Exhibit 10.54
Severance and Release Agreement
dated October 20, 2006 between HEI, Inc. and Mack V.
Traynor III
SEVERANCE AND RELEASE
AGREEMENT
In exchange for the
promises and covenants contained herein, HEI, Inc.
(“Company”) and Mack V. Traynor III
(“Employee”) hereby agree as follows:
1.
Definitions. We intend all words used in
this Severance Agreement (“Agreement”) to have their
plain meanings in ordinary English. Specific terms we use in this
Agreement have the following meanings:
A.
Employee , as used herein, shall include the
undersigned Employee and anyone who has obtained any legal rights
or claims through the undersigned Employee.
B.
Company , as used herein, shall at all times mean
HEI, Inc., its parent company, its subsidiaries, successors and
assigns, its affiliated and predecessor companies, their successors
and assigns, their affiliated and predecessor companies and the
present or former directors, shareholders, officers, employees,
representatives and agents (including, without limitation, its
accountants and attorneys) of any of them, whether in their
individual or official capacities, and the current and former
trustees or administrators of any pension or other benefit plan
applicable to employees or former employees of Company, in their
official or individual capacities.
C.
Employee’s Claims , as used herein, means all
of the rights Employee individually and on behalf of his spouse,
heirs, administrators, executors, assigns has now to any relief of
any kind from Company whether or not Employee now knows about those
rights, arising out of his employment with Company and member of
the Board of Directors, and his resignation of employment and as a
member of the Company’s Board of Directors, including, but
not limited to, claims arising under the Age Discrimination in
Employment Act, as amended by the Older Worker Benefit Protection
Act; the Minnesota Human Rights Act; the Americans with
Disabilities Act; Title VII of the Civil Rights Act of
1964, as amended; claims under the Family Medical Leave Act; the
Fair Labor Standards Act of 1938, as amended; the Worker Adjustment
and Retraining Act, the Sarbanes Oxley Act; the Minnesota
Whistleblower Statute; or other federal, state or local civil
rights laws; claims for breach of contract; fraud or
misrepresentation; defamation, intentional or negligent infliction
of emotional distress; breach of covenant of good faith and fair
dealing; promissory estoppel; negligence; wrongful termination of
employment; claims pursuant to that certain Employment Agreement
dated April 19, 2004 between Employee and Company; claims for
any form of compensation, including without limitation, claims for
severance, salary, bonus, and vacation pay; and any other claims
for unlawful employment practices.
2.
Resignation. Company and Employee agree
that Employee will voluntarily resign his employment as Chief
Executive Officer and President of the Company and as a member of
Company’s Board of Directors effective Friday,
October 20, 2006 and the Company has accepted his resignation
effective Friday, October 20, 2006.
3.
Company’s Obligations and Severance Agreements.
In consideration for Employee’s promises
contained herein, specifically including, but not limited to the
release of all claims by Employee and Employee’s promises to
refrain from: (i) competing with the Company;
(ii) soliciting the Company’s clients and employees; and
(iii) disclosing confidential information and trade secrets of
Company, Company agrees as follows:
A. Severance
Payment. Company agrees to pay to Employee a
Severance payment of $145,000 (“Severance Payment”).
This Severance Payment will be payable in one lump sum after the
expiration of the Rescission Periods, as hereinafter defined. The
Severance Payment shall be subject to federal and state withholding
taxes and FICA.
B. Stock
Options/Restricted Shares. Company acknowledges
and agrees that Employee shall have a period of 90 days from
the date of this Agreement to exercise the following stock option
agreements:
(i) Option
agreement dated March 19, 2003.
(ii) Option
agreement dated December 19, 2001.
(iii) Option
agreement dated July 1, 2005.
Company and Employee agree that all
remaining stock options and restricted shares have not vested and
may be cancelled.
C. Medical
Insurance Benefits and Benefits. Company,
pursuant to federal and state law, will provide, for a period of
eighteen (18) months following the effective date of
Employee’s termination (“COBRA Period”), a
continuation of the group medical insurance coverage previously
provided to Employee by Company. Through April 19, 2007,
Company will pay that portion of the premium for group medical
insurance that it paid during Employee’s employment. After
April 19, 2007, Employee will be required to pay for such
benefits for the remainder of the COBRA Period, should Employee
elect to continue COBRA coverage. Company shall also, through
April 19, 2007, maintain and pay for all the benefits provided
under the April 19, 2004 Employment Agreement between Employee
and Company, a copy of which is attached hereto as
Exhibit A to this Agreement, including dental insurance
and supplemental life insurance coverage.
D. Computer,
Blackberry and Cellular Phone. Employee shall
be allowed to retain possession of the Company computer (once the
Company has securely erased all Company documentation), blackberry
and cellular phone assigned to him during his employment with the
Company. The Company will continue service on the Company
blackberry and cellular phone assigned to Employee until
October 31, 2006.
E.
Non-Disparagement. Company agrees that
its officers, directors and senior management shall not disparage
or defame Employee in any respect.
F.
Remedies. Company acknowledges that any
breach of any of the promises set forth in Section 3.E. will
cause Employee irreparable harm for which there is no adequate
remedy at law and Company therefore consents to the issuance of any
injunction in favor of
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