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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 parties further agree that neither they nor their
respective attorneys will acknowledge or comment upon the existence
of a settlement agreement with respect to EMPLOYEE’s claims.
Any and all comments by the parties hereto to third parties shall
be limited in all circumstances to "The matter has be
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