ex10-1.htm


    
      

    

    Exhibit
10.1

     

     

    TRANSITION
AGREEMENT

    


    This
Transition Agreement (the “Agreement”) is made and entered into this 16th day of
March, 2009 (the “Effective Date”) between On2 Technologies, Inc., a Delaware
corporation (“On2”), and Anthony Principe (hereinafter “Principe”).

    


    WHEREAS,
Principe has served as the Senior Vice President and Chief
Financial  Officer of On2 and as a member of the Board of Directors of
On2 Technologies Finland Oy (the “On2 Finland”); and

     

    WHEREAS,
Principe and On2 have agreed that Principe will resign as an officer of On2 and
as a member of the Board of Directors of On2 Finland, and will serve as a
consulting independent contractor for On2 until September 15, 2009, all under
the terms and conditions of this Agreement.

    


    NOW, THEREFORE, AND IN
CONSIDERATION of the mutual promises of the parties to this Agreement,
the receipt and sufficiency of which are hereby acknowledged, Principe and On2
hereby agree as follows:

    


    1.   Resignation.  As
of the Effective Date, Principe resigns, and On2 accepts his resignation, from
his employment with On2 and from all the offices, directorships and other
positions that he holds with On2 and any of On2’s directly and indirectly owned
subsidiaries, including without limitation his positions as Senior Vice
President and Chief Financial Officer of On2 and member of the Board of
Directors of On2 Finland.  After the Effective Date, Principe shall
not be entitled to the receipt of any further payments or benefits from On2
other than those expressly provided for in this Agreement. The parties hereto
agree that this Agreement constitutes written notice to On2 Finland of
Principe’s resignation from the Board of Directors of On2 Finland.

     

    2.   Consulting
Engagement.   From the Effective Date through September
15, 2009 (the “Transition Period”), Principe shall serve in an independent
contractor capacity as a consultant to On2.  Principe’s
responsibilities during the Transition Period shall be to assist in effecting a
smooth transition of On2’s chief financial officer responsibilities and to
perform such other advisory duties as On2’s chief financial officer or chief
executive officer shall reasonably assign to him, up to a maximum of twenty (20)
hours per month.  During the Transition Period, Principe will not
undertake any business activities as an advisor to On2 or otherwise on behalf of
On2 without the prior approval of On2’s chief financial officer or chief
executive officer.  Principe shall have no power or authority to act
for or to take any action on behalf of On2 or to bind On2 to any obligation with
any third party.

     

    3.   Compensation During
Transition Period.

     

    (a)        
Vacation Days;
Expenses.

     

    (i)          On the
next regularly scheduled pay day after the Effective Date, On2 will pay Principe
for any accrued but unused vacation days as of the Effective Date, in accordance
with On2’s applicable policies and procedures.

     

    (ii)         On2 shall
reimburse Principe for appropriate and reasonable expenses incurred by Principe
on or before the Effective Date, if any, in accordance with On2’s applicable
policies and procedures.

     

    (b)        
Consulting
Fees.  Provided that Principe (i) signs this Agreement and does
not revoke his signature and (ii) complies with all of his obligations in this
Agreement, then during the Transition Period, On2 shall pay Principe twelve
equal consulting fee payments of Six Thousand Six Hundred and Forty-Nine Dollars
and 94 cents ($6,649.94), each such payment to be issued on fifteenth and last
day of each month during the Transition Period, with such amounts being payable
even if Principe becomes employed during the Transition Period.

     

    
      
         

      

      
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    (c)        
Stock Options and Restricted
Stock Awards.  Notwithstanding the terms of the grants of any
On2 stock options granted to Principe prior to the Effective Date, all of
Principe’s On2 stock options that are vested as of the Effective Date shall
remain exercisable through March 15, 2011.  The vesting schedules for
any On2 restricted stock issued to Principe shall remain unchanged.

     

    (d)        
Benefits.  During
the Transition Period and for three (3) months thereafter (the “Health Care
Period”), Principe and the Principe family members currently covered under On2’s
employee health care plan, shall continue to be eligible to participate in On2’s
employee health care plan, as amended from time to time; provided, however
that if during the Health Care Period, Principe accepts employment with
an employer that offers health care benefits, Principe agrees to notify On2 of
such employment and his On2 health care benefits shall terminate on the earlier
of the date of his eligibility for health care benefits from his new employer or
the last day of the Health Care Period.

