EXHIBIT 10.6
EXECUTION VERSION
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SEPARATION AGREEMENT AND GENERAL RELEASE
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This Separation Agreement and General Release (hereinafter "Agreement") is
hereby entered into this 2nd day of October 2000 between Corvis Corporation
(hereinafter "the Company") and Xxxxx Xxxxxx (hereinafter "Xx. Xxxxxx"), who are
collectively referred to herein as the "Parties."
WHEREAS, the Parties now desire and agree to forever sever their
employment relationship and to fully and finally resolve any and all existing or
potential issues, claims, causes of action, grievances and disputes without any
admission of liability or finding or admission that any of Xx. Xxxxxx'x rights,
under any statute, claim or otherwise, were in any way violated. In
consideration of the mutual promises contained herein, and other good and
valuable consideration as hereinafter recited, the receipt and adequacy of which
is hereby acknowledged, the Parties, intending to be legally bound, agree as
follows:
1. The Parties agree that Xx. Xxxxxx'x employment at the Company will
terminate on October 2, 2000. The parties hereby confirm that Corvis' remaining
obligation under the Employment Agreement dated July 22, 1999 are as follows and
to the extent not set out below, Xx. Xxxxxx waives all rights to performance of
any remaining obligations of Corvis under such Employment Agreement:
(a) The Company agrees that it will make monthly payments to Xx. Xxxxxx in
the amount of Thirteen Thousand Seven Hundred and Fifty Dollars
($13,750.00), less all lawful deductions, until the earlier to occur
of: (a) October 2, 2001; or (b) Xx. Xxxxxx'x commencing full-time
employment or a substantially full-time consulting position with
another person or entity other than the Company prior to October 2,
2001. Xx. Xxxxxx agrees that if he commences part-time employment or a
part-time consulting position prior to October 2, 2001, the amount the
Company is obligated to pay pursuant to this paragraph shall be
reduced by the amounts Xx. Xxxxxx earns from such part-time employment
or from such part-time consulting position. The Company will make
these monthly payments to Xx. Xxxxxx on or before the last day of the
respective month. The maximum Xx. Xxxxxx can receive under this
paragraph is One Hundred Sixty Five Thousand Dollars ($165,000.00),
less all lawful deductions. The Company agrees to commence the
payments in this Paragraph to Xx. Xxxxxx after the expiration the
seven (7) day revocation in paragraph 26 herein, but only if Xx.
Xxxxxx does
not exercise his revocation rights under that paragraph 26. In the
event Xx. Xxxxxx exercises his revocation rights under paragraph 26,
the Company has no obligation to make any payments to Xx. Xxxxxx,
including without limitation the payments under this paragraph.
b. The Company further agrees to pay Xx. Xxxxxx a total of Twenty
Thousand Dollars ($20,000.00) in three monthly installments of
$6,667.00, less all lawful deductions, as the unpaid portion of the
signing bonus described in paragraph 2 of the July 22, 1999 Employment
Agreement. The Company agrees to commence the payments in this
Paragraph to Xx. Xxxxxx after the expiration the seven (7) day
revocation in paragraph 26herein, but only if Xx. Xxxxxx does not
exercise his revocation rights under that paragraph 26. In the event
Xx. Xxxxxx exercises his revocation rights under paragraph 26, the
Company has no obligation to make any payments to Xx. Xxxxxx,
including without limitation the payment under this paragraph. The
Company will make these monthly payments to Xx. Xxxxxx on or before
the last day of the respective month.
c. The Company agrees that Xx. Xxxxxx shall be entitled to participate in
the Company's group hospitalization, health, dental care and life
insurance plans until October 2, 2001, under the payment terms that
applied to Xx. Xxxxxx for those benefit plans as of October 1, 2000,
and in accordance with the Company's policies for those benefits. Xx.
Xxxxxx recognizes that for purposes of the continuation coverage
requirements of group health plans under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA), as amended, and the group
health provisions of the Maryland Annotated Code, a "qualifying event"
and "applicable change in status" occurs on October 2, 2001. The
Company agrees to commence the benefits coverage in this Paragraph to
Xx. Xxxxxx after the expiration the seven (7) day revocation in
paragraph 26 herein, but only if Xx. Xxxxxx does not exercise his
revocation rights under that paragraph 26. In the event Xx. Xxxxxx
exercises his revocation rights under paragraph 26, the "qualifying
event" and "applicable change in status" occurs on October 2, 2000,
and the Company has no obligation to make any payments to Xx. Xxxxxx,
including without limitation the benefits coverage under this
paragraph.
