Exhibit 10.24
SEPARATION AGREEMENT AND GENERAL RELEASE
     This Separation Agreement and General Release is entered into this 12th day
of October, 2007, by and between HearUSA, Inc. (the “Company”) and Kenneth
Schofield (“Schofield” or “Employee”) (collectively the “Parties”).
     WHEREAS, Company provides hearing care to patients primarily through
hearing care centers offering a complete range of hearing care products, with
operations in the United States and Ontario, Canada;
     WHEREAS, Schofield has been an employee of the Company, most recently
serving as Chief Operating Officer;
     WHEREAS, Schofield desires to resign from the Company;
     WHEREAS, the Parties and their respective representatives have engaged in
substantial negotiation and now desire to end Schofield’s employment
relationship as set forth herein; and
     WHEREAS, on the terms and conditions set forth below, the Parties desire to
settle and terminate, with prejudice, any and all potential claims, demands,
liability or causes of action, if any, that do or may exist as of the date
hereof between them.
     NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the Parties enter into this Settlement Agreement
and General Release (“Agreement”) and agree as follows:
1. No Admission Of Liability or Wrongdoing
     This Agreement and/or the Separation Amount (as defined herein) made
hereunder and any other consideration that has been or shall be received by
Schofield from any Releasee (as defined herein) are not intended to be, shall
not be construed as and are not an admission or concession of any wrongdoing or
illegal or actionable acts or omissions, and each Releasee expressly denies that
any of them engaged in any wrongdoing or illegal or actionable acts or
omissions. Schofield hereby represents and agrees that he has not made and shall
not make any written or oral statements, suggestions or representations that any
Releasee has made or implied any such admission or concession. The fact that a
settlement was agreed to, and the terms of this Agreement, including, without
limitation, that the Separation Amount payment is being made, shall not be
offered, relied upon, used or admitted in any action or proceeding as evidence
of any violation of any law or duty as against any Releasee.
2. Separation Amount, Other Loan Forgiveness and COBRA
     (a) The Parties hereby agree that in accordance with the terms and
conditions of this Agreement, and following Schofield’s delivery to the Company
of a signed and notarized original of this Agreement, and following the
expiration of the Revocation Period described in Paragraph 4 below, the Company
will cause to be paid, and Schofield will accept, on behalf of himself
individually and on behalf of his heirs, executors, administrators, successors
and assigns

 

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(collectively, “Releasor”), the sum of $301,547.50, less applicable withholdings
(the “Separation Amount”), as follows:
     (i) Upon expiration of the Revocation Period, the Company shall forgive the
$50,000 loan Schofield owes to the Company evidenced by the Promissory Note
executed by Schofield, a copy of which is attached hereto as Exhibit A. In
addition, upon expiration of the Revocation Period, the Company shall forgive
the $10,000 loan Schofield owes to the Company evidenced by the Promissory Note
executed by Schofield, a copy of which is attached hereto as Exhibit B. To
satisfy applicable withholding obligations, the Company will pay to Schofield
$25,000, less the sum of (x) all applicable withholdings on the $25,000 payment,
(y) all applicable withholdings on the $50,000 loan forgiveness, and (z) all
applicable withholdings on the $10,000 loan forgiveness.
     (ii) Within five days following the expiration of the Revocation Period,
Releasor will accept $31,547.50, in the form of a check by the Company made
payable to Schofield, less applicable withholdings (together with the
forgiveness of the $50,000 loan and the $10,000 loan, the “Initial Payment”).
     (iii) Thereafter, on each of the following regular Company pay periods,
Releasor will accept, in the form of a check by the Company made payable to
Schofield, his regular salary installment for such pay period, less applicable
withholdings (the “Separation Amount Balance Payments”), until the $185,000
balance of the Separation Amount (less applicable withholdings on this and any
other consideration paid hereunder and not captured by the above) is reached.
The payments made after October 12, 2007, but on or before March 15, 2008, shall
each be deemed to be a separate payment qualifying under the short-term deferral
rule for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the payments made on or after April 1, 2008 shall each
be deemed to be a separate payment for purposes of Section 409A of the Code.
Notwithstanding the provision of this paragraph 2(a), no payments will be made
between March 15, 2008 and April 12, 2008. Any payments otherwise due during
such time period shall be paid on April 12, 2008.
     (b) In the event the Company receives a complaint, charge, notice,
statement of claim, demand for arbitration, or similar document alleging that
the Company is responsible for unlawful conduct committed by Schofield, the
Company shall deposit the Separation Amount Balance Payments otherwise payable
to Schofield into an interest bearing account. If following trial, arbitration,
administrative action, or other proceeding of any kind (“Action”), it is not
determined that Schofield committed unlawful conduct for which the Company is
liable, Schofield will receive the amounts deposited into the escrow account,
plus the interest it will have earned. If, and only if, it is determined in the
Action that Schofield did commit unlawful conduct and such determination
mandates payment by the Company to some third party, the Company shall keep the
amounts deposited into the escrow account, plus the interest it will have
earned.

