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Exhibit 10.1
SEPARATION AGREEMENT
This Separation Agreement (the "Agreement") is entered into this 3rd
day of June, 1997, by and between ReSound Corporation ("Company"), and Xxxxxxx
Xxxxxxxxx ("Employee").
WHEREAS, Company and Employee have mutually agreed to terminate the
employment relationship and to establish a consulting arrangement between them;
NOW THEREFORE, the parties agree as follows:
1. Employee's resignation as Executive Vice President and an employee
of Company shall be effective on June 4, 1997 (the "Termination Date").
Employee's resignation from any other positions with any affiliate of the
Company shall also be effective on the Termination Date.
2. Company shall pay Employee One Hundred Eighty Thousand Dollars
($180,000), plus all personal time off and salary accrued as of the Termination
Date, less in all cases applicable withholding taxes (collectively, the
"Termination Payment"), within three (3) business days of the Termination Date.
Company will also repay Employee's loan of Thirty Thousand Dollars ($30,000)
under the Company's 401(k) plan, and will pay Employee an amount equal to the
amount of witholding taxes required to be reported by Company as a result of the
repayment of such loan.
3. Employee acknowledges and agrees that upon payment of the
Termination Payment he will have received all salary, accrued personal time off,
commissions, bonuses, compensation or other such sums due to him. In light
thereof, the parties acknowledge and agree that California Labor Code Section
206.5 is not applicable to the parties hereto. That section provides in
pertinent part as follows:
No employer shall require the execution of any release
of any claim or right on account of wages due, or to
become due, or made as an advance on wages to be earned,
unless payment of such wages has been made.
4. Employee's participation in Company's employee benefit programs,
including without limitation the long term and short term disability, 401(k),
and employee stock purchase plans, shall cease as of the Termination Date,
except as provided in Sections 5 and 6 below. No additional personal time off
shall accrue following the Termination Date.
5. Employee shall continue to receive Company's standard medical,
dental, vision and life insurance benefits, subject to normal payroll
deductions, until the earlier of the end of the Consulting Term (as defined in
Section 7) or the first date Employee becomes covered under another employer's
medical, dental, vision or life insurance program, as the case may be,
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providing substantially the same level of benefits. Employee agrees and
acknowledges that the qualifying event contemplated by COBRA shall be deemed to
be the Termination Date. Employee shall be entitled to continue to use, during
the Consulting Term, the computer, printer and fax provided to him during his
employment with Company.
6. Subject to the provisions of Section 12, vesting of options
granted to Employee under Company's 1988 Stock Option Plan shall continue
vesting pursuant to the normal vesting schedule during the one year period
commencing on the Termination Date, and all vested options shall be exercisable
during such one year period. All options not exercised during this period and
not expiring earlier by their express terms shall expire on the last day of the
period. For purposes of this Section 6, "options" shall include "Repriced
Options" as that term is defined in the Option Pricing Agreement effective April
25, 1997. Employee understands and agrees that as a result of the extension of
the vesting and exercise periods of his unexercised options, such options will
hereafter be treated for tax purposes as nonstatutory options.
7. Employee will make himself available to perform consulting
services for up to twenty (20) hours per month during the period beginning on
the Termination Date and ending twelve (12) months thereafter (the "Consulting
Term"). Employee will be paid a consulting fee of Two Thousand Five Hundred
Dollars ($2,500) per month, payable on the first day of each month (except that
the first payment shall be made on the date the Termination Payment is made).
All consulting assignments shall come from the Chief Executive Officer of
Company or his designee. Company will use reasonable efforts to provide written
notice of consulting assignments for any given month at the beginning of the
month, and to accommodate any other employment Employee may have.
8. Employee acknowledges and agrees: (a) that by reason of his
employment with Company he had, and by reason of his consulting services with
Company he may have, access to inventions, patents, patent applications,
original works of authorship, developments, concepts, improvements, techniques,
know-how, or trade secrets (collectively, "Inventions"), as well as Company's
other confidential information including without limitation financial records,
information about customers and suppliers, marketing plans, product development
plans, business plans and other confidential material and information which
derive independent economic value from not being generally known to the public
or to other persons who could obtain economic value from the disclosure or use
of these materials and information; and (b) that the foregoing constitute trade
secrets and/or confidential information respecting Company's business affairs.
