Exhibit 10.45


 


SEPARATION
AGREEMENT AND RELEASE OF ALL CLAIMS


 


This Separation Agreement and Release of All Claims (the “Agreement”) is
between Francis Memole (“Employee”)
and Iteris, Inc., a Delaware corporation (the “Iteris” or “Company”).  Employee and the Company are sometimes
collectively referred to as the “Parties” or individually as a “Party.”


 


RECITALS


 


A.    Employee’s employment as a Senior Vice
President and General Manager of Iteris ended effective May 1, 2009
(hereinafter “Separation
Date”); and


 


B.    Employee holds the following outstanding
options to purchase an aggregate of 142,000 shares of the Company’s Common
Stock (collectively the “Options”),
which Options were granted under the Company’s 1998 Stock Incentive Plan (the “1998 Plan”) or the 1997 Stock
Incentive Plan (the “1997 Plan”):


 


	
  Grant Date

  	
   

  	
  No. of Shares

  	
   

  	
  Exercise

  Price

  	
   

  	
  Shares Vested as of

  Separation Date

  	
   

  	
  Equity Plan

  Covering Option

  	
   

  
	
  09/21/01

  	
   

  	
  68,000

  	
   

  	
  $

  	
  1.19

  	
   

  	
  68,000

  	
   

  	
  1998
  Plan

  	
   

  
	
  05/01/02

  	
   

  	
  20,000

  	
   

  	
  $

  	
  1.40

  	
   

  	
  20,000

  	
   

  	
  1998
  Plan

  	
   

  
	
  08/29/05

  	
   

  	
  24,000

  	
   

  	
  $

  	
  3.21

  	
   

  	
  18,000

  	
   

  	
  1997
  Plan

  	
   

  
	
  06/15/06

  	
   

  	
  30,000

  	
   

  	
  $

  	
  2.21

  	
   

  	
  15,000

  	
   

  	
  1997
  Plan

  	
   

  



 


C.    Except as specifically set forth herein,
Employee was obligated to return all Iteris property, including any files,
records, electronic data, computers, laptops, PDAs, cell phones, printers,
reports, customer information, disc, keys, vehicles, or any property of any
kind to Iteris as of the Separation Date; and


 


D.    Employee and Iteris desire to end their
relationship amicably and resolve any potential disagreements between them, and
any matters pertaining to Employee’s employment with Iteris as specified in
this Agreement and the Company has elected to offer Employee compensation and
benefits to which he would not otherwise be entitled.


 


AGREEMENTS


 


Based upon the foregoing, and in consideration of the mutual promises
contained in this Agreement, Employee and the Company (for its benefit and the
benefit of the other Company Parties as defined below) agree, effective upon
the date of execution by Employee, as follows:


 


1.         Acknowledgements.


 


(a)           Payments Received.  Employee represents that he has full power
and authority to enter into this Agreement. 
Employee further acknowledges and agrees that he  has been paid all
amounts due and owing as of the date of execution of this Agreement, including
but not limited to, all regular salary, accrued but unused vacation and PTO,
expenses, commissions, distributions, bonuses, stock and any other Company
benefits due and owing as of the date of execution of this Agreement, less
appropriate withholdings and Employee confirms he is not 


 


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owed any monies
allowed, including but not limited to those required under the California Labor
Code, as of the date of execution of this Agreement.  Employee further understands, agrees and
acknowledges that such amounts are not consideration for this Agreement.


 


(b)           Options.  The date of cessation of Service as defined
in the Options shall be the Separation Date, and Employee agrees that no
further vesting of any of the Options will take place after the Separation Date
pursuant to the terms of the Options, the 1997 Plan, the 1998 Plan, the
applicable option documents or any other agreement.  Employee acknowledges and agrees that except
as indicated above, Employee does not own any options, warrants or any other
rights to acquire any securities of the Company.