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     (c) Schofield acknowledges that (i) a “qualifying event” within the meaning
of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”) occurred with respect to Schofield on (October 9, 2007 [Termination
Date]), as a result of which Schofield would lose coverage under the Company’s
group health plan as of October 31, 2007; (ii) Schofield has received timely
written notice of his right to elect to receive continuation coverage under said
group health plan pursuant to COBRA (“COBRA Coverage”) after (November 1, 2007
[following end of coverage]); and (iii) Schofield has elected to receive and to
pay for COBRA Coverage. In further consideration for all terms of this
Agreement, during the period commencing November 1, 2007 and ending upon the
earliest to occur of (x) October 31, 2008, (y) the effective date of any
coverage under any “group health plan” provided to or obtained by Schofield, or
(y) the date that COBRA Coverage otherwise would terminate pursuant to the
provision of COBRA (“Benefits Period”), the Company shall continue to provide
COBRA Coverage to Employee at the Company’s cost (“Benefits Coverage”). Upon the
expiration of the Benefits Period, the Company shall have no obligation to pay
for the costs of COBRA Coverage, and any COBRA Coverage to which Schofield may
be entitled pursuant to COBRA shall be at Schofield’s sole cost. During the
Benefits Period, Schofield shall notify the Company, attention Director of Human
Resources, in writing of the occurrence of any event, by reason of which
Schofield shall or may be eligible for coverage under any “group health plan”
within the meaning of COBRA, and of the terms of such coverage, within ten
(10) days from such event and not later than five (5) business days prior to the
effective date of such coverage.
3. Exercise of Vested Stock Options
     The Company and Schofield agrees that, notwithstanding any term to the
contrary in option grant agreements, Schofield may exercise any stock options
vested on the date of this Agreement for a period equal to the shorter of
(i) six months from the date of this Agreement, or (ii) the expiration date of
such option. All vesting of any unvested options shall immediately cease on the
date of this Agreement.
4. Time to Consider and Revocation Period
     By executing this Agreement, Releasor acknowledges that (a) Schofield has
been advised by the Company to consult with an attorney before executing this
Agreement; (b) Schofield was provided adequate time (i.e, twenty-one [21] days)
to review it and to consider whether to sign the Agreement; and (c) Schofield
has been advised that he has seven (7) days following execution to revoke it
(“Revocation Period”). Notwithstanding anything to the contrary contained
herein, this Agreement will not be effective or enforceable until the Revocation
Period has expired, and no portion of the Separation Amount is payable and shall
not be delivered or paid by the Company until the Revocation Period has expired.
Employee agrees that any revocation shall be made in writing and he will cause
such written revocation to be delivered to Stephen J. Hansbrough, President and
Chief Executive Officer, prior to the expiration of the Revocation Period.
5. Acknowledgment of Full Payment
     Schofield acknowledges and agrees that (a) the Initial Payment is adequate
consideration for all of the terms of this Agreement; (b) the Company’s
agreement to pay the Separation