d. The Company shall continue to have the obligations to Xx. Xxxxxx
contained in the second and third paragraphs of paragraph 3 of the
Employment Agreement
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2. Pursuant to the Stock Option Agreement between Xx. Xxxxxx and the
Company dated July 26, 1999, Xx. Xxxxxx and the Company agree that Xx. Xxxxxx
has vested ownership pursuant to such Stock Option Agreement effective
immediately after termination of his employment with the Company in a total of
Two Million Thirty-Two Thousand (2,032,000) shares of common stock of the
Company (herein "Shares"). The parties agree that pursuant to such Stock Option
Agreement Xx. Xxxxxx would be entitled to a higher number of shares but that Xx.
Xxxxxx waives all rights to such greater number of shares beyond the 2,032,000
Shares referenced in the preceding sentence. The Company will confirm this to
the Stock Plan Administrator and Transfer Agent and work with Xx. Xxxxxx to
effect transfer of vested shares to Credit Suisse First Boston Corporation
within three days after the date of this Agreement and previously unvested
shares within seven days after the expiration the seven day revocation in
paragraph 26 herein, but only if Xx. Xxxxxx does not exercise his revocation
rights under that paragraph 26. In the event Xx. Xxxxxx exercises his revocation
rights under paragraph 26, the Company has no obligation to make any payments or
conveyances to Xx. Xxxxxx, including without limitation the Shares under this
paragraph. The Parties agree that Xx. Xxxxxx'x right to offer, pledge, contract,
sell, hedge or otherwise dispose of the Shares conveyed to him under this
paragraph will be governed by the Amended Lock-Up Agreement dated October __
2000, which is attached hereto as Exhibit 1 and incorporated by reference. The
parties agree that Xx. Xxxxxx shall make no sale of shares of Corvis before 48
hours after the release of the press release announcing his departure from the
Company which shall be made in accordance with paragraph 9.
3. Xx. Xxxxxx agrees and acknowledges that, except as provided in
paragraphs 1 and 2 herein, the Company has no further obligations or liabilities
of any kind to Xx. Xxxxxx, and Xx. Xxxxxx is not entitled to any other
remuneration, compensation, right of indemnity, stock, or stock options from the
Company. Xx. Xxxxxx specifically agrees that, except as provided in paragraph 1
herein, he has no further rights and expressly waives any rights he might have
under the July 22, 1999 Employment Agreement. Xx. Xxxxxx specifically agrees
that, except as provided in paragraph 2 herein, he has no further rights, and
expressly waives any rights he might have under the June 30, 2000 Corvis
Corporation Amended 1997 Stock Option Plan Non-Qualified Stock Option Agreement,
under the July 26, 1999 Corvis Corporation Amended 1997 Stock Option Plan
Incentive Stock Option Agreement or any other Company stock or stock option plan
or agreement in place.
4. Xx. Xxxxxx waives any right to future employment with the Company or
any of its parents, subsidiaries, affiliates, or successors.
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Xx. Xxxxxx further agrees never to apply for, seek, or pursue employment at the
Company or any such related entities.
5. Xx. Xxxxxx agrees that upon the separation of his employment with the
Company, he will surrender to the Company every item and every document that is
the Company's property (including but not limited to keys, records, computers,
peripherals, computer files and disks, notes, memoranda, models, inventory and
equipment) or contains Company information, in whatever form. All of these
materials are the sole and absolute property of the Company. Xx. Xxxxxx may,
however, retain the Company's notebook computer he is currently using provided
that the Company has been able to remove all proprietary information from it. He
may also retain the mobile telephone and mobile telephone number he is currently
using provided that he shall be responsible for all charges incurred after the
effective date of this Agreement.
6. Xx. Xxxxxx hereby releases, discharges and acquits the Company, its
subsidiaries and affiliates, and the Company's and its subsidiaries' and
affiliates' agents, employees, stockholders, directors, officers, successors,
attorneys and assigns (collectively "Releasees") from any and all claims,
demands, liabilities or causes of action, known or unknown, against Releasees or
any of them, which Xx. Xxxxxx now owns or holds or will own or hold at any time
in the future, by reason of any action, matter, cause or thing whatsoever
arising from or relating to any act, occurrence, or transaction before the date
of this Agreement or related to the termination of Xx. Xxxxxx'x employment with
the Company or in any way related to the employment relationship between Xx.