 


2.         Consideration and Effective Date.  The Parties recognize that, apart from this
Agreement, the Company is not obligated to provide employees with any of the
benefits set forth hereunder. The Company agrees to provide the Employee the
following consideration beginning no later than five (5) business days
after the expiration of the seven (7) day revocation period described in
Paragraph 10 below (“Effective
Date”), provided Employee has not revoked this Agreement as
described in that Paragraph.  The Company’s
obligations are not triggered before the Effective Date.  Subject to Employee’s compliance with the
terms and conditions of this Agreement, the Company agrees to provide Employee
the following consideration for agreeing to the obligations specified in this
Agreement as follows:


 


(a)           Total Severance
Payment. Payment of four and one half months (780 hours) salary in the
aggregate amount of Seventy-One Thousand Nine Hundred and Ninety-Four Dollars
($71,994), less standard employee withholding taxes and other lawful deductions
the Company deems appropriate, in eight (8) bi-weekly payments of
$7,384.00 and one (1) final bi-weekly payment of $12,922.00 in accordance
with the Company’s regular payroll practices (the “Severance
Payment”).


 


(b)           COBRA.  Employee is advised that he may be an “assistance
eligible individual” as that term is used in American Recovery and Reinvestment
Act (the “Act”).  Employee will receive COBRA paperwork from
directly the Company’s COBRA administrator, Conexis, and must sign and return
the form directly to Conexis to elect COBRA coverage.  Upon Employee’s timely election of COBRA
continuation coverage under the Company’s health plan and the Company’s receipt
from Employee of a copy of such election and proof of his timely payment of 35%
of the first month of COBRA premiums, the Company will pay to Employee a lump
sum equal to 35% of the first month of COBRA premiums and the Company will
comply with its’ obligations under the Act and pay the remaining 65% of the
COBRA premiums through December 31, 2009 or until such time as Employee
subsequently becomes covered by another group health plan, whichever is
earlier.  Employee agrees to notify the
Company immediately if he becomes covered by another group health plan.  Employee understands and assumes the risk
that the Employee may become ineligible for the subsidy by virtue of his
modified adjusted gross income or other facts and that there may be additional
tax liability as a result of the Company’s payment of this subsidy.  Employee is advised that he may waive his
right to the subsidy by contacting Conexis and hereby releases the Company from
any and all liability connected with his election or waiver of the subsidy.


 


(c)           Other
Property.  Employee shall be allowed
to take ownership of the laptop computer that has been assigned to him and
provided for his use, provided however, prior to the delivery to Employee of
such laptop computer, the Company shall remove from such laptop computer (i) any
information, documents, data or other proprietary information of, or related
to, the Company or its business; and (ii) any software which is not
properly licensed for Employee’s personal use.


 


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3.         No Rights to Additional Benefit; No Admission
of Liability.
Employee acknowledges and agrees that, apart from this Agreement, the Company
is not obligated to provide employees with any of the benefits set forth hereunder,
including the Severance Payments and other consideration referenced in
Paragraph 2 and that such consideration is in exchange for entering into this
Agreement.  Employee will not at any time
seek additional consideration in any form from the Company except as expressly
set forth in this Agreement.  Employee further agrees and acknowledges
that nothing contained in this Agreement shall constitute or be treated as an
admission of liability or wrongdoing by the Company, which liability or wrongdoing
the Company expressly denies.


 


4.             Taxes.  Notwithstanding the tax deductions set forth
in Paragraph 2 above, Employee shall pay in full when due, and shall be solely
responsible for, any and all federal, state or local income taxes that are or
may be assessed against him relating to the consideration provided, including
the Severance Payment or other consideration received pursuant to this
Agreement, as well as all interest or penalties that may be owed in connection
with such taxes.  Employee is not relying
on any representations or conduct of the Company with respect to the adequacy
of the withholdings.


