Exhibit 10.41
RELEASE AND SETTLEMENT
AGREEMENT
This RELEASE AND SETTLEMENT
AGREEMENT (“Agreement”) is made and entered into this
18 day of October 2006, by and between:
1. Alan J. Ballard
(“Ballard”), an individual who resides in Topsham,
Maine,
2. American Technology
Corporation, (“ATC”), a corporation organized under
the laws of California with its principal executive offices in San
Diego, California. [Collectively, Ballard and ATC shall be referred
to herein as the “Parties.”]
WHEREAS, ATC formerly employed
Ballard in ATC’s government military division;
WHEREAS, ATC terminated
Ballard’s employment in May 2006;
WHEREAS, in connection with
Ballard’s employment, and the termination of that employment,
various disputes (“the Disputes”) have arisen between
the Parties, including but not limited to the lawsuit filed by
Ballard against ATC which is currently pending in Sagadahoc County
Superior Court, captioned Alan J. Ballard v. American Technology
Corporation , CV-06 (“the Litigation”);
WHEREAS, the Parties desire to
resolve the Disputes, and all issues raised by or that could have
been raised by the Disputes, without the further expenditure of
time or the expense of contested litigation. Additionally, the
Parties desire to resolve any known or unknown claims as more fully
set forth below. For these reasons, the Parties have entered into
this Agreement;
WHEREAS, ATC expressly denies any
violation of any federal, state or local statute, ordinance, rule,
regulation, policy, order or other law. ATC also expressly denies
any liability to Ballard. This Agreement is the compromise of
disputed claims and nothing
contained herein is to be construed as an
admission of liability on the part of the parties hereby released,
by whom liability is expressly denied. Accordingly, while this
Agreement resolves all issues referenced herein, it does not
constitute an adjudication or finding on the merits of the
allegations in the Disputes and it is not, and shall not be
construed as, an admission by ATC of any violation of federal,
state or local statute, ordinance, rule, regulation, policy, order
or other law, or of any liability alleged in the
Disputes;
NOW THEREFORE, the parties agree to
settle said claims pursuant to the terms of this Agreement, as set
forth below.
1. Payment to Ballard
In consideration of and in return
for the promises and covenants undertaken by ATC and Ballard herein
and the releases given by Ballard and ATC herein:
a. ATC shall pay Ballard the total
gross sum of $90,000.00 (the “Payment”). The Payment
shall be allocated as follows:
1) $36,250 shall be allocated as
severance pay and will be subject to standard tax withholdings and
customary payroll deductions. ATC will issue to Ballard a W-2
statement for this portion of the Payment.
2) The balance of $53,750.00 shall
be allocated as non-wage damages, including but not limited to
emotional distress, damages to Ballard’s reputation,
attorneys’ fees and costs. ATC shall issue a 1099 form for
this portion of the Payment.
b. The Payment shall be made by
check payable to Ballard.
c. The Payment shall be delivered to
Ballard within seven (7) days of the Effective Date of this
Agreement.
d. Ballard agrees that the Payment
made to Ballard under this Agreement constitutes adequate
consideration and is more than ATC is required to pay Ballard under
its plans, policies, and procedures. The Parties confirm Ballard
would not be entitled to the Payment set forth in this
Section 1 if Ballard did not sign this Agreement.
2. Mutual Releases
a. Except for any rights or claims
created by this Agreement, in consideration of and in return for
the promises and covenants undertaken herein by ATC, and for other
good and valuable consideration, receipt of which is hereby
acknowledged: Ballard, for himself and anyone who may claim through
him, including but not limited to his heirs, successors, and
assigns, does hereby irrevocably and unconditionally remise,
release, and forever discharge ATC, and all ATC’s current and
former agents, employees, representatives, attorneys, insurers,
related entities and the predecessors, successors and assigns of
all of them, and all persons acting by, through, under or in
concert with any of them (hereinafter collectively referred to as
“Releasees”), of and from any and all actions, causes
of action, suits, liabilities, defenses, claims, demands and
expenses (including all costs and attorneys’ fees) of any
nature whatsoever, both at law and in equity, whether known or
unknown, which have accrued on or prior to the date of this
Agreement, including specifically but not exclusively and without
limiting the generality of the foregoing, any and all claims,
demands, grievances, agreements, obligations and causes of action,
known or unknown, suspected or unsuspected: (1) arising out of
or in any way connected with the Disputes; (2) arising out of
Ballard’s employment with ATC; (3) arising out of or in
any way connected with the Litigation; or (4) arising out of
or in any way connected with any claim, loss, damage or injury
whatever, known or unknown, suspected or unsuspected, resulting
from any act or omission by or on the part of the Releasees, or any
of them, committed or omitted on or before the Effective Date
hereof.