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Amount Balance Payments is further consideration for all terms of this
Agreement; (c) the Separation Amount does not include any benefit, monetary or
otherwise, which was earned or accrued or to which Schofield was already
entitled; and (e) any monetary or other benefits which, prior to the execution
of this Agreement, Schofield may have earned or accrued or to which Schofield
may have been entitled, either have been paid, or are hereby released, waived or
settled pursuant to this Agreement.
6. Cessation of Relationship and No Hire
     Schofield acknowledges that upon the execution of this Agreement, he ceases
any employment relationship with any Releasee. Schofield hereby waives any right
to, and agrees not to, knowingly seek retention as an employee or to seek
employment with any Releasee, including the Company, and, without waiver by any
Releasee of the foregoing, the existence of this Agreement shall be a valid,
legal, non-discriminatory basis for rejecting any such application or, in the
event Schofield obtains such retention or employment, to terminate such
retention or employment.
7. Releasor’s Release of all Claims
     Releasor hereby irrevocably, unconditionally and generally releases the
Company, its current and former officers, directors, shareholders, employees,
owners, partners, members, affiliates, subsidiaries, divisions, related
entities, agents, attorneys, and the current and former officers, directors,
shareholders, partners, affiliates, subsidiaries, agents, attorneys and
employees of any of the foregoing, and the heirs, executors, administrators,
receivers, successors and assigns of all of the foregoing (collectively,
“Releasee”), from or in connection with, and hereby waives and/or settles with
prejudice, any and all actions, causes of action, suits, debts, dues, sums of
money, accounts, controversies, agreements, promises, damages, judgments,
executions, or any liability, claims or demands, known or unknown and of any
nature whatsoever and which Releasor ever had, now has or hereafter can, shall
or may have for, upon, or by reason of any matter, cause or thing whatsoever
from the beginning of the world to the date of this Agreement, including,
without limitation, arising directly or indirectly pursuant to or out of any
aspect of Schofield’s relationship with or any other contact with any Releasee,
the payment or nonpayment of any compensation, the performance of services for
any Releasee, the termination of such services, and any liability for any
emotional injury, pain or suffering he may have allegedly experienced in
connection with such relationship or other contact. Specifically, without
limitation, this Agreement shall release Releasee from and apply to any rights
and/or claims (a) arising under any contract or other arrangement, express or
implied, written or oral; (b) for wrongful dismissal or termination; (c) arising
under any applicable federal, state, local or other statutes, orders, laws,
ordinances, regulations or the like, or case law, that relate to employment or
employment practices and/or, specifically, that prohibit discrimination based
upon age, race, religion, sex, national origin, pregnancy, disability, sexual
orientation, gender identity, or any other unlawful bases, including without
limitation, the United States Constitution, the Civil Rights Act of 1964, as
amended, the Civil Rights Act of 1991, as amended, the Civil Rights Acts of 1866
and 1871, as amended, the Americans with Disabilities Act of 1990, as amended,
the Age Discrimination in Employment Act, as amended, the Family Medical Leave
Act of 1993, as amended, the Pregnancy Discrimination Act of 1978, as amended,
the Employee Retirement

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Income Security Act of 1990, as amended, the Workers Adjustment and Relocation
Notice Act, as amended, the Fair Labor Standards Act, as amended, the Vietnam
Era Veterans’ Readjustment Assistance Act, as amended, the Equal Pay Act, as
amended, and any similar applicable statutes, orders, laws, ordinances,
regulations or the like, or case law, of any state in which any Releasee is
subject to jurisdiction, and/or any political subdivision thereof, and all
applicable rules and regulations promulgated pursuant to or concerning any of
the foregoing statutes, orders, laws, ordinances, regulations or the like;
(d) based upon any other federal, state or local statutes, orders, laws,
ordinances, regulations or the like, or case law; (e) for tortious or harassing
conduct, infliction of mental distress, interference with contract, fraud, libel
or slander; and (f) for damages, including without limitation, punitive or
compensatory damages, or for attorneys’ fees, expenses, costs, wages, injunctive
or equitable relief.
8. No Attorneys’ Fees
     Schofield and his attorneys specifically acknowledge and agree that none of
them are entitled to any award of attorneys’ fees, costs or expenses, and
Schofield is not a “prevailing party,” under any federal, state, local or other
statute, order, law, ordinance, regulation or the like.
9. No Access To Company Premises
     Schofield agrees not to enter, for any purpose, upon the premises of any
current or future Company corporate offices or the premises of any current or
future Company owned, leased or managed property including, but not limited to
the Company’s retail business locations.
10. No Actions or Proceedings and Non-Participation
     Schofield represents and warrants that he has not filed or commenced any
complaints, claims, actions or proceedings of any kind against any Releasee with
any federal, state or local court or any administrative, regulatory or
arbitration agency or body. If in fact Schofield has commenced any complaints,
claims, actions or proceedings of any kind against any Releasee, Schofield
agrees to take all steps needed to dismiss or withdraw such complaints, claims,
actions or proceeding with prejudice. Schofield agrees, to the fullest extent
permitted by law, not to commence, maintain, prosecute or participate in any
action or proceeding in any court, agency, or forum against any Releasee with
respect to any act, omission, transaction or occurrence up to and including the
date of the execution of this Agreement. Schofield further agrees, to the
fullest extent permitted by law, not to instigate, encourage, assist or
participate in an action or proceeding commenced by anyone else against any
Releasee, including the Company, and further agrees, except as may be prohibited
by law, that as a precondition to challenging the enforceability of any
provision of this Agreement, or in the event the release contained herein is
held to be unenforceable, in whole or in part, to repay to the Company the
Separation Amount.
11. Non-Disparagement
     The Parties agree not to engage, support, or participate in any act or to
make, either directly or by or through another person, any oral or written
statement or communication,

