Exhibit 10.1

 

SEPARATION AND TRANSITION AGREEMENT AND GENERAL RELEASE

In return for the mutual promises in this Separation and Transition Agreement
and General Release (the “Agreement”), FALCONSTOR SOFTWARE, INC. (the
“Company”), 823 Congress Ave, Suite 1300, Austin, Texas 78701, its predecessor
companies, and its and their respective stockholders, affiliates, subsidiaries,
divisions, successors and assigns and the current and former employees,
officers, directors and agents thereof (collectively referred to throughout this
Agreement as “Employer”), and PATRICK MCCLAIN, his heirs, executors,
administrators, successors, and assigns (collectively referred to throughout
this Agreement as “You”), agree as follows:

1. Transition and Resignation. Effective April 9, 2018, you have resigned from
your position as Chief Financial Officer of the Company. You shall resign from
your employment with the Company effective August 31, 2018 (the “Termination
Date”). Between April 9, 2018 and the Termination Date, you agree to assist the
Company in the transition (the “Transition Period”). The Company shall continue
to pay You your current annual base salary during the Transition Period.

2. Time to Return and Legal Review. You understand and agree that You have until
May 2, 2018 to sign and return this Agreement. You are advised to consult with
an attorney, at your own expense, before signing. By signing, You acknowledge
that Company has advised You to consult with an attorney before signing, at your
own expense, and that You have had enough time to do so. You further understand
that if You do not sign and return this Agreement by May 2, 2018, Company shall
have no obligation to make any payments or provide any benefits to You under
this Agreement.

3. Revocation. You may revoke (cancel) this Agreement for a period of seven (7)
calendar days after the day You sign this Agreement. Any revocation within this
period must be submitted, in writing, to the Company’s Director of Human
Resources, and state, “I hereby revoke my acceptance of our Agreement.” The
revocation must be personally delivered to the Company’s Director of Human
Resources or a person he designates, or mailed to the Company’s Director of
Human Resources and received within seven (7) calendar days of your signing of
this Agreement. This Agreement shall not become effective or enforceable until
the revocation period has expired without revocation by You. If the last day of
the revocation period is a Saturday, Sunday, or legal holiday in New York, then
the revocation period shall not expire until the next following day which is not
a Saturday, Sunday, or legal holiday.

4. Duty of Confidentiality. You expressly agree and confirm that You will comply
with all of the terms and provisions of the Confidentiality, Proprietary
Information and Invention Agreement between You and the Company (the
“Confidentiality Agreement”). A copy will be provided to You upon request.

 

 

5. Return of Company Property; Expenses. You represent and warrant that, You
have returned to Company all property belonging to Company, including but not
limited to keycard, master and office keys, computer equipment, files, records,
computer access codes, cell phones, beepers, personal digital assistants (such
as BlackBerry or iPhone), memoranda, letters, files, computer software, business
plans, instruction manuals and any other property whether furnished to You by
the Company or which You have prepared or helped to prepare in conjunction with
Your employment with Company. You further agree to return to Company any such
property You find in Your possession after the date You sign and deliver this
Agreement to Company. You will submit a final expense report by August 31, 2018.

6. Nondisparagement and References. You understand and agree that You will not
disparage Company or any other “Released Party” (as defined in Paragraph 11) or
encourage or induce others to disparage Company or any other Released Party. If
the Company receives an inquiry regarding You from a prospective employer, the
Employer agrees to confirm the positions You held, the date You were employed by
the Company, and that You resigned to pursue other opportunities . Nothing in
this Agreement shall be construed to prevent You, the Company or any Released
Party from providing truthful and accurate testimony in any civil, criminal or
regulatory proceeding. Subject to your obligations under the Confidentiality
Agreement, nothing in this Agreement shall be construed to prevent You from
providing factual information to a prospective employer that you resigned to
pursue other opportunities.

