[LOGO] EXHIBIT 10.31
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release ("Agreement") is entered
into by and between SYNC RESEARCH (the "Company"), and Xxxxx X. Xxxx
("Employee").
WHEREAS, Employee has been employed by the Company;
WHEREAS, the Company and Employee have entered into an agreement
regarding confidential information and ownership of inventions (the "Employee
Agreement");
WHEREAS, the Company and Employee have mutually agreed to terminate the
employment relationship and to release each other from any claims arising
from or related to 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. Resignation and Termination. The Company and Employee acknowledge
and agree that Employee will resign as President and CEO and as an Officer of
the Company effective October 27, 1997 (the "Resignation Date") and that the
employment with the Company will terminate effective July 31, 1998 (the
"Termination Date").
2. Consideration. In the consideration for the release of claims set
forth below and other obligations under this Agreement, the Company agrees to
pay Employee $19,583.33 (less applicable tax withholding) each month through
the Termination Date, in accordance with the Company's normal payroll
practices.
3. Stock Options. In consideration of the Employee's willingness to
avail himself to the Company through the Termination Date, vesting of
Employee's options to purchase shares of Common Stock granted to Employee
under the Company's Stock Option Plan that have not been exercised as of the
date of this Agreement, shall continue though the April 30, 1998. No
additional options shares shall vest after such date. In accordance with the
terms of the Option Agreement(s) issued to Employee, vested options will be
exercisable until June 30, 1998.
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4. Change of Control. Effective with the Resignation Date, the
Amended and Restated Change of Control Severance Agreement dated and signed
June 5, 1997 becomes null and void.
5. Benefits.
(a) Employee shall continue to receive the Company's standard
medical, dental and life insurance benefits through the Termination Date.
After such date, Employee shall have the right to continue, at his own
expense, coverage under the Company's health insurance as provided by the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA").
(b) Employee shall be entitled to participate in the Company's
401(k) Plan and Section 125 Plan until Termination Date.
(c) Employee shall not continue to accrue vacation after the
Resignation Date.
6. Termination of Agreement. Should the Employee become an employee
of another company or firm, or enter into a consulting arrangement for more
than 20 hours per work week, prior to the Termination Date, all payments and
participation in the benefit programs will cease immediately. Employee
agrees to engage in employment or a consultant arrangement only on a
non-compete basis.
7. No Other Payments Due. Employee acknowledges and agrees that he
has received, or will receive on April 30, 1998, all salary, accrued
vacation, commissions, bonuses, compensation, shares of stock options
therefore or other such sums due to Employee other than amounts to be paid
pursuant to Sections 2, 3 and 4 of this Agreement. In light of the payment
by the Company of all wages due, or to become due to the Employee, the
Parties further acknowledge and agree that California Labor Code Section
206.5 is not applicable to the Parties hereto. That section provides in
pertinent part as follows:
No employer shall require the execution of any release of
any claim or right on account of wages due, or to become
due, or made as an advance on wages to be earned, unless
payment of such wages has been made.
8. Release of Claims. Employee agrees that the foregoing
consideration represents settlement in full of all outstanding obligations
owed to Employee by the Company. Employee and the Company, on behalf of
themselves, and their respective heirs, executors, officers, directors,
employees, investors, shareholders, administrators, predecessor and successor
corporations and assigns, hereby fully and forever release each other and
their respective heirs, executors, officers, directors, employees, investors,
shareholders, administrators, predecessor and successor corporations and
assigns from any claim duty, obligation or cause of action relating to any
matters of any
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kind, whether known or unknown, suspected or unsuspected, that either of them
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 termination of that relationship;
(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;
(c) any and all claims for wrongful discharge of employment;
breach of contract, both express and implied; breach of a covenant of good
faith and fair dealing, both express and implied; negligent or intentional
infliction of emotional distress; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic
advantage; and defamation;
(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 Age Discrimination in Employment Act of 1967, and the
California Fair Employment and Housing Act.
(e) any and all claims arising out of any other laws and
regulations relating to employment or employment discrimination; and
(f) any and all claims for attorney's fees and costs.
The Company and Employee agree that the release set forth in the section
shall be and remain in effect in all respects as a complete and general
release as to the matters released. This release does not extend to any
obligations incurred under this Agreement.
9. Acknowledgment of Waiver of Claims under ADEA. Employee
acknowledges that he is waiving and releasing any rights he may have under
the Age Discrimination in Employment Act of 1967 ("ADEA") and that the waiver
and release is knowing and voluntary. Employee and the Company agree that
the waiver and release does not apply to any rights or claims that may arise
under ADEA after the Effective Date of this Agreement. Employee acknowledges
that the consideration given for this waiver and release Agreement is in
addition to anything of value to which Employee was already entitled.
Employee further acknowledges that he has been advised by the writing that
(a) he should consult with an attorney PRIOR to executing this Agreement; (b)
he has at least twenty-one (21) days within which to consider this Agreement;
(c) he has a least seven (7) days following the execution of this Agreement
by the parties to revoke this Agreement; and (d) this Agreement shall not be
effective until the revocation period has expired.
