Document:

Exhibit 10.1

 

 

 

 

 

 

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
JEFFREY J. RITCHEY (“Employee”) and PRO-DEX, Inc., a Colorado corporation (“the
Company”).

RECITALS

WHEREAS, Employee has been employed by
the Company in the positions of Treasurer, Chief Financial Officer, and
Secretary.  

WHEREAS, Employee and the Company are
parties to that certain December 5, 2007 letter agreement signed by
Employee and by Mark P. Murphy on behalf of the Company, the provisions of
which letter agreement the parties intend to supersede through their entry into
this Agreement; and

WHEREAS, Employee’s employment with the
Company will separate on October 5, 2010 (the “Separation Date”), and the
Company and Employee mutually desire to settle fully and finally all
obligations to Employee that the Company may have of any nature whatsoever, as
well as any asserted or unasserted claims that Employee may have arising out of
his employment with the Company or the separation of that employment.

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, unpaid bonuses earned, unreimbursed
business expenses, together with any accrued but unused vacation pay, less state
and federal taxes and other required withholding, for the period from the last
regular pay day through the Separation Date.  Employee acknowledges and agrees
that upon the receipt of the foregoing payment, the Company will have paid to
him all salary, bonuses, benefits, accrued vacation pay, or other consideration
owed to him at any time and for any reason through the Separation Date. 
Employee further represents and agrees that no further sums are or were due and
owing Employee either by the Company or by any individual or entity related to
the Company in any way, except as provided for in this Agreement.  

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.  

 

 

	   	 	
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3.         Special Additional Compensation. 
In consideration of this Agreement, and provided that none of the provisions of
Paragraph 4 has been violated, and that the revocation period referenced
in Paragraph 13 shall have expired without this Agreement having been
revoked, the Company also will do the following:  

A.      Continue to pay Employee, over a period of six months from the
Separation Date, in regular installments on the Company’s regular payroll pay
dates for exempt employees, a gross amount equal to Employee’s last regular
bi-weekly salary until the total gross payments have reached the amount of Eighty-Five
Thousand Dollars ($85,000), less applicable legal deductions and withholdings
(the “Separation Agreement Payment”).    

B.      As additional consideration for the promises and obligations contained
herein, and provided Employee elected coverage under the Company’s group health
insurance program prior to the Separation Date and makes a timely election for
continued coverage pursuant to COBRA, the Company further agrees to pay the
Company’s portion of the monthly premiums for such continued coverage under the
Company’s group health insurance program for a period from the Separation Date
through April 30, 2011 (provided Employee remains eligible for COBRA
continuation coverage).  Thereafter, if applicable, continuation coverage
pursuant to COBRA will be available to Employee at Employee’s sole expense, and
Employee will be responsible for the full COBRA premium for any remaining
months of the COBRA coverage period made available pursuant to applicable law.

C.      Provide Employee with an outplacement services package to assist with
Employee’s transition into a new position.

4.         Return of Company Property. 
Employee understands that, except as otherwise
provided by this Paragraph 4, 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 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, credit cards, and office machines, and also including
any electronic or tangible documents or files relating to the Company, except
for (i) such personnel and compensation records provided to Employee during the course of his employment, and
(ii) the following tangible items which were assigned for Employee’s use prior
to the Separation Date, and which the Company has agreed Employee may retain thereafter:
cell phone and cell phone number, laptop computer and docking station (but
excluding Company data files and documents, which Company shall be entitled to
remove from the computer and any related storage devices).

5.          Health Insurance Benefits. Employee is entitled to continue his health
insurance benefits at his own expense (except as otherwise provided in Paragraph
3) and for such period as may be permitted by law.

6.          Complete Release of Claims by Employee. 

 

	   	 	
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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, expressly including, but
not limited to, PRO-DEX, Inc., 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 Effective Date of 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 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.

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 occurring on or
before the Effective Date of this Agreement that arise out of or are in any
manner related to Employee’s employment with the Company 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 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.

 

	   	 	
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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.

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 December 5, 2007
letter agreement).  

8.          General Nature of Release;
Claims Not Released. 
The Release 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 any claims
that may arise from the terms of this Agreement, or any claims which may not be
released as a matter of law.  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.”

 

	   	 	
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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 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 all other agreements previously
made with the Company with respect to the protection of the Company’s intellectual
property and confidential information, and that all such agreements shall
survive the parties’ entry into this Agreement to their maximum lawful extent
except as specifically superseded by this Agreement.  

12.        Twenty-One Day Consideration
Period.  This Agreement is being given to Employee
on October 7, 2010.  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.  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.  

 

 

	   	 	
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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 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.

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, 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 the December 5, 2007 letter agreement between Employee
and the Company), other than (a) the Confidentiality, Unfair Competition,
Non-Recruiting, and Assignment of Inventions Agreement signed by Employee on
August 4, 2010, and (b) the Indemnification Agreement between the parties,
dated October 24, 2008, each of which agreements shall survive the execution of
this Agreement and the separation of Employee’s employment. 

 

	   	 	
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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.         Acknowledgment by Company of No Known Claims Against Employee. 
The Company represents and acknowledges that it knows of no claims it has
against Employee, and hereby confirms that the Company has no present intention
of pursuing any claim or claims against Employee.  

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, on the dates set forth below.

