Utah
|
87-0398877
|
|||
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
employer
identification
number)
|
5225
Wiley Post Way, Suite 500
Salt
Lake City, Utah
|
84116
|
|||
(Address
of principal executive offices)
|
(Zip
Code)
|
Page
Number
|
||
3
|
||
Item
1
|
||
4
|
||
5
|
||
7
|
||
9
|
||
Item
2
|
14
|
|
Item
3
|
21
|
|
Item
4
|
21
|
|
Item
1
|
22
|
|
Item
1A
|
23
|
|
Item
2
|
28
|
|
Item
3
|
28
|
|
Item
4
|
28
|
|
Item
5
|
28
|
|
Item
6
|
28
|
|
29
|
I
te
m
1.
|
Financial
Statements
|
(unaudited)
|
||||||||
September 30,
|
June 30,
|
|||||||
2007
|
2007
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ |
2,506
|
$ |
2,782
|
||||
Marketable
securities
|
21,102
|
19,871
|
||||||
Accounts
receivable, net of allowance for doubtful accounts of $56 and $54,
respectively
|
8,053
|
8,025
|
||||||
Note
Receivable
|
166
|
163
|
||||||
Inventories,
net
|
7,490
|
7,263
|
||||||
Income
tax receivable
|
326
|
0
|
||||||
Deferred
income taxes
|
122
|
0
|
||||||
Prepaid
expenses
|
336
|
213
|
||||||
Total
current assets
|
40,101
|
38,317
|
||||||
Property
and equipment, net
|
2,619
|
2,694
|
||||||
Note
Receiveable - long-term
|
0
|
43
|
||||||
Other
assets
|
9
|
9
|
||||||
Total
assets
|
$ |
42,729
|
$ |
41,063
|
||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ |
2,198
|
$ |
1,745
|
||||
Accrued
taxes
|
0
|
660
|
||||||
Accrued
liabilities
|
3,411
|
1,874
|
||||||
Deferred
product revenue
|
5,875
|
4,872
|
||||||
Total
current liabilities
|
11,484
|
9,151
|
||||||
Deferred
rent
|
816
|
855
|
||||||
Deferred
income taxes, net
|
122
|
0
|
||||||
Other
long-term liabilities
|
958
|
619
|
||||||
Total
liabilities
|
13,380
|
10,625
|
||||||
Shareholders'
equity:
|
||||||||
Common
stock, par value $.001, 50,000,000 shares authorized,10,937,460
and
10,861,920 shares issued and outstanding, respectively
|
11
|
11
|
||||||
Additional
paid-in-capital
|
47,712
|
47,582
|
||||||
Accumulated
deficit
|
(18,374 | ) | (17,155 | ) | ||||
Total
shareholders' equity
|
29,349
|
30,438
|
||||||
Total
liabilities and shareholders' equity
|
$ |
42,729
|
$ |
41,063
|
Three
Months Ended September 30,
|
||||||||
2007
|
2006
|
|||||||
Revenue
|
$ |
9,442
|
$ |
9,411
|
||||
Cost
of goods sold
|
4,299
|
4,316
|
||||||
Gross
profit
|
5,143
|
5,095
|
||||||
Operating
expenses:
|
||||||||
Marketing
and selling
|
1,601
|
1,918
|
||||||
Research
and product development
|
1,756
|
2,079
|
||||||
General
and administrative
|
2,895
|
809
|
||||||
Total
operating expenses
|
6,252
|
4,806
|
||||||
Operating
income (loss)
|
(1,109 | ) |
289
|
|||||
Other
income (expense), net
|
||||||||
Interest
Income
|
313
|
307
|
||||||
Other,
net
|
28
|
25
|
||||||
Total
other income, net
|
341
|
332
|
||||||
Income
(loss) from continuing operations before income taxes
|
(768 | ) |
621
|
|||||
Provision
(benefit) for income taxes
|
(171 | ) |
19
|
|||||
Income
(loss) from continuing operations
|
(939 | ) |
640
|
|||||
Discontinued
Operations:
|
||||||||
Income
from discontinued operations
|
0
|
55
|
||||||
Gain
on disposal of discontinued operations
|
24
|
3
|
||||||
Income
tax provision
|
(9 | ) | (21 | ) | ||||
Income
from discontinued operations
|
15
|
37
|
||||||
Net
income (loss)
|
$ | (924 | ) | $ |
677
|
Three
Months Ended
|
||||||||
September 30,
|
September 30,
|
|||||||
2007
|
2006
|
|||||||
Basic
earnings per common share from continuing operations
|
$ | (0.09 | ) | $ |
0.05
|
