**Exhibit 10.34**

 

April 17, 2002

(revised April 25, 2002)

 

 

Michael E. Ford

Kaizersgracht 40

Apt. 6C

Amsterdam, The Netherlands101 5CR

 

Dear Mike,

 

We regret to inform youthat your position with Interactive Intelligence, Inc. (“InteractiveIntelligence”) is being eliminated as part of a reduction in workforceeffective April 27, 2002.  This actionis being taken as part of an overall strategy to bring InteractiveIntelligence’s expenses more in line with its expected revenues.

 

In accordance with youremployment agreement with Interactive Intelligence, this letter serves as a ten(10) day written notice of termination of employment.  Because this termination of employment is defined as ‘withoutcause,” you are entitled, per your employment agreement, to a severancecompensation amount equal to one month of base salary, from the date oftermination.  This severancecompensation will be paid to you on Interactive Intelligence’s usual payrollpayment dates.  Severance checks arecontingent upon returning all Interactive Intelligence assets and companyequipment unless noted. All documents/folders/code should not be removed fromequipment.  The information isInteractive Intelligence’s property and should not be removed.

 

In addition, you areentitled to receive payments, subject to applicable withholdings, for:

•                  currentlyunpaid commissions per the sales commission plan; paid pursuant to the plan.

•                  accruedand unused vacation benefits paid on the next normal pay date,  and

•                  actual2001 French taxes owed (payable directly to the French Government aftercompletion of 2001 tax return).

 

We understand that it isimportant for you to begin a search for new employment immediately.  Therefore, April 17, 2002 is your lastofficial day of work.  However, yourregular pay and benefits will continue through April 27, 2002.

 

This packet includes aseparate notification regarding your rights under COBRA to continue your healthinsurance coverage and important information regarding your stock optionprogram with Interactive Intelligence. If you are a participant in the Employee Stock Purchase Plan, the 401(k)plan, or the voluntary life insurance plan, appropriate information isincluded.  Deductions for 401(k) andother voluntary benefits will continue through your notice period, April 27,2002, unless you notify us otherwise prior to April 27, 2002.  I invite you to contact me if you have anyquestions.

 

Mike, we furtherunderstand and appreciate what you have done for us in your various roles atInteractive Intelligence, and would like to end this relationship on a positiveand fair note.  As such, we are offeringyou the following:

 

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1)              Five additionalmonths of base salary as severance (to total six months), less:

•                  AutomobileDeposit - $8,000

•                  1998,1999 Tax Equalization Amounts – $6,000

•                  2000,2001 Tax Equalization Amounts – $15,000 (please note that 2000 and 2001 amountsowed to Interactive Intelligence, excluding AMT amounts, are estimated atapproximately $85,000).

•                  2002Recoverable Draws - $15,000

 

2)     The net amount, less applicablewithholdings, will be paid to you in a lump sum payment.

3)     We will pay you an amount of $10,000 forrelocation expenses.

4)     We will make an exception to allow you toretain the 6,000 options that vest June 30, 2002.

 

The above describedbenefits will be provided to you in exchange for:

1)     a full release of any and all claimsassociated with your employment and the termination of that employment, asdetailed with other provisions in Attachment A, which is expressly made a part of this letteragreement.  Your acceptance of theprovisions of Attachment A shall be confirmed by your signature on this letteragreement.

2)     a promissory note for $50,000 related to2000 and 2001 Tax Equalization amounts, as set forth  in Attachment B.  This isinterest-free, and payable at 50% of any refund obtained from a US FederalIncome Tax filing within the next five years. Any unpaid amount will be due at the end of five years.

3)     an acknowledgement that you are responsiblein whole for your 2002 global income taxes, which acknowledgement shall beconfirmed by signature on this letter agreement.

 

Mike, this offer can beaccepted by signing at the bottom of this letter agreement.  Please note that the offer will lapse at12:00 midnight on Thursday, April 25, 2002. If we have not heard from you by then, the severance amount will revertto our contractual obligation, and we will contact you as the first step tomaking arrangements for repayment of all amounts owed.

