Exhibit 10.2


    Exhibit
      10.2

     

    EMPLOYMENT
      TERMINATION
      AGREEMENT

    


    This
      Employment Termination Agreement (“Agreement”) is entered into by and between
      ClearOne Communications, Inc. (“ClearOne” or the “Company”) and Susie S. Strohm
      (“Strohm”) (ClearOne and Strohm shall sometimes be hereinafter referred to
      collectively as the “Parties”).

    


    RECITALS

    


    A. Strohm
      has been employed by ClearOne in a variety of positions, most recently as the
      Company’s Chief Financial Officer.

    


    B. On
      January 15, 2003, the United States Securities and Exchange Commission
      filed a civil action against ClearOne, Strohm, and Frances M. Flood, who was
      then serving as the Company’s Chief Executive Officer, alleging various
      improprieties and misstatements in connection with the Company’s financial
      statements (the “SEC Action”).

    


    C. The
      filing of the SEC Action has spawned, and may continue to spawn, multiple
      related proceedings, including, but not limited to, multiple shareholder
      securities class actions, multiple shareholder derivative actions, a grand
      jury
      investigation being conducted by the United States Department of Justice, a
      dispute and potential litigation between the Company and its directors and
      officers liability insurers, and potential litigation between the Company and
      its former auditor, Ernst & Young (collectively, “Related
      Proceedings”).

    


    D. Soon
      after the filing of the SEC Action, the Company placed Strohm on a paid
      administrative leave of absence, and this paid administrative leave has
      continued in effect at all times up to the execution of this
      Agreement.

    


    E. Strohm
      has employed separate counsel, Milo Steven Marsden and the law firm of
      Bendinger, Crockett, Peterson & Casey, PC (collectively, “BCP&C”), to
      defend her in the SEC Action and the Related Proceedings. BCP&C has also
      represented Strohm in connection with the negotiation and drafting of this
      Agreement.

    


    F. Strohm
      has made various demands on the Company for indemnification and for advancement
      of the attorneys’ fees and costs she has incurred to date, as well as the
      attorneys’ fees and costs she may subsequently incur, in connection with the SEC
      Action and the Related Proceedings and has provided the Company with written
      undertakings, dated August 29, 2003 and September 3, 2003, in
      conformity with the requirements of Utah Code Ann.
§ 16-10a-904.

    


    G. ClearOne
      referred Strohm’s demands for indemnification to its Special Litigation
      Committee (“SLC”) comprised of two independent directors. The SLC reviewed those
      demands, as well as similar demands for indemnification made by other present
      or
      former officers and directors of the Company, in conjunction with its
      investigation of the various claims asserted in the multiple shareholder
      derivative actions filed against certain of the Company’s present and former
      officers and directors, including Strohm. On October 13, 2003, the SLC
      completed its investigation concerning the derivative actions and the
      indemnification demands and issued its reports
      to the Company wherein it concluded, inter alia,
      that
      pursuing the derivative actions was not in the best interest of the Company
      and
      that the Company should attempt to negotiate a settlement of Strohm’s
      indemnification demands in the context of negotiating a global settlement of
      all
      potential claims and counterclaims between the Company and Strohm. In reliance
      on the SLC’s conclusions and recommendations, the Company has moved to dismiss
      the derivative actions pursuant to Utah Code Ann. § 16-10a-740(4)(a) and
      has negotiated this Agreement with Strohm.

    

      
        
          
          

        

        
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    H. Strohm
      and ClearOne desire to resolve any and all disputes that may exist between
      them,
      whether known or unknown, including, but not limited to, disputes regarding
      Strohm’s demand for indemnification, disputes relating to Strohm’s employment
      with ClearOne, and disputes relating to the termination of that employment
      relationship.