|||
Diluted
earnings per common share from continuing operations
|
$ | (0.08 | ) | $ |
0.05
|
|||
Basic
earnings per common share from discontinued operations
|
$ |
-
|
$ |
-
|
||||
Diluted
earnings per common share from discontinued operations
|
$ |
-
|
$ |
-
|
||||
Basic
earnings per common share
|
$ | (0.08 | ) | $ |
0.06
|
|||
Diluted
earnings per common share
|
$ | (0.08 | ) | $ |
0.06
|
|||
Basic
weighted average shares
|
10,961,256
|
12,184,849
|
||||||
Diluted
weighted average shares
|
11,072,565
|
12,231,744
|
Three
Months Ended
|
||||||||
September 30,
|
September 30,
|
|||||||
2007
|
2006
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income (loss) from continuing operations
|
$ | (940 | ) | $ |
640
|
|||
Adjustments
to reconcile net income (loss) from continuing operations to net
cash
provided by operations:
|
||||||||
Depreciation
and amortization expense
|
188
|
268
|
||||||
Stock-based
compensation
|
171
|
230
|
||||||
Write-off
of inventory
|
331
|
111
|
||||||
(Gain)
loss on disposal of assets and fixed assets write-offs
|
3
|
-
|
||||||
Provision
for doubtful accounts
|
2
|
-
|
||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(133 | ) |
484
|
|||||
Note
receivable - Ken-A-Vision
|
40
|
(319 | ) | |||||
Inventories
|
(558 | ) |
324
|
|||||
Prepaid
expenses and other assets
|
(123 | ) |
67
|
|||||
Accounts
payable
|
557
|
(954 | ) | |||||
Accrued
liabilities
|
1,537
|
(261 | ) | |||||
Income
taxes
|
(942 | ) |
59
|
|||||
Deferred
product revenue
|
1,003
|
(622 | ) | |||||
Net
change in other assets/liabilities
|
1
|
(6 | ) | |||||
Net
cash provided by continuing operating activities
|
1,137
|
21
|
||||||
Net
cash provided by discontinued operating activities
|
-
|
35
|
||||||
Net
cash provided by operating activities
|
1,137
|
56
|
||||||
Cash
flows from investing activities:
|
||||||||
Purchase
of property and equipment
|
(155 | ) | (112 | ) | ||||
Proceeds
from the sale of property and equipment
|
-
|
18
|
||||||
Purchase
of marketable securities
|
(5,681 | ) |
-
|
|||||
Sale
of marketable securities
|
4,450
|
-
|
||||||
Net
cash used in continuing investing activities
|
(1,386 | ) | (94 | ) | ||||
Net
cash provided by discontinued investing activities
|
15
|
567
|
||||||
Net
cash provided by (used in) investing activities
|
(1,371 | ) |
473
|
|||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from common stock
|
455
|
2
|
||||||
Common
stock purchased and retired
|
(566 | ) | (37 | ) | ||||
Tax
benefit attributable to exercise of stock options
|
69
|
-
|
||||||
Net
cash (used in) continuing financing activities
|
(42 | ) | (35 | ) | ||||
Net
increase (decrease) in cash and cash equivalents
|
(276 | ) |
494
|
|||||
Cash
and cash equivalents at the beginning of the period
|
2,782
|
1,240
|
||||||
Cash
and cash equivalents at the end of the period
|
$ |
2,506
|
$ |
1,734
|
Three
Months Ended
|
||||||||
September 30,
|
September 30,
|
|||||||
2007
|
2006
|
|||||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid (received) for income taxes
|
$ |
1,052
|
$ | (57 | ) | |||
Supplemental
disclosure of non-cash financing activities:
|
||||||||
Exchanged
accounts receivable from a vendor with acccounts payable to the
same
vendor
|
$ |
103
|
$ |
-
|
||||
Increase
in accumulated deficit and income tax liability as a result of
the
adoption of FIN48 (see note 6)
|
$ |
295
|
$ |
-
|
1.
|
Basis
of Presentation
|
2.