7. Consideration. In consideration for (i) Your signing and returning this
Agreement, (ii) Your agreement to assist the Company with the transition until
August 31, 2018, and (iii) Your performance of the obligations under this
Agreement and being available to the Company for consultation until August 31,
2018, the Company agrees to (A) pay You $60,000.00 (minus applicable
withholdings and deductions) which is equal to three (3) months of your base
salary at your current rate of pay. Such payments shall be made on a
semi-monthly basis as part of regular Company payroll (which shall be
accelerated to a single payment on May 31, 2018 if the Company, in its sole
discretion, determines that You have fulfilled your obligations to assist with
the transition per (ii) above) and (B) the Company shall continue to pay the
Company portion of your current group health insurance benefits until the
earlier of (i) December 31, 2018 or (ii) the first date on which You become
eligible for coverage under another group health insurance plan, provided You
timely elect and are eligible for COBRA coverage starting September 1, 2018. The
Company also acknowledges that You will be paid any earned MIP for Q12018
results in accordance with the MIP which has been approved by the Board.

8. Availability. You are free to accept another position with another company
after May 31, 2018 provided that You make yourself available for calls, as
needed to support the Company through August 31, 2018.

9. Disclosure of this Agreement. You acknowledge that You understand that the
Company is required to file this Agreement with the SEC within four business
days after it is fully executed. That filing shall be in the form of the Form
8-K which shall state that You resigned to pursue other opportunities.

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10. Nonadmission. You and Company each understand and agree that neither the
signing of this Agreement nor the payment of any money or benefits constitutes
an admission by Company, or any other Released Party of any wrongdoing. Company
and each other Released Party expressly denies any liability or violation of
law.

GENERAL RELEASE OF ALL CLAIMS

11. Release of Company and other Released Parties. In consideration of (in
return for) the benefits from Company as outlined in Paragraph 6 as well as the
release of You pursuant to Paragraph 11, You hereby irrevocably and
unconditionally release, waive and forever discharge Company, its affiliates,
parents, successors, predecessors, subsidiaries, assigns, stockholders,
directors, officers, employees, representatives, agents, and attorneys
(collectively, the “Released Parties”), from any and all claims, agreements,
causes of action, demands, or liabilities of any nature whatsoever arising,
occurring or existing at any time prior to the signing of this Agreement or
arising out of any facts or circumstances that occurred or existed at any time
prior to the signing of this Agreement, whether known or unknown, except as to
all claims that cannot be released under applicable law (including claims of
discrimination arising under federal law filed with or through a federal agency)
or claims related to the validity of this Agreement.

Examples of Claims Released. You understand that this release is intended to and
does waive:

a.Your ability to file a lawsuit against the Company for any and all claims
arising from or relating to Your employment with Company and/or the termination
of Your employment with Company. This includes, but is not limited to, any and
all claims for breach of Company’s or its predecessor’s policies, rules,
regulations, or handbooks or for breach of expressed or implied contracts or
expressed or implied covenants of good faith, and any and all claims for
promissory estoppel, wrongful discharge, defamation, invasion of privacy,
violation of public policy, retaliation, mental distress or any other personal
injury; any and all claims for back pay, front pay, or for any kind of
compensatory, special or consequential damages, punitive or liquidated damages,
attorneys’ fees, costs, disbursements or expenses of any kind whatsoever.

b.Any and all claims arising under the Family Medical Leave Act, as amended,
that were available on or prior to the date You sign this Agreement, whether
known or unknown.

c.Any and all claims arising under the Age Discrimination in Employment Act, as
amended, that were available on or prior to the date You sign this Agreement,
whether known or unknown.

d.Any and all other claims of any kind whatsoever that You had or may have
against Company or any other Released Party at the time You sign this Release,
whether known or unknown. This includes, but is not limited to, any and all
rights or claims of any kind that You may have against Company or any other
Released Party arising, existing or occurring (or that arise out of any facts or
circumstances that occurred or existed) before You became an employee and/or
during any period of time You acted as a consultant to the Company.

e.Any and all claims for payment for vacation pay.

