EX-10.4
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ex10-4.htm
SETTLEMENT AGREEMENT AND RELEASE
Exhibit
10.4
SETTLEMENT
AGREEMENT AND RELEASE
This
Settlement Agreement and Release (this “Agreement") is made and entered into as
of the date it is executed by both parties, between Xxxxxx Xxxxxxx (“Employee”)
and ClearOne Communications, Inc. (“ClearOne”), who shall be referred to as the
“Parties”, or individually as a “Party”.
DEFINITIONS
1. The
term
“Employee” shall mean Employee and his or her heirs, assigns, and legal
representatives.
2. The
phrase "ClearOne Released Parties" shall mean ClearOne and any and all business
units, committees, groups, and their present, former or future parents,
affiliates, subsidiaries, employees, agents, directors, owners, officers,
attorneys, successors, predecessors, and assigns.
3. The
"Released Claims" shall mean any type or manner of suits, claims, demands,
allegations, charges, damages, or causes of action whatsoever in law or in
equity under federal, state, municipal or local statute, law, ordinance,
regulation, constitution, or common law, whether known or unknown, which
Employee has ever had or now has against the ClearOne Released Parties. This
includes but is not limited to any action for costs, interest or attorney's
fees, which arise in whole or in part from Employee's employment relationship
with ClearOne, from the ending of that relationship, and from any other conduct
by or dealings of any kind between Employee and the ClearOne Released Parties,
which occurred prior to the execution of this Agreement. This also includes
but
is not limited to any and all claims, rights, demands, allegations and causes
of
action for alleged wrongful discharge, breach of alleged employment contract,
breach of the covenant of good faith and fair dealing, termination in violation
of public policy, intentional or negligent infliction of emotional distress,
fraud, misrepresentation, defamation, interference with prospective economic
advantage, failure to pay wages due or other monies owed, failure to pay
pension
benefits, conversion, breach of duty, interference with existing economic
relations, punitive damages, retaliation, discrimination on the basis of
age in
violation of the Age Discrimination and Employment Act of 1967, as amended
("ADEA"), negligent employment, negligent supervision, Claims under Title
VII of
the Civil Rights Act of 1964, claims under the Xxxxxxxx-Xxxxx Act of 2002,
harassment or discrimination on the basis of sex, race, color, citizenship,
religion, age, national origin, or disability, or other protected classification
under the federal, state, municipal or local laws of employment, including
those
arising under the common law, and any alleged violation of the Employee
Retirement Income Security Act of 1974 ("ERISA"), the Fair Labor Standards
Act
("FLSA"), the Occupational Safety and Health Act ("OSHA"), and any other
law.
Release Claims do not include any claims that arise in the future out of
events
that occur after the date of this Agreement.
RECITALS
A. WHEREAS,
the Parties desire to settle and compromise the Released Claims and to enter
into this Agreement.
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COVENANTS
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, and in consideration of the mutual covenants
set
forth in this Agreement, the Parties agree as follows:
1. Employee’s
employment with ClearOne shall end effective August 11, 2006.
2. Notwithstanding
the provisions of section 1, above, after his or her execution of this Agreement
and upon the expiration of the revocation period described in paragraph 22,
ClearOne will make a one-time severance payment to Employee in the net amount
of
$9,230.79.
3. In
addition, the Employee must elect from one of the following two options.
The
election shall be made by circling either Option 1 or Option 2 and placing
the
Employee’s initials next to the circle. The options are as follows:
A.
Option 1.
Employee retains Employee’s vested stock options and upon the expiration of the
presently existing employee, executive officer and director trading blackout
(which trading blackout will expire when ClearOne becomes current in its
periodic filings with the Securities and Exchange Commission), Employee will
have 90 days in which to exercise said vested options; or
B.
Option 2.
Employee will receive an additional net cash payment of $5,000.00 payable
upon
the expiration of the revocation period described in paragraph 22. All
unexercised stock options acquired by Employee during his employment with
ClearOne, whether vested or unvested, shall immediately be deemed cancelled.
Employee further agrees that all of his rights, entitlements, and benefits
under
the 1998 ClearOne Stock Option Plan, including any agreements entered into
in
relation to the foregoing plans, are hereby terminated and
cancelled.