|
Inventory
|
September 30,
|
June 30,
|
|||||||
2007
|
2007
|
|||||||
Raw
materials
|
$ |
439
|
$ |
453
|
||||
Finished
goods
|
4,902
|
4,695
|
||||||
Consigned
inventory
|
2,149
|
2,115
|
||||||
Total
inventory
|
$ |
7,490
|
$ |
7,263
|
3.
|
Share-Based
Payment
|
4.
|
Discontinued
Operations
|
Three
Months Ended
|
||||||||
September 30,
|
September 30,
|
|||||||
2007
|
2006
|
|||||||
Income
from discontinued operations:
|
||||||||
Ken-A-Vision
|
$ |
-
|
$ |
55
|
||||
Gain
on disposal of discontinued operations:
|
||||||||
Ken-A-Vision
|
$ |
-
|
$ |
3
|
||||
OM
Video
|
24
|
-
|
||||||
Total
gain on disposal of discontinued operations
|
24
|
3
|
||||||
Income
tax (provision) benefit:
|
||||||||
Ken-A-Vision
|
$ |
-
|
$ | (21 | ) | |||
OM
Video
|
(9 | ) |
-
|
|||||
Total
income tax (provision) benefit
|
(9 | ) | (21 | ) | ||||
Total
income from discontinued operations, net of income taxes:
|
||||||||
Ken-A-Vision
|
$ |
-
|
$ |
37
|
||||
OM
Video
|
15
|
-
|
||||||
Total
income from discontinued operations,net of income taxes
|
$ |
15
|
$ |
37
|
5.
|
Shareholders’
Equity
|
6.
|
Income
Taxes
|
7.
|
Contingent
Liability
|
8.
|
Recent
Accounting Pronouncements
|
9.
|
Compromise
Agreement and Release
|
10.
|
Subsequent
Events
|
I
te
m
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Deferred
Revenue
|
Deferred
Cost of Goods Sold
|
Deferred
Gross Profit
|
||||||||||
September
30, 2007
|
$ |
5,875
|
$ |
2,149
|
$ |
3,726
|
||||||
June
30, 2007
|
4,872
|
2,115
|
2,757
|
|||||||||
March
31, 2007
|
5,111
|
2,265
|
2,846
|
|||||||||
December
31, 2006
|
4,711
|
2,166
|
2,545
|
|||||||||
September
30, 2006
|
5,249
|
2,541
|
2,708
|
|||||||||
June
30, 2006
|
5,871
|
2,817
|
3,054
|
|||||||||
March
31, 2006
|
5,355
|
2,443
|
2,912
|
|||||||||
December
31, 2005
|
4,936
|
2,199
|
2,737
|
|
·
|
Significant
underperformance relative to projected future operating
results;
|
|
·
|
Significant
changes in the manner of our use of the acquired assets or the
strategy
for our overall business; and
|
|
·
|
Significant
negative industry or economic
trends.
|
Three
Months Ended
(In thousands)
|
||||||||||||||||
2007
|
2006
|
|||||||||||||||
%
of Revenue
|
%
of Revenue
|
|||||||||||||||
Product
Revenue:
|
$ |
9,442
|
100.0 | % | $ |
9,411
|
100.0 | % | ||||||||
Cost
of goods sold:
|
||||||||||||||||
Total
cost of goods sold
|
4,299
|
45.5 | % |
4,316
|
45.9 | % | ||||||||||
Gross
profit
|
5,143
|
54.5 | % |
5,095
|
54.1 | % | ||||||||||
Operating
expenses:
|
||||||||||||||||
Marketing
and selling
|
1,601
|
17.0 | % |
1,918
|
20.4 | % | ||||||||||
Research
and product development
|
1,756
|
18.6 | % |
2,079
|
22.1 | % | ||||||||||
General
and administrative
|
2,895
|
30.7 | % |
809
|
8.6 | % | ||||||||||
Total
operating expenses
|
6,252
|
66.2 | % |
4,806
|
51.1 | % |
Three
Months Ended
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2007
|
2006
|
|||||||||||||||
%
of Revenue
|
%
of Revenue
|
|||||||||||||||
Product
Revenue:
|
$ |
9,442
|
100.0 | % | $ |
9,411
|
100.0 | % | ||||||||
Cost
of goods sold:
|
||||||||||||||||
Total
cost of goods sold
|
4,299
|
45.5 | % |
4,316
|
45.9 | % | ||||||||||
Gross
profit
|
5,143
|
54.5 | % |
5,095
|
54.1 | % |
Ite
m
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
Ite
m
4.
|
CONTROLS
AND PROCEDURES
|
It
em
1.