 


5.             Release.


 


(a)           Employee, on behalf
of himself, his spouse, successors, heirs, and assigns, hereby forever
relieves, releases, and discharges the Company as well as its past, present and
future officers, directors, administrators, stockholders, employees, agents,
attorneys, successors, subsidiaries, parents, assigns, representatives,
brother/sister corporations, and all other affiliated or related corporations,
all benefit plans sponsored by the Company, and entities, and each of their
respective present and former agents, employees, or representatives, insurers,
partners, associates, successors, and assigns, and any entity owned by or
affiliated with any of the above (all of the foregoing are collectively
referred to as the “Company Parties”) from any
and all claims, debts, liabilities, demands, obligations, liens, promises,
acts, agreements, costs and expenses 
(including but not limited to attorneys’ fees), damages, actions, and
causes of action, of whatever kind or nature, including but not limited to any
statutory, civil, administrative, or common law claims, whether known or
unknown, suspected or unsuspected, fixed or contingent, arising out of any act
or omission occurring before Employee’s execution of this Agreement, including
but not limited to any claims based on, arising out of, or related to Employee’s
employment with, or the ending of Employee’s employment with the Company, any
claims arising from rights under federal, state, and local laws relating to the
regulation of federal or state tax payments or accounting; federal, state or
local laws that prohibit harassment or discrimination on the basis of race,
national origin, religion, sex, gender, age, marital status, bankruptcy status,
disability, perceived disability, ancestry, sexual orientation, family and
medical leave, or any other form of harassment or discrimination or related
cause of action (including but not limited to failure to maintain an
environment free from harassment and retaliation, inappropriate comments or
touching and/or “off-duty” conduct of other Company employees); statutory or
common law claims of any kind, including but not limited to, any alleged
violation of Title VII of the Civil Rights Act of 1964, The Civil Rights Act of
1991, Sections 1981 through 1988 of Title 42 of the United States Code, as
amended; The Employee Retirement Income Security Act of 1971, as amended, The
Americans with Disability Act of 1990, as amended, the Workers Adjustment and
Retraining Notification Act, as amended; the


 


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Occupational
Safety and Health Act, as amended, the Sarbanes-Oxley Act of 2002, the
California Family Rights Act (Cal. Govt. Code § 12945.2 et seq.), the
California Fair Employment and Housing Act (Cal. Govt. Code § 12900 et.
seq.), statutory provision regarding retaliation/discrimination for filing a
workers’ compensation claim under Cal. Labor Code § 132a, California Unruh
Civil Rights Act, California Sexual Orientation Bias Law (Cal. Lab. Code
§ 1101 et. seq.), California AIDS Testing and Confidentiality Law,
California Confidentiality of Medical Information (Cal. Civ. Code § 56 et.
seq.), contract, tort, and property rights, breach of contract, breach of
implied-in-fact contract, breach of the implied covenant of good faith and fair
dealing, tortious interference with contract or current or prospective economic
advantage, fraud, deceit, invasion of privacy, unfair competition, misrepresentation,
defamation, wrongful termination, tortious infliction of emotional distress
(whether intentional or negligent), breach of fiduciary duty, violation of
public policy, or any other common law claim of any kind whatsoever; any claims
for severance pay, sick leave, family leave, liability pay, overtime pay,
vacation, life insurance, health insurance, continuation of health benefits,
disability or medical insurance, or Employee’s 401(k) rights or any other
fringe benefit or compensation, including but not limited to stock options; any
claim for damages or declaratory or injunctive relief of any kind.  The Parties agree and acknowledge that the
release contained in this Paragraph 5 does not apply to any vested rights
Employee may have under any 401(k) Savings Plan with the Company.  Employee represents that at the time of the
execution of this Agreement, he suffers from no work-related injuries and has
no disability or medical condition as defined by the Family Medical Leave
Act.  Employee represents that he has no
workers’ compensation claims that he intends to bring against the Company.  Employee understands that nothing contained
in this Agreement, including, but not limited to, this Paragraph 5, will be
interpreted to prevent him from filing a charge with a governmental agency or
participating in or cooperating with an investigation conducted by a
governmental agency.  However, Employee
agrees that he is waiving the right to monetary damages or other individual
legal or equitable relief awarded as a result of any such proceeding.


