May 5, 2005
EXHIBIT 10.49
May 5, 2005
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Xx. Xxxxxxx Xxxxxxx
[Address not included]
[Address not included]
Dear Rich:
This letter sets forth the terms of the separation agreement (the “Agreement”) that Photon
Dynamics Inc. (the “Company”) is offering to you to aid in your employment transition.
1. Separation. Your employment with the Company will terminate on December 1,
2005 (the “Separation Date”), unless terminated earlier as provided below. You agree
to provide a
letter of resignation not later than May 5 in a form acceptable to the Company.
2. Transition Period. Your last day in your current position of Chief Financial
Officer
will be May 31, 2005 (the “Transition Date”). From June 1, 2005 until the Separation
Date (the
“Transition Period”) you will hold the position of Business Development Internal
Consultant, and in
that role your duties will include assisting the Company’s new Chief Financial
Officer to the learn
the position, and other duties that are requested of you by the Company’s Chief
Executive Officer
(“CEO”). During the Transition Period (a) you will be required to work as necessary
to perform your
assigned duties, which will not be full time, and you shall have no authority with
respect to the
Company’s business activities except as expressly conveyed by the CEO, and (b) your
base salary
and benefits as of the Transition Date shall continue, subject to any change in the
Company’s
benefits generally. You agree not to engage in any conduct during the Transition
Period that is
detrimental to the interests of the Company.
Without waiving any other rights or remedies, the Company may terminate immediately the
Transition Period and your employment and the Company’s corresponding obligation to pay you
compensation and provide benefits, upon your breach of any provision of this Agreement. Upon
termination of the Transition Period by the Company in accordance with the previous sentence, the
Company will pay you only accrued and unpaid base salary through and including the effective date
of such termination.
3. Stock Options. All stock options you received from the Company will cease vesting
on the Transition Date, and all unvested shares will terminate as of such date. Your rights
and
obligations with respect to all vested shares, including your right to exercise such shares,
will be in
accordance with the governing grant notice(s), stock option agreement(s), and stock option
plan(s).
4. Accrued Salary And Vacation. On the Separation Date, the Company will pay you
all accrued and unpaid salary, and all accrued and unused paid time off, earned through the
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Separation Date, less required payroll deductions and withholdings. You are entitled to
these payments regardless of whether you sign this Agreement. You will not accrue any
additional vacation time during the Transition Period.
5. Other Compensation Or Benefits. You acknowledge that, except as expressly
provided in this Agreement, you will not receive from the Company any additional compensation,
severance or benefits during the Transition Period or on or after the Separation Date,
including but
not limited to any bonuses or stock option vesting acceleration, with the sole exception of
any benefit
the right to which has vested as of the Separation Date under the express terms of a Company
benefit
plan document.
6. Expense Reimbursements. You agree that, within fifteen (15) days after the
Transition Date, you will submit your final documented expense reimbursement statement
reflecting
all business expenses you incurred through the Transition Date, if any, for which you seek
reimbursement with respect to your Company employment. The Company will reimburse you for
these expenses pursuant to its regular business practices.
7. Information Disclosure. You are aware of and have provided information with
respect to an investigation the Company commenced in or about [month] 2005 concerning certain
revenue recognition issues. You hereby represent that you have disclosed to the Company
(including
its outside counsel) all information in your knowledge, custody or control relevant to such
investigation. You represent further that you have no additional information with respect to
any
aspect of the Company’s business or operations that you reasonably believe could or should be
the
subject of any further or separate investigation.
8. Cooperation. During and alter the Transition Period, you will cooperate with the
Company in responding to the reasonable requests of the CEO or the Company’s outside counsel,
in
connection with any and all existing or future litigation, arbitrations, mediations or
investigations
initiated by or against the Company, or its current or former affiliates, agents, officers,
directors or
employees, of any nature, including (without limitation) administrative, civil or criminal, in
which
the Company reasonably deems your cooperation necessary or desirable. In such matters, you
agree
to provide the Company with reasonable advice, assistance and information, including offering
and
explaining evidence, providing sworn statements, and participating in discovery and trial
preparation
and testimony. You also agree to promptly send the Company copies of all correspondence (for
example, but not limited to, subpoenas) you receive in connection with any such proceedings,
unless
you are expressly prohibited by law from so doing. Your failure to cooperate fully with the
Company in accordance with this paragraph will be a material breach of the terms of this
Agreement,
which (a) will excuse the Company’s obligation to provide continued salary and other benefits
to you
under this Agreement, but (b) will have no effect on the releases you are giving the Company
under
this Agreement. The Company agrees to reimburse you for all reasonable out-of-pocket expenses
you incur in connection with the performance of your obligations under this paragraph;
provided,
however, that such expenses shall not include attorneys fees, foregone wages or payment for
services
provided under this paragraph.