    


    AGREEMENT

    


    NOW,
      THEREFORE, in consideration of the mutual promises, covenants, warranties,
      and
      agreements set forth herein, the Parties mutually agree as follows:

    


    1. Effective
      Date.
      This
      Agreement is effective on the eighth day following Strohm’s signing of this
      Agreement, provided that Strohm does not revoke her execution of this Agreement
      as provided in Paragraph 19 below.

    


    2. Receipt
      of this Agreement.
      Strohm
      acknowledges that she received a copy of this Agreement on December 2,
      2003, and that she has 21 days from the receipt of this Agreement in which
      to
      consider and consult with an attorney regarding this Agreement. Strohm further
      acknowledges that she has had an adequate amount of time in which to consult
      with BCP&C, her counsel of choice, with respect to the contents of this
      Agreement prior to signing.

    


    3. Payment
      to Strohm.
      Upon
      the expiration of the revocation period described in Paragraph 19 below and
      the unrevoked signing of this Agreement by Strohm, ClearOne shall pay Strohm
      the
      sum of $75,000. The Parties acknowledge and agree that this payment is being
      made in consideration of, inter alia,
      the
      Company’s purchase of Strohm’s shares of the Company’s common stock, the
      Company’s cancellation of Strohm’s options to purchase additional shares of the
      Company’s common stock, and the release of all claims that Strohm may have
      against the Company, all as more fully stated in Paragraphs 5, 6, and 9
      below. The Parties also acknowledge and agree that the Company is not
      responsible for the withholding of any federal or state taxes from said payment
      and that Strohm is responsible for paying any taxes that may become due and
      owing as a result of her receipt of said payment.

    


    4. Resignation
      of Employment.
      Strohm
      hereby resigns her employment with ClearOne effective December 5,
      2003.

    


    5. Cancellation
      of Stock Options.
      As
      partial consideration for the payment specified in Paragraph 3 above, upon
      the expiration of the revocation period described in Paragraph 19 below and
      the unrevoked signing of this Agreement by Strohm, all unexercised stock options
      acquired by Strohm during her employment with the Company, whether vested or
      unvested, shall immediately
      be deemed cancelled. Strohm represents and warrants that, immediately prior
      to
      the effective date of this Agreement, she holds vested and unvested stock
      options entitling her to purchase up to a total of 268,464 shares of the
      Company’s common stock and that 171,963 of these options are vested. Strohm
      further agrees that all of her rights, entitlements, and benefits under the
      1990
      Gentner Stock Option Plan and the 1998 ClearOne Stock Option Plan, including
      any
      agreements entered into in relation to the foregoing plans, are hereby
      terminated and cancelled.


    
      
        
          
          

        

        
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    6. Transfer
      of Stock.
      As
      partial consideration for the payment specified in Paragraph 3 above, upon
      the expiration of the revocation period described in Paragraph 19 below and
      the unrevoked signing of this Agreement by Strohm, Strohm shall transfer,
      assign, and sell to the Company 15,500 shares of the Company’s common
      stock.

    


    7. Cooperation
      in Related Proceedings.
      Strohm
      shall cooperate with the Company and its counsel in the defense and/or
      prosecution of the SEC Action and the Related Proceedings. Strohm’s cooperation
      shall include, but shall not be limited to, voluntarily providing deposition
      and
      trial testimony, meeting with the Company and its counsel for the purpose of
      preparing for depositions or trial proceedings, and providing information and
      documents to the Company or its counsel in connection with the defense and/or
      prosecution of the SEC Action and the Related Proceedings. With respect to
      any
      request by the Company and/or its counsel for deposition or trial testimony,
      meetings, information, or documents, the Company shall give reasonable notice
      to
      Strohm of its request, including the time and place of the deposition, trial,
      or
      meeting, and shall reimburse Strohm for all reasonable expenses incurred by
      her,
      including reasonable attorneys’ fees and costs, in providing the requested
      cooperation.