     

    4.   General
Release of Claims. In consideration for the promises herein, Principe on
behalf of himself and his heirs, executors, administrators and assigns, hereby
irrevocably and unconditionally remises, releases and forever discharges On2
Technologies, Inc. (“On2”) and its
affiliates and subsidiaries, and all of their respective officers, directors,
employees, agents and advisors (collectively, the “Releasees”), from any
and all liabilities, actions, causes of action, contracts, agreements, promises,
claims, debts and demands of any kind or nature whatsoever, in law or equity,
whether known or unknown, which Principe has or ever has had against the
Releasees, or any of them, including, but not limited to, claims arising out of
or relating to Principe’s employment or the termination of Principe’s employment
with On2 and any claims for compensation and benefits from
On2.  Principe understands and agrees that this General Release of
Claims is a complete bar to any claim, demand or action of any kind whatsoever
which could be brought by Principe against the Releasees, including, without
limitation, any claim under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Older Worker Benefits Protection Act, the
Americans With Disabilities Act, the Family and Medical Leave Act, the Fair
Labor Standards Act,  the New York Human Rights Law, the New York
City  Human Rights Law and any and all other federal, state or local
statutes or common laws. This General Release of Claims shall not apply to (a)
any claim which may arise after the date of the execution of this General
Release of Claims; (b) and claim that may not be waived by law, and (c) any
claim by Principe to enforce this Agreement.  To the extent permitted
by law, Principe further agrees that he will not file any charge, claim or
action for or on account of anything covered by this General Release of
Claims.  Principe agrees that he will not seek or accept any
compensation from any action brought against any of the Releasees on his behalf
or on behalf of any class of which he is a member.

     

    5.   No Other
Consideration. Principe affirms that the terms stated herein are the only
consideration for signing this Agreement and that no other representations,
promises, or agreements of any kind have been made by any person or entity to
cause him to sign this Agreement. Principe has accepted the terms of this
Agreement because he believes them to be fair and reasonable and for no other
reason.

     

    6.   Cooperation in Legal
Proceedings. Principe agrees to reasonably cooperate with On2 and its
directly and indirectly owned subsidiaries in connection with litigation and
other legal and regulatory proceedings, investigations and inquiries that relate
to his services or relate to his areas of responsibility during his employment.
On2 shall reimburse Principe for reasonable expenses, if any, that he may incur
while complying with this obligation. Nothing in this Agreement shall terminate
or otherwise affect On2’s obligation to indemnify Principe in accordance with
the terms and conditions of its bylaws with respect to his service as an officer
prior to the Effective Date.

     

    
      
         

      

      
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    7.   No Admission. It is
understood and agreed by the parties hereto that neither the fact nor any term
of this Agreement constitutes, or shall be construed to constitute, an admission
of liability or wrongdoing on the part of On2 or Principe.  It is
understood and agreed by the parties that this Agreement is intended solely as
an offer of compromise.

     

    8.   Successors and
Assigns.  This Agreement shall inure to the benefit of and
shall be binding upon (i) On2, its successors and assigns, and any company with
which On2 may merge or consolidate or to which On2 may sell all or substantially
all its assets, and (ii) Principe and Principe’s executors, administrators,
heirs and legal representatives.  Principe may not sell or otherwise
assign his rights, obligations or benefits under this Agreement, and any attempt
to do so shall be void.

     

    9.   Remedies. The parties
hereto each acknowledge and agree that their respective rights under this
Agreement are of a specialized and unique character, that a monetary remedy for
a breach of the agreements set forth in this Agreement will be inadequate and
impracticable and that immediate and irreparable damage will result to On2 or
Principe (the "Aggrieved Party") if the other (the "Aggrieving Party") fails to
or refuses to perform its obligations under this Agreement. Notwithstanding any
election by any person to claim damages from On2 or Principe, as the case may
be, as a result of any such failure or refusal, the Aggrieved Party may, in
addition to any other remedies and damages available, seek temporary and
permanent injunctive relief (without the posting of a bond or other security) in
a court of competent jurisdiction to restrain any such failure or refusal and
the Aggrieving Party, on its own behalf and, in the case of On2, on behalf of
its affiliates, waives any defense that the Aggrieved Party has an adequate
remedy at law. The Aggrieving Party agrees that, in addition to all other
remedies available at law or in equity, the Aggrieved Party shall be entitled to
such injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions as a court of competent jurisdiction shall
determine.

     

    10.        
Withholding. All
payments to be made to Principe under this Agreement, or otherwise by On2 shall
be subject to withholding to satisfy required withholding taxes and other
required deductions.