b. Except for any rights or claims
created by this Agreement, in consideration of and in return for
the promises and covenants undertaken herein by Ballard, and for
other good and valuable consideration, receipt of which is hereby
acknowledged: ATC, for itself and anyone who may claim through it,
including but not limited to its heirs, successors, and assigns,
does hereby irrevocably and unconditionally remise, release, and
forever discharge Ballard, and all Ballard’s current and
former agents, employees, representatives, attorneys, insurers,
related entities and the predecessors, successors and assigns of
all of them, and all persons acting by, through, under or in
concert with any of them (hereinafter collectively referred to as
“Releasees”), of and from any and all actions, causes
of action, suits, liabilities, defenses, claims, demands and
expenses (including all costs and attorneys’ fees) of any
nature whatsoever, both at law and in equity, whether known or
unknown, which have accrued on or prior to the date of this
Agreement, including specifically but not exclusively and without
limiting the generality of the foregoing, any and all claims,
demands, grievances, agreements, obligations and causes of action,
known or unknown, suspected or unsuspected: (1) arising out of
or in any way connected with the Disputes; (2) arising out of
Ballard’s employment with ATC; (3) arising out of or in
any way connected with the Litigation; or (4) arising out of
or in any way connected with any claim, loss, damage or injury
whatever, known or unknown, suspected or unsuspected, resulting
from any act or omission by or on the part of the Releasees, or any
of them, committed or omitted on or before the Effective Date
hereof.
The mutual releases under this
paragraph 2 do not apply to any claim which as a matter of law
cannot be released.
3. Consideration
The Parties acknowledge that the
promises contained herein are good and sufficient consideration for
this Agreement and further warrant that they will not interpose
failure of consideration as a defense to an action to enforce this
Agreement.
4. Dismissal of Claims and
Forbearance from Litigation
Ballard hereby agrees that within
seven (7) days of receipt of the Payment under this Agreement,
Ballard will take all actions necessary to dismiss, with prejudice
and without costs or attorney’s fees, his claims against ATC
that are currently pending in the Litigation.
Ballard further covenants, promises
and agrees that neither he nor any person, organization or other
entity acting on his behalf will file, charge, claim, sue or cause
or permit to be filed any charge, claim or action for damages or
other relief against ATC or the Releasees involving any matter or
based upon any claims, demands, causes of action, defenses,
obligations, damage or liabilities which are the subject of this
Agreement, other than to enforce this Agreement.
5. Nondisclosure and
confidentiality
A. EMPLOYEE and EMPLOYER acknowledge
the receipt and sufficiency of the consideration, mutual promises,
agreements and undertakings as set forth herein.
B. For purposes of this
Section 5, “EMPLOYER” is defined as and limited to
those who are authorized and recognized as having actual authority
in an official capacity to speak for and on behalf of
ATC.
C. For purposes of this
Section 5, “EMPLOYEE” is defined as Ballard and
his spouse.
D. EMPLOYEE and EMPLOYER agree to
keep the terms of this settlement agreement confidential and agree
that they and their representatives will not comment upon or
discuss in any manner EMPLOYEE’s claims against EMPLOYER with
any third-parties, other than their respective attorneys, including
but not limited to any public or news medium, except as set forth
in paragraph E below. The parties’ respective attorneys,
David Perkins, Esq. for EMPLOYEE and Preti, Flaherty,
Beliveau, & Pachios, LLP for EMPLOYER, by their signatures
on this Agreement, represent that they and all their employees will
adhere to all the terms of this Agreement’s Nondisclosure and
Confidentiality Section herein.
E. The partie
