Exhibit 10.1
SEPARATION AND CONSULTING
AGREEMENT
This SEPARATION AND CONSULTING
AGREEMENT is entered into as of the 4th day of October, 2005, by
and between METRO ONE TELECOMMUNICATIONS, INC., an Oregon
corporation (the “Company”), and TIMOTHY A. TIMMINS
(“Timmins”), with respect to the following
facts:
A.
Timmins has been the President and
Chief Executive Officer, and a director, of the Company.
B.
The parties each desire to, among
other things, confirm Timmins’ resignation as an officer and
director of the Company and any subsidiaries and affiliates of the
Company and as trustee of any of the Company’s employee
benefit plans, resolve any disputes that may exist between the
parties and provide for Timmins to render certain consulting
services to the Company, all on the terms and conditions set forth
below.
ACCORDINGLY, in consideration of the
foregoing premises, and the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Timmins and the
Company hereby agree as follows:
1.
Resignation
. Concurrently with the
execution and delivery of this Agreement, Timmins has delivered a
resignation to the Board of Directors of the Company, in the form
attached to this Agreement as Exhibit A .
2.
Consideration
.
(a)
Upon expiration of the seven-day
period referred to in Section 25, provided that Timmins does
not revoke this Agreement during such seven-day period, the Company
will pay to Timmins the sum of $175,000.
(b)
The Company will pay to Timmins the
aggregate sum of $100,000 in 36 semi-monthly installments of
$2,777.77, commencing December 5, 2005. Timmins hereby
acknowledges receipt of the first $6,550 of these
payments.
(c)
Those employee benefits currently
being provided to Timmins, including group medical coverage, will
be continued through September 30, 2006, at the
Company’s expense to the extent the costs are currently being
borne by the Company.
(d)
Timmins hereby represents and
warrants to the Company that he has been previously paid by the
Company for all accrued and unpaid salary and vacation through
October 4, 2005. In addition, Timmins hereby releases
the Company from any obligation to reimburse Timmins for business
expenses he incurred on behalf of the Company.
(e)
All payments due under this
Section 2 shall accelerate and become immediately due and
payable in the event (i) of a “Change-in-Control”
(determined as provided below) or (ii) the Company fails to
make any payment to Timmins due under this
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Section 2 within 10 business days after the
Company’s receipt (determined as provided in Section 20
hereof) of written notice from Timmins advising the Company that it
has failed to make such payment when originally due. For
purposes of this Section 2(e), a
“Change-in-Control” will be deemed to have occurred
(A) in the event of the sale or other disposition of all or
substantially all the assets of the Company, or (B) in the
event that any person or entity, or two or more persons or entities
acting in concert, shall have acquired beneficial ownership (within
the meaning of Securities and Exchange Commission Rule 13d-3
under the Securities Exchange Act of 1934), directly or indirectly,
of securities of the Company representing more than 50% of the
combined voting power of all outstanding securities of the Company
entitled to vote in the election of directors, or (C) in the
event of a merger or consolidation involving the Company unless
following such merger or consolidation those persons who were
beneficial owners (defined as set forth in clause (B) above)
immediately prior thereto own, directly or indirectly, more than
50% of the combined voting power of the then outstanding voting
securities of the entity resulting from such merger or
consolidation.
(f)
Timmins hereby acknowledges and
agrees that, except as set forth in this Section 2 or as
otherwise specifically provided for herein, (i) he is not
entitled to any additional compensation or benefits (including, but
not limited to, vacation pay, sick pay, severance pay or any other
benefit) as a result of, in connection with, or related to his
employment by the Company, and (ii) all payments provided for
in this Agreement are subject to all applicable withholding taxes
and other normal deductions.
(g)
Nothing in this Agreement shall
affect Timmins’ rights and interests in the Company’s
401(k) plan or the Company’s “Top Hat” deferred
compensation plan (collectively, the “Plans”).
The parties acknowledge and agree that, as of November 25,
2005, the vested portion of Timmins’ interest in the
Company’s 401(k) plan was $71,456.79, and the vested portion
of Timmins’ interest in the Company’s “Top
Hat” deferred compensation plan was $87,586.69.