 

If there are any othermatters you wish to discuss, do not hesitate to contact me at (317)715-8432.   On behalf of the entireteam, I wish to thank you for your service and contributions to InteractiveIntelligence and wish you the best in your future endeavors.

 

Sincerely,

 

 

Debra L. Jones

Human Resources Manager,Interactive Intelligence, Inc.

 

 

Offer Acceptance:

 

 
| /s/Michael E. Ford |   | April 25, 2002 |   |
|--------------------|--------|----------------|--------|
| Michael E. Ford    | Date   |
|               |   |

 

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**Attachment A**

 

General Release

In consideration of thepayment of the additional severance benefits described in the attached letteragreement, you hereby generally, irrevocably and unconditionally release andforever discharge and covenant not to sue Interactive Intelligence and/or anyof its predecessor, successor, and/or related entities and its or their currentand/or former employees, board members, shareholders, officers, directors,representatives and attorneys (either in their individual or representativecapacities) and their successors, heirs, administrators and assigns, and/or anypersons acting by, through or under or in concert with any of them(collectively the “Releasees”) from all charges, complaints, claims, demands,liabilities, obligations, injuries, actions or rights of action of any naturewhatsoever, including claims for attorneys’ fees, interest and costs, whetherknown or unknown, disclosed or undisclosed, administrative or judicial,suspected or unsuspected, that exist in whole or in part as of the date youexecute the attached letter agreement, including, but not limited to any claimsbased upon, arising out of or in any manner connected with your employment withInteractive Intelligence or the termination of your employment with InteractiveIntelligence.  You acknowledge that thisrelease, discharge and covenant not to sue is to be construed as broadly aspossible and includes, but is not limited to, and constitutes a complete waiverof, any and all possible claims under Title VII of the Civil Rights Act of1964, as amended, and any and all other federal, state and local laws andstatutes, and also applies to any wrongful discharge, breach of contract,or other state law claims.  You alsorelease and waive any rights you may have against any of the Releasees forretirement or severance payments or benefits (other than those specificallydescribed in the attached letter agreement or Attachment).

 

Entire Agreement

The attached letteragreement and Attachments  shall notaffect your obligations (and Interactive Intelligence’s rights and remediesregarding such obligations) with respect to paragraphs 7, 8, 9, 10 and 11 ofyour Employment Agreement dated June 30, 1997. Any such obligations, rights, and remedies shall remain in full forceand effect.  Other than with respect tosuch aforementioned obligations, rights and remedies, the attached letteragreement and Attachments set forth the entire agreement between you andInteractive Intelligence and supersede any and all other prior agreements orunderstandings, written or oral, between you and Interactive Intelligence.  The attached letter agreement and Attachmentscan only be modified by a writing signed by you and an authorized official ofInteractive Intelligence.

 

No Admission

You acknowledge that the attached letter agreement and Attachments andthe actions taken pursuant thereto do not constitute an admission byInteractive Intelligence of any wrongdoing or liability to you, and InteractiveIntelligence expressly denies any wrongdoing or liability.

 

Severability

Should any clause, portion or section of the attached letter agreementor Attachments be unenforceable or invalid for any reason, you and InteractiveIntelligence acknowledge and agree that such unenforceability or invalidityshall not affect the enforceability or validity of the remainder of theattached letter agreement or Attachments. Should any particular covenant, provision or clause of the attachedletter agreement  or Attachments be heldunreasonable or contrary to public policy for any reason, you and InteractiveIntelligence acknowledge and agree that such covenant, provision or clause shallautomatically be deemed modified such that the 

 

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contested covenant, provision or clause will have the closest effectpermitted by applicable law to the original form and shall be given effect andenforced as so modified to whatever extent would be reasonable and enforceableunder applicable law.

