EXHIBIT 10.1
SEPARATION AGREEMENT
AND RELEASE OF ALL CLAIMS
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This Separation Agreement And Release Of All Claims (the "Agreement")
is entered into effective as of September 1, 2005, by APPLIED INNOVATION INC., a
Delaware corporation, hereinafter referred to, together with all its
predecessors and past, present and future assigns, successors, affiliates,
subsidiary organizations, divisions, and corporations, and including all past,
present and future officers, directors, shareholders, employees, and agents of
the same, individually and in their respective capacities, as the "Company," and
XXXXXX X. XXXXX, hereinafter referred to, together with his heirs, executors,
administrators, successors, assigns and other personal representatives as "Xx.
Xxxxx," under the following circumstances:
A. Xx. Xxxxx has been employed by the Company for several years
and entered into a written Employment Agreement with the Company dated February
23, 2004 (the "Employment Agreement").
B. The Company has proposed, and Xx. Xxxxx has agreed, to certain
severance benefits in connection with his resignation as an officer and
termination of employment.
C. Xx. Xxxxx acknowledges that the severance benefits described
in the Agreement include benefits to which he is not otherwise entitled.
NOW THEREFORE, the parties agree, in consideration of the provisions
contained herein, as follows:
1. Termination of Employment; Resignation from Office. Xx.
Xxxxx'x employment with the Company will terminate effective September 9, 2005
("the Termination Date"), and Xx. Xxxxx resigns as an officer of the Company
effective on the Termination Date.
2. Severance Benefits. The Company agrees to pay Xx. Xxxxx his
basic salary (annual rate of $140,000), less all applicable withholding and FICA
taxes, from the Termination Date through December 30, 2005, payable in
accordance with the Company's normal salary payment schedule; provided, however,
any such payments will immediately end if (i) Xx. Xxxxx violates any of his
obligations under Sections 6 (Confidential Information), 7 (Inventions) or 8
(Noncompetition and Nonsolicitation) of the Employment Agreement, as amended by
this Agreement, which obligations continue following the Termination Date; or
(ii) the Company, after the Termination Date, learns of any facts about Xx.
Xxxxx'x performance or conduct that would have given the Company Cause, as
defined in Section 9(b) of the Employment Agreement, to terminate his employment
for Cause. Section 8(b)(iii) of the Employment Agreement is hereby amended to
provide that for a period following Employment Separation through December 30,
2005, instead of 12 months following Employment Separation, Xx. Xxxxx shall not
own, manage, operate, join, control, be employed by, consult with or participate
in the ownership, management, operation or control of, or be connected with (as
a stockholder, partner, or otherwise), any business, individual, partner, firm,
corporation, or other entity that competes or plans to compete, directly or
indirectly, with the Company, its products, or any division, subsidiary or
affiliate of the Company; provided, however, that Xx. Xxxxx'x "beneficial
ownership," either individually or as a member of a "group" as such terms are
used in Rule 13d of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), of not more than two
percent (2%) of the voting stock of any publicly held corporation, shall not be
a violation of Section 8(b)(iii) of the Employment Agreement.
3. Reference. The Company agrees to provide a neutral job
reference for Xx. Xxxxx stating the following information: hire and termination
dates and last position held.
4. Benefit Programs. Xx. Xxxxx understands and agrees that all
benefit programs he participates in as a result of his employment with the
Company have (except to the extent vested and nonforfeitable by law) ceased
effective upon the Termination Date.
5. Release of Claims. In exchange for the consideration set forth
in paragraph 2 and other valuable consideration, the adequacy of which Xx. Xxxxx
expressly acknowledges, Xx. Xxxxx hereby releases and forever discharges the
Company, and all of its affiliates, parent corporations, subsidiaries,
divisions, predecessors, successors, and assigns, and all of their respective
directors, officers, agents and employees, personally and in their
representative and official capacities, from any and all local, state and
federal lawsuits, claims, remedies, damages, demands, discrimination suits or
charges, costs and attorneys fees, and any causes of action of whatever type or
nature, whether legal or equitable, whether known, unknown or unforeseen. The
rights, liabilities, claims and actions released, waived and extinguished here
by Xx. Xxxxx, and with respect to which Xx. Xxxxx covenants not to xxx, shall
include but not be limited to those arising or which might arise under Title VII
of the Civil Rights Act of 1964; any and all claims under the Civil Rights Act
of 1866; any and all claims under the Americans With Disabilities Act of 1990;
any and all claims under the Age Discrimination in Employment Act, as amended,
including the Older Workers Benefit Protection Act of 1990; any and all claims
under Family Medical Leave Act of 1993; any and all claims under the Employment
Retirement Income Security Act; any and all claims for attorneys fees; any and
all contract, tort or common law claims, included but not limited to, any and
all claims for compensation or bonuses under any of the Company's compensation
plans; and any and all claims under any federal, state or local statute or
ordinance or under any federal, state or local common law.