Attached hereto as Exhibit B is a
“Distribution/Direct Rollover Request” for the
Company’s 401(k) plan and attached hereto as
Exhibit C is a “Distribution Request” for
the Company’s “Top Hat” deferred compensation
plan (collectively, the “Request Forms”). Timmins
shall complete those sections of the Request Forms required to be
completed by him, shall sign the Request Forms, and shall submit
the completed and signed Request Forms to the Company. Within
10 days after receiving the completed and signed Request Forms from
Timmins, the Company shall complete those sections of the Request
Forms required to be completed by it, shall cause the Plan
Administrator and/or Trustee of the Plans to sign the Request
Forms, and shall return the completed and signed Request Forms to
Timmins for filing with Great-West Retirement Services. In
addition to the foregoing, the Company will sign such additional
forms and take such additional actions as Timmins may reasonably
request to effect the transfer of his interests in the
Plans.
3.
Vesting and Expiration of
Options . From time
to time in the past, Timmins has been granted both incentive stock
options (“ISOs”) and non-qualified stock options
(“NQSOs”) to purchase shares of the Company’s
common stock under the Company’s 1994 Stock Incentive Plan
and its 2004 Stock Incentive Plan (collectively, the “Option
Plans”). The parties hereby acknowledge and agree that
attached hereto as Exhibit D is a true and complete
list and description of all options granted to Timmins by the
Company. As shown
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on Exhibit D , as of October 4,
2005 Timmins holds outstanding options to purchase 225,001 shares
of the Company’s common stock. Of this amount, options
covering 137,501 shares are vested and exercisable, and options
covering 87,500 shares are unvested and are not exercisable.
Notwithstanding the terms of the Option Plans or any option
agreement except as provided below, the Company hereby agrees that,
as of the date hereof, (i) the unvested options covering
87,500 shares shall vest and be fully exercisable; and
(ii) Timmins shall be entitled to exercise the options he
holds covering 225,001 shares of the Company’s common stock
at any time or from time to time from the date hereof until the
close of business on September 30, 2009, subject to the
provisions of the Option Plans that provide for the termination of
options in the event of a proposed sale of assets, merger,
liquidation or dissolution of the Company (in which case the
options held by Timmins will be given the most favorable treatment
given to any director, officer, employee, consultant or other
option holder of the Company with respect to their options).
The Company hereby represents and warrants that it has full
authority to execute this Agreement, including this
Section 3. The parties hereby agree to promptly take
such actions as may be reasonably necessary or desirable to reflect
the agreements set forth in clauses (i) and (ii) above,
including without limitation amending any applicable option
agreement(s). Except as expressly provided in this
Section 3, the terms and conditions of all options held by
Timmins shall be subject to the existing provisions of the Plans
and any applicable option agreement(s).
4.
Return of Property
. Timmins hereby represents
and warrants to the Company that he has returned to the Company all
property of the Company and all property related to the
Company’s business, in the custody or under the control of
Timmins, in whatever form, including, but not limited to, all
equipment (including computers), security access codes, proprietary
information, documents, books, records, reports, memoranda,
contracts, lists, computer disks (or other computer-generated files
or data), and copies thereof, created on any medium.
5.
Consulting Services
.
(a)
The Company hereby retains Timmins
as a consultant, and Timmins hereby accepts such appointment, on
the terms and conditions set forth below, to perform during the
period commencing on the date hereof and ending on April 4,
2007 (the “Consulting Period”) such services as are
required hereunder.
(b)
Timmins shall render such services
to the Company, and shall perform such duties and acts, as
reasonably may be requested by the Company, in connection with any
patent infringement suits or other intellectual property matters,
or in order to assure the smooth transition of his
responsibilities.
(c)
Timmins shall devote such time,
ability and attention to the Company’s business as may be
necessary or advisable to discharge his duties hereunder in a
professional and businesslike manner.
(d)
Timmins shall be an independent
contractor of the Company. Nothing in this Agreement shall be
construed to give Timmins any rights as an employee, agent, partner
or
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joint venturer of the Company or to entitle
Timmins to control in any manner the business of the Company or to
incur any debt, liability or obligation on behalf of the
Company.