 


(b)          Mistakes
in Fact; Voluntary Consent.  Employee
expressly and knowingly acknowledges that, after the execution of this
Agreement, he may discover facts different from or in addition to those that he
now knows or believes to be true with respect to the claims released in this
Agreement.  Nonetheless, this Agreement
shall be and remain in full force and effect in all respects, notwithstanding
such different or additional facts and Employee intends to fully, finally, and
forever settle and release those claims released in this Agreement.  In furtherance of such intention, the release
given in this Agreement shall be and remain in effect as a full and complete
release of such claims, notwithstanding the discovery and existence of any
additional different claims and Employee assumes the risk of mistakes, and if
Employee should subsequently discover that any fact relied upon in entering
into this Agreement was untrue or that his understanding of the facts or law
was incorrect, he shall not be entitled to set aside this Agreement or the
settlement reflected in this Agreement or be entitled to recover any damages on
that account.


 


(c)           Section 1542
of the California Civil Code. 
Employee expressly waives any and all rights and benefits conferred upon
him by Section 1542 of the California Civil Code, which states as follows:


 


A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.


 


4

















 


Accordingly, Employee
knowingly, voluntarily and expressly waives and relinquishes any rights and
benefits arising under Section 1542 of the California Civil Code and any
other statute or principle of similar effect.


 


6.             No
Lawsuits.  Employee represents that
he has not filed any claims, charges, complaints or actions against the Company
or any Company Parties, or assigned to anyone any charges, complaints, claims
or actions against the Company or any Company Parties.  Employee agrees to take any and all steps
necessary to insure that no lawsuit arising out of any claim released herein
shall ever be prosecuted by Employee or on his behalf in any forum, and hereby
warrants and covenants that no such action has been filed or shall ever be
filed or prosecuted.  Employee also
agrees that if any claim is prosecuted in his name before any court or
administrative agency that he waives and agrees not to take any award or other
damages from such suit to the extent permissible under applicable law.  Employee
further agrees to cooperate fully with the Company in the event of a lawsuit or
threat of lawsuit arising out of acts and events occurred during Employee’s
employment with the Company.


 


7.             Confidentiality
/ Nondisparagment.  Employee agrees
that Employee will not disclose to others, except to the extent required by
law, subpoena or by the Company’s independent auditors, (i) the fact or
terms of this Agreement, (ii) the amounts referenced in this Agreement, (iii) the
fact of the payment of these amounts,
or (iv) any
disparaging information pertaining to or relating to Employee’s employment
with, the Company’s employees or agents, or the ending of Employee’s employment
with, the Company, except that he may disclose such facts to his attorneys,
accountants, insurers or other professional advisors to whom the disclosure is
necessary to effect the purpose for which the professional has been consulted,
provided that the professional agrees to be bound by his confidentiality
provision. Except as otherwise specifically provided herein, Employee agrees
that if ever asked to disclose any fact covered by this Paragraph he must state
words to the effect of “I cannot comment” until such time when the information
becomes available in the public domain through no fault of Employee.


 


Nothing contained in this
Paragraph shall preclude Employee from revealing or describing his  employment
with the Company to prospective employers; provided however, such disclosure
shall be limited to the fact that he was employed by the Company, the dates of
his employment and the nature and depth of his job responsibilities and
accomplishments while employed by the Company. 
Employee agrees to direct all requests for references to Cathy Steger,
Human Resources Director, c/o Iteris, Inc., 1700 Carnegie Avenue, Suite 100,
Santa Ana, CA  92705 (Phone: (949)
270-9679).  The Company acknowledges that
in describing Employee’s employment with the Company to his prospective
employer, any such disclosure shall be limited to the Company’s regular
practice of disclosure only of the last job title Employee held, dates of
employment and any other information the Company has been required to disclose
by the state or federal securities laws and filings.


