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Exhibit
10.2
SETTLEMENT AGREEMENT AND
RELEASE
This Settlement Agreement and
Release (“Agreement”) is made by and between Sonic
Innovations, Inc. (the “Company”) and Stephen L. Wilson
(“Employee”).
WHEREAS, Employee was
employed by the Company;
WHEREAS, the Company and
Employee have entered into an Invention and Confidential
Information Agreement (the “Confidentiality
Agreement”);
WHEREAS, the Company and
Employee have mutually agreed to terminate the employment
relationship;
NOW THEREFORE, in
consideration of the mutual promises made herein, the Company and
Employee (collectively referred to as “the Parties”)
hereby agree as follows:
1. Termination .
Employee will relinquish his position as Chief Financial Officer
effective July 21, 2006, and will terminate his position with
the Company effective November 16, 2006. From July 21,
2006 through November 16, 2006 Employee will provide services
to the Company as set forth herein.
2. Services by
Employee. From July 21, 2006 through November 16,
2006 Employee will be Special Assistant to the President and will
provide services, advice and counsel to the Company to facilitate a
smooth transition of duties. In particular, Employee will be called
upon to review financial reports, statements and filings; provide
input into ongoing litigation; review documents related to equity
and loan financing transactions; and provide appropriate transition
services and information; among other services.
3. Consideration . The
Company agrees to pay Employee severance equal to Three Hundred
Seventy Five Thousand and no/100 dollars ($375,000.00), less
applicable withholdings, as follows:
(a) Employee will continue to
receive his bi-weekly salary in accordance with Company’s
normal payroll schedule from July 31, 2006 through
November 10, 2006, in the cumulative gross amount of
$84,519.23; and
(b) On or about
November 16, 2006, the Company will pay Employee a lump sum of
$290,480.77.
In addition, on or about
November 16, 2006, the Company will pay Employee for all
accrued vacation in the amount of $24,000.00. No bonuses or
additional consideration, other than as stated herein, will be
payable to Employee.
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4. Stock Options
.
(a) The Parties agree that,
for purposes of determining the number of shares of the
Company’s Common Stock which Employee is entitled to purchase
from the Company pursuant to any stock option, Employee will cease
vesting as of November 16, 2006, and have ninety
(90) days thereafter to exercise any such option, after which
time the unexercised portion of any such option shall expire. For
any shares of the Company’s Common Stock which are subject to
a right of repurchase pursuant to a restricted stock purchase
agreement, the lapsing of such right to repurchase the restricted
stock shall cease as of November 16, 2006, and the Company may
exercise its right of repurchase for restricted stock subject to a
right of repurchase under the terms of such restricted stock
purchase agreement. The exercise of any stock options shall
continue to be subject to the terms and conditions of the
Company’s Stock Option Plan and the applicable Stock Option
Agreement between Employee and the Company.
(b) Employee agrees not to
exercise any stock options or sell any shares of the
Company’s Common Stock prior to the closing of the
Company’s currently anticipated Private Investment in Public
Equity (PIPE) transaction. Such restriction shall expire upon the
earliest of (a) closing of the PIPE transaction, (b) the
Company’s decision not to pursue the PIPE transaction, or
(c) August 31, 2006.
5. Benefits . Employee
will be entitled to all benefits as an employee through
November 16, 2006. On December 1, 2006, Employee has the
right to convert his medical and dental insurance to self-paid
coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“ COBRA ”). If Employee
elects and qualifies for such COBRA coverage, Employee will be
responsible for payment of such premiums.
6. Confidential
Information . Employee shall continue to maintain the
confidentiality of all confidential and proprietary information of
the Company, and shall continue to comply with the terms and
conditions of the Confidentiality Agreement. Employee shall return
all the Company property and confidential and proprietary
information in his possession to the Company.
7. Payment of Salary .
Employee acknowledges and represents that the Company has paid all
salary, wages, bonuses, accrued vacation, commissions and any and
all other benefits due to Employee to date, except as provided for
elsewhere in this Agreement.
8. Release of Claims by
Employee . Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed
to Employee by the Company. Employee, on behalf of himself, and his
heirs, family members, executors and assigns, hereby fully and
forever releases the Company and its respective officers,
directors, employees, agents, attorneys and assigns, from, and
agrees not to sue concerning, any claim, duty, obligation or cause
of action relating to any matters of any kind, whether presently
known or unknown, suspected or unsuspected, that he may possess
arising from any omissions, acts or facts that have occurred up
until and including the effective date of this Agreement including,
without limitation:
(a) any and all claims
relating to or arising from Employee’s employment
relationship with the Company and the termination of that
relationship;
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(b) any and all claims
relating to, or arising from, Employee’s right to purchase,
or actual purchase of shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach
of fiduciary duty, breach of duty under applicable state corporate
law, and securities fraud under any state or federal
law;
(c) any and all claims
for wrongful discharge of employment; termination in violation of
public policy; discrimination; breach of contract, both express and
implied; breach of a covenant of good faith and fair dealing, both
express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; negligent or intentional
misrepresentation; negligent or intentional interference with
contract or prospective economic advantage; unfair business
practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment; and
conversion;
(d) any and all claims for
violation of any federal, state or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Fair
Labor Standards Act, the Employee Retirement Income Security Act of
1974, The Worker Adjustment and Retraining Notification Act, Older
Workers Benefit Protection Act, the Family and Medical Leave
Act;
(e) any and all claims
for viola
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