Xxxxxx and the Company and/or arising out of the termination of that employment
or relationship, including but not limited to, any and all claims pursuant under
the Age Discrimination In Employment Act (29 U.S.C. (S)(S) 626 et seq.,
("ADEA")), Title VII of the Civil Rights Acts of 1964 and 1991 as amended (42
U.S.C. (S)(S) 2000e et seq.), the Americans With Disabilities Act (42 U.S.C.
(S)(S) 12101 et seq.), and any other applicable law, statute, code or
ordinance. It is the intention of Xx. Xxxxxx in executing this Agreement that
this General Release provided for herein shall be effective as a bar to each and
every claim, demand and cause of action, and shall extend to claims that Xx.
Xxxxxx does not know or suspect to exist in his favor at the time of executing
this Agreement, which if known by Xx. Xxxxxx might have materially affected his
entering into this Agreement. Xx. Xxxxxx acknowledges that he is aware that he
may hereafter discover facts different from or in addition to those he now knows
or believes to be true with respect to the matters herein released, and Xx.
Xxxxxx agrees that this Agreement shall be and remain in effect in all respects
as a complete General Release notwithstanding any such different or additional
facts.
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7. Xx. Xxxxxx agrees not to make or file any lawsuits, complaints, or
other proceedings against the Company or to join in any such lawsuits,
complaints, or other proceedings against the Company, or any other person or
entity specified in the preceding Paragraph, concerning any matter that arose
prior to the date of this Agreement. Xx. Xxxxxx further agrees that, as to any
such lawsuits, complaints, or other proceedings that have already been made or
filed by or on behalf of Xx. Xxxxxx, Xx. Xxxxxx agrees to immediately dismiss
with prejudice all such lawsuits. Xx. Xxxxxx further agrees and covenants not to
assist or encourage others in making or filing any lawsuits, complaints, or
other proceedings against the Company, or any other person or entity specified
in the preceding Paragraph.
8. The Company agrees that, in consideration of the consideration
described above, it will, and hereby does, forever and irrevocably release and
discharge Xx. Xxxxxx from any and all grievances, claims, demands, debts,
defenses, actions or causes of action, obligations, damages, and liabilities
whatsoever which it now has, has had, or may have, whether the same be at law,
in equity, or mixed, in any way arising from or relating to any act, occurrence,
or transaction before the date of this Agreement, including without limitation
Xx. Xxxxxx'x employment or separation of employment. This is a General Release.
9. The Parties agree to announce the separation of Xx. Xxxxxx from the
Company through the press release attached as Exhibit 2. Xx. Xxxxxx and the
Company agree to make such press release on Tuesday, October 10, 2000.
10. Xx. Xxxxxx acknowledges the adequacy of the above-described
consideration and payments from the Company and agrees that he is not otherwise
entitled to the above-described consideration and payments from the Company.
11. Xx. Xxxxxx acknowledges and stipulates that all of the Company's
electronic and telephonic communication systems, computers and other business
equipment including, but not limited to, computer systems, data bases, phone
mail, modems, e-mail, Internet access, Web sites, fax machines, techniques,
processes, formulas, mask works, source codes, programs, semiconductor chips,
processors, memories, disc drives, tape heads, computer terminals, keyboards,
storage devices, printers and optical character recognition devices, and any and
all components, devices, techniques or circuitry incorporated in any of the
above and similar business devices (herein collectively referred to as
"Electronic Equipment"), are the sole property of the Company, and that any
information transmitted by, received from, or stored in such Electronic
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Equipment is also the Company's property. Xx. Xxxxxx agrees that, after his
separation of employment from the Company, he shall not, directly or indirectly,
for himself or for any other person or entity, use, access, copy, or retrieve,
or attempt to use, access, copy, or retrieve, any of the Company's Electronic
Equipment or any information on the Company's Equipment.