 

Governing Law, Jurisdiction and Venue

You and Interactive Intelligence acknowledge and agree that theattached letter agreement and Attachments shall be construed and enforced inaccordance with the laws of the State of Indiana, notwithstanding any state’sor nation’s choice-of-law rules to the contrary.  You and Interactive Intelligence also agree that any legal actionrelating to the attached letter agreement or Attachments shall be commenced andmaintained exclusively before any appropriate state court of record in HamiltonCounty, Indiana, or, if subject matter jurisdiction is appropriate, theUnited States District Court for the Southern District of Indiana,Indianapolis Division, and you and Interactive Intelligence submit to thejurisdiction of such courts and waive any right to challenge or otherwise raisequestions of personal jurisdiction or venue in any action commenced ormaintained in such courts.

 

Successors and Assigns

You acknowledge that Interactive Intelligence shall have the right toassign the attached letter agreement and Attachments.  The attached letter agreement and Attachments shall inure to thebenefit of, and may be enforced by, any and all successors and assigns ofInteractive Intelligence, including without limitation by asset assignment,stock sale, merger, consolidation or other corporate reorganization, and shallbe binding on you, your executors, administrators, personal representatives orother successors in interest.  You shallnot have the right to assign the attached letter agreement or Attachments.

 

Modification

This attached letter agreement and Attachments may not be amended,supplemented, or modified except by a written document signed by both you andInteractive Intelligence.

 

Knowledge, Voluntariness andNon-Reliance

You acknowledge that youhave had ample time to review the attached letter agreement and Attachments andthat you understand the meaning of the attached letter agreement andAttachments.  You acknowledge that youare voluntarily entering into the attached letter agreement and Attachments andthat in entering into such letter agreement and Attachments, you have notrelied  on any representations made byInteractive Intelligence or any of the Releasees other than those specified inthe attached letter agreement and Attachments.

 

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# **ATTACHMENTB: PROMISSORY NOTE**

 

 
| $50,000.00 |   | Indianapolis, Indiana |   | April 17, 2002                           |
|------------|--------|-----------------------|--------|------------------------------------------|
|       |   |                  |   | Scheduled Due Date:  April 16, 2007 |

 

**FORVALUE RECEIVED**, the undersigned, MICHAEL E. FORD (“**Maker**”),promises to pay to the order of INTERACTIVE INTELLIGENCE, INC., an Indianacorporation (hereinafter called the “**Company**,” which term shall include anyholder hereof) at such place as the Company may designate by written notice toMaker or, in the absence of such designation, at the Company’s headquarters inIndianapolis, Indiana, the sum of Fifty Thousand Dollars ($50,000.00)(hereinafter referred to as the “**Loan**”), together with interest after theMaturity Date as hereinafter provided and payable at the time and in the mannerhereinafter provided.

 

This Note shall mature on that date (the “**Maturity Date**”) which is theearlier of:  (i) April 16, 2007; or (ii)that date on which the Company accelerates payment of this Note.  On the Maturity Date, the principal balanceof the Loan outstanding on such date shall be due and payable in full.

 

The principal balance of the Loan outstanding from time to time fromand after the date of this Note (the “**Closing Date**”) shall bear interest(computed on the basis of a 360-day year and actual days elapsed) asfollows:  (i) from and after theClosing Date until the Maturity Date, at a rate equal to zero percent (0%) perannum; and (ii) after the Maturity Date until paid in full, at rate of tenpercent (10%) per annum.

 

Maker shall pay to the Company, for application against the Loan fiftypercent (50%) of the gross amount of each United States income tax refundreceived by Maker (whether such amounts are received individually or jointly)at any time during the period from the date of this Note to the Maturity Date,each such payment to be made within seven (7) days of the date of the receiptby Maker of the corresponding income tax refund (each, a “**Refund Payment**”).

 

The remaining principal of the Loan and all interest accruing thereon,shall be due and payable in full on the Maturity Date.  All amounts paid under this Note, asreceived, shall be applied prior to any Event of Default as follows:  (i) first, to the payment of interestaccrued to the date of receipt of payment; and (ii) the balance, if any, toprincipal of the Loan.  All amountspayable under this Note shall be payable without relief from valuation andappraisement laws, and with all collection costs and reasonable attorneys’fees.  The principal of this Note may beprepaid in whole or in part at any time and from time to time without penaltyor premium.