 


The confidentiality
obligations contained in this Paragraph shall be in addition to the Iteris
Associate Agreement between the Company and Employee dated November 24,
2003 (the “Associate Agreement”) any
other confidentiality agreements between the Parties.  Notwithstanding the foregoing, nothing in this Agreement shall be construed as precluding
disclosure where such disclosure is required and compelled by law.  In the event that Employee is required and
compelled by law to disclose any such matters, he will first give fifteen (15)
days


 


5

















 


advance written notice
(or, in the event that it is not possible to provide fifteen (15) days written
notice, as much written notice as is possible under the circumstances) to the
Company so that the Company may present and preserve any objections that it may
have to such disclosure and/or seek an appropriate protective order.  Employee acknowledges and agrees that this
Paragraph is a material inducement to the Company’s entering into this
Agreement, and further acknowledges and agrees that any breach of this
Paragraph by Employee shall be subject him to a claim for damages or equitable
relief (or both), including but not limited to injunctive relief.


 


8.         Proprietary Information and Return of Company Property.  Employee agrees to continue to abide by the
terms and provisions of the Associate Agreement, a copy of which is attached as
Exhibit A to this Agreement.  Employee understands, acknowledges and agrees that whether or not
Employee signs this Agreement, he has both a contractual and common law
obligation to protect the confidentiality of the Company’s trade secret
information after the termination of Employee’s employment for so long as the
information remains confidential.   Employee further agrees to immediately
return all Company property in his possession, including but not limited to
documents, all materials, documents, photographs, handbooks, manuals,
electronic records, files, cellular telephones, keys and access cards, prior to
the Effective Date, provided however, Employee may retain his laptop computer
subject to the provisions of Paragraph 2(c) above and may continue to use
his cellular phone until May 31, 2009 but shall immediately thereafter
return such cellular phone to the Company..


 


9.         ADEA Waiver.  Employee specifically agrees and
acknowledges:  (a) that his waiver of rights under this Agreement is
knowing and voluntary as required under the Age Discrimination in Employment
Act, 29 U.S.C. § 621 et. seq. and the Older Workers Benefit Protection Act; (b) that
he understands the terms of this Agreement; (c) that the Company advises
Employee to consult with an attorney prior to executing this Agreement; (d) that
the Company has given him a period of up to twenty-one (21) days within which
to consider this Agreement; (e) that, following his execution of this
Agreement, he has seven (7) days in which to revoke his agreement to this
Agreement as specified in Paragraph 10, and that, if he chooses not to so
revoke, the Agreement shall then become effective and enforceable and the
payment and extension of benefits listed above shall then be made to him in
accordance with the terms of this Agreement; and (f) nothing in this
Agreement shall be construed to prohibit him from filing a charge or complaint,
including a challenge to the validity of the waiver provision of this
Agreement, with a government agency or the Equal Employment Opportunity
Commission or participating in any investigation conducted by the Equal
Employment Opportunity Commission.  However, Employee agrees he is waiving
the right to monetary damages or other equitable or monetary relief as a result
of such proceedings.


 


10.       Revocation Period.  Employee may revoke this Agreement and his
release of claims, insofar as it extends to potential claims under the Age
Discrimination in Employment Act, by informing Iteris of his intent to revoke his release
within seven (7) calendar days following his execution of this
Agreement.  Employee understands that any
such revocation must be in writing and delivered by hand or by certified mail -
return receipt requested - within the applicable seven (7) day period to
Cathy Steger, Human Resources Director, c/o Iteris, Inc. 1700 Carnegie
Avenue, Suite 100, Santa Ana, CA 
92705.  Employee understands that
if Employee exercises his right to revoke, then Iteris will have no obligations
under this Agreement to Employee or to others whose rights derive from him.  The Agreement shall not become effective or
enforceable, until the seven (7) day revocation period identified above
has expired.  The terms of this Agreement
shall be open for acceptance by Employee for a period of twenty-one (21)  calendar days, and Employee understands that
he should and the Company hereby advises him to, consult with legal counsel
regarding the releases contained herein and to consider whether to accept the
Company’s offer and sign the Agreement.