4. Employee
acknowledges that the above sums constitute consideration for Employee’s
execution and adherence to the provisions of this Agreement. Employee
understands and agrees that he or she would not receive the amounts specified
herein except for his or her execution of this Agreement and the fulfillment
of
the promises contained herein. The ClearOne Released Parties make no
representations whatsoever to Employee concerning the taxable status of the
payment of the settlement amount. Employee assumes full and sole responsibility
for any tax consequences related to the settlement amount. Employee understands
and agrees to indemnify and hold harmless the ClearOne Released Parties from
any
taxes, assessments, withholding obligations, penalties or interest payments
that
they may incur at any time by reason of demand, suit or proceeding brought
against them for any taxes or assessments or withholdings arising out of
the
payment of the settlement amount. Employee acknowledges he or she has been
fully
compensated by the terms of this Agreement for releasing the Released
Claims.
5. Employee
represents that he or she has not filed and there is not pending with any
governmental agency or any state or federal court, any other claims, complaints,
charges, or lawsuits of any kind against the ClearOne Released Parties.
6. Employee
hereby waives and releases each and every one of the ClearOne Released Parties
from liability with respect to the Released Claims. Employee acknowledges
that
he or she understands he or she is prohibited from any further relief on
the
Released Claims. Specifically and without limitation, Employee understands
and
agrees that he or she is waiving and forever discharging the ClearOne Released
Parties from any and all claims, causes of action or complaints he or she
may
have or has ever had, which have or may have arisen prior to the execution
of
this Agreement, and Employee understands that the Release Claims specifically
includes age discrimination claims under the Age Discrimination in Employment
Act (ADEA). However, employee understands that he or she can bring a suit
limited to challenging the enforceability of the waiver and release of any
age
discrimination claims under the ADEA.
7. Employee
represents and warrants that he or she is the sole owner of the Released
Claims,
that the Released Claims have not been assigned, transferred, or disposed
of in
fact, by operation of law or in any manner whatsoever, and that he or she
has
the full right and power to grant, execute and deliver the full and complete
releases, undertakings, and agreements herein contained.
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8. Employee
agrees that the existence and terms of this Agreement shall be and remain
confidential. Employee acknowledges that this confidentiality provision is
an
essential element of the consideration he provides to ClearOne for entering
into
this Agreement. Therefore, Employee agrees not to discuss or describe any
information concerning ClearOne, the circumstances of the ending of Employee's
employment with ClearOne or the existence of the terms of this Agreement
to
anyone, except as required by law or permitted herein.
9. Employee
reaffirms and agrees to observe and abide by the terms of the Confidentiality
and Invention Assignment Agreement (“Confidentiality Agreement”) he or she
signed with ClearOne. Employee certifies and represents that he or she has
fully
complied with all terms of the Confidentiality Agreement to date and has
returned to ClearOne all records or documents or other property of ClearOne
within his or her possession. Employee understands that his or her receipt
of
the consideration provided under this Agreement is expressly conditioned
on
Employee’s compliance with the obligations in this paragraph.
10. Employee
agrees not to disparage, orally or in writing, ClearOne, its officers,
employees, management, operations, products, designs, or any other aspects
of
ClearOne’s affairs to any third person or entity.
11. Employee
agrees that for one year following Employee’s separation from employment with
ClearOne, Employee shall not, directly or indirectly, in any capacity (including
but not limited to, as an individual, a sole proprietor, a member of a
partnership, a stockholder, investor, officer, or director of a corporation,
an
employee, agent, associate, or consultant of any person, firm or corporation
or
other entity) hire any person from, attempt to hire any person from, or solicit,
induce, persuade, or otherwise cause any person to leave his or her employment
with ClearOne.
12. Employee
agrees that for one year following Employee’s separation from employment with
ClearOne, Employee shall not, directly or indirectly, in any capacity, solicit
the business of any customer of ClearOne except on behalf of ClearOne, or
attempt to induce any customer of ClearOne to cease or reduce its business
with
ClearOne; provided that following Employee’s separation from employment with
Company he or she may solicit a customer of ClearOne to purchase goods or
services that do not compete directly or indirectly with those then offered
by
ClearOne.
13. Any
breach of Employee’s obligations under this Agreement shall, in addition to all
other remedies available to ClearOne, result in the immediate release of
ClearOne from any obligations it has to provide further payments under this
Agreement. In addition, ClearOne may pursue such additional legal or equitable
remedies as may be available to it.
14. This
Agreement does not constitute and shall not be construed as an admission
by
ClearOne of any breach of any alleged agreements or duties, or of any wrongdoing
toward Employee or any other person, including any alleged breach of contract
or
violation of any federal, state, or local law, regulation, or ordinance.
ClearOne specifically disclaims any liability to Employee for wrongdoing
of any
kind.