Employee agrees that he will hold all such information strictly confidential
until it becomes publicly known otherwise than by act or collusion of Employee,
and that he will not use such information for any purpose other than providing
consulting services to Company, without the prior written consent of Company.
9. Employee represents that he has made full written disclosure to
Company of all Inventions which he solely or jointly conceived or caused to be
conceived, developed or reduced to practice during his employment with Company.
Employee agrees that he will promptly make full written disclosure to Company of
all Inventions which he solely or jointly conceives, develops or reduces to
practice, or causes to be conceived, developed or reduced to practice
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while performing consulting services pursuant to this Agreement. Employee also
agrees and acknowledges that he: (a) holds and will hold in trust for the sole
right and benefit of Company; (b) will execute patent applications relating to;
and (c) (except with respect to inventions which qualify fully under the
provisions of California Labor Code Section 2870) hereby assigns to Company or
its designee all his right, title, and interest in, any and all Inventions,
whether or not patentable or registrable under copyright or similar laws, which
he solely or jointly conceived or caused to be conceived, developed or reduced
to practice during his employment with Company, or which he solely or jointly
conceives, develops or reduces to practice or causes to be conceived, developed
or reduced to practice while performing a consulting assignment pursuant to this
Agreement.
10. Employee also agrees to disclose to Company any other invention
not covered under Section 9 solely or jointly conceived, developed or reduced to
practice by him which relates or might reasonably be deemed to relate to any
work to be performed pursuant to a consulting assignment under this Agreement.
11. Employee also agrees to notify Company in writing of any other
invention relevant to nonimplantable acoustic hearing devices not covered under
Section 9 solely or jointly conceived, developed or reduced to practice by him
during the Consulting Term. Company shall have the exclusive right, for a period
of sixty (60) days after Employee notifies Company in writing of such invention,
to enter into an exclusive or non-exclusive license or other business
relationship with Employee, on reasonable terms and conditions, with respect to
such invention.
12. During the Consulting Term Employee may engage in other
employment or businesses, provided such activity does not preclude him from
making himself available to provide consulting services to Company as provided
above. In order to protect Company's trade secrets, and to avoid claims that
Employee's consulting services for Company resulted in improper use of a
competitor's trade secrets, Employee agrees that during the Consulting Term he
will not, directly or indirectly, enter into a Restricted Relationship unless he
gives Company sixty (60) days prior written notice of his intent to do so, which
notice shall describe the nature of the proposed relationship. A "Restricted
Relationship" shall be deemed to exist if Employee becomes an employee, officer,
director, 5% or greater shareholder or partner of, or consultant to, any person,
firm, corporation or business that engages in any business activity which
involves the design, manufacture or sale of acoustic hearing devices (excluding
implantable hearing devices) subject, in the United States, to FDA approval
("Direct Competitor"). Upon receipt of notice that Employee intends to enter
into a Restricted Relationship the Consulting Term specified in Section 7 and
Employee's vesting and exercise rights as provided in Section 6 with respect to
options that had not vested as of April 25, 1997, shall terminate, and all such
options that had not expired earlier by their terms shall expire.
Employee also agrees that he will not, at any time before March 15, 1998,
directly or indirectly, have an interest in or business relationship of any kind
with Nokia Telecommunications Oy ("Nokia") or Telefonaktiebolaget LM Ericcson
("Ericcson") or any affiliated company of either (whether as an employee, 5% or
greater shareholder, proprietor, officer, director, agent, 5% or
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greater partner, consultant or otherwise). For purposes of this Section 12,
neither Nokia nor Ericcson shall be considered to be a Direct Competitor.
13. During the Consulting Term Employee will not: (a) divert or
attempt to divert, directly or indirectly, any business of Company; (b) induce
or attempt to induce directly or indirectly, any person to terminate his or her
employment or consulting arrangement with Company or to provide consulting
services involving the design, manufacture, or sale of acoustic hearing devices
to Employee or any other party; or (c) induce or attempt to induce any customer,
supplier, licensor or other business partner of Company to cease doing business
with Company or in any way interfere with the existing business relationship
between any such customer, supplier, licensor or business partner and Company.