|
LEGAL
PROCEEDINGS
|
ITEM
1A
.
|
RISK
FACTORS
|
|
·
|
meeting
required specifications and regulatory
standards;
|
|
·
|
meeting
market expectations for
performance;
|
|
·
|
hiring
and keeping a sufficient number of skilled
developers;
|
|
·
|
obtaining
prototype products at anticipated cost
levels;
|
|
·
|
having
the ability to identify problems or product defects in the development
cycle; and
|
|
·
|
achieving
necessary manufacturing
efficiencies.
|
|
·
|
unexpected
changes in, or the imposition of, additional legislative or regulatory
requirements;
|
|
·
|
unique
environmental regulations;
|
|
·
|
fluctuating
exchange rates;
|
|
·
|
tariffs
and other barriers;
|
|
·
|
difficulties
in staffing and managing foreign sales
operations;
|
|
·
|
import
and export restrictions;
|
|
·
|
greater
difficulties in accounts receivable collection and longer payment
cycles;
|
|
·
|
potentially
adverse tax consequences;
|
|
·
|
potential
hostilities and changes in diplomatic and trade relationships;
and
|
|
·
|
disruption
in services due to natural disaster, economic or political difficulties,
quarantines, transportation, or other restrictions associated with
infectious diseases.
|
|
·
|
statements
or changes in opinions, ratings, or earnings estimates made by
brokerage
firms or industry analysts relating to the market in which we do
business
or relating to us specifically;
|
|
·
|
disparity
between our reported results and the projections of
analysts;
|
|
·
|
the
shift in sales mix of products that we currently sell to a sales
mix of
lower-gross profit product
offerings;
|
|
·
|
the
level and mix of inventory levels held by our
distributors;
|
|
·
|
the
announcement of new products or product enhancements by us or our
competitors;
|
|
·
|
technological
innovations by us or our
competitors;
|
|
·
|
success
in meeting targeted availability dates for new or redesigned
products;
|
|
·
|
the
ability to profitably and efficiently manage our supplies of products
and
key components;
|
|
·
|
the
ability to maintain profitable relationships with our
customers;
|
|
·
|
the
ability to maintain an appropriate cost
structure;
|
|
·
|
quarterly
variations in our results of
operations;
|
|
·
|
general
consumer confidence or general market conditions or market conditions
specific to technology industries;
|
|
·
|
domestic
and international economic
conditions;
|
|
·
|
the
adoption of the new accounting standard, SFAS No. 123R, “Share-Based
Payments,” which requires us to record compensation expense for certain
options issued before July 1, 2005 and for all options issued or
modified
after June 30, 2005;
|
|
·
|
our
ability to report financial information in a timely manner;
and
|
|
·
|
the
markets in which our stock is
traded.
|
Ite
m
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans
or
Programs
|
Maximum
Number (or Approximate Dollar Value) of Shares that May by Purchased
Under
the Plans or Programs (1)
|
July
1, 2007 – July 31, 2007
|
0
|
N/A
|
0
|
$721,000
|
August
1, 2007 – August 31, 2007
|
51,243
|
$6.11
|
51,243
|
$3,312,000
|
September
1, 2007 – September 30, 2007
|
37,012
|
$6.84
|
37,012
|
$3,059,000
|
Total
|
88,255
|
88,255
|
(1)
|
On
August 31, 2006, the Company’s Board of Directors approved a stock
buy-back program to purchase up to $2 million of the Company’s common
stock over the following 12 months on the open market. All repurchased
shares were retired. The stock buy-back program expired in August
2007.
|
It
e
m
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
I
tem
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
It
em
5.
|
OTHER
INFORMATION
|
Ite
m
6.
|
EXHIBITS
|
Exhibit
|
SEC
Ref.
|
|||
No.
|
No.
|
Title
of Document
|
Location
|
|
10
|
Compromise
Agreement between ClearOne Communications UK Limited and Martin
James
Offwood dated August 13, 2007
|
This
filing
|
||
10
|
Warehouse
Lease Agreement between Woodenshoe Development and ClearOne
Communications, Inc. dated October 5, 2007
|
This
filing
|
||
10.3
|
10
|
Warehouse
Lease Agreement between Alder Construction Company and ClearOne
Communications, Inc. dated September 20, 2006
|
Incorp. by
reference
1
|
|
31
|
Section
302 Certification of Chief Executive Officer
|
This
filing
|
||
31
|
Section
302 Certification of Principal Financial Officer
|
This
filing
|
||
32
|
Section
906 Certification of Chief Executive Officer
|
This
filing
|
||
32
|
Section
906 Certification of Principal Financial Officer
|
This
filing
|
CLEARONE
COMMUNICATIONS, INC.