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10. Civil Code Section 1542. The parties represent that they are not
aware of any claim by either of them other than the claims that are released
by this Agreement. Employee and the Company acknowledge that they are
familiar with the provisions of California Civil Code Section 1542 which
provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Employee and the Company, being aware of such code section, agree to
waive any rights they may have thereunder, as well as under any other stature
or common law principles of similar effect.
11. Tax Consequences. The Company makes no representations or
warranties with respect to the tax consequences of the payment of any such
sums to Employee under the terms of this Agreement. Employee agrees and
understand that he is responsible for payment, if any, of local, state and/or
federal taxes on the sums paid hereunder by the Company and any penalties or
assessments thereon. Employee further agrees to indemnify and hold the
Company harmless from any claims, demands, deficiencies, penalties,
assessments, executions, judgments, or recoveries by any government agency
against the Company for any amounts claimed due on account of Employee's
failure to pay federal or state taxes or damages sustained by the Company by
reason of any such claims, including reasonable attorney's fees.
12. Confidentiality. The parties agree to use their best efforts to
maintain in confidence the existence of this Agreement, the contents and
terms of this Agreement, and the consideration for this Agreement.
Notwithstanding the foregoing, the Employee shall be permitted to discuss
provisions of this Agreement in confidence with his attorneys, accountants,
tax advisors and spouse.
13. Nondisclosure of Confidential and Proprietary Information. Employee
shall continue to maintain the confidentiality of all confidential and
propriety information of the Company as provided by the Employee Agreement
previously entered into between the Company and the Employee, a copy of which
is attached hereto as Exhibit A. Employee agrees that at all times
hereafter, Employee shall not intentionally divulge, furnish or make
available to any party any of the trade secrets, patents, patent
applications, price decisions or determinations, inventions, customers,
proprietary information or other intellectual property rights of the Company,
until after such time as information has become publicly known otherwise than
by act of collusion of Employee. Employee further agrees that he will return
all the Company's property and confidential and proprietary information in
his possession to the Company within five business days after the Resignation
Date.
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14. Breach of this Agreement. Employee acknowledges that upon breach
of the confidential and proprietary information provision contained in
Section 10 of this Agreement, the Company would sustain irreparable harm from
such breach, and, therefore, Employee agrees that in addition to any other
remedies which the Company may have for any breach of this Agreement or
otherwise, including termination of the Company's obligations to provide
benefits to Employee as described in Sections 2, 3 and 4 of this Agreement,
the Company shall be entitled to obtain equitable relief, including specific
performance and injunctions, restraining Employee from committing or
continuing any such violation of this Agreement.
15. Non-Disparagement. Each party agrees to refrain from any
disparagement, criticism, defamation, slander of the other, or tortious
interference with the contracts and relationships of the other.
16. Authority. The Company represents and warrants that the
undersigned has the authority to act on behalf of the Company and to bind the
Company and all who may claim through it to the terms and conditions of this
Agreement. Employee represents and warrants that he has the capacity to act
on his own behalf and on behalf of all who might claim through him to bind
them to the terms and conditions of this Agreement. Each Party warrants and
represents that there are no liens or claims of lien or assignments in law or
equity or otherwise of or against any of the claims or causes of action
released herein.
17. No Representations. Each party represents that it has carefully
read and understands the scope and effect of the provisions of this
Agreement. Neither party has relied upon any representations or statements
made by the other party which are not specifically set forth in this
Agreement.
18. Costs. The Parties shall each beach their own costs, attorneys'
fees and other fees incurred in connection with this Agreement.
19. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
20. Entire Agreement. This Agreement represents the entire agreement
and understanding between the Company and Employee concerning Employee's
separation from the Company and supersedes and replaces any and all prior
agreements and understanding concerning Employee's relationship with the
Company and his compensation by the Company other than any option agreement
as described in Section 3 and other than the Employee Agreement as described
in Section 10.
21. No Oral Modification. This Agreement may only be amended in
writing signed by Employee and the Company.
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22. Governing Law. This Agreement shall be governed by the laws of the
State of California.
23. Effective Date. This Agreement shall be effective once it has been
signed by both parties and such date is referred to herein as the "Effective
Date".
24. Counterparts. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and
shall constitute an effective binding agreement on the part of each of the
undersigned.
25. Assignment. This Agreement may not be assigned by Employee or the
Company without the prior consent of the other party. Notwithstanding the
foregoing, this Agreement may be assigned by the Company to a corporation
controlling, controlled by or under common control with the Company without
the consent of Employee.
26. Voluntary Execution of Agreement,. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf
of the parties hereto, with the full intent of releasing all claims. The
parties acknowledge that:
(a) They have read this Agreement;
(b) They have been represented in the preparation, negotiation and
execution of this Agreement by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;
(c) They understand the terms and consequences of this Agreement
and of the releases it contains; and
(d) They are fully aware of the legal and binding effect of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
respective dates set forth below.
COMPANY
By:
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Title:
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Dated:
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EMPLOYEE
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Employee Name
Dated:
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