May 24, 2010 Michael Schlehr Re: Separation Agreement Dear Mike:
May 24,
2010
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Dear
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This
letter will summarize the agreement between you and IEC Electronics Corp. (the
“IEC” or “Company”) with respect to all issues relating to your cessation of
employment with the Company. This letter supersedes the severance
arrangements set forth in your original letter of employment.
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1)
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General. The
intent of this letter agreement is to mutually, amicably and finally
resolve all issues and claims surrounding the employment relationship
between you and IEC, and the termination of that relationship effective
May 28, 2010.
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2)
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Separation
Pay:
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a)
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Salary Continuation Payments
and Other Consideration. IEC will provide to you the
following amounts and benefits in consideration of the agreements
contained herein.
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b)
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Salary. In
accordance with your Offer letter dated January 11, 2008 the Company will
provide you with severance payments for a period of six (6)
months. If at any time between the date severance payments
begin and during the severance period you receive compensation for
services rendered in any capacity all such guaranteed compensation shall
be offset against the severance due from the Company You agree to promptly
notify the Company of all such compensation. Compensation
received per the Consulting Agreement (Appendix A) will not IEC will be
considered as compensation under this agreement. The Company
will continue to provide you with medical insurance during the severance
period upon the same terms and conditions as immediately prior to
termination of employment, subject to any changes to IEC’s coverage
generally provided to IEC’s employees. Such coverage shall
continue until the earlier of (1) the expiration of the Severance Payment
Period, or (2) you become eligible for medical coverage through another
employer.
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c)
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Consulting Agreement (Appendix
A). The Company agrees to pay you $100,000 for duties as
an Independent Consultant, subject to the provisions contained in the
Independent Consulting Agreement. The Consulting Agreement will
be for a period of six months following your last date of
employment.
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i)
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The
Company will allow you to retain permanently your laptop, provided you
agree that after the consulting period all company information is
destroyed. The Company requests confirmation that the
information has been destroyed.
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ii)
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The
consulting agreement and payment is contingent upon receipt of a fully
executed copy of the Separation Agreement and your full cooperation as
determined solely by the Company.
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d)
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Other
Benefits. Except as specifically provided in this
Agreement, all other employee benefits shall be discontinued as of May 28,
2010, and except as specifically provided in this Agreement, you shall not
be entitled to any other compensation, bonuses or perquisites from
IEC. In
addition, IEC will not contest any claim for unemployment
benefits.
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3)
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Stock Options/Restricted
Stock. You have been granted incentive stock options
that as of the date of this agreement are not vested, which by their terms
will be forfeited upon your termination. You have been granted
Restricted Stock, which by their terms will forfeit upon your
termination.
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4)
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Release. You
agree not to disparage IEC in any manner and not to disclose any
confidential information or trade secrets, which you learned while
employed by IEC. You agree that the terms set forth in this
letter agreement are in full satisfaction of all obligations IEC may have
to you. In return for the consideration set forth above, you
agree irrevocably and unconditionally to release IEC and any related
companies, and all their predecessors, successors, employees, officers,
directors, stockholders, representatives, assigns, agents, insurers, and
employee benefit programs and the trustees, administrators, fiduciaries
and insurers of such programs from any and all claims, demands, and
liabilities whatsoever you may have, or claim to have, arising out of any
act or omission which occurred prior to the date you sign this agreement,
including any attorneys’ fees. This includes a release of any
rights or claims you may have under the Age Discrimination in Employment
Act, Older Workers’ Benefit Protection Act, Fair Labor Standards Act,
Employee Retirement Income Security Act, Title VII of the Civil Rights Act
of 1964, the Equal Pay Act, The Americans with Disabilities Act, New York
State Human Rights Law, New York Labor Laws or any other federal, state,
or local laws or regulations which prohibit employment discrimination,
restrict any employer’s right to terminate employees or otherwise regulate
employment. This also includes a release by you of any claims
for breach of contract, wrongful discharge, and all claims for alleged
physical or personal injury, emotional distress relating to or arising out
of your employment with IEC or the termination of that employment, and all
claims under the Employee Retirement Income Security Act. In
return for this severance package being accorded to you under this
agreement, it is your intent to provide IEC the broadest release of claims
and liabilities that may be provided by law. This agreement shall not be
construed as an admission by IEC that it has acted wrongfully with respect
to your employment or termination from employment. This
release shall not be affected by the full or partial invalidity of any
other provision of this agreement. In the event you bring a
claim which is determined to be covered by the terms of this release, you
will be required to reimburse the defending parties for their reasonable
attorneys’ fees in connection with the defense of such
claims. The only exceptions to this paragraph are suits brought
solely to test the validity of the release and waiver herein and/or suits
brought to enforce the terms of this Agreement, and nothing in this
Agreement shall be construed to prohibit you from participating in any
Equal Employment Opportunity (“EEOC”)/State Division of Human Rights
investigation or proceeding and/or from filing a charge with the EEOC, to
the extent such a right is protected by law. You acknowledge
that you shall not be entitled to any legal or equitable relief
(including, but not limited to, monetary relief) from any such suit or
EEOC proceeding or charge.
