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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
injuncti
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