12. Xx. Xxxxxx acknowledges, represents and agrees that he continues to be
bound by all the covenants, terms and provisions in paragraph 6 of his July 22,
1999 Employment Agreement which is attached hereto as Exhibit 3 and is
incorporated by reference. Xx. Xxxxxx further agrees that for a period of 18
months after the effective date of this Agreement, he will not: (a) on his own
behalf or as a partner, officer, director, employee, agent, or consultant of any
other person, company, partnership, business group, venturer or entity directly
engage or attempt to engage in the business of providing goods or services the
same as or materially similar to the goods or services of the Company as offered
as of October 2, 2000 (which includes all Corvis products, whether commercially
available or not, set out in the Company's final prospectus relating to its IPO,
the edge switch currently under development by the Baylight group within Corvis
and the transmission products under development by the Corvis Algety subsidiary
in France); or (b) on his own behalf or as a partner, officer, director,
employee, agent, or consultant of any other person, company, partnership,
business group, venturer or entity, directly or indirectly, be employed by, work
for, provide services to, consult for or otherwise be associated with any of the
following entities or their subsidiaries or affiliates: Ciena Corporation,
Nortel Networks, Lucent Technologies, Alcatel, Sycamore Networks, Cisco Systems,
Marconi or Siemens. The parties agree that in the event the Company experiences
a change of control event where the acquiror is one of the entities named in (b)
above, the obligations contained in the preceding sentence shall expire one year
after the effective date of this Agreement or, if later, upon the consummation
of such change of control event.. The parties further agree that in the event
the Company experiences a change of control event where the acquiror is an
entity not named in (b) above, the obligations contained in the second sentence
of this paragraph shall expire six months after consummation of such change of
control event. Change of control event shall mean the sale by the Company of
shares representing more than 50% of the voting power of the Company or a change
in the identity of a majority of the directors of the Company due to (i) a proxy
contest or (ii) any unsolicited tender, exchange or other purchase offer.
13. It is the intention of the Parties that this Agreement shall be
enforceable to the fullest extent allowed by law. In the event that a court
holds any provision of this Agreement to be unenforceable, the Parties
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agree that, if allowed by law, that provision shall be reduced to the degree
necessary to render it enforceable without affecting the rest of this Agreement,
and, if such reduction is not allowed by law, the Parties shall promptly agree
in writing to a provision to be substituted therefore which will have an effect
as close as possible to the invalid provision that is consistent with applicable
law. The Parties agree that the invalidity or unenforceability of any provision
of this Agreement shall not affect or limit the validity and enforceability of
the other provisions hereof.
14. The Parties agree that any breach by Xx. Xxxxxx of any of the
provisions contained in paragraph 12 of this Agreement will cause the Company
immediate, material and irreparable injury and damage, and there is no adequate
remedy at law for such breach. Accordingly, in the event of a breach of any of
the provisions of this Agreement by Xx. Xxxxxx, in addition to any other
remedies it may have at law or in equity, the Company shall be entitled
immediately to seek enforcement of this Agreement in a court of competent
jurisdiction by means of a decree of specific performance, an injunction without
the posting of a bond or the requirement of any other guarantee, any other form
of equitable relief, liquidated damages in the amount of $10 million in the
event the breach involves any company named in clause (b) of paragraph 12, and
the Company is entitled to recover from Xx. Xxxxxx the costs and attorneys' fees
it incurs to recover under or enforce this Agreement. This provision is not a
waiver of any other rights which the Company may have under this Agreement,
including the right to receive money damages.
15. Xx. Xxxxxx acknowledges and agrees that the covenants contained herein
are necessary for the protection of the Company's legitimate business interests
and are reasonable in scope and content. The Parties agree that the failure of
the Company to enforce any term of this Agreement (or any agreement with any
other person) shall not constitute a waiver of the Company's rights or deprive
the Company of the right to insist thereafter upon strict adherence to that or
any other term of this Agreement, nor shall a waiver by the Company of any
breach of this Agreement constitute a waiver of any preceding or succeeding
breach, nor shall the passage of any amount of time after the Company becomes
aware of a breach of this Agreement constitute a waiver of its rights to
enforcement. No waiver of a right under this Agreement shall be binding on the
Company unless expressly made in writing and signed by the President of the
Company.
16. Xx. Xxxxxx agrees that the above-mentioned consideration is not to be
construed as an admission of any wrongdoing or liability on the part of the
Company under any statute or otherwise, but that on the contrary, any such
wrongdoing or liability is expressly denied by the Parties.
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17. Xx. Xxxxxx agrees that neither this Agreement nor the negotiations in
pursuance thereof shall be construed or interpreted to render Xx. Xxxxxx a
prevailing party for any reason, including but not limited to an award of
attorney's fees, expenses or costs under any statute or otherwise.
18. Xx. Xxxxxx represents that he has not heretofore assigned or
transferred, or purported to assign or transfer, to any person or entity, any
claim against the Company or portion thereof or interest therein, and that any
such claim is not assignable or transferable.
19. The Parties agree that this Agreement shall be binding upon and inure
to the benefit of the personal representatives, heirs, executors, and
administrators of Xx. Xxxxxx and the heirs, executors, administrators,
affiliates, successors, predecessors, subsidiaries, divisions, officers,
purchasers, agents, assigns, representatives, directors and employees of the
Company.