 


6

















 


11.           Nonassignment.  Employee represents and warrants that he has
not assigned or transferred any portion of any claim or rights he has or may
have to any other person, firm, corporation or any other entity, and that no
other person, firm, corporation, or other entity has any lien or interest in
any such claim.


 


12.           Miscellaneous
Provisions.


 


(a)          Integration.  This Agreement and documents and exhibits
referenced and attached to this Agreement, constitute a single, integrated
written contract expressing the entire Agreement of the Parties concerning the
subject matter referred to in this Agreement. 
No covenants, agreements, representations, or warranties of any kind
whatsoever, whether express or implied in law or fact, have been made by any
Party to this Agreement, except as specifically set forth in this
Agreement.  All prior and contemporaneous
discussions, negotiations, and agreements have been and are merged and
integrated into, and are superseded by, this Agreement.


 


(b)          Modifications.  No modification, amendment, or waiver of any
of the provisions contained in this Agreement shall be binding upon any Party
to this Agreement unless made in writing and signed by both Parties, nor shall
be asserted by any Party based upon any act or performance unless evidenced by
a specific writing acknowledging the same by the Party to be charged.


 


(c)          Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law and to carry out each provision herein to the greatest
extent possible, but if any provision of this Agreement is held to be void,
voidable, invalid, illegal or for any other reason unenforceable, the validity,
legality and enforceability of the other provisions of this Agreement will not
be affected or impaired thereby, and will be interpreted so as to effect, as
closely as possible, the intent of the Parties hereto.


 


(d)          Non-Reliance
on Other Parties.  Except for
statements expressly set forth in this Agreement, neither of the Parties has
made any statement or representation to any other Party regarding a fact relied
on by the other Party in entering into this Agreement, and no Party has relied
on any statement, representation, or promise of any other Party, or of any
representative or attorney for any other Party, in executing this Agreement or
in making the settlement provided for in this Agreement.


 


(e)          Negotiated
Agreement.  The terms of this
Agreement are contractual, not a mere recital, and are the result of
negotiations between the Parties. 
Accordingly, no Party shall be deemed to be the drafter of this
Agreement.


 


(f)           Successors and
Assigns.  This Agreement shall inure
to the benefit of and shall be binding upon the heirs, successors, and assigns
of the Parties hereto and each of them. 
In the case of the Company, this Agreement is intended to release and
inure to the benefit of the Company and the Company Parties.


 


7

















 


(g)          Applicable Law.  This Agreement shall be construed in
accordance with, and governed by, the laws of the State of California without
taking into account conflict of law principles.


 


(h)          Facsimile and
Counterpart. This Agreement may be executed via facsimile and in one or
more counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument, binding on the Parties.


 


EMPLOYEE
ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS CAREFULLY READ AND VOLUNTARILY SIGNED
THIS AGREEMENT, THAT EMPLOYEE HAS HAD AT LEAST 21 DAYS IN WHICH TO CONSIDER AND
REVIEW THE AGREEMENT, THAT EMPLOYEE HAS HAD AN OPPORTUNITY TO CONSULT WITH AN
ATTORNEY OF EMPLOYEE’S CHOICE, AND THAT EMPLOYEE SIGNS THIS AGREEMENT WITH THE
INTENT OF RELEASING THE COMPANY AND THE COMPANY PARTIES FROM ANY AND ALL
CLAIMS.


 


	
  ACCEPTED
  AND AGREED TO:

  	
   

  
	
   

  	
   

  
	
  May 20, 2009

  	
  May 20, 2009

  
	
  ITERIS
  SYSTEMS, INC.

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Abbas
  Mohaddes

  	
   

  	
  /s/ Francis Memole

  
	
   

  	
  Abbas Mohaddes,

  	
   

  	
  Name:Francis Memole

  
	
   

  	
  Chief Executive
  Officer

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
   

  



 


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