ShoreTel, Inc. July 19, 2004
Exhibit 10.14
ShoreTel, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxxxxx, XX 00000
July 19, 2004
Xx. Xxxxxx xxx Xxxxxxxx
| Re: | Terms of Employment Separation and Releases of Claims |
Dear Xxx:
This letter confirms the agreement (this “Agreement’) between you and ShoreTel, Inc. (the
“Company” or “ShoreTel”) concerning your separation of employment with the Company.
1. Amendment of Company Options. It is acknowledged and agreed that the Company has
previously granted you stock options under the Company’s 1997 Stock Option Plan (the “Plan”) to
purchase an aggregate of 13,596,299 shares of the Company’s common stock, which, as of the date
hereof, 6,776,938 are vested (the “Company Options”). You will continue to vest in your Company
Options pursuant to their current vesting schedule so long as you continue to serve as a member of
the Company’s Board of Directors (the “Board”). Notwithstanding anything to the contrary as may be
provided for in any written agreement between you and the Company (including, without limitation,
any option agreement, stock purchase agreement, employment offer (including that certain offer of
employment from the Company dated December 12, 2001) or employment agreement), by this Agreement,
your Company Options are hereby expressly amended to preclude forever any accelerated vesting and
exercisability (including any accelerated lapse of the Company’s repurchase right) in the event of
(i) your termination of employment without cause, (ii) your termination of employment for good
reason (e.g., a constructive termination or otherwise), (iii) a change of control of the Company,
or (iv) upon the occurrence of a corporate transaction that results in a change of control of the
Company (the “Old Acceleration Benefit”). In lieu of the Old Acceleration Benefit and effective as
of the Effective Date (as defined below): all of your unvested Company Options will fully vest and
become exercisable (or the Company’s repurchase right shall fully lapse) if, within the six (6)
month period starting on July 19, 2004 and ending on January 19, 2005, either (i) the Company
closes a change of control as defined in the Plan (a “Change of Control”), or (ii) upon the
occurrence of a corporate transaction that results in a Change of Control of the Company (the “New
Acceleration Benefit”). In the event the Company does not undergo a Change of Control or a
corporate transaction does not occur that results in a Change of Control of the Company during such
six (6) month period, the New Acceleration Benefit shall lapse and be of no force
and effect, and your Company Options (or shares exercised in connection with your Company
Options that remain subject to the Company’s repurchase right), shall continue to vest in
accordance with their current vesting schedule (without the Old Acceleration Benefit) so long as
you continue to serve on the Board.
2. COBRA Continuation Coverage. The Company shall use commercially reasonable efforts
to continue your health care coverage as an active employee under its group health plan so long as
you continue to serve on the Board. In the even the Company is unable to continue such coverage
(for instance, due to such coverage being available only to employees of the Company), the Company
will reimburse you for your and your wife’s applicable COBRA premium (provided you timely elect
COBRA continuation coverage) until the earlier of: (i) the date you no longer serve as a member of
the Board, (ii) the date you no longer are eligible to receive continuation coverage pursuant to
COBRA, or (iii) the date you become covered under another employer’s group health plan.
3. Repayment of Promissory Note. Pursuant to the terms of a promissory note entered
into between you and the Company dated June 20, 2002 (and as amended thereafter in March 2003) (the
“Note”) you agree to repay the outstanding principle and accrued interest pursuant to the terms of
the Note.
4. Resignation Date; Board of Directors.
(a) As of July 19, 2004, you will deemed to have voluntarily resigned your employment with the
Company without further action on your part (“Resignation Date”), and your employment with the
Company will end on such date.
(b) Effective as of the Resignation Date the Company will take such corporate actions as are
necessary to create a new sixth board seat on the Company’s Board of Directors (the “At-Large
Seat”), which seat will be (i) elected by the holders of a majority of all of the Company’s
outstanding Common Stock and Preferred Stock voting together as a single class; and (ii) filled by
a nominee selected by both (A) at least 2 out of the 3 directors elected by the holders of
Preferred Stock and (B) the Company’s “CEO-director,” all under the terms of the Company’s Fourth
Amended and Restated Shareholders’ Voting Agreement, as amended. Effective as of the Resignation
Date, it is understood that you will be appointed by the Board to fill the newly created At-Large
Seat on the Board to serve until your successor may be nominated and elected.