 

Maker covenants to the Company as follows (the “**Reporting Covenants**”):

 

(a)           Within thirty (30)days after filing with the United States Internal Revenue Service, Maker shallprovide to the Company, together with a written statement signed by Makerconfirming the correctness of the copy provided, a complete copy of the signedfederal  personal income tax returnsfiled by Maker (whether individually or jointly) for 2001 and for each calendaryear thereafter to and including 2006.

 

(b)           At the close of eachcalendar year until this Note is paid in full, beginning with the close of  calendar year 2002, Maker shall certify tothe Company  the amount of United Statesincome tax refunds received by Maker at any time during that calendar year,such certification to be made in a writing signed by Maker, dated as ofDecember 31 and delivered to the Company within thirty (30) days after theclose of each such calendar year.

 

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Each of the following events shall constitute an “**Event of Default**” forpurposes of this Note and each such Event of Default shall be deemed to existand continue so long as, but only so long as, it shall not have been remedied:

 

(a)           Maker shall defaultin the payment when due of any amount payable under this Note or in the paymentwhen due of any of the other obligations, liabilities or indebtedness of Makerto the Company, and all renewals and extensions thereof.

 

(b)           Maker shall becomesubject as a debtor to an order for relief under the United States BankruptcyCode.

 

(c)           Maker shall fail totimely perform and satisfy any of the Reporting Covenants.

 

In the Event of Default, the entire unpaid balance of principal of thisNote shall become due and payable immediately, without notice or demand, at theelection of the holder of this Note.

 

Maker, and any endorser, surety hereby waives presentment, notice ofdishonor, protest, notice of protest, and diligence in bringing suit againstany party hereto, and any defenses of any accommodation maker and consent thatwithout discharging any of them, the time of payment of this Note may beextended an unlimited number of times before or after maturity without noticeto Maker.  Maker agrees that no omissionor delay on the Company’s part in exercising any right against, or taking anyaction to collect from or pursue the Company’s remedies against any partyhereto will release, discharge, or modify the duties of Maker to make paymentshereunder.

 

The obligations evidenced hereby may from time to time be evidenced byanother note or notes given in substitution, renewal or extension hereof.

 

If any of the terms or provisions of this Note shall be deemedunenforceable, the enforceability of the remaining terms and provisions shallnot be affected.

 

MAKER AGREES THAT THE COURTS OF THE STATE OF INDIANA LOCATED ININDIANAPOLIS, INDIANA, AND THE FEDERAL COURTS LOCATED IN THE SOUTHERN DISTRICTOF INDIANA, MARION COUNTY, HAVE EXCLUSIVE JURISDICTION OVER ANY AND ALL ACTIONSAND PROCEEDINGS INVOLVING THIS NOTE AND MAKER HEREBY IRREVOCABLY ANDUNCONDITIONALLY AGREES TO SUBMIT TO THE JURISDICTION OF SUCH COURTS FORPURPOSES OF ANY SUCH ACTION OR PROCEEDING. MAKER HEREBY IRREVOCABLY ANDUNCONDITIONALLY WAIVES ANY OBJECTION THAT MAKER MAY NOW OR HEREAFTER HAVE TOTHE VENUE OF ANY SUCH ACTION OR PROCEEDING, INCLUDING ANY CLAIM THAT SUCH COURTIS AN INCONVENIENT FORUM, AND CONSENTS TO SERVICE OF PROCESS PROVIDED THE SAMEIS IN ACCORDANCE WITH THE TERMS HEREOF. FINAL JUDGMENT IN ANY SUCH PROCEEDINGAFTER ALL APPEALS HAVE BEEN EXHAUSTED OR WAIVED SHALL BE CONCLUSIVE AND MAY BEENFORCED IN OTHER JURISDIC­TIONS BY SUIT ON THE JUDGMENT OR AS OTHERWISEPROVIDED BY LAW.

 

Executed and delivered this 17th day of April, 2002.

 
|   | /s/Michael E. Ford      |
|--------|-------------------------|
|   | Michael E. Ford         |
|   |                    |
|   | (“**Maker**”) |

 

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