9. Return Of Company Property. You agree that not later than the Transition Date,
you will return to the Company, all Company Entities documents (and all copies thereof) and
other
Company Entities property in your possession or control, including,
but not limited to: Company
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Entities
files, notes, memoranda, correspondence, agreements, draft documents, notebooks, logs,
drawings, records, plans, proposals, reports, forecasts, financial information, sales and marketing
information, research and development information, personnel information, specifications,
computer-recorded information, tangible property and equipment, credit cards, entry cards,
identification badges and keys; and any materials of any kind that contain or embody any
proprietary or confidential information of the Company Entities (and all reproductions thereof in
whole or in part); provided, however, that during the Transition Period only, the Company will
permit you to retain, receive, and/or use certain specified documents and/or information reasonably
necessary to perform your duties to the Company, all of which equipment, documents and information
you must return to the Company not later than the Separation Date.
10. Proprietary Information Obligations. You acknowledge your continuing
obligations under your Proprietary Information and Inventions Agreement, a copy of which is
attached to this Agreement as Exhibit A. including but not limited to your obligations not to
use or
disclose, at any time, any trade secret, confidential or proprietary information of the
Company.
11. Non-Competition. In order to protect the trade secrets and confidential and
proprietary information of the Company and its affiliated entities (collectively “Company
Entities”),
you agree that during the Transition Period you will not, directly or indirectly, without the
prior
written consent of the CEO, own, manage, operate, join, control, finance or participate in the
ownership, management, operation, control or financing of, or be connected as an officer,
director,
employee, partner, principal, agent, representative, or consultant, in any location(s)
worldwide, of
any person or entity that directly competes with any Company Entities product or service then
currently available or in development and known to you.
12. Non-Solicitation. You agree that you will not, either directly or through others, on
behalf of any person or entity, (a) during the Transition Period and for two (2) years
thereafter, solicit
or attempt to solicit any employee, consultant, or independent contractor of the Company
Entities to
terminate his or her relationship with any Company Entities, including, without limitation, in
order to
become an employee, consultant or independent contractor to or for any other person or entity
other
than the Company Entities, or (b) at any time, using any Company Entities’ confidential,
proprietary
or trade secret information, call on, solicit, take away, or attempt to call on, solicit, or
take away, the
business of any person or entity that is then an actual client, or to your knowledge a
prospective
client, of any Company Entities.
13. Confidentiality. The provisions of this Agreement will be held in strictest
confidence by you and the Company and will not be publicized or disclosed in any manner
whatsoever: provided, however, that: (a) you may disclose this Agreement in confidence to your
immediate family; (b) the parties may disclose this Agreement in confidence to their
respective
attorneys, accountants, auditors, tax preparers, and financial advisors; (c) the Company may
disclose
this Agreement as necessary to fulfill standard or legally required corporate reporting or
disclosure
requirements; and (d) the parties may disclose this Agreement insofar as such disclosure may
be
necessary to enforce its terms or as otherwise required by law. In particular, and without
limitation,
you agree not to disclose the terms of this Agreement to any current or former Company
employee,
consultant or independent contractor.
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14. Nondisparagement. You agree not to disparage the Company Entities or their
officers, directors, employees, shareholders, affiliates or agents, in any manner likely to be
harmful to
them or their business, business reputation or personal reputation;
provided, however, that
you shall
respond accurately and fully to any question, inquiry or request for information when required
by
legal process.
15. Release. In exchange for the consideration provided to you by this Agreement that
you are not otherwise entitled to receive, you hereby generally and completely release the
Company
Entities and their directors, officers, employees, shareholders, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns
from any and
all claims, liabilities and obligations, both known and unknown, that arise out of or are in
any way
related to events, acts, conduct or omissions occurring prior to the time you sign this
Agreement.
This general release includes, but is not limited to: (1) all claims arising out of or in any
way related
to your employment with the Company or the termination of that
employment; (2) all claims related
to your compensation or benefits from the Company, including salary, bonuses, commissions,
vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or
any
other ownership interests in the Company; (3) all claims for breach of contract, wrongful
termination
or breach of the implied covenant of good faith and fair dealing; (4) all tort claims,
including claims
for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5)
all
federal, state, and local statutory claims, including claims for discrimination, harassment,
retaliation,
attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as
amended), the
federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment
Act
of 1967 (as amended) (“ADEA”), or the California Fair Employment and Housing Act (as amended).
16. ADEA
Waiver. You acknowledge that you are knowingly and voluntarily waiving
and releasing any rights you have under the ADEA and that the consideration given for the
waiver
and release is in addition to anything of value to which you were already entitled. You
further
acknowledge that you have been advised by this writing, as required by the ADEA, that: (a)
your
waiver and release specified in this paragraph do not apply to any rights or claims that arise
after the
date you sign this Agreement; (b) you have the right to consult with an attorney prior to
signing this
Agreement; (c) you have twenty-one (21) days to consider this Agreement (although you may
choose
voluntarily to sign this Agreement earlier); (d) you have seven (7) days after you sign this
Agreement
to revoke the Agreement; and (e) this Agreement will not be effective until the date on which
the
revocation period has expired, which will be the eighth day after you sign this Agreement,
assuming
you have returned it to the Company by such date.
17. Waiver of Unknown Claims. In granting the general release herein, you
acknowledge that you have read and understand California Civil Code section 1542, which
states:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.
