SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS
Exhibit 10.2
SEPARATION AGREEMENT
AND RELEASE OF ALL CLAIMS
AND RELEASE OF ALL CLAIMS
This Separation Agreement And Release Of All Claims (the “Agreement”) is entered into
effective as of July 10, 2006, 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 Xxxx 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 since May 20, 2002, and entered into a written
Employment Agreement with the Company dated May 20, 2002 (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 the termination of his employment.
C. Xx. Xxxxx acknowledges that the severance benefits described in the Agreement, other than
those described in Section 2(a) of this Agreement that are in accordance with Section 9(d) of the
Employment 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 terminates effective July 10, 2006 (the “Termination Date”) and Xx. Xxxxx resigns as an
officer of the Company effective on the Termination Date. This termination is categorized as
“without cause” as defined in Section 9(d) of the Employment Agreement.
2. Severance Benefits.
(a) In accordance with Section 9(d) of the Employment Agreement, the Company agrees to pay Xx.
Xxxxx his basic salary in the amount of $6,923.08 bi-weekly, less all applicable withholding and
FICA taxes, for six (6) months from the Termination Date, 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, 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.
(b) In addition to the severance benefits provided under the Employment Agreement as described
in Section 2(a) above, the Company agrees to pay Xx. Xxxxx an additional $769.23 bi-weekly ($10,000
total), less all applicable withholding and FICA taxes, for six months from the Termination Date,
payable in accordance with the Company’s normal salary payment schedule.
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, except for the Company
provided medical insurance, which will terminate on July 31, 2006. If Xx. Xxxxx elects to continue
his medical and/or dental coverage under COBRA, as an additional benefit, the Company shall
continue to pay the Company’s cost for continuing such coverage at the same rate as for active
employees, for six (6) months, or until he becomes eligible for group medical coverage through
another employer, whichever occurs first. Xx. Xxxxx agrees that
he will
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notify the Company
within one week of his becoming eligible for group insurance coverage through another
employer.
5. Release of Claims. In exchange for the consideration set forth in paragraphs 2(b)
and 4 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. Confidentiality. Xx. Xxxxx agrees to keep the existence and terms of this
Agreement strictly confidential, and further agrees not to disclose or permit disclosure of any
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dollar amount, benefit or other term or information concerning this Agreement, to any other person,
commercial or non-profit entity, print, radio or television news media, or make other
disclosure of any kind whatsoever, except: (a) as required to do so by court order; (b) as
necessary for tax preparation or to respond to inquiries or audits by a federal, state or local
taxing authority; (c) to an immediate family member, such as a spouse (who must be instructed about
the confidentiality requirements and penalties of this Agreement); or (d) to his legal counsel in
connection with his execution of this Agreement.
8. 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.
9. 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.
10. 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.
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11. 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.
12. 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.
13. 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 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), 10 (Remedies; Venue;
Process), 12 (No Waiver), 13 (Saving), 14 (No Limitation), 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.
[INTENTIONALLY LEFT BLANK]
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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 up to twenty-one (21)
days within which to consider this Agreement, that he was advised to consult with legal counsel
prior to signing the Agreement, and that he has the right to revoke this Agreement, in writing to
the Company, for a period not to exceed seven (7) days after the date on which it is signed by him.
The parties hereby acknowledge that if Xx. Xxxxx fails to exercise this right to revoke, this
Agreement will immediately become a binding contract as to its terms. 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/ Xxxx X. Xxxxx
|
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| President and CEO | ||||||||||
Date:
|
July 11, 2006 | Date: | July 11, 2006 | |||||||
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