14. Employee will make himself available at reasonable times and upon
reasonable notice to give deposition and trial testimony and otherwise to assist
Company's attorneys in the prosecution or defense of legal proceedings involving
Company. During the Consulting Term time spent by Employee on such matters shall
be considered consulting time. Company will make reasonable efforts to
accomodate any other employment Employee may have. Employee shall receive an
additional fee of One Hundred Twenty-Five Dollars ($125) for each hour of time
spent in such matters in excess of twenty hours per month during the Consulting
Term, or for each hour of time spent in such matters after the Consulting Term.
15. Employee represents that he has returned to Company all
confidential or proprietary information of Company, including without limit all
records, data, notes, reports, correspondence, specifications, drawings,
blueprints, sketches, materials, and other documents, and all copies thereof,
and all equipment and other property of Company, except as otherwise permitted
in Section 5 above.
16. Employee will cooperate with Company in filing all reports with
the Securities and Exchange Commission required as a result of his employment
with or resignation from Company.
17. Each party agrees to refrain from (and Company shall cause its
executive officers and directors to refrain from) any disparagement or criticism
of the other party (and in the case of Company, its officers, directors and
employees).
18. The parties agree to use their best efforts to maintain in
confidence the existence and terms of this Agreement, except as may be disclosed
in a press release and except for disclosures required by law or necessary to
effectuate the terms of this Agreement. (Employee understands and acknowledges
that Company may be required to file a copy of this Agreement with the
Securities and Exchange Commission and to disclose its terms in Company's next
proxy statement.) Notwithstanding the foregoing, each party shall be permitted
to discuss the provisions of this Agreement in confidence with its attorneys,
accountants, tax advisors and, in the case of Employee, his spouse. Company will
issue a press release, mutually acceptable to Employee, announcing his
resignation within a reasonable time after the Termination Date but not later
than the date Company issues a press release announcing that it has entered into
a
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development agreement with another company. Employee agrees not to disclose that
he has resigned or is going to resign, until Company makes an announcement
thereof. Notwithstanding the foregoing, Employee shall be permitted to
disclose his resignation to selected individuals if and only to the extent
necessary to enable Employee to solicit new employment, provided any such person
agrees in writing not to disclose such information. Under no circumstances will
Employee make any such disclosure to any Company employee, consultant, customer,
supplier or present or prospective Company business partner prior to the date
Company makes such announcement.
19. Except as otherwise provided in this Agreement, Employee hereby
and forever releases and discharges Company and each of its past and present
directors, shareholders, agents, employees, attorneys, successors and assigns
("Releasees") from any and all claims, causes of action, obligations, and
liabilities of any nature whatsoever, known or unknown, that Employee ever had,
now has or may hereafter claim to have against any of the Releasees relating to
Employee's employment or nonemployment by Company, to the termination of
Employee's employment, to any status, term or condition of such employment, or
any physical or mental harm or distress from such employment or from conditions
of such employment, including without limitation:
(a) any and all claims under federal anti-discrimination
laws (including, but not limited to Title VII of the
Civil Rights Act of 1964 and the Americans With
Disabilities Act);
(b) any and all claims under California statutory or
decisional law pertaining to wrongful discharge,
discrimination, or breach of public policy (including
but not limited to the California Fair Employment and
Housing Act);
(c) any and all claims for employment benefits,
including without limitation, wages, severance payments,
fringe benefits, bonuses, or disability payments, except
for rights accrued through the date of termination of
Employee's employment;
(d) any and all claims of age discrimination under the
Age Discrimination in Employment Act; and
(e) any and all claims relating to Employee's right to
purchase, or the actual purchase of shares of stock of
the Company.
Except as otherwise provided in this Agreement, Company hereby fully and forever
releases Employee, his heirs and executors, of and from any claim, duty,
obligation or cause of action relating to any matters of any kind, whether
presently known or unknown that Company may possess arising from any omissions,
acts or facts that have occurred up until and including the effective date of
this Agreement.