You
expressly waive and relinquish all rights and benefits under that section and any law of
any jurisdiction of similar effect.
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May 5, 2005
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May 5, 2005
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18. Supplemental Release. In further exchange for the consideration under this
Agreement to which you would not otherwise be entitled, you agree to sign and return to the
Company, on or after the Separation Date, the Supplemental Release, in the form attached
hereto as
Exhibit B.
19. Dispute Resolution. To ensure rapid and economical resolution of any and all
disputes that might arise in connection with this Agreement, you and the Company agree that
any and
all disputes, claims, and causes of action, in law or equity, arising from or relating to this
Agreement
or its enforcement, performance, breach, or interpretation, will be resolved solely and
exclusively by
final, binding, and confidential arbitration, by a single arbitrator, in San Francisco,
California, and
conducted by Judicial Arbitration & Mediation Services, Inc. (“JAMS”) under its then-existing
employment rules and procedures. Nothing in this section, however, is intended to prevent
either
party from obtaining injunctive relief in court to prevent irreparable harm pending the
conclusion of
any such arbitration.
20. Miscellaneous. This Agreement, including Exhibits A and B, constitutes the
complete, final and exclusive embodiment of the entire agreement between you and the
Company with regard to its subject matters. It is entered into without reliance on any
agreement,
promise or representation, written or oral, other than those expressly referred to herein, and
it
supersedes any other such agreements, promises or representations, including but not limited
to
the April 21, 2003 letter agreement between you and the Company (including any amendments
thereto). This Agreement may not be modified or amended except in a writing signed by both
you and a duly authorized officer of the Company. This Agreement will bind the heirs, personal
representatives, successors and assigns of both you and the Company,
and inure to the benefit of
both you and the Company, their heirs, successors and assigns. The failure to enforce any
breach
of this Agreement shall not be deemed to be a waiver of any other or subsequent breach. For
purposes of construing this Agreement, any ambiguities shall not be construed against either
party as the drafter. If any provision of this Agreement is determined to be invalid or
unenforceable, in whole or in part, this determination will not affect any other provision of
this
Agreement and the provision in question will be modified by the court so as to be rendered
enforceable in a manner consistent with the intent of the parties insofar as possible. This
Agreement will be deemed to have been entered into and will be construed and enforced in
accordance with the laws of the State of California as applied to contracts made and to be
performed entirely within California. This Agreement may be executed in counterparts, each of
which shall be deemed to be part of one original, and facsimile signatures shall be equivalent
to
original signatures.
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Xxxxxxx
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May 5, 2005
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If this Agreement is acceptable to you, please sign below and return the signed original to
me.
Sincerely, |
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By: /s/ Xxxx Xxxxxxxxx |
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| Name: | XXXX XXXXXXXXX |
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| Title: | CEO |
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I
have read, understand, and
agree fully to the foregoing agreement: |
/s/ Xxxxxxx Xxxxxxx |
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Xxxxxxx Xxxxxxx |
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Dated: MAY 5, 2005 |
Exhibit A
Proprietary
Information and Inventions Agreement
Exhibit
B
Supplemental Release
(To be signed on or after December 1, 2005)
In further consideration of the separation agreement between Photon Dynamics Inc. (the “Company”)
and me dated May 5, 2005 (the “Agreement”), I hereby generally and completely release the Company
Entities (as defined in the Agreement) and their directors, officers, employees, shareholders,
partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations, both known and
unknown, that arise out of or are in any way related to events, acts, conduct or omissions
occurring prior to the time I sign this Supplemental Release (“Release”). This Release includes,
but is not limited to: (1) all claims arising out of or in any way related to my employment with
the Company or the termination of that employment; (2) all claims related to my compensation or
benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense reimbursements,
severance
pay, fringe benefits, stock, stock options, or any other ownership interests in the Company;
(3) all claims for breach of contract, wrongful termination or breach of the covenant of good faith
and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress
or discharge in violation of public policy; and (5) all federal, state, and local statutory claims,
including claims for discrimination, harassment, retaliation, attorneys’ fees or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended)
(“ADEA”), or the California Fair Employment and Housing Act (as amended).
I
acknowledge that I am knowingly and voluntarily waiving and releasing any rights I have under the
ADEA and that the consideration given for the waiver and release is in addition to anything of
value to which I was already entitled. I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (a) my waiver and release specified in this paragraph do
not apply to any rights or claims that arise after the date I sign this Release; (b) I have the
right to consult with an attorney prior to signing this Release; (e) I have twenty-one (21) days to
consider this Release (although I may choose voluntarily to sign this Release earlier); (d) I have
seven (7) days after the date I sign this Release to revoke the
Release; and (e) this Release will
not be effective untiI the date on which the revocation period has expired, which will be the
eighth day after I sign this Release, assuming I have returned it to the Company by such date.
In
granting the general release herein, I acknowledge that I have read and understand California
Civil Code section 1542, which states: “A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of executing the release, which
if known by him must have materially affected his settlement with the debtor.”
I expressly waive and relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect.
| By: | ||||
| Xxxxxxx Xxxxxxx | ||||
| Date: | ||||