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including, but not limited to any electronic communication, e-mail or blog
posting, that is negative, disparaging or adverse of or concerning the other.
12. Confidentiality of Separation Agreement
     Except as may be required by law, Schofield shall keep confidential and
shall not disclose orally or in writing, directly or indirectly, to any person
any and all information concerning any aspect of Schofield’s relationship with
any Releasee, including without limitation (i) any facts, claims or assertions
relating or referring to any conduct or practices by or on behalf of any
Releasee; (ii) any facts, claims or assertions relating or referring to any
experiences of Schofield or treatment Schofield received by or on behalf of any
Releasee through the date of this Agreement, which experiences or treatment
could have provided a factual or legal basis for any claim of any kind in any
action or proceeding before any court or administrative or arbitral body;
(iii) the existence or terms of this Agreement; and (iv) the amount of any
payment made hereunder. Schofield further represents that he has not disclosed
to any third party that the Company has agreed to pay any monies to Schofield,
the existence or terms of this Agreement or the amount of any payment to be made
hereunder. Notwithstanding the foregoing, in response to any inquiry concerning
any of the foregoing or otherwise, Schofield may state that any dispute with the
Company has been resolved. Nothing herein shall preclude Schofield from
disclosing the terms of this Agreement to his accountant, legal counsel, insurer
or tax advisors; provided that such accountant, legal counsel, insurer or tax
advisors are advised of and agree to be bound by the provisions of this
paragraph and that Schofield acknowledges that he will be responsible for any
violation of the terms of this paragraph by any of those persons.
13. Confidential Information, Non-Solicitation
     Schofield agrees that certain obligations set forth in the Employment
Agreement survive the termination of his employment, notwithstanding the
termination of the Employment Agreement. Specifically, Schofield agrees as
follows:

  (a)   Third party confidentiality. Schofield acknowledges that the Company has
disclosed that it was subject to duties to third parties to maintain information
in confidence and secrecy. Schofield agrees to continue to be bound by any such
duties owed by the Company to any third party.     (b)   Confidentiality.
Schofield acknowledges that his work for the Company brought him into close
contact with various confidential business data of the Company, its contracting
parties, affiliates and customers not readily available to the public.
Accordingly, Schofield:

  (i)   covenants and agrees that on and after the date hereof, on any basis for
any reason, Schofield shall not use or disclose to anyone, whether or not for
his benefit or otherwise, any confidential matters (collectively, “Confidential
Matters”) concerning the Company or its suppliers, consultants, agents, other
contracting parties or customers, whether such customers are deemed former,
current or potential customers (collectively, the “Clients”), including without
limitation all confidential technical