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20. Employee and Company expressly waive all rights under section
1542 of the Civil Code of California which provides:
A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor
at the time of executing the release, which if known by
him must have materially affected his settlement with
the debtor.
Employee and Company understand and agree that they may not know or suspect the
existence of some claims covered by the terms of this Agreement, the nature of
which they have not yet discovered. Future claims covered by the terms of this
release shall be limited to acts or events which have occurred on or prior to
the final date of execution of this Agreement. It is expressly understood and
agreed that the possibility that such unknown claims exist was explicitly taken
into account by Employee and Company in determining the amount of consideration
to be paid or accepted for the giving of this Agreement.
21. Employee and Company covenant and agree that they will never,
individually or with any person or in any way, commence, aid in any way, except
as required by due legal process, prosecute or cause or permit to be commenced
or prosecuted against any Releasee, any action or other proceeding based upon
any claim which is released by the Agreement. This Agreement shall be deemed
breached and a cause of action shall be deemed to have accrued immediately upon
the commencement or prosecution of any action or proceeding contrary to this
Agreement.
In the event of any breach of this Section 21 the aggrieved Releasee shall be
entitled to recover from the breaching party not only the amount of any judgment
which may be awarded against such Releasee, but also all such other damages,
costs and expenses, taxable or otherwise, in preparing the defense of or
defending against, or seeking or obtaining an abatement of or injunction against
any action or proceeding brought in violation of this Section 21, and in
prosecuting any claim, counterclaim or cross-claim based on this Agreement.
22. Employee represents and warrants that no other person had or has
any claims in the claims referred to in Section 19 above; that he has the sole
right and exclusive authority to execute this Agreement; that he has the sole
right to receive the consideration paid therefor; and that he has not sold,
assigned, transferred, conveyed or otherwise disposed of any claim or demand
released by this Agreement. Company represents and warrants that the undersigned
has the authority to act on behalf of Company and to bind Company to this
Agreement.
23. Employee acknowledges that upon breach of the provisions
contained in Sections 8, 9, 10, 11, 12, 13, 14, or 17 of this Agreement, Company
would sustain irreparable harm from such breach, and, therefore, Employee agrees
that in addition to any remedies which the Company may have under this Agreement
or otherwise, Company shall be entitled to obtain equitable relief, including
specific performance and injunctions, restraining Employee from committing or
continuing any such violation of this Agreement. Employee understands and agrees
that upon his material or intentional breach of any provision of this Agreement,
in addition to and without limiting any other remedies the Company may have
under this Agreement or otherwise,
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Employee's benefits as provided in Section 5, his consulting fees as
provided in Section 7, and his option vesting and exercise rights as
provided in Section 6, shall immediately terminate.
24. Each party represents that it has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither party has
relied upon any representations or statements made by the other party which are
not specifically set forth in this Agreement.
25. The parties shall each bear their own costs, attorneys' fees and
other fees incurred in connection with this Agreement.
26. In the event that any provision hereof becomes or is declared by
a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision.
27. This Agreement represents the entire agreement and understanding
between Company and Employee concerning Employee's separation from Company and
supersedes and replaces any and all prior agreements and understandings
concerning Employee's relationship with and compensation by Company.
28. This Agreement may only be amended in writing signed by Employee
and a duly authorized officer of Company.
29. This Agreement shall be governed by the laws of the State of
California.
30. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
31. This Agreement is executed voluntarily and without any duress or
undue influence on the part or behalf of the parties hereto, with the full
intent of releasing all claims. The parties acknowledge that:
(a) They have read this Agreement;
(b) They have had full opportunity to consult with legal
counsel of their own choice or that they have
voluntarily declined to seek such counsel;
(c) They understand the terms and consequences of this
Agreement and of the releases it contains; and
(d) They are fully aware of the legal and binding effect
of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the respective dates set forth below.
RESOUND CORPORATION
By: /s/ Xxxxx Riepenhausen
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Title: President and CEO
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Dated: June 3, 1997
/s/ Xxxxxxx Xxxxxxxxx
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XXXXXXX XXXXXXXXX
Dated: June 3, 1997