(e)
Timmins shall not be entitled to any
additional compensation for the consulting services he provides
under this Section 5, unless at the Company’s request he
provides services outside the Portland, Oregon metropolitan area,
in which case the Company will (i) reimburse Timmins for all
reasonable out-of-pocket expenses he incurs in connection with the
performance of services outside the Portland, Oregon metropolitan
area, subject to compliance with the Company’s reimbursement
policies, and (ii) pay Timmins a consulting fee of $1,000 per
day during which he performs services outside the Portland, Oregon
metropolitan area.
6.
General Release
.
(a)
Subject to the Company’s
performance of its obligations under Section 2(a) and its
obligations under all but the last sentence of Section 2(g),
except as expressly set forth in this Agreement, each party hereby
fully, forever and unconditionally releases, exonerates, waives,
relinquishes, discharges, acquits, relieves and covenants not to
sue or charge the other and its agents, employees, representatives,
attorneys, stockholders, officers, directors, successors and
assigns (collectively, “all related persons”), and all
affiliated, parent and subsidiary corporations, and each of them,
and all related persons connected therewith, from any and all
rights, claims, demands, debts, obligations, liabilities, promises,
acts, agreements, costs, expenses (including, but not limited to,
attorneys’ fees and costs), damages, disputes, controversies,
actions and causes of action (collectively, “claims”)
through the date of this Agreement, of whatever kind or nature, in
law or equity, whether known or unknown, suspected or unsuspected,
potential or actual, including but not limited to those based on,
arising out of or in any way connected with or related to
(i) the employment of Timmins by the Company, or the
termination of such employment, (ii) Timmins’ right to
purchase, or actual purchase, of securities of the Company,
(iii) the breach by Timmins or the Company of any provision of
the Company’s employee handbook, personnel policies or any
oral or written representations or statements made by Timmins or by
officers, directors, employees or agents of the Company,
(iv) the breach by Timmins or the Company of any state or
federal law regulating wages, hours, compensation or employment,
(v) the breach by Timmins or the Company of the implied
covenant of good faith and fair dealing in connection with any of
the foregoing matters, (vi) any claim for misrepresentation,
wrongful termination or intentional infliction of emotional
distress in connection with any of the foregoing matters,
(vii) any discrimination claim on the basis of race, sex, age,
religion, marital status, national origin, physical or mental
disability or medical condition, or (viii) any claim arising
under the Oregon Fair Employment Act, the federal Age
Discrimination in Employment Act, the Older Workers Benefit
Protection Act, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Fair Labor Standards Act, the
Americans with Disabilities Act or the Age Discrimination in
Employment Act. Notwithstanding the foregoing or any other
provision of this Agreement, the releases provided for in this
Section 6 do not extend to (1) any obligations arising
under this Agreement, or (2) any claims based on, arising out
of or in any way connected with or related to fraud or criminal
activity.
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(b)
Subject to the exclusions set forth
in the last sentence of Section 6(a) of this Agreement,
the parties hereby acknowledge and agree that
Section 6(a) specifically includes any and all claims,
demands, obligations, and/or causes of action for compensatory
and/or exemplary damages and/or other relief relating to or in any
way connected with the terms, conditions and benefits of
employment, including, without limitation, workers’
compensation benefits, emotional distress, disability, and other
health benefits, vacation pay, sick pay, age discrimination, and
any other discrimination, including, but not limited to, sex,
national origin, race, religion, handicap, and/or any other type of
discrimination, whether or not specifically or particularly
described herein. Each party expressly waives any right or
claim of right to assert hereafter that any claim, demand,
obligation and/or cause of action has, through ignorance, oversight
or error, been omitted from the release provided for in this
Agreement.
(c)
Except as expressly set forth in
this Agreement, each party hereby acknowledges that except for the
express provisions of this Agreement, no statement, representation,
promise or inducement has been made by the other party in
connection with this Agreement, and each party specifically
acknowledges that he or it has not relied upon any statement,
representation, promise or inducement of the other party in
executing this Agreement that is not expressly set forth in this
Agreement. Each party hereby represents and warrants to the
other party that he or it holds all rights necessary to release all
claims being released under this Agreement by he or it, without
obtaining the approval or consent of any other person or entity,
and he or it has not transferred or otherwise assigned any of the
claims being released under this Agreement by he or it to any other
person or entity.
(d)
Each party understands and
ag