15. The
Parties agree that this Agreement may be used in evidence in a subsequent
proceeding in which any of the Parties alleges a breach of this
Agreement.
16. The
parties shall attempt in good faith to resolve any dispute arising out of
or
relating to this Agreement by negotiation. The parties recognize that
irreparable injury to ClearOne will result from a material breach of this
Agreement, and that monetary damages will be inadequate to rectify such injury.
Accordingly, notwithstanding anything to the contrary, ClearOne shall be
entitled to one or more preliminary or permanent orders: (i) restraining
or
enjoining any act which would constitute a material breach of this Agreement,
and (ii) compelling the performance of any obligation which, if not performed,
would constitute a material breach of this Agreement, and to attorney’s fees in
connection with any such action
17. Employee
affirms he or she is not relying on any representations or statements made
by
the ClearOne Released Parties which are not specifically included in this
Agreement. Employee acknowledges he or she has been informed in writing by
this
Agreement that he or she has the right to consult with legal counsel regarding
this release, that he or she has been advised by this Agreement that he or
she
should consult with legal counsel and confirms Employee has consulted with
counsel to the extent desired concerning the meaning and consequences of
this
Agreement.
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18. This
Agreement constitutes the entire agreement between the Parties with relation
to
the subject matter hereof. Any prior negotiations or correspondence relating
to
the subject matter hereof shall be deemed to have merged into this Agreement
and
to the extent inconsistent herewith shall be deemed to be of no force or
effect.
19. This
Agreement may be executed in any number of counterparts, each of which when
executed and delivered shall be an original, but all of such counterparts
shall
constitute one and the same instrument.
20. This
Agreement shall be interpreted and enforced in accordance with the laws of
the
State of Utah, and/or when applicable, of the United States. By entering
into
this Agreement, the Parties submit themselves and their principals individually
to personal jurisdiction in the courts in the State of Utah and agree that
Utah
is the only appropriate venue for any action brought to interpret or enforce
any
provision of this Agreement, or which may otherwise arise under or relate
to the
subject matter of this Agreement.
21. The
provisions of this Agreement are severable, and if any part of it is found
to be
unenforceable, the other parts and/or paragraphs shall remain fully valid
and
enforceable. Should any provisions of this Agreement be determined by any
court
or administrative body to be invalid, the validity of the remaining provisions
is not affected thereby and the invalidated part shall be deemed not a part
of
this Agreement. Any court or administrative body shall construe and interpret
this Agreement as enforceable to the full extent available under applicable
law.
This Agreement shall survive the termination of any arrangements contained
in
it.
22. Employee
acknowledges and understands this is a legal contract and that he or she
signs
this Agreement knowingly, freely and voluntarily and has not been threatened,
coerced or intimidated into making the same. Employee acknowledges that he
or
she has had ample and reasonable time to consider this Agreement and the
effects
and import of it and that he or she has fully dwelt on it in his or her mind
and
has had such counsel and advice, legal or otherwise, as Employee desires
in
order to make this Agreement. EMPLOYEE, BY SIGNING THIS AGREEMENT, ACKNOWLEDGES
IT CONTAINS A RELEASE OF KNOWN AND UNKNOWN CLAIMS. Employee has read and
fully
considered this Agreement and understands and desires to enter into it. The
terms of this agreement were derived through mutual compromise and are fully
understood. Employee acknowledges that he or she has been offered at least
twenty one (21) days to consider the impact of this Agreement and its release
of
his or her rights to bring suit against the ClearOne Released Parties and
after
due consideration has decided to enter into this Agreement at this time.
Employee further understands that he or she may revoke this Agreement for
a
period of up to seven (7) days following signature and execution of the same.
This Agreement shall not become effective or enforceable until the revocation
period has expired. Any revocation within this period must be signed and
submitted in writing to the undersigned representative of ClearOne and must
state, "I hereby revoke my acceptance of the Agreement." Employee understands
that if he or she revokes this Agreement, he or she is not entitled to receive
the consideration provided by this Agreement.
If
Employee does not accept such terms and conditions within 21 days, this offer
shall expire at that
time.
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the dates
set
forth below.
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EMPLOYEE
/s/
Xxxxxx Xxxxxxx
Xxxxxx
Xxxxxxx
Date:
August 24, 2006
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CLEARONE
COMMUNICATIONS, INC.
/s/
Zee Hakimoglu
Zee
Hakimoglu
President
and Chief Executive Officer
Date:
August 31, 2006
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