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5)
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Indemnification: The
Company agrees to indemnify and hold you harmless from any and all
liability, loss, suits, claims, damages, costs, judgments and expenses
(including attorney’s fees and costs of litigation) which in whole or in
part result from, or arise out of, or are claimed to result from or to
arise out of any acts, errors or omissions in connection with the
performance of your duties under this Agreement, provided that any such
acts, errors or omissions are not willful or negligent. If a
claim by a third party is made or threatened against you, and if you
intend to seek indemnity, you shall notify the company in writing of such
claim within ten (10) days of notice of such claim. The
Company, at its sole option, shall have the authority to undertake,
conduct and control, through counsel of its own choosing and at its
expense, the settlement or defense of the claim, and Consultant shall
cooperate with it in connection therewith. You shall not,
without the prior written consent of the Company, settle or compromise any
claim or consent to the entry of any judgment. In addition, the
Company will immediately begin proceedings to remove your name from any
licenses or contracts that may cause rise to any liability or claims as
indicated in the foregoing
paragraph.
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6)
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You
acknowledge that the Company advised you that you had twenty-one (21) days
in which to consider whether you should sign this Release; and
advised you that if you signed this Release, you would be given seven (7)
days following the date in which you signed the Release to revoke it, and
that the Release would not be effective until after this seven (7) day
period had lapsed.
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7)
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Full
Satisfaction. You agree that the benefits provided in this
separation agreement are in full satisfaction of any and all obligations
of IEC. You also agree that the benefits received under this agreement are
in excess of what you would otherwise be entitled to. Any
breach by you of the provisions of this agreement will permit IEC to
discontinue any benefits under this agreement and seek recovery of any
such benefits previously paid, without any effect on the full release of
claims provided under this
agreement.
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8)
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Nondisclosure
Statement. You agree not to disclose any information
regarding the substance of this agreement and the circumstances of the
separation of service to anyone, except as required by law, or a spouse,
medical professional, counselor, or to an attorney or accountant with whom
you choose to consult regarding consideration of this
agreement. You also specifically agree not to initiate contact
with any IEC customers or have discussions with any third parties
regarding the details of your separation or this agreement. Any violation
of this confidentiality provision will entitle IEC to recover any benefits
paid to you, stop future payments and benefits under this agreement, plus
reasonable attorney’s fees incurred in obtaining a court order enjoining
such disclosures. IEC agrees not to disclose any information
regarding the substance of this agreement and the circumstances of the
separation of service to anyone, except as required by law or in a legal
proceeding, or to a professional retained by
it.
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9)
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Entire
Agreement. This agreement constitutes and contains the entire agreement
and understanding concerning your employment, separation from employment,
and the other subject matters addressed herein between the parties and
supersedes and replaces all prior negotiations and prior agreements
proposed or otherwise, whether written or oral, concerning the subject
matter hereof.
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10)
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Acknowledgment. This
letter agreement is the entire agreement between you and IEC with respect
to your termination of employment with IEC. You acknowledge and
agree that you have been advised of your right to seek the advice of an
attorney, that you fully understand the terms of this agreement, that you
are not executing this agreement in reliance on any promises,
representations, or inducements other than those contained herein; that
you have entered into this agreement knowingly, voluntarily, and without
threat, coercion, or duress.
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PLEASE
READ THIS AGREEMENT CAREFULLY, IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.
Very
truly yours,
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/s/
▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇
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Director
of Human Resources
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I hereby
accept and agree to the foregoing terms and conditions for my termination of
employment with IEC Electronics Corp.
Dated:
June 9, 2010
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/s/
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APPENDIX
A
INDEPENDENT
CONSULTING AGREEMENT
This
agreement is entered into and shall become effective on the 24th day of
May, between IEC Electronics Corp. (“the Company”) and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (“the
Consultant”).
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1.
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Subject
to the terms and conditions of this Agreement, the Company hereby engages
the Consultant as an Independent Consultant to perform services in
connection with the support of IEC
Electronics.
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2.
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Term
of Contract: Unless terminated earlier as provided in this
Agreement, this Agreement expires on November 26,
2010.
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3.
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Compensation: Conditioned
upon the full cooperation of consultant as determined solely in the
discretion of the Company:
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a.
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Consultant
will be paid a fixed fee of $100,000 payable in two
installments.
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i.
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$25,
000 to be paid upon the filing of the 10Q for fiscal
Q3
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ii.
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$75,000
available to be paid after November 26, 2010, date to be determined by ▇▇.
