SEPARATION AGREEMENT, RELEASE
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AND CONSULTING AGREEMENT
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WHEREAS, Xxxxx X. Xxxxx ("Xxxxx") desires to voluntarily resign from his
employment with Tandem Computers Incorporated ("Tandem"); and
WHEREAS, the parties wish to effectuate an orderly transition for Tandem
and Xxxxx;
THEREFORE, the parties have agreed upon the following schedule of events,
rights and obligations:
1. Xxxxx has resigned from his employment with Tandem effective January 31,
1997 (the "Resignation Date").
2. Xxxxx shall be paid for all accrued and unused vacation as of the
Resignation Date. Xxxxx shall continue to be covered under Tandem's health
insurance plan through the Resignation Date, and at that time, shall have the
right to continue such coverage, at his own expense, under the Company's health
insurance as provided by the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"). Except as expressly provided herein, Xxxxx shall not
be entitled to any compensation, benefit coverage or other perquisites of
employment.
3. In connection with the stock option agreements pursuant to which Xxxxx
was granted a non-qualified option to purchase shares of Tandem Common Stock
under the 1989 Stock Plan of Tandem ("the Plan"), the Compensation/Option
Committee of the Board of Directors of Tandem has interpreted the Plan and
Xxxxx'x stock option agreements to provide that Xxxxx'x performance under the
terms of this Consulting Agreement shall toll or delay the beginning of the
30-day period during which Xxxxx must exercise the options following termination
of employment or consultancy.
4. In consideration of the undertakings described in this Agreement, which
exceed that to which Xxxxx is otherwise entitled, Xxxxx relinquishes all rights
to the options listed in Exhibit "A" attached hereto and incorporated herein to
which Xxxxx would otherwise have been entitled in exchange for the rights
described in this Agreement. Xxxxx'x other options shall remain outstanding and
will be subject to the terms of this Agreement.
5. In order to resolve any potential claims by Xxxxx arising from his
employment with Tandem and to effectuate an orderly transition, Tandem wishes to
retain the consulting services of Xxxxx for a twelve-month period ("Consulting
Period") following the Resignation Date. During the Consulting Period, Xxxxx
shall be available for consultation to Tandem for up to ten (10) hours per
month, upon reasonable notice, in order to provide assistance with customer
relations, financial issues, special projects, or other work as may be
reasonably assigned. In consideration for the consulting services, and the
general release provided by
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Xxxxx, Xxxxx'x stock options shall continue to vest during the Consulting Period
in the same manner as if he were employed by Tandem, and Xxxxx'x performance
under this Consulting Agreement shall toll or delay the beginning of the 30-day
period during which Xxxxx must exercise the options following the termination of
employment. The Consulting Period may not be terminated prior to January 1,
1998, except by the mutual written consent of both parties hereto. In the event
of Xxxxx'x death during the Consulting Period, Xxxxx will be treated in the same
manner as if he were a Tandem employee on the date of his death.
6. Xxxxx represents and warrants that he has obtained his current
employer's approval of this Consulting Agreement, as evidenced by the Consent
attached hereto as Exhibit "B". Xxxxx agrees that he will obtain the approval of
any new Employer(s) in the event that his employment with his current employer
is terminated.
7. During the Consulting Period, Xxxxx shall operate at all times as an
independent contractor of Tandem, and is in no way considered an employee of
Tandem. This Agreement does not authorize Xxxxx to act for Tandem as its agent
or to make commitments on behalf of Tandem. Tandem shall not withhold payroll
taxes, and Xxxxx shall not be covered by health, life, disability, or worker's
compensation insurance of Tandem.
8. Neither Tandem nor Xxxxx shall disclose the existence of this
Agreement, or any of its terms, except as necessary to obtain professional
advice regarding the operation of the Agreement and its tax consequences and as
required under this Agreement.
9. In further consideration of the undertakings described in this
Agreement, Xxxxx, on behalf of himself and his representatives, successors,
heirs and assigns, hereby completely releases and forever discharges Tandem, all
affiliated and subsidiary corporations, and their past and present officers,
representatives, agents, directors, employees, attorneys, predecessors,
successors and assigns, from all claims, rights, demands, obligations and causes
of action of any and every kind nature and character, known or unknown, which
Xxxxx may now have, or has ever had, including, but not limited to, those claims
arising from or in any way connected with Xxxxx'x employment with Tandem or his
resignation therefrom. This Release expressly extends to: (1) any claim for
wrongful discharge and any other claims relating to any contracts, express or
implied, or any covenant of good faith and fair dealing, express or implied; (2)
any claim for harassment or infliction of emotional distress; (3) any claims for
defamation, misrepresentation, battery or any other tort; (4) any claims under
any federal, state or municipal statute or ordinance; (5) any claims under the
California Fair Employment and Housing Act, Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act of 1967, the Older Workers'
Benefit Protection Act, the California Labor Code, and any other laws and
regulations relating to discrimination; and (6) any and all claims for
attorneys' fees and costs.
