SEPARATION AND LEASE AGREEMENT
Exhibit
10.13.1
I,
Xxxxxx
Xxxxx ('Employee," "me" or "I"), understand that my position with American
Technology Corporation (the "Company") was terminated effective October 17,
2005
(the "Separation Date"). The Company has agreed that in exchange for my
signature on this Agreement and the promises and covenants herein, the Company
will pay me severance in the amount of $82,500.00 (Eighty-Two Thousand Five
Hundred Dollars and No Cents). This payment will be made within five (5)
business days after the expiration of the revocation period described below,
and
will be subject to standard withholdings and deductions. The Company will also
pay on my behalf the premiums for continuing health benefits under COBRA, until
the earlier to occur of my being eligible for health care coverage through
my
next employer, or February 28, 2006. The Company will also agree to extend
until
February 15, 2006 the period of time for which the vested portion (as of the
Separation Date) of all Company stock options I hold may be exercised. I
understand that as a result of these extensions, those stock options designated
as incentive stock options (as defined under Section 422(b) of the Internal
Revenue Code) will no longer be treated as such, and will be treated instead
as
non-statutory stock options. I understand that I am not entitled to the
above-described severance benefits unless I sign and do not revoke this
Agreement. I understand and agree that in addition to these severance benefits,
the Company has paid me all of my accrued salary and vacation, to which I am
entitled by law.
In
exchange for the consideration provided to me by this Agreement that I am not
otherwise entitled to receive, I hereby unconditionally and completely release
the Company and its directors, officers, employees, shareholders, partners,
agents, attorneys, predecessors, successors, parent and subsidiary entities,
insurers, affiliates, and assigns from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way related
to events, acts, conduct, or omissions occurring prior to my signing this
Agreement. This general
release includes, but is not limited to: (1) all claims arising out of or in
any
way related to
my
employment with the Company or the termination of that employment; (2) all
claims related to my compensation or benefits from the Company, including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests
in
the Company; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (5) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys' fees, or other claims arising under the federal Civil Rights Act
of
1964 (as amended), the federal Americans with Disabilities Act of 1990, the
federal Age Discrimination in Employment Act of 1967 (as amended) ("AREA"),
and
the California Fair Employment and Housing Act (as amended) and other analogous
state and local laws or regulations.
In
giving
this release, which includes claims which may be unknown to me at present,
I hereby acknowledge that I have read and understand Section 1542 of the Civil
Code of
the
State of California which reads as follows:
1
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.
I
hereby
expressly waive and relinquish all rights and benefits under Section
1542
and any
law or legal principle of similar effect in any jurisdiction with respect to
claims released hereby.
I
acknowledge that I am knowingly and voluntarily waiving and releasing any
rights
I
may have under the federal Age Discrimination in Employment Act of 1967, as
amended
("ADEA"). I also acknowledge that the consideration given for the waiver in
the
above paragraph is in addition to anything of value to which I was already
entitled. I have been advised by this writing, as required by the ADEA that:
(a)
my waiver and release do not apply to any claims that may arise after my signing
of this Agreement; (b) I should consult with an attorney prior to executing
this
release; (c) I have twenty-one (21) days within which to consider this release
(although I may choose to voluntarily execute this release earlier); and (d)
as
set forth in the
following paragraph, I have seven (7) calendar days following the execution
of
this release to
revoke
the Agreement.
Within
three (3) calendar days of signing and dating this Agreement, I agree to deliver
the executed original of this Agreement to Xxxxx X. Xxxxxxx, Sheppard, Mullin,
Xxxxxxx & Hampton LLP,
000
Xxxx
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxxx, XX 00000-0000. However, I and the Company
acknowledge and agree that I may revoke this Agreement for up to seven (7)
calendar days following my execution of this Agreement and it shall not become
effective or enforceable until the revocation period has expired. I and the
Company further acknowledge and agree
that such revocation must be in writing addressed to and received by Xxxxx
X.
Xxxxxxx not later
than midnight on the 7"'
day
following execution of this Agreement by me. Should I revolve
this
Agreement under this paragraph, this Agreement shall not be effective or
enforceable and I will not receive the monies and benefits described
above.
I
acknowledge my continuing obligations under my Employee Nondisclosure Agreement
(attached as Exhibit A). Pursuant to the Employee Nondisclosure Agreement I
understand that among other things, I must not use or disclose any confidential
or proprietary information of the Company and I must immediately return all
Company property and documents (including all embodiments of proprietary
information) and all copies thereof in my possession or control. I acknowledge
that I have acquired no rights by license or otherwise in any "Information"
as
such term is defined in the Employee Nondisclosure Agreement. I also
acknowledge
the Mutual Agreement to Arbitrate (attached as Exhibit B) between myself and
the
Company
dated September 2, 2003, and agree to that Mutual Agreement to Arbitrate's
validity and application to any disputes arising under this Agreement. I also
agree that any arbitration regarding this Agreement shall take place in San
Diego County, California.
I
agree
not to make any statement or take any action which would damage the
reputation or promotion of the Company or its products.
2
If
either
I or the Company commences an action against the other party to
enforce
any of
the terms hereof or because of the breach by such other party of any of the
terms hereof, the prevailing party shall be entitled, in addition to any other
relief granted, to all actual out-of pocket
costs and expenses incurred by such prevailing party in connection with such
action and the enforcement and collection of any judgment rendered therein,
including, without limitation, all reasonable attorneys' fees, consultant fees
and expert witness fees, and a tight to such costs and expenses shall be deemed
to have accrued upon the commencement of such action and shall be enforceable
whether or not such action is prosecuted to judgment.
This
Agreement, including Exhibits A and S
hereto,
constitutes the complete, final and exclusive embodiment of the entire agreement
between the Company and me with regard to the subject matter hereof. I am not
relying on any
promise
or representation by the Company that is not expressly stated herein- This
Agreement may only be modified by a writing signed by both me and a duly
authorized officer of the Company.
I
accept
and agree to the terms and conditions stated above:
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10/20/05
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/s/
Xxxxxx Xxxxx
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Date
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Xxxxxx
Xxxxx
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12/21/2005
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AMERICAN
TECHNOLOGY CORPORATION
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Date
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By:
/s/ Xxxx Xxxxxx
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Title:
President
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3
