Exhibit
10.4
SETTLEMENT AGREEMENT AND RELEASE
This
Settlement Agreement and Release (this “Agreement") is
made and entered into as of the date it is executed by both
parties, between Werner Pekarek (“Employee”) and
ClearOne Communications, Inc. (“ClearOne”), who
shall be referred to as the “Parties”, or
individually as a “Party”.
DEFINITIONS
1.
The term “Employee” shall mean Employee and his or her
heirs, assigns, and legal representatives.
2.
The phrase "ClearOne Released Parties" shall mean ClearOne and any
and all business units, committees, groups, and their present,
former or future parents, affiliates, subsidiaries, employees,
agents, directors, owners, officers, attorneys, successors,
predecessors, and assigns.
3.
The "Released Claims" shall mean any type or manner of suits,
claims, demands, allegations, charges, damages, or causes of action
whatsoever in law or in equity under federal, state, municipal or
local statute, law, ordinance, regulation, constitution, or common
law, whether known or unknown, which Employee has ever had or now
has against the ClearOne Released Parties. This includes but is not
limited to any action for costs, interest or attorney's fees, which
arise in whole or in part from Employee's employment relationship
with ClearOne, from the ending of that relationship, and from any
other conduct by or dealings of any kind between Employee and the
ClearOne Released Parties, which occurred prior to the execution of
this Agreement. This also includes but is not limited to any and
all claims, rights, demands, allegations and causes of action for
alleged wrongful discharge, breach of alleged employment contract,
breach of the covenant of good faith and fair dealing, termination
in violation of public policy, intentional or negligent infliction
of emotional distress, fraud, misrepresentation, defamation,
interference with prospective economic advantage, failure to pay
wages due or other monies owed, failure to pay pension benefits,
conversion, breach of duty, interference with existing economic
relations, punitive damages, retaliation, discrimination on the
basis of age in violation of the Age Discrimination and Employment
Act of 1967, as amended ("ADEA"), negligent employment, negligent
supervision, Claims under Title VII of the Civil Rights Act of
1964, claims under the Sarbanes-Oxley Act of 2002, harassment or
discrimination on the basis of sex, race, color, citizenship,
religion, age, national origin, or disability, or other protected
classification under the federal, state, municipal or local laws of
employment, including those arising under the common law, and any
alleged violation of the Employee Retirement Income Security Act of
1974 ("ERISA"), the Fair Labor Standards Act ("FLSA"), the
Occupational Safety and Health Act ("OSHA"), and any other law.
Release Claims do not include any claims that arise in the future
out of events that occur after the date of this
Agreement.
RECITALS
A.
WHEREAS,
the Parties desire to settle and compromise the Released
Claims and to enter into this Agreement.
COVENANTS
NOW,
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and in
consideration of the mutual covenants set forth in this
Agreement, the Parties agree as follows:
1.
Employee’s employment with ClearOne shall end effective
August 11, 2006.
2.
Notwithstanding the provisions of section 1, above, after his or
her execution of this Agreement and upon the expiration of the
revocation period described in paragraph 22, ClearOne will make a
one-time severance payment to Employee in the net amount of
$9,230.79.
3.
In addition, the Employee must elect from one of the following two
options. The election shall be made by circling either Option 1 or
Option 2 and placing the Employee’s initials next to the
circle. The options are as follows:
A. Option 1 .
Employee retains Employee’s vested stock options and upon the
expiration of the presently existing employee, executive officer
and director trading blackout (which trading blackout will expire
when ClearOne becomes current in its periodic filings with the
Securities and Exchange Commission), Employee will have 90 days in
which to exercise said vested options; or
B. Option 2 .
Employee will receive an additional net cash payment of $5,000.00
payable upon the expiration of the revocation period described in
paragraph 22. All unexercised stock options acquired by Employee
during his employment with ClearOne, whether vested or unvested,
shall immediately be deemed cancelled. Employee further agrees that
all of his rights, entitlements, and benefits under the 1998
ClearOne Stock Option Plan, including any agreements entered into
in relation to the foregoing plans, are hereby terminated and
cancelled.
4.
Employee acknowledges that the above sums constitute consideration
for Employee’s execution and adherence to the provisions of
this Agreement. Employee understands and agrees that he or she
would not receive the amounts specified herein except for his or
her execution of this Agreement and the fulfillment of the promises
contained herein. The ClearOne Released Parties make no
representations whatsoever to Employee concerning the taxable
status of the payment of the settlement amount. Employee assumes
full and sole responsibility for any tax consequences related to
the settlement amount. Employee understands and agrees to indemnify
and hold harmless the ClearOne Released Parties from any taxes,
assessments, withholding obligations, penalties or interest
payments that they may incur at any time by reason of demand, suit
or proceeding brought against them for any taxes or assessments or
withholdings arising out of the payment of the settlement amount.
Employee acknowledges he or she has been fully compensated by the
terms of this Agreement for releasing the Released
Claims.
5.
Employee represents that he or she has not filed and there is not
pending with any governmental agency or any state or federal court,
any other claims, complaints, charges, or lawsuits of any kind
against the ClearOne Released Parties.
6.
Employee hereby waives and releases each and every one of the
ClearOne Released Parties from liability with respect to the
Released Claims. Employee acknowledges that he or she
understa