|
||
November
12, 2007
|
By:
|
/s/
Zeynep Hakimoglu
|
Zeynep
Hakimoglu
|
||
President
and Chief Executive Officer
|
||
(Principal
Executive Officer)
|
||
November
12, 2007
|
By:
|
/s/
Greg A. LeClaire
|
Greg
A. LeClaire
|
||
VP
Finance
|
||
(Principal
Financial and Accounting
Officer)
|
13
August
2007
|
Clause
No.
|
Page
No.
|
|
1.
|
Definitions
|
1
|
2.
|
Termination
of Employment
|
2
|
3.
|
Remuneration
|
2
|
4.
|
P45
|
2
|
5.
|
Severance
Payment
|
2
|
6.
|
Tax
|
3
|
7.
|
Secrecy
|
3
|
8.
|
Post-Termination
Restrictions
|
3
|
9.
|
New
Employment
|
4
|
10.
|
Company
Property
|
4
|
11.
|
Legal
Expenses
|
4
|
12.
|
Claims
against the Employer
|
4
|
13.
|
Interpretation
|
7
|
14.
|
Third
Party Rights
|
7
|
15.
|
Enforcement
of the Compromise Agreement
|
7
|
16.
|
Without
Prejudice
|
7
|
17.
|
Entire
Agreement
|
7
|
18.
|
Jurisdiction
and Governing Law
|
7
|
SCHEDULE
1
|
9
|
|
SCHEDULE
2
|
10
|
|
SCHEDULE
3
|
11
|
(1)
|
CLEARONE
COMMUNICATIONS UK LIMITED
of 12 York Gate, London NW1 4QS (the
"
Employer
"); and
|
(2)
|
MARTIN
JAMES OFFWOOD
of West Bull House, 19 High Street, Nettlebed, Oxon
RG9 5DA (the
"
Employee
”).
|
(A)
|
The
Employee's employment with the Employer will terminate on 13 August
2007.
|
(B)
|
The
parties wish to compromise any claims which may be made in connection
with
the employment and make other arrangements for an orderly
transition. This agreement does not, except to the extent
expressly stated, vary the Service Agreement, but rather sets out
terms
for the compromise of such claims and the required
arrangements.
|
(C)
|
The
Employer is entering into this agreement for itself and as agent
for all
Group Members and is duly authorised in that
behalf.
|
1.
|
Definitions
|
2.
|
Termination
of Employment
|
2.1
|
With
effect from the Termination Date the Employee will cease to be
an employee
of the Employer and shall not hold himself out as having any continuing
connection with the Employer or with any Group
Member.
|
2.2
|
On
or before the Termination Date, the Employee shall, without any
claim for
damages or compensation for loss of office, resign with immediate
effect
from any office which the Employee may hold as director or other
officer
of the Employer or a Group Member by completing and returning to
Alicia
Garcia, Human Resources Manager a letter in the form set out in
schedule
2. The Employee undertakes not to hold himself out as a
director or other officer of the Employer or a Group
Member. The Employee irrevocably appoints the Employer as
attorney to execute letters of resignation of such offices or appointments
on the Employee's behalf.
|
2.3
|
Until
the Termination Date the terms of the Service Agreement will remain
in
full force and effect save to the extent that they have been expressly
varied by the terms of this
agreement.
|
2.4
|
The
Employee will do everything necessary to resign as Director of
the
Employer’s German entity.
|
3.
|
Remuneration
|
3.1
|
Except
as set out in this agreement all entitlements to payments or benefits
arising out of or in connection with the Employee's employment
with the
exception of accrued pension rights, if any, will cease from the
Termination Date and the Employee acknowledges that he has no further
claims in respect of them.
|
3.2
|
The
Employer shall within 14 days pay to the Employee the sum of £46,750.02,
representing six months' notice, less income tax at the marginal
rate and
employee National Insurance
contributions.
|
3.3
|
The
Employer shall within 14 days pay to the Employee the sum of £5,064.54,
representing 13 days of accrued but unused holiday
days.
|
3.4
|
The
Employee shall have 90 days from the date of termination to exercise
any
vested options in the Share Option
Scheme.