5. Waiver of Claims. In consideration for the Company’s payments and promises set
forth in the Agreement, you agree to release and waive any and all claims you may have against the
Company and its owners, agents, officers, shareholders, employees, directors, attorneys,
subscribers, subsidiaries, affiliates, successors and assigns (collectively “Releasees”), whether
known or not known, including, without limitation, claims under any employment laws, including, but
not limited to, claims of unlawful discharge, breach of contract, breach of the covenant of good
faith and fair dealing, fraud, violation of public policy, defamation, physical injury, emotional
distress, claims for additional compensation or benefits arising out of your employment or
separation of employment, claims under Title VII of the 1964 Civil Rights Act, as amended, the
California Fair Employment and Housing Act and any other laws and/or
2
regulations relating to employment or employment discrimination, including, without
limitation, claims based on age or under the Age Discrimination in Employment Act or Older Workers
Benefit Protection Act and/or claims based upon disability or under the Americans with Disabilities
Act. By signing below, you expressly waive any benefits of Section 1542 of the Civil Code of the
State of California, which provides as follows:
“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 and the Company agree that the waiver and release set forth in this section five (5) shall
be and remain in effect as to the matters released. The waiver and release do not extend to any
obligations of the Company created under this Agreement.
6. Return of Company Property. You hereby represent and warrant to the Company that
you have returned all real or intangible property or data of the Company of any type whatsoever
that has been in his possession or control.
7. Proprietary Information. You hereby acknowledge that you are bound by the Employee
Invention Assignment and Confidentiality Agreement dated [insert date] (the “Employee Invention
Agreement”) and that as a result of your employment with the Company you had access to the
Company’s Proprietary Information (as defined in the Employee Invention Agreement), that you will
hold all Proprietary Information in strictest confidence and that you will not make use of such
Proprietary Information on behalf of anyone. You further confirm that you have delivered to the
Company all documents and data of any nature containing or pertaining to such Proprietary
Information and that you have not taken with you any such documents or data or any reproduction
thereof.
8. Legal and Equitable Remedies. The parties have the right to enforce this Agreement
and/or Release and any of the provisions by injunction, specific performance or other equitable
relief without prejudice to any other rights or remedies the parties may have at law or in equity
for breach of this Agreement.
9. Attorneys’ Fees. If any action is brought to enforce the terms of this Agreement
and/or Release, the prevailing party will be entitled to recover his or its reasonable attorneys’
fees, costs and expenses from the other party, in addition to any other relief to which the
prevailing party may be entitled.
10. No Admission of Liability. This Agreement and Release are not and shall not be
construed or contended by you to be an admission or evidence of any wrongdoing or liability on the
part of Releasees, their representatives, heirs, executors, attorneys, agents, partners, officers,
shareholders, directors, employees, subsidiaries, affiliates, divisions, successors or assigns.
This Agreement and Release shall be afforded the maximum protection allowable under California
Evidence Code Section 1152 and/or any other state or Federal provisions of similar effect.
3
11. Review of Separation Agreement and Effective Date of Release. The Company hereby
advises you to consult with your own attorney concerning the terms of this Release. You understand
that you may take up to twenty-one (2l) days to consider this Release and, by signing below, affirm
that you were advised to consult with an attorney prior to signing this agreement. You also
understand you may revoke this agreement within seven (7) days of signing this document. This
Release will be effective (the Effective Date”) on the 8th day after you sign it.
12. Entire Agreement. This Agreement constitutes the entire agreement between you and
the Company with respect to the subject matter hereof and supersedes all prior negotiations and
agreements, whether written or oral other than your Employee Invention Assignment and
Confidentiality Agreement dated 02/24/02 , the Note and documents evidencing your
Company Options (including the Plan) and shares purchased with respect to your Company Options.
You acknowledge that neither the Company nor its agents or attorneys have made any promise,
representation or warranty whatsoever, either express or implied, written or oral, which is not
contained in this Agreement for the purpose of inducing you to execute the Agreement, and you
acknowledge that you have executed this Agreement in reliance only upon such promises,
representations and warranties as are contained herein.
13. Modification. It is expressly agreed that this Agreement may not be altered,
amended, modified, or otherwise changed in any respect except by another written agreement that
specifically refers to this Agreement, executed by authorized representatives of each of the
parties.
14. Effective Date of Agreement. This Agreement will be effective on the Effective
Date.
If you agree to abide by the terms outlined in this Agreement, please sign the attached copy
and return it to me.
| Sincerely, |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Xxxx Xxxxxx | ||||
| Board Member | ||||
I have read, understand and agree to the terms set forth above:
/s/ Xxxxxx xxx Xxxxxxxx
|
Date: Aug 9, 2004 |
4