▇▇▇▇▇▇▇.
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▇.
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Duties: Consultant
will act as an independent consultant to assist in management
consultations and the transition of ▇▇. ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇ into the
organization. Consultations when required will be
either in person or by phone.
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In
addition to the above, Consultant also agrees to with the
following:
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a.
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Support
the finance department with the completion of the 10Q for quarter ending
June 25, 2010.
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b.
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Support
the Company with the completion and filing of the 10K for fiscal year end
2010.
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c.
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Support
the Company with Crane working capital reconciliation issues and any
resulting legal issues.
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d.
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Not
to solicit for employment, or advise or recommend to any other person that
they solicit for employment any senior executive, key manager or member of
IEC or its affiliates.
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5.
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Confidentiality: Consultant
acknowledges and agrees that Consultant will be exposed to Confidential
Information, knowledge or data and Consultant further acknowledges and
agrees that such Confidential Information, knowledge or data is
proprietary to and a valuable trade secret of the Company and that any
disclosure or unauthorized use thereof will cause irreparable harm and
loss to the Company. Consultant agrees that Consultant will
not, directly or indirectly, disclose or authorize anyone else to disclose
or use or make known for Consultant’s or another’s benefit any
Confidential Information, knowledge or data of the Company whether or not
patentable or copyrightable, in any way acquired by
Consultant. For purposes of this provision, Confidential
information shall include, without limitation, plans, procedures,
products, processes, trade secrets, software programs, formulas,
inventions, improvements, techniques, data, know-how, strategies,
financial data, client names, customer lists, files, lists of suppliers,
price lists, and other information with respect to the Company’s business
or received from third parties, subject to a duty on the Company’s part to
maintain the confidentiality of such information or with respect to its
suppliers, clients or potential clients, whether prepared by me or
others.
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6.
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Termination: The
Company or the Consultant may terminate this Agreement at any
time.
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7.
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Independent
Consultant: This Agreement shall not render the Consultant an
employee, partner, agent of or joint venture with the Company for any
purpose. The Consultant is and will remain an independent
Consultant in his relationship to the Company. The Company
shall be not responsible for withholding taxes with respect to the
Consultant’s compensation hereunder and shall be issued a Form
1099. The Consultant represents and warrants that the
Consultant shall pay in a timely manner all federal and state income taxes
and FICA in connection with the compensation the Consultant receives from
the Company, and shall indemnify and hold the Company harmless from any
liability, loss, or costs arising out of (1) a breach of this warranty, or
(2) a determination by any government agency that the Consultant is an
employee rather than an independent Consultant of the
Company. The Consultant shall have no claim against the Company
hereunder or otherwise for vacation pay, sick leave, retirement benefits,
worker’s compensation, health or disability benefits, or employee benefits
of any kind.
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8.
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Modification
or Amendment: No amendment, change or modification of the
Agreement shall be valid unless in writing signed by the parties
hereto.
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9.
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Entire
Understanding: This Agreement constitutes the entire
understanding and agreement of the parties, and any and all prior
agreements, understandings, and representations are hereby terminated and
canceled and are of no further force and
effect.
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10.
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Indemnification: The
Company agrees to indemnify and hold harmless the Consultant from any and
all liability, loss, suits, claims, damages, costs, judgments and expenses
(including attorney’s fees and costs of litigation) which in whole or in
part result from, or arise out of, or are claimed to result from or to
arise out of any acts, errors or omissions of the Consultant in connection
with the performance of Consultant’s duties under this Agreement, provided
that any such acts, errors or omissions are not willful or
negligent. If a claim by a third party is made or threatened
against Consultant, and if Consultant intends to seek indemnity,
Consultant shall notify the company in writing of such claim within ten
(10) days of notice of such claim. The Company, at its sole
option, shall have the authority to undertake; conduct and control,
through counsel of its own choosing and at its expense, the settlement or
defense of the claim, and Consultant shall cooperate with it in connection
therewith. The Consultant shall not, without the prior written
consent of the Company, settle or compromise any claim or consent to the
entry of any judgment.
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11.
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Governing
Law and Venue. This Agreement shall be construed and enforced
in accordance with the laws of New York State. Any action or
proceeding brought by either party against the other arising out of or
related to the Agreement shall be brought only in a state court of
competent jurisdiction located in the county of ▇▇▇▇▇, New York, or the
Federal District Court for the Western District of New York located in
Monroe County, and the parties hereby consent to the personal jurisdiction
of said courts.
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IN
WITNESS WHEREOF the undersigned have executed this Agreement as of the day and
year first written above.
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By:
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/s/
▇▇▇▇ ▇▇▇▇▇
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By:
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇
▇▇▇▇▇, Director of Human Resources
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June
9, 2010
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June
9, 2010
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Date
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Date
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