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This provides examples of the claims that are waived and is not a complete
listing of waived claims.

Notwithstanding the foregoing, nothing in this Agreement shall be construed to
prevent You from being indemnified as an officer or Director of the Company
pursuant to the Company’s Amended and Restated By-Laws, or the General
Corporation Law of the State of Delaware or from filing a charge with or
participating in an investigation conducted by any governmental agency,
including, without limitation, the United States Equal Employment Opportunity
Commission (“EEOC”) or applicable state or city fair employment practices
agency, to the extent required or permitted by law. Nevertheless, You understand
and agree that You are waiving any relief available (including, for example,
monetary damages or reinstatement), under any of the claims and/or causes of
action waived in this Paragraph 9, including but not limited to financial
benefit or monetary recovery from any lawsuit filed or settlement reached by the
EEOC or anyone else with respect to any claims released and waived in this
agreement.

12. No Claims Exist. You confirm that You have not filed, caused to be filed, or
are a party to, any claim, charge, complaint, or action against any Released
Party in any court. In the event that any such claim, charge, complaint, or
action is filed in any court and You obtain a judgment, it is the intent of You
and Company that all payments made to You under this Agreement shall be offset
against (the amount will be deducted from) any judgment You obtain. You further
confirm that You have no known workplace injuries. In addition, You agree that
it is the Company’s policy to comply with all applicable laws and regulations,
including its own policies. You are not aware of any violations of any such
applicable laws or Company policies by the Company or anyone associated with the
Company.

You agree that you shall not, at any time in the future, encourage any current
or former Company employee, or any other person or entity, to file any legal or
administrative claim of any type or nature against the Company or any of its
directors, officers, or employees. You further agree that you shall not, at any
time in the future, assist in any manner any current or former Company employee,
or any other person or entity, in the pursuit or prosecution of any legal or
administrative claim of any type or nature against the Company or any of its
officers or employees, unless pursuant to a duly-issued subpoena or other
compulsory legal process.

13. Release of You. In consideration of (in return for) You entering into this
Agreement and the release set forth in Paragraph 9, the Company hereby
irrevocably and unconditionally releases, waives and forever discharges You from
any and all claims, agreements, causes of action, demands or liabilities of any
nature whatsoever arising, occurring or existing at any time prior to the
signing of this Agreement or arising out of any facts or circumstances that
occurred or existed at any time prior to the signing of this Agreement, whether
known or unknown claims related to the validity of this Agreement other than (i)
any claims resulting from fraud or gross negligence committed by You, (ii) any
claim that cannot be released under applicable law or (iii) claims related to
the validity of this Agreement.

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14. No Claims Exist. The Company confirms that it has not filed, caused to be
filed, or are a party to, any claim, charge, complaint, or action against You in
any court.

15. COBRA Rights. Your regular coverage under Company’s medical and dental plans
ends on August 31, 2018. You become eligible to receive health care continuation
coverage under the respective plans under COBRA and under applicable laws the
day after the regular coverage under the respective plans ends. If You timely
elect health care continuation coverage under COBRA in accordance with Section
4980B of the Code, You shall be entitled to receive COBRA continuation coverage
for the maximum period allowed under the law at your own expense, other than as
set forth in Paragraph 8, and in accordance with the provisions of COBRA, which
provisions are more fully explained in the COBRA information provided to You by
the Company. However, You will no longer be eligible for any continuation
coverage under COBRA if Your eligibility for continuation coverage ceases
pursuant to the provisions of COBRA.

16. No Entitlement to Severance. You acknowledge that the compensation You are
receiving is being received solely in exchange for Your promises in this
Agreement. You understand that severance pay is not ordinarily available under
Company’s policy to employees whose employment relationship ends. You further
acknowledge that You have been paid all wages and provided all benefits
(including, but not limited to, base salary, bonuses, and paid time
off/vacation).

17. Cooperation. You shall assist in the orderly transition of all current
projects and assignments. You will sign (and, as necessary, at the Company’s
expense, have notarized) all documents as reasonably requested by the Company,
including all documents relating to resignation from executive or director
positions with the Company’s subsidiaries.

