I need to know how to reset a business owned iPad after the employee that set it up has been terminated and will not divulge his password info

Try this:

1. Disconnect the USB cable from the device, but leave the other end of the cable connected to your computer's USB port.
2. Turn off the device: Press and hold the Sleep/Wake button for a few seconds until the red slider appears, then slide the slider. Wait for the device to shut down.
3. While pressing and holding the Home button, reconnect the USB cable to the device. The device should turn on.
4. Continue holding the Home button until you see the Connect to iTunes screen.
5. iTunes will alert you that it has detected a device in recovery mode. Click OK, and then restore the device.

There have been unconfirmed reports that a business can contact Apple and provide proof of ownership and there may be something Apple can do, but again that is unconfirmed. It would be worth calling Apple Support and asking, though.

Regards.

It sounds as if you ex-employee had "find my iPhone " set which means activation lock is set

see here to understand

http://support.apple.com/kb/HT5818

unfortunately there is no way any one ,not even ,apple can activate with out the original Apple id used to activate originally

You may have to write this one off but update your company procedures to recognise this "anti theft device "

does this employee have any pay due ,in which case deduct cost of new iPad ,they may then see sense 😉

Just had an employee terminated most acrimoniously and had an iPhone 5C that was a brick. Apple support can help remove the lock. Better hold onto your original receipt and record the Serial# ! I do not mean the MEID or IMEI but the Serial# found on the original box or Settings>General>About. In my case no receipt or Serial#. 2 hours on the phone between Apple and Verizon and got what was needed. Submitted form and got reply to allow 2-10 business days.

Here is the form I had to complete and sent to pv_inst_amr@apple.com...

ORIGINAL SALES INFORMATION:

PRODUCT PURCHASE DATE:

INVOICE/RECEIPT NUMBER:

PRODUCT SERIAL NUMBER:

PRODUCT IMEI/MEID:

PRODUCT DESCRIPTION:

BUSINESS/INSTITUTION NAME:

REQUESTOR NAME/TITLE:

PHONE NUMBER:

STREET ADDRESS:

CITY:

STATE:

POSTAL CODE:

EMAIL ADDRESS:

UNLOCK AUTHORIZATION STATEMENT: I [YOUR NAME] representing
[BUSINESS/INSTITUTION NAME] authorize Apple, Inc. to unlock the devices listed.

Best regards,

The Apple Support Team

If the iPad is on IOS 7, you cannot reset the iPad to Factory Default without the Apple ID and Password of your employee.

That will not work if Find My iPhone and hence Activation Lock has been set, which from the original post it has been.

Regards.