|
4.
|
P45
|
5.
|
Severance
Payment
|
6.
|
Tax
|
6.1
|
The
parties agree that the Severance Payment represents compensation
for the
termination of the Employee’s employment and as such does not represent
contractual remuneration.
|
6.2
|
The
Employer makes no warranty as to the taxable status of the Severance
Payment and, accordingly, the Employee agrees that any income tax
and
employee National Insurance payable pursuant to the Severance Payment
and
on any other benefits provided to the Employee pursuant to this
agreement
is the Employee’s personal
responsibility.
|
6.3
|
The
Employee undertakes that if the Employer or any Group Member is
called
upon to account to HM Revenue & Customs for any income tax, employee
National Insurance contributions, interest or penalties thereon
arising in
respect of the payments made or benefits provided under this agreement,
other than any income tax deducted under clause 5 above (such income
tax,
National Insurance contributions, interest or penalties referred
to in
this agreement as the "
Excess Tax
"), and if the Employer
or any other Group Member pays the Excess Tax to HM Revenue & Customs,
the Employee will, at the written request of such entity, immediately
pay
to such entity an amount equal to the Excess Tax provided that
no payment
of Excess Tax will be made to HM Revenue & Customs without particulars
of any proposed payment being given to the Employee and the Employee being
given the opportunity at his own expense to dispute any such
payment.
|
7.
|
Secrecy
|
7.1
|
The
Employee undertakes that he will not, whether directly or indirectly,
make, publish or otherwise communicate any disparaging or derogatory
statements, whether in writing or otherwise, concerning the Employer
or
any Group Member or any of its or their officers, shareholders
or
employees.
|
7.2
|
Each
of the Employee and the Employer undertakes to the other that neither
shall make any announcement, statement or comment
concerning:
|
|
(a)
|
the
terms of this agreement; and/or
|
|
(b)
|
events
during the Employee’s employment with the Employer or the circumstances of
the termination of the Employee's
employment,
|
8.
|
Post-Termination
Restrictions
|
9.
|
New
Employment
|
10.
|
Company
Property
|
11.
|
Legal
Expenses
|
12.
|
Claims
against the Employer
|
12.1
|
Although
the Employer makes no admission of any liability, the terms set
out in
this agreement have been agreed in full and final settlement of
claims the
Employee has or may have against the Employer, Group Members, and
any of
its or their officers, employees, shareholders, consultants or
agents
arising directly or indirectly out of or in connection with the
Employee's
employment by the Employer, the Employee's holding of any office
or the
termination of such employment or office which he asserts including
and
limited to claims for unfair dismissal, accrued but untaken holiday,
unlawful deductions from wages or a statutory redundancy
payment.
|
12.2
|
It
is further the intention of the Employee and the Employer that
the terms
set out in this agreement have been agreed in full and final settlement
of
all or any claims, costs and expenses and any rights of action
of any kind
whatsoever whether under English or European Union law or the laws
of any
other jurisdiction that the Employee has or may have against the
Employer,
Group Members and any of its or their officers, employees, shareholders,
consultants or agents (in each case current or former) arising
directly or
indirectly out of or in connection with the Employee's employment
by the
Employer, the Employee's holding of any office or the termination
of such
employment or office under common law, statute or otherwise including,
without limitation, any claim or claims the Employee may have in
respect
of:
|
|
(a)
|
unfair
dismissal;
|
|
(b)
|
wrongful
dismissal;
|
|
(c)
|
breach
of contract;
|
|
(d)
|
a
redundancy payment pursuant to section 135 of the Employment Rights
Act
1996 (or otherwise pursuant to the Service
Agreement);
|
|
(e)
|
equal
pay;
|
|
(f)
|
sex
discrimination contrary to the Sex Discrimination Act
1975;
|
|
(g)
|
race
discrimination contrary to the Race Relations Act
1976;
|
|
(h)
|
disability
discrimination contrary to the Disability Discrimination Act
1995;
|
|
(i)
|
age
discrimination contrary to the Employment Equality (Age) Regulations
2006;
|
|
(j)
|
sexual
orientation discrimination contrary to the Employment Equality
(Sexual
Orientation) Regulations 2003;
|
|
(k)
|
religion
or belief discrimination contrary to the Employment Equality (Religion
or
Belief) Regulations 2003;
|
|