10. Xxxxx has been informed of Section 1542 of the Civil Code of
the State of California, which provides as follows:
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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.
Xxxxx understands that Section 1542 gives him the right not to release
existing claims of which he is not now aware, unless he voluntarily chooses to
waive this right. Having been so apprised, he understands that this is a full
and final release of all claims known as well as unknown and unanticipated
claims, and hereby voluntarily elects to, and does, waive the rights described
in Section 1542 and elects to assume all risks for claims that now exist in his
favor, known or unknown, including, but not limited to, those claims relating in
any way to his employment with Tandem or the termination thereof.
11. Xxxxx understands and agrees that, by entering into this Agreement,
(i) he is waiving any rights or claims he might have under the Age
Discrimination in Employment Act, as amended by the Older Workers Benefit
Protection Act; (ii) he has received consideration beyond that to which he was
previously entitled; (iii) he has been advised to consult with an attorney
before signing this Agreement; and (iv) he has been offered the opportunity to
evaluate the terms of this Agreement for not less than twenty-one (21) days
prior to his execution of the Agreement. Employee may revoke this Agreement (by
written notice to Employer) for a period of seven (7) days after his execution
of the Agreement, and it shall become enforceable only upon the expiration of
this revocation period without prior revocation by Employee
12. Xxxxx hereby acknowledges that he has read and understands the
contents and legal effect of this Agreement and that he has affixed his
signature hereto voluntarily and without coercion and that he acknowledges that
the waivers herein are knowing, conscious, not in reliance upon any
representations or promises made by Tandem, other than those contained herein,
and with full appreciation that he is forever foreclosed from pursuing the
rights so waived.
13. Should any part, term or provision of this Agreement be declared or
determined by a court of competent jurisdiction to be illegal or invalid, the
validity of the remaining parts, terms, or provisions shall not be affected
thereby and said illegal or invalid part, term or provision shall be deemed not
to be a part of this Agreement.
14. 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.
15. This Agreement represents and constitutes the entire agreement
between the parties, may only be amended in writing signed by both parties, and
supersedes all prior agreements and understandings with respect to the matters
covered by this Agreement. The parties agree that the terms of this Agreement
represent the final expression of their agreement with respect to Xxxxx'x
separation from employment from Tandem and that this Agreement may not be
contradicted by any prior or contemporaneous writing or agreement.
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16. This Agreement shall be governed by the laws of the State of
California.
17. This Agreement may be executed in counterparts and by facsimile
signature with the same force and effect as if all original signatures were set
forth in a single document.
Tandem Computers Incorporated
By /s/ Xxxxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Its General Counsel and Secretary
------------------------------- Date February 20, 1997
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Date February 21, 1997
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EXHIBIT A
VESTING CALCULATION SHEET
Employee: Xxxxx X. Xxxxx
Employee #: 5268
Number of Vested
Total Options
Option ID Effective Date Option Price Granted Shares as of 1/31/97
--------- -------------- ------------ -------------- -------------
007 12/09/88 16.750 5,970 5,970
008 12/09/88 16.750 10,000 10,000
019 12/09/88 16.750 9,030 9,030
033 03/08/96 15.000 40,000 9,014
034 03/08/96 18.750 40,000 9,014
035 03/08/96 23.500 40,000 9,014
Totals 145,000 52,042
A-1
EXHIBIT B
ACKNOWLEDGMENT
By this signature below, Bay Networks Inc. ("Bay") acknowledges that
Xxxxx X. Xxxxx ("Xxxxx"), a Bay employee, has disclosed his intent to provide
consulting services to Tandem Computers Incorporated ("Tandem") on a limited
basis for a period of twelve (12) months. Under the terms disclosed to Bay, Bay
acknowledges that such consultancy does not present a conflict of interest and
consents to Xxxxx providing such consultant services to Tandem for the period of
the Consulting Agreement.
Date 1/31/97
-------------- BAY NETWORKS INC.
By /s/ Xxxxx X. House
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Xxxxx X. House
Its
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