    


    8. Indemnification.
      Subject
      to the limitations imposed by Utah Code Ann. § 16-10a-902 and the Company’s
      articles of incorporation and bylaws, and also subject to the undertakings
      referred to in Recital F above, ClearOne shall indemnify Strohm for any
      liability and for all reasonable attorneys’ fees and costs incurred by her in
      connection with the SEC Action or any Related Proceedings, whether incurred
      before or after the effective date of this Agreement. The Company’s duty to
      indemnify Strohm is further conditioned upon Strohm’s fulfillment of her duty
      under Paragraph 7 above to cooperate with the Company and its counsel in
      connection with the SEC Action and Related Proceedings.

    


    9. Release
      of Claims by Strohm.
      Strohm,
      on behalf of herself and her heirs and assigns, hereby completely releases
      and
      discharges ClearOne and all of ClearOne’s predecessors, successors, parents,
      subsidiaries, and affiliates, and all of their respective present and former
      directors, officers, employees, attorneys and agents (hereinafter collectively
      referred to as “Releasees”) from any and all existing claims and causes of
      action of every kind and nature, whether presently known or unknown by the
      Parties, including but not limited to any claims or causes of action for breach
      of implied or express contract, libel, slander, wrongful discharge or
      termination, discrimination claims under the Age Discrimination in Employment
      Act and/or Older Workers Benefit Protection Act, Title VII of the Civil Rights
      Act of 1964, as amended, the Utah Antidiscrimination Act, local laws prohibiting
      age, race, religion, sex, national origin, disability and other forms of
      discrimination, or any other federal or state law that may be applicable
      thereto, claims growing out of any legal restrictions on ClearOne’s right to
      terminate its
      employees, any tort claim or other claim arising in any way out of the
      employment relationship between Strohm and ClearOne or the termination of that
      relationship. Strohm specifically waives any and all claims for back pay, front
      pay, or any other form of compensation for services, except as set forth
      herein.

    

      
        
          
          

        

        
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    Except
      as
      expressly stated in Paragraph 8 above, Strohm hereby waives any right to
      recover damages, costs, attorneys’ fees, and any other relief in any proceeding
      or action brought against ClearOne by any other party, including without
      limitation the Equal Employment Opportunity Commission and the Utah
      Antidiscrimination and Labor Division, on Strohm’s behalf asserting any claim,
      charge, demand, grievance, or cause of action released by Strohm as stated
      above.

    


    Notwithstanding
      the foregoing, Strohm does not waive rights, if any, Strohm may have to
      unemployment insurance benefits or workers’ compensation benefits. Nothing in
      this Paragraph 9 prohibits Strohm from paying COBRA premiums to maintain
      Strohm’s participation, if any, in ClearOne’s group health plan to the extent
      allowed by law and by the terms, conditions, and limitations of the health
      plan.

    


    10. Release
      of Claims by ClearOne.
      Except
      for any claim as to which indemnification is not allowed by Utah Code Ann.
      § 16-10a-902 and any claim that may accrue under the undertakings
      referenced in Recital F above, ClearOne, on behalf of itself and its successors
      and assigns, hereby completely releases and discharges Strohm from all existing
      claims and causes of action of any kind and nature, whether presently known
      or
      unknown by the Parties, including but not limited to any claims or causes of
      action arising out of or relating to Strohm’s employment with
      ClearOne.

    


    11. No
      Assignment of Claims.
      Strohm
      represents and warrants that she has not previously assigned or transferred,
      or
      attempted to assign or transfer, to any third party, any of the claims waived
      and released herein.

    


    12. No
      Claim Filed.
      Strohm
      represents that she has not filed any claim, complaint, charge, or lawsuit
      against ClearOne or any other Releasee with any governmental agency or any
      state
      or federal court, and covenants not to file any lawsuit at any time hereafter
      for any matter, claim, or incident known or unknown which occurred or arose
      out
      of occurrences prior to the date hereof.

