrees that he has not, with respect to any act or omission
occurring, or state of facts existing, on or prior to the time of execution of
this Agreement, filed any complaints, charges or lawsuits, or taken similar
action, against any of the Released Parties with any governmental agency or any
court or tribunal or similar body or authority.


 


4.               Voluntary Agreement;
Attorney Consultation; Revocation.  


 


The Employee represents that he has carefully read
this Agreement, that he has been advised to consult with an attorney, that he
knows and understands the contents of this Agreement, that he executes this
Agreement knowingly and voluntarily as his own free act and deed, that the
terms of this Agreement including, but not limited to, those of Section 3
are totally satisfactory and thoroughly understood by him, and that this
Agreement was entered into without fraud, duress or coercion.


 


5.               Confidentiality;
Return of Company Property.  The
Employee agrees and understands that in the Employee’s position with the
Company and performance of his responsibilities, duties and services for the
Company and/or its Affiliates, the Employee has been exposed to and received
information relating to the confidential affairs of the Company and/or its
Affiliates, including but not limited to technical information, intellectual
property, business and marketing plans, strategies, customer information, other
information concerning the products, promotions, development, financing,
expansion plans, business policies and practices of the Company and/or its
Affiliates, and other forms of confidential information, trade secrets and/or
confidential information in the nature of trade secrets of the Company and/or
its Affiliates (“Confidential Information”).  The Employee acknowledges and represents that
as of the time of execution of this Agreement the Employee has not disclosed,
and agrees that at any time thereafter the Employee will not disclose,
Confidential Information, either directly or indirectly, to any third person or
entity without the prior written consent of the Company and/or its Affiliates,
as appropriate.  This confidentiality covenant
has no temporal, geographical or territorial restriction. The Employee agrees
that during the Continuation Period, and for one year thereafter, the employee
will not work for nor consult with any person or entity that competes with the
Company, where that person or entity would benefit from Confidential
Information as a result. The Employee will also be available from time to time
to provide support to the Company at no charge. 
Any out of pocket expenses incurred by the Employee, as a result of such
support will be reimbursed within (15) days.


 


Except for his
laptop computer, palm pilot and home fax machine, which the Employee will be
permitted to retain, the employee has returned to the Company and/or its
Affiliates, as appropriate, all property, keys, computer equipment, software
data files, notes, memoranda, writings, lists, files, reports, customer lists,
correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical
data and any other tangible product or document which has been produced by,
received by or otherwise submitted to the Employee during or prior to his
employment with the Company and, as applicable, all copies, in whatever medium,
thereof.  Any such data or property
(including copies thereof) stored on computer, software data files or other
equipment belonging to the Employee (or to which the Employee otherwise has
lawful access after the date hereof) shall be deleted by the Employee
immediately following execution of this Agreement.


 


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6.               Non-Disparagement.  The Employee agrees not to make any written
or oral statement that could disparage the goods, products, services,
employees, officers, directors, shareholders or reputation, of the Company or
its Affiliates.  The Company agrees that
it shall use its best efforts to cause its officers and directors not to make
any written or oral statement that could disparage the Employee.


 


7.               Successors.  This Agreement shall be binding upon and
shall inure to the benefit of each of the parties hereto and their respective
heirs, personal representatives, successors and assigns.


 


8.               Entire
Agreement; Waiver; and Severability. 
This instrument contains the entire agreement of the parties relating to
the subject matter hereof, and it replaces and supersedes any prior agreements,
written or oral, between the parties relating to said subject matter.  No modifications or amendments of this
Agreement shall be valid unless made in writing and signed by the parties
hereto.  The waiver of the breach of any
term or of any condition of this Agreement shall not be deemed to constitute
the waiver of any other breach of the same or any other term or condition.  If any provision of this Agreement is held
invalid or unenforceable, the remainder of this Agreement shall nevertheless
remain in full force and effect, and if any provision is held invalid or
unenforceable with respect to particular circumstances, it shall nevertheless
remain in full force and effect in all other circumstances.


 


9.               Governing Law.  This Agreement shall be governed by the laws
of the state of Connecticut, without regard to the choice of law principles
thereof.


 


 


	
   

  	
  AXSYS TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Lynn M. Kerley

  
	
   

  	
   

  	
  Title:  Corporate Human
  Resources Manager

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Kenneth F. Stern

  	
  Date

  
					



 


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