     

    11.        
Modification. This
Agreement may not be released, discharged, abandoned, supplemented, changed, or
modified in any manner, orally or otherwise, except by an instrument in writing
signed and duly executed by each of the parties hereto.

     

    12.        
Entire Agreement.
This Agreement contains and constitutes the entire understanding and agreement
between the parties on its subject matter, and, except as otherwise provided
herein, it supersedes all previous negotiations, agreements, commitments, and
writings in connection herewith. If a conflict or inconsistency is found between
the terms of this Agreement and any other agreement, the terms of this Agreement
shall control.  Notwithstanding the foregoing, the parties acknowledge
the continuing effectiveness, according to its terms, of the Employee NDA,
Non-competition, Non-disclosure, Proprietary Information and Patent and
Invention Assignment Agreement between Principe and On2 dated August 26,
2002.

     

    13.        
Waiver.  The
failure of either party to insist upon strict compliance with any term,
covenant, or condition of this Agreement shall not be deemed to be a waiver by
that party of such term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power under this Agreement at any time or times
be deemed a waiver or relinquishment of such right or power at any other time or
times.

     

    
      
         

      

      
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    14.        
Severability. The
parties expressly agree that the character, duration and geographical scope of
the provisions set forth in this Agreement are reasonable in light of the
circumstances as they exist on the date hereof.  If a court of
competent jurisdiction determines that the character, duration or geographical
scope of the provisions of this Agreement are unreasonable, then it is the
intention and the agreement of the parties hereto that the provisions hereof
shall be construed by the court in such a manner as to impose only those
restrictions on each party's respective conduct that are reasonable in light of
the circumstances and as are necessary to assure to each party the benefits of
this Agreement. If, in any judicial proceeding, a court shall refuse to enforce
all of the separate covenants deemed included herein because taken together they
are more extensive than necessary to assure to each party hereto the intended
benefits of this Agreement, it is expressly understood and agreed by the parties
hereto that the provisions hereof that, if eliminated, would permit the
remaining separate provisions to be enforced in such proceeding, shall be deemed
eliminated, for the purposes of such proceeding, from this
Agreement.

     

    15.        
Choice of Law and Forum
Selection. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflict of
law principles.  Principe agrees and submits to the exclusive
jurisdiction of any state or federal court in the State of New York where there
is proper venue in any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated herein, and agrees that all claims in
respect of any such action or proceeding may be heard or determined in such
court.

     

    16.        
Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which together will constitute one and the
same Agreement.  Signature by facsimile shall be deemed to be an
original signature.

     

    17.        
Acknowledgements.  Principe
hereby acknowledges that he has carefully read and fully understands the
provisions of this Agreement, including the General Release of Claims and that
he has had the opportunity to consult with counsel.  Principe further
acknowledges that he is signing this Agreement voluntarily and without coercion
because he believes it is fair and reasonable and for no other
reason.

    


    18.        
Right to Consult with
Counsel; Time for Signing; Revocation.  Principe has the right
to and should consult with an attorney prior to signing this
Agreement.  Principe acknowledges that he has received this Agreement
on February 27, 2009 and that he shall have twenty-one (21) days from his
receipt of this Agreement (until 5:00 p.m. EST on March 20, 2009) to decide
whether to sign it.  Principe will have seven (7) days after signing
this Agreement to revoke his signature.  If Principe intends to revoke
his signature, he must do so in writing addressed and delivered to General
Counsel, On2 Technologies, Inc., 3 Corporate Drive, Suite 100, Clifton Park, New
York 12065, prior to the end of the 7-day revocation period.  This
Agreement shall not become effective, and neither On2 nor Principe shall have
any rights or obligations hereunder, until the expiration of the 7-day
revocation period.  Notwithstanding the foregoing, if Principe signs
this Agreement before March 20, 2009 and does not revoke his signature as
provided herein, the Agreement shall be effective as of the Effective
Date.

     

    IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set
forth below.

     

    
      	 ON2
      TECHNOLOGIES, INC.	 
      	
              ANTHONY
      PRINCIPE

            	 
	 	 
      	 
      	 
      	 
	By:	
              /s/ Matthew C. Frost

            	 
      	
              /s/ Anthony Principe

            	 
	Name:  Matthew
      C. Frost	 
      	
              Date:
      March 16, 2009

            	 
	Title:
      Interim CEO & COO	 
      	 
      	 
	Date:
      March 16, 2009	 
      	 
      	 


    

     

     

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