    


    13. No
      Admission of Liability.
      This
      Agreement does not constitute an admission of any fault, liability, or
      wrongdoing by any Releasee, nor an admission that Strohm has any claim
      whatsoever against ClearOne or any other Releasee. ClearOne and all other
      Releasees specifically deny having any liability to Strohm or having committed
      any wrongful acts against Strohm. This Agreement does not constitute an
      admission of any fault, liability, or wrongdoing by Strohm, nor an admission
      that ClearOne has any claim against Strohm. Strohm specifically denies having
      any liability to ClearOne or having committed any wrongful acts against
      ClearOne.

     

    14. Additional
      Consideration.
      Strohm
      acknowledges and agrees that as of the date she signs this Agreement, ClearOne
      has paid to Strohm (a) all compensation for wages earned, less normal
      payroll deductions, (b) all amounts due for earned vacation pay less normal
      payroll deductions, and (c) all other amounts due and owing to Strohm by
      ClearOne. Strohm agrees and acknowledges that the sums paid pursuant to this
      Agreement are in addition to any sums or payments to which Strohm would be
      entitled but for the signing of this Agreement.

    
      
        
          
          

        

        
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    15. Conditions
      Subsequent.
      This
      Agreement is conditioned upon Strohm signing settlement documents in the SEC
      Action by December 5, 2003, and upon the final approval of the settlement
      of the SEC Action, as it applies to Strohm, by January 31, 2004. If for any
      reason Strohm fails to satisfy either of these conditions, this Agreement will
      automatically become null and void, and the Parties shall forthwith return
      to
      each other any and all consideration received by them pursuant to this
      Agreement.

    


    16. Integration
      Clause.
      This
      Agreement contains the entire agreement and understanding of ClearOne and Strohm
      concerning the subject matter hereof, and except as expressly noted herein,
      this
      Agreement supersedes and replaces all prior negotiations, proposed agreements,
      agreements or representations whether written or oral concerning the subject
      matter hereof. ClearOne and Strohm agree and acknowledge that neither ClearOne
      or Strohm, nor any agent or attorney of either, has made any representation,
      warranty, promise or covenant whatsoever, express or implied, not contained
      in
      this Agreement, to induce the other to execute this Agreement. No amendment,
      alteration, or modification of this Agreement shall be effective unless made
      in
      writing and signed by both Parties.

    


    17. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Utah, without giving effect to Utah’s choice of law rules.

    


    18. Voluntary
      and Knowing Signing.
      Strohm
      acknowledges that she has read this Agreement carefully and fully understands
      this Agreement and that she has consulted with her attorney, BCP&C, prior to
      signing this Agreement. Strohm acknowledges that she has executed this Agreement
      voluntarily and of her own free will and that she is knowingly and voluntarily
      releasing and waiving all claims she may have against Releasees, including
      ClearOne.

    


    19. Revocation
      Period.
      Strohm
      has seven (7) days from the date on which she signs this Agreement to revoke
      this Agreement by providing written notice, by mail, hand delivery, or
      facsimile, of her revocation to:

    


    Raymond
      J. Etcheverry

    Parsons
      Behle & Latimer

    Counsel
      for ClearOne

    201
      South
      Main Street

    Suite
      1800

    Salt
      Lake
      City, Utah 84111

    Facsimile:
      (801) 536-6111

     

    Strohm’s
      revocation, to be effective, must be received by the above-named person by
      the
      end of the seventh day after Strohm signs this Agreement. This Agreement becomes
      effective on the eighth day after Strohm signs this Agreement, providing that
      Strohm has not revoked this Agreement as provided above.

    


    


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the Parties have executed this Agreement on the dates indicated
      below.

     

     

     

    
      	
               

               

               

               

              Dated:
                December 5, 2003

            	
              CLEARONE
                COMMUNICATIONS, INC.

               

              /s/
                Mike Keough

               

              By:
                Mike Keough

               

              Its:
                CEO

            
	
               

               

               

              Dated:
                December 2, 2003

            	
               

              /s/
                Susie Strohm

               

              Susie
                Strohm

              SUSIE
                S. STROHM