 

	
  Dated:
	October 7, 2010

  	
  
	/s/ Jeffrey
  J. Ritchey                        
	

  Jeffrey
  J. Ritchey

  
	Employee

  
	
   

  Dated:
  October 7, 2010

  	
  PRO-DEX, INC. 

  
	/s/ Mark P. Murphy                        
	

	By: Mark P. Murphy  

	

	Its: Chief
  Executive OfficerEXHIBIT 10.2

 

 

 

 

 

 

EXHIBIT
10.2

Offer Letter to Mr. Hurwitz

 

August 23, 2010

 

 

Mr. Harold (Hal) Hurwitz

21 Lexington

  Irvine, CA  92620

 

 

Dear Hal:

 

On
behalf of Pro-Dex, Inc., I am pleased to
extend our offer of employment to you for the position of Vice President and
Chief Financial Officer under the terms and conditions described in this
letter.

 

Date of Hire

Your
employment with Pro-Dex, Inc. will begin on a date to be mutually determined,
but no later than September 30, 2010.  Should your start date occur later than
September 15, 2010, we will enter a consulting arrangement with you at the same
base salary from September 15th through your start date, but no
later than September 30th.

 

Base Compensation

Your
rate of pay will be $7,115.38, payable bi-weekly on every other Thursday, for
an annual compensation of $185,000.  This is a full-time, exempt position.

 

Bonus Compensation

You,
will be eligible to participate in the Annual Incentive Plan which is the
company’s executive performance bonus program..  Your initial target bonus
award under this plan will be 25% of your base salary.  Your actual incentive
under this plan is dependent upon achievement of the Company operating income
targets and your individual goals and the terms of the plan. Upon its
implementation, you will also be eligible to participate in the Company’s Long
Term Incentive Plan with a target award that has not yet been determined.  You
will not be eligible to participate in the company wide bonus plan.

 

Equity Grants

You will be eligible to
participate in any program of stock option or other equity grants which the
Company may from time to time provide key employees.  Such
grants are made under the terms and provisions of the First Amended and
Restated 2004 Stock Option Plan in varying amounts to individual participants
based upon their perceived impact upon the long term success of the Company and
are made at the sole and absolute discretion of the Board, generally at the
first Board meeting following the filing of the Company’s Form 10-K for the
previous fiscal year.   Subject to the foregoing, your initial grant under this
program will be 20,000 options to purchase the Company’s common shares at the
average of the high and low prices for the Company’s shares on the grant date
and which will vest ratably over the 36 month period following the grant
date.   The options will have a term of ten years from the grant date and to
the maximum extent permissible under the relevant Internal Revenue Service
regulations, will be made as Incentive Stock Options.  

 

Associate Benefits

You
will be eligible for health benefits the first of the month following one (1)
month of full-time active employment.  Assuming a September 18th
start date, you will become eligible to participate in health benefit programs
starting November 1, 2010.  These benefits include health, dental, vision, and
life insurance.  Optional benefits include supplemental insurance products,
flexible medical and dependent care savings plans, and health savings accounts.

 

 

 

 

 

 

 

In
addition, associates may enroll in the Company’s 401(k) program quarterly,
beginning January 1, April 1, July 1 and October 1.  Following the completion
of six months of employment, Pro-Dex matches associate 401(k) contributions at
a rate of $0.25 per dollar up to a total employee contribution of 5% of an
associate’s base salary.  Further details of such benefits will be explained in
your Orientation Meeting on your first day of employment.  

 

You
should note that, if you were previously covered for medical insurance and you
obtain a certificate of insurance from your previous employer, HIPAA
regulations prohibit restrictions of pre-existing conditions when you enroll
with a new employer provided that you attach a copy of the certificate to your
enrollment form.

 

You
will receive Paid Time Off (PTO) in accordance with the plan applicable to
other senior executives in the company.

 

Reporting Relationship

This
position is based in Irvine, California and reports to the Chief Executive
Officer. 

 

Employment Relationship

Your employment will be “at-will.”  This means that
you or Pro-Dex, Inc. may decide to change the status of your employment or
terminate the employment relationship at any time, for any reason or no reason,
with or without cause or prior notice.  Your “at-will” employment relationship
may not be changed except in writing signed by the CEO of Pro-Dex, Inc. with
the approval of the Board of Directors.

 

Employment Contingency

This offer of employment and/or your employment by Pro-Dex,
Inc. is contingent upon the fulfillment of items listed in Exhibit A.

 

Agreements with Prior Employers

By
your signature below, you represent to us that, as of such signature date, you
are not bound by any proprietary or confidentiality agreements or covenants
with any prior employers, customers, clients, etc. that would have a bearing on
or create a conflict of interest with the position you are being offered with
our Company.

 

 

* * * * * * * * * * * * * * *

 

Hal,
I want you to know how excited I am to have you join the Pro-Dex team.  I am
confident that we will enjoy a mutually rewarding relationship.  If you have
any questions, please let me know.

 

If
the terms of this letter are agreeable to you, please sign in the space
provided below indicating your understanding of and agreement to the provisions
of this offer of employment and return it to me as soon as possible.

 

 

 

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Sincerely,

 

 

 

Mark P. Murphy

Chief Executive Officer

 

 

I
have read the above terms of this offer of employment and I accept and agree to
them.

 

 

/s/ Harold (Hal) Hurwitz                  ________________

Harold (Hal) Hurwitz                                  Date

 

 

Enclosures

 

 

 

 

 

 

 

 

 

 

 

 

 

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