(l)
|
an
unlawful deduction from wages;
|
|
(m)
|
any
breach of the Working Time Regulations
1998;
|
|
(n)
|
any
breach of the Employee's rights in respect of accompaniment at
disciplinary or grievance hearings;
|
|
(o)
|
any
breach of the Part Time Workers (Prevention of Less Favourable
Treatment)
Regulations 2000;
|
|
(p)
|
any
breach of the Fixed Term Employees (Prevention of Less Favourable
Treatment) Regulations 2002;
|
|
(q)
|
any
breach of the Maternity and Parental Leave etc Regulations
1999;
|
|
(r)
|
harassment
under section 3 Protection from Harassment Act
1997;
|
|
(s)
|
dismissal
or action short of dismissal taken by the Employer on grounds related
to
the Employee's union membership activities and/or other relevant
statutory
provisions;
|
|
(t)
|
Employment
Act 2002;
|
|
(u)
|
Employment
Act 2002 (Dispute Resolution) Regulations
2004;
|
|
(v)
|
section
43 A-L Employment Rights Act 1996;
|
|
(w)
|
section
47B Employment Rights Act 1996; and
|
|
(x)
|
personal
injury,
|
12.3
|
The
Employee represents and warrants
that:
|
|
(a)
|
the
claims and prospective claims listed at clauses 12.1 and 12.2 are
all the
claims or prospective claims which the Employee believes that he
has or
may have against the Employer or any Group Member or its or their
respective shareholders, officers, employees, consultants or agents
(in
each case current or former) arising out of or in connection with
his
employment, directorships or its or their
termination;
|
|
(b)
|
he
is not aware of any claims for personal
injury;
|
|
(c)
|
he
has instructed the Adviser to advise whether he has any claims,
including
without limitation claims under clauses 12.1 and 12.2 above, against
the
Employer or the persons referred to in clause 12.3(a) and that
he has
provided the Adviser with all available information which the Adviser
requires in order to do so;
|
|
(d)
|
the
Employee has received independent legal advice from a relevant
independent
adviser as to the terms and effect of this agreement and in particular
its
effect on the Employee's ability to pursue his rights before an
employment
tribunal. The name of the relevant independent adviser who has
advised the Employee is Linky Trott of 2 Stone Buildings, Lincoln’s Inn,
London WC2A 3TH;
|
|
(e)
|
the
Employee is advised by the Adviser that there is in force and was,
at the
time the Employee received the advice referred to above a contract
of
insurance or an indemnity provided for members of a profession
or
professional body covering the risk of a claim by the Employee
in respect
of loss arising in consequence of that advice;
and
|
|
(f)
|
the
Employee has not issued proceedings before the employment tribunals,
High
Court or County Court in respect of any claim in connection with
his
employment or its termination. The Employee undertakes that
neither the Employee, nor anyone acting on his behalf, will issue
or
continue any such proceedings in respect of such claims as are
referred to
in clauses 12.1 or 12.2, and if they do so, or if any of the warranties
given by him in this agreement is untrue, without prejudice to
any other
remedy which may be available the Employee agrees he will repay
the
Severance Payment to the Employer immediately as a debt and on
demand.
|
12.4
|
To
give full effect to the provisions in clauses 12.1 and 12.2 above
the
Employee hereby agrees to refrain from instituting or continuing
any
proceedings before an Employment Tribunal in relation to any claims
or
complaints set out in clauses 12.1 or
12.2.
|
12.5
|
The
Employer and the Employee agree and acknowledge that the conditions
regulating compromise agreements in the Employment Rights Act 1996
and
legislation specified in clauses 12.1 and 12.2 are intended to
be and have
been satisfied.
|
12.6
|
The
provisions of clauses 12.1 and 12.2 shall have effect irrespective
of
whether or not the Employee is or could be aware of such claims,
costs,
expenses or rights of action at the date of this agreement and
irrespective of whether or not such claims, costs, expenses or
rights of
action are in the express contemplation of the Employer and the
Employee
at the date of this agreement (including such claims, costs, expenses
or
rights of action of which the Employee becomes aware after the
date of
this agreement in whole or in part as a result of the commencement
of new
legislation or the development of common
law).
|
13.
|
Interpretation
|
14.
|
Third
Party Rights
|
15.
|
Enforcement
of the Compromise
Agreement
|
15.1
|
The
parties agree that they consider the provisions of this agreement
to be
valid, reasonable and enforceable.