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      information of the Company, secrets, trade secrets, proprietary software,
copyrights, client lists, lists of employees, confidential evaluations, mailing
lists, details of consultant contracts, pricing policies, sales data and
reports, margins, operational methods and processes, plans, financial
information and other confidential business affairs, learned by Schofield
concerning the Company, its clients or a third party, including without
limitation any subsidiaries, partners, affiliates, shareholders, employees,
lenders, suppliers, consultants, agents or joint venture partners of the Company
(collectively “Affiliates”); and     (ii)   covenants and agrees that (A) all
confidential memoranda, notes, lists (including, without limitation, mailing and
client lists), records and other confidential documents, whether in written,
electronic or other form (and all copies thereof) made or compiled by Schofield
or made available to him concerning the Company, its clients and any Affiliates
are the sole property of the Company, and (B) if such documents are in the
possession or control of Schofield, Schofield shall deliver them, without
retaining any copies thereof, to the Company promptly after execution of this
Agreement.     (iii)   The provisions of subparagraph (b)(i) above shall not
apply to any information that: (1) is publicly available or becomes publicly
available through no act or fault of Schofield; (2) is made known to Schofield
by a third party who did not obtain it directly or indirectly from the Company;
(3) is independently developed by Schofield without use of the Company’s
information as evidence by credible written records of Schofield; or (4) is
information required to be disclosed by operation of law, governmental
regulation or court order provided that, if Schofield determines that such
disclosure might be required, Schofield will promptly notify the Company and
provide the Company, to the extent practicable, an opportunity to seek a
protective order or other appropriate remedy to prevent such disclosure.

  (c)   Non-Solicitation. Schofield agrees that for a period of one year from
the date of termination, he shall not, directly or indirectly, alone or in
concert with others, (i) solicit or encourage any employee of the Company, or an
employee of any person or entity with which the Company has an agreement through
which the Company and the person or entity are to act in concert with respect to
the business of the Company, to leave their respective employment or (ii) hire
any employee of the Company.

Schofield acknowledges that the Company may cease making the Separation Amount
Balance Payments if he breaches paragraph 13 of this Agreement, and may recover
any Separation Amount Balance Payments the Company may have made to Schofield
while he was in breach of this paragraph 13.

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14. Future Cooperation
     Schofield agrees to execute any other writings and/or documents consistent
with this Agreement and reasonably necessary to effectuate the terms of this
Agreement. In addition, Schofield will comply with all reasonable requests from
any Releasee for assistance and/or information in connection with any matters
and/or issues relating to or encompassed within the duties and responsibilities
of Schofield’s employment, including without limitation, consulting with any of
the employees and/or attorneys of any Releasee with respect to, and/or appearing
as a witness in, any dispute, controversy, action or proceeding of any kind.
Reasonable out-of-pocket expenses actually incurred by Schofield in connection
with his compliance with this paragraph will be reimbursed to Schofield by the
Company. Finally, Schofield agrees to appear in any court or other tribunal upon
ten (10) business days’ notice if such appearance is necessary to effectuate the
terms of this Agreement.
15. Employment References
     If Schofield requires a job reference from a prospective employer, and
provided such prospective employment does not violate paragraph 13 of this
Agreement, Schofield shall contact the President and Chief Executive Officer of
the Company, who will advise Schofield’s prospective employer of the dates of
Schofield’s employment with the Company, Schofield’s title at the Company, and
Schofield’s annual salary during the last year of his employment with the
Company.
16. Return of Company Property
     Schofield represents that he has returned to the Company all property of
the Company in his possession or over which he retained control such as keys,
automobiles, cell phones, credit cards, access cards, records, documents and
files and all copies and recordings thereof. To the extent Schofield
subsequently discovers property of the Company in his possession or within his
control, he shall immediately return such property and all copies, recordings or
duplicates thereof to the Company.
17. Survival
     The covenants, representations and acknowledgments made in this Agreement
shall survive the execution of the Agreement and the delivery of the Separation
Amount. In the event that Schofield is found to have made a material
misstatement in any term, condition, covenant, representation or acknowledgment
in this Agreement, or has committed or commits a breach of any term, condition
or covenant in this Agreement, Schofield shall be liable for any damages
suffered or incurred by the Company by reason of such misstatement or breach.
18. Entire Agreement and Severability
     This Agreement constitutes the sole and complete understanding and
agreement between the Parties with respect to the matters set forth herein, and
there are no other agreements or understandings, whether written or oral and
whether made during the course of negotiating this Agreement or otherwise, with
respect to the matters set forth herein. The Parties acknowledge