6. No Admission. The parties agree that this Agreement is entered
into solely because of a desire of the parties to amicably resolve all matters
between them, and nothing contained herein, and no actions undertaken by the
Company with respect to this Agreement, shall ever be treated as, or claimed or
construed to be, an admission by the Company of any fault, wrongdoing,
liability, injury or damages.
7. Company Property. Xx. Xxxxx agrees that all information,
files, records, materials and property furnished to him by or on behalf of the
Company in the performance of his employment for the Company and all
information, files, records, materials and property prepared or maintained by
him in the performance of his employment for the Company are and
shall remain the sole and exclusive property of the Company. Xx. Xxxxx
represents and agrees that all such information, files, records, materials and
property, company identification card, business cards and any Company credit
cards and all keys to any Company property or premises have been turned over to
the Company.
8. Cooperation. Xx. Xxxxx agrees to cooperate fully with the
Company in providing information and assistance to make whatever transitions the
Company deems necessary on any Company matters or projects in which he is or may
have been involved. Xx. Xxxxx also agrees to not make any disparaging statements
about the Company, including but not limited to, its management, staff, products
or services. Xx. Xxxxx further agrees that if future litigation or claims are
asserted against or by the Company, its assets, employees or officers regarding
any matter that arose during his employment and relate to him or his area of
responsibility, that he will cooperate fully in supplying thorough and accurate
information for the Company's investigation, defense or prosecution of such
claims or litigation.
9. Binding Agreement. This Agreement is binding on and will inure
to the benefit of both parties and the parties' respective heirs, executives,
administrators, personal representatives, successors and assigns. Each party
acknowledges and represents that they have the authority to enter into and bind
themselves to the terms and conditions of this Agreement.
10. Saving. In the event that one or more of the provisions of
this Agreement or portions thereof are determined to be illegal or
unenforceable, all remaining provisions will remain valid and in full force and
effect to the fullest extent permitted by law.
11. Governing Law. This Agreement is entered into in the State of
Ohio, enforceable by either party, and will be construed and interpreted in
accordance with Ohio law. This Agreement also may be used as the basis for an
injunction action in the event a breach or threatened breach of its
confidentiality provision occurs.
12. Entire Agreement. This Agreement contains the entire agreement
between the parties and no additional promises have been made or relied upon and
this Agreement supersedes all previous agreements between the parties with
respect to the employment of Xx. Xxxxx; provided, however, this Agreement does
not supersede, modify or affect, except as to the modification of Section
8(b)(iii) of the Employment Agreement set forth in Section 2 of this Agreement,
Sections 6 (Confidential Information), 7 (Inventions), 8 (Noncompetition and
Nonsolicitation), 9(b) (Termination by Company for Cause), 9(c) (Termination by
You), 9(d) (Termination by Company Without Cause), 9(f) (Suspension of
Noncompetition Period), 9(g) (No Limitation of Obligations), 10 (Remedies;
Venue; Process), 12 (No Waiver), 13 (Saving), 14 (No Limitation), 15 (Governing
Law), and 17 (Further Acknowledgement) of the Employment Agreement, which
sections of said agreement remain in full force and effect and Xx. Xxxxx
continues to be fully bound by the terms thereof. The terms of this Agreement
are contractual and not a mere recital and the parties intend this Agreement to
be a substituted contract, and not an executory accord.
By their signature below, the parties acknowledge that they have read
the foregoing Agreement, and fully understand it. Xx. Xxxxx acknowledges that he
was given adequate time within which to consider this Agreement and that he was
advised to consult with legal counsel prior to signing the Agreement. We now
voluntarily sign this Agreement effective as of the date first written above,
signifying our agreement and willingness to be bound by its terms.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first above stated.
Applied Innovation Inc.
By: /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxx
President and Chief Executive Officer