You shall cooperate fully with Company and with Company’s counsel in connection
with any present or future, actual or threatened, litigation or administrative
proceeding involving Company or any predecessor of Company that relates to
events, occurrences or conduct occurring (or claimed to have occurred) during
the period of Your employment by Company or any predecessor to Company. This
cooperation by You shall include, but not be limited to (i) being reasonably
available for interviews and discussions with Company’s counsel as well as for
depositions and trial testimony; (ii) if depositions or trial testimony are to
occur, being reasonably available and cooperating in the preparation therefore
as and to the extent that Company’s or other party’s counsel reasonably
requests; (iii) refraining from impeding in any way Company’s prosecution or
defense of such litigation or administrative proceeding; and (iv) cooperating
fully in the development and presentation of prosecution or defense of such
litigation or administrative proceeding.

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You will be reimbursed by Company for reasonable travel, lodging, telephone and
similar expenses incurred in connection with such cooperation.

18. Governing Law. This Agreement shall be governed by the laws of the State of
New York except to the extent preempted by Federal law.

19. Venue. Both You and the Company hereby irrevocably waive any objection that
they now or hereafter may have to the laying of venue of any action or
proceeding arising out of or relating to this Agreement brought in the United
States District Court for the Eastern District of New York, or any New York
state court, and any objection on the ground that any such action or proceeding
in either of such Courts has been brought in an inconvenient forum. This means
that if Company sues you for violating this Agreement, Company may do so in a
state or federal court located in New York, including Suffolk County.

20. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, YOU AND THE
COMPANY IRREVOCABLY WAIVE YOUR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO
ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF
SUCH RIGHTS AND OBLIGATIONS. This means that only a judge, not a jury, will
decide any lawsuit.

21. Amendment. This Agreement may not be modified, altered or changed except
upon express written consent of both parties in a document that specifically
refers to this Agreement.

22. Severability. Each provision of this Agreement is severable from the entire
Agreement. In the event that any provision is declared invalid or unenforceable,
that provision shall be amended if possible to be enforceable, but in any event,
the remaining provisions of this Agreement shall remain in effect.

23. Entire Agreement. You and the Company agree that: (a) this Agreement
contains the entire agreement between the Released Parties, the Company and You;
and (b) that neither Company, any other Released Party, nor You has made any
other representations except those set forth in this Agreement to induce the
other parties to agree to this Agreement.

YOU ACKNOWLEDGE THAT YOU HAVE READ THIS AGREEMENT, THAT YOU HAVE BEEN GIVEN AN
OPPORTUNITY TO HAVE ANY PARAGRAPHS EXPLAINED, AND THAT YOU UNDERSTAND EACH
PARAGRAPH OF THE AGREEMENT.

YOU HAVE BEEN ADVISED THAT YOU HAVE TWENTY-ONE (21) CALENDAR DAYS TO CONSIDER
THIS AGREEMENT AND YOU HAVE BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY
BEFORE SIGNING THIS AGREEMENT.

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YOU AGREE THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT
DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAY
CONSIDERATION PERIOD.

HAVING ELECTED TO SIGN THIS AGREEMENT, TO FULFILL THE PROMISES SET FORTH IN THIS
AGREEMENT, AND TO RECEIVE THE AMOUNTS SET FORTH IN PARAGRAPH “7” ABOVE, YOU
FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTER INTO THIS AGREEMENT
INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS YOU HAVE OR MIGHT HAVE AS OF
THE DATE OF SIGNING AGAINST THE COMPANY OTHER THAN SET FORTH IN PARAGRAPH 11
ABOVE.

IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this
Agreement as of the date set forth below:

  NAME     FalconStor Software, Inc. By:

/s/ Patrick McClain

  By:

Todd Brooks

  Patrick McClain    

Todd Brooks, Chief Executive Officer

 

Date:  
 
  Date:  
 

 

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