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that, in executing this Agreement, they are not relying on any representation or
statement made to them by any person other than as set forth herein. No term,
condition, covenant, representation or acknowledgment contained in this
Agreement may be amended unless in a writing signed by the Parties. If any
section of this Agreement is determined to be void, voidable or unenforceable,
it shall have no effect on the remainder of the Agreement which shall remain in
full force and effect.
19. Arbitration
     Any future dispute, controversy or claim between Releasor and any Releasee
shall be submitted to and finally determined by binding arbitration to be held
in New York, New York at the American Arbitration Association (“AAA”), before
one arbitrator with each party to be responsible for its own attorneys’ fees and
costs incurred in connection therewith. Claims subject to this arbitration
provision are and shall be (a) those claims which arise out of or relate to this
Agreement, including the enforceability and/or violation of any term or
provision of this Agreement; (b) any future disputes that may arise between
Releasor and Releasee; and/or (c) in the event that paragraph 7 of this
Agreement is determined or deemed to be void or unenforceable, in whole or in
part, those claims which arise out of or relate to any rights or claims, or
constituting any claims, that are described in and/or are referred to, and were
intended to be waived and released, in paragraph 7 of this Agreement. In the
event that this arbitration provision is determined by a court with appropriate
jurisdiction to be unenforceable, the Parties waive their right, if any, to a
trial by jury of any claim arising out of or in connection with this Agreement,
or in the event that paragraph 7 of this Agreement is determined or deemed to be
void or unenforceable, of any claims that are described in and/or referred to,
and were intended to be waived and released, in paragraph 7 of the Agreement.
Notwithstanding the foregoing, the Company may seek injunctive relief from any
court of competent jurisdiction.
20. Governing Law
     This Agreement shall in all respects be subject to, governed by and
enforced and construed pursuant to and in accordance with the laws of the State
of Delaware, without regard to and excluding its choice of law rules and except
that the interpretation and enforceability of the arbitration clause herein
shall be governed by the Federal Arbitration Act.
21. Binding Agreement and Execution
     This Agreement shall be binding upon and inure to the benefit of the
successors, heirs, devisees, legatees, executors, administrators, assignees,
trustees, affiliates and parent companies of each of the Parties as provided for
herein. This Agreement may be executed in one or more counterparts. The several
executed counterparts shall be considered an original and shall be binding on
the Parties.
22. Representation of Schofield
     Schofield agrees and acknowledges that (a) he has had an adequate
opportunity to review this Agreement and all of its terms and has been
represented by counsel with respect to any potential claims he may have had, and
this Agreement; (b) he understands all of the terms of this

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Agreement, and such terms are fair, reasonable and are not the result of any
fraud, duress, coercion, pressure or undue influence exercised by or on behalf
of any Releasee; and (c) he has agreed to and entered into this Agreement and
all of the terms hereof, knowingly, freely and voluntarily.
23. Miscellaneous
          a. The captions in this Agreement are inserted for convenience of
reference only and in no way define, describe or limit the scope or intent of
this Agreement or any of the provisions hereof.
          b. As used in this Agreement, the masculine shall include the feminine
and neuter, the singular shall include the plural and the plural shall include
the singular, as the context may require.
          c. No rules of construction against the drafter of this Agreement
shall apply in any interpretation or enforcement of this Agreement.
     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.

                Date: 10/12/07  /s/ Kenneth Schofield       KENNETH SCHOFIELD   
        Date: 10/12/07  HearUSA, Inc.
      By:   /s/ Stephen J. Hansbrough         Name/Title:   Stephen J.
Hansbrough           President and Chief Executive Officer     

         
STATE OF FLORIDA
    )  
COUNTY OF                     
    )  

On the                      day of                                         ,
2007, before me came Kenneth Schofield, to me known, and known to me to be the
individual described in, and who executed the foregoing Settlement Agreement and
General Release, and duly acknowledged to me that he executed same.

                        Notary Public           

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