20. Xx. Xxxxxx acknowledges, represents and agrees that he continues to be
bound by the Secured Promissory Note dated August 11, 1999 in the amount of One
Million Two Hundred and Twenty-Four Thousand Dollars ($1,224,000.00) (herein
"August 11, 1999 Secured Promissory Note") which is attached hereto as Exhibit 4
and incorporated by reference. Xx. Xxxxxx agrees to execute and be bound by the
Proprietary Information and Inventions Agreement (herein "October 2, 2000
Proprietary Information and Inventions Agreement") that is attached hereto as
Exhibit 5 and is incorporated by reference.
21. The Parties agree that this Agreement, Paragraph 6 of the July 22,
1999 Employment Agreement which is attached hereto as Exhibit 3, the October __
2000 Amended Lock-Up Agreement which is attached hereto as Exhibit 1, the August
11, 1999 Secured Promissory Note which is attached hereto as Exhibit 4, and the
October 2, 2000 Proprietary Information and Inventions Agreement which is
attached hereto as Exhibit 5, contain and comprise the entire agreement and
understanding of the Parties, that there are no additional promises or terms
between the Parties, and all other discussions, promises, representations, and
understandings relating to the topics herein discussed are hereby merged into
this Agreement. This Agreement may be modified only by a written instrument
signed by Xx. Xxxxxx and the President and Chief Executive Officer of the
Company.
22. The Parties agree that this Agreement and the rights and obligations
hereunder shall be governed by, and construed in accordance with, the laws of
the State of Maryland regardless of any principles of
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conflicts of laws or choice of laws of any jurisdiction. The Parties agree that
the state courts of the State of Maryland and, if the jurisdictional
prerequisites exist, the United States District Court for the District of
Maryland, shall have sole and exclusive jurisdiction and venue to hear and
determine any dispute or controversy arising under or concerning this Agreement.
23. If any terms of the above provisions of this Agreement are found null,
void or inoperative, for any reason, the remaining provisions will remain in
full force and effect. The language of all parts of this Agreement shall in all
cases be construed as a whole, according to its fair meaning, and not strictly
for or against either of the Parties.
24. Xx. Xxxxxx represents that he has read this Agreement, that he
understands all of its terms, that in executing this Agreement he does not rely
and has not relied upon any representation or statements made by any of the
Company's agents, representatives, or attorneys with regard to the subject
matter, basis, or effect of the Agreement, and that he enters into this
Agreement voluntarily, of his own free will, without any duress and with
knowledge of its meaning and effect.
25. Xx. Xxxxxx understands that he has twenty-one (21) days from the date
of his receipt of this Agreement, which was September 28, 2000, to consider his
decision to sign it, and that he may unilaterally waive this period at his
election. Xx. Xxxxxx'x signature on this Agreement constitutes an express waiver
of the twenty-one (21) day period if affixed prior to the expiration of that
period. By signing this Agreement, Xx. Xxxxxx expressly acknowledges that his
decision to sign this Agreement was knowing and voluntary and of his own free
will. Xx. Xxxxxx understands that he is not waiving any claims that may arise
after the date of this Agreement.
26. Xx. Xxxxxx acknowledges that he may revoke this Agreement only as it
pertains to claims under the ADEA for up to and including seven (7) days after
his execution of this Agreement, and that the aspects of this Agreement
regarding his release of claims under the ADEA shall not become effective until
the expiration of seven (7) days from the date of his execution of this
Agreement. This provision as of this Agreement are independently supported by
adequate consideration and are fully enforceable. Xx. Xxxxxx expressly agrees
that, in order to be effective, his revocation pursuant to this Paragraph must
be in writing and must actually be received by Xxx Xxxxxx, Senior Vice President
and General Counsel of Corvis, before 5:00 p.m. on the seventh day following Xx.
Xxxxxx'x execution of this Agreement.
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27. Xx. Xxxxxx acknowledges that he has been advised to consult with an
attorney prior to signing this Agreement and that he has in fact consulted with
an attorney of his choice prior to executing this Agreement.
28. The Company and Xx. Xxxxxx agree for themselves, their respective
directors, officers and their agents and representatives, in each case acting
under specific directions, to refrain from uttering or publishing to any third
party by oral, written or electronic statements or comments any derogatory
remarks which disparage or defame the business or personal reputation of the
Company or Xx. Xxxxxx.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first written above.
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Xxxxx Xxxxxx Date
CORVIS CORPORATION
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Xxxxx X. Xxxxx, President and Date
CEO
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