|
15.2
|
The
parties acknowledge and agree that the clauses and sub-clauses
of this
agreement are severable and that if any clause or sub-clause or
identifiable part is held to be invalid or unenforceable by any
court of
competent jurisdiction then such invalidity or unenforceability
shall not
affect the validity or enforceability of the agreement’s remaining
clauses, sub-clauses, or parts of the
agreement.
|
15.3
|
The
Employee agrees that if he breaches or violates any of the terms
of this
agreement damages alone may not compensate for such breach or violation
and that injunctive relief is reasonable and essential to safeguard
the
interests of the Employer and that an injunction in addition to
any other
remedy may accordingly be obtained by the Employer. No waiver
of any such breach or violation should be implied from the forbearance
or
failure by the Employer to take action in respect of such breach
or
violation.
|
16.
|
Without
Prejudice
|
17.
|
Entire
Agreement
|
17.1
|
Except
for those provisions of the Service Agreement which are expressed
in that
document or herein to continue in effect, this agreement sets out
the
entire agreement between the Employer and the Employee with regard
to the
effect of termination of the employment and supersedes all prior
discussions between the parties or their advisers and all statements,
representations, terms and conditions, warranties, guarantees,
proposals,
communications and understandings whenever given and whether given
orally
or in writing.
|
17.2
|
The
Employee acknowledges that the Employer enters into this agreement
in
reliance on the Employee's warranties in clauses 9, 10 and
12.
|
18.
|
Jurisdiction
and Governing Law
|
Signed
by :
|
/s/
Greg LeClaire
|
|
For
and on behalf of the Employer
|
||
Date:
|
13
August 2007
|
|
Signed
by :
|
/s/
Martin J. Offwood
|
|
The
Employee
|
||
Date:
|
13
August 2007
|
1.
|
I
am a "relevant independent adviser" (as such term is defined in
section
203 of the Employment Rights Act
1996).
|
2.
|
Before
the Employee signed the agreement, I advised him as to the terms
and
effect of the agreement and in particular upon its effect on his
ability
to pursue his rights before an employment
tribunal.
|
3.
|
At
the time that I gave the advice referred to in paragraph 2 of this
certificate, there was in force a contract of insurance or an indemnity
provided for members of a profession or professional body covering
the
risk of a claim by the Employee in respect of any loss arising
as a
consequence of that advice.
|
Signed
|
/s/
Linky Trott
|
|
Name:
|
Linky
Trott
|
|
Address:
|
Edwin
Coe LLP
|
|
2
Stone Buildings
|
||
Lincoln’s
Inn
|
||
WC2A3TH
|
||
Dated:
|
13
August 2007
|
Sincerely,
|
Accepted
and Approved by
|
WOODENSHOE
DEVELOPMENT
|
CLEAR
ONE INC.
|
Greg
Robinson
|
Greg
LeClaire
|
Property
Management
|
V.P.
Finance
|
1.
|
I
have reviewed this quarterly report of ClearOne Communications,
Inc. on
Form 10-Q;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such
statements
were made, not misleading with respect to the period covered by
this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial
information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures
(as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant
and have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including
its
consolidated subsidiaries, is made known to us by others within
those
entities, particularly during the period in which this report is
being
prepared;
|
|
b)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
c)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting.
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design
or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: November
12, 2007
|
By:
|
/s/
Zeynep Hakimoglu
|
Zeynep
Hakimoglu
|
||
Chairman,
President and Chief Executive
Officer
|
1.
|
I
have reviewed this quarterly report of ClearOne Communications,
Inc. on
Form 10-Q;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such
statements
were made, not misleading with respect to the period covered by
this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial
information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures
(as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant
and have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including
its
consolidated subsidiaries, is made known to us by others within
those
entities, particularly during the period in which this report is
being
prepared;
|
|
b)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
c)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting.
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design
or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
November 12, 2007
|
By:
|
/s/
Greg A. LeClaire
|
Greg
A LeClaire
|
||
VP
Finance
(Principal
Financial and Accounting Officer)
|
Date: November
12, 2007
|
By:
|
/s/
Zeynep Hakimoglu
|
Zeynep
Hakimoglu
|
||
Chairman,
President and Chief Executive Officer
(Principal
Executive Officer)
|
Date:
November 12, 2007
|
By:
|
/s/
Greg A. LeClaire
|
Greg
A. LeClaire
|
||
VP
Finance
(Principal
Financial and Accounting Officer)
|