Exhibit 10.12
CORVIS CORPORATION
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
January 4, 2002
Xx. Xxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxx, X.X.
Xxxxxxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
This letter agreement specifies the terms of your employment with Corvis
(the "Company"):
1. Position. You will be employed as Chief Financial Officer of the Company
effective as of the date of your execution of this Employment Agreement (the
"Effective Date"). You will report directly to the President and Chief Executive
Officer of the Company.
2. Salary. Your initial base salary shall be at the annual rate of
$257,000, subject to increase at the discretion of the Board of Directors of the
Company ("Board"), and will be payable in accordance with the Company's policies
for its senior executives.
3. Bonus. In accordance with our Employee Incentive Plan, you would be
eligible for a bonus of up to 60% of your base salary, contingent upon the
successful attainment of corporate and individual objectives.
4. Benefits. The payments provided to you under Paragraph 2 and 3, are in
addition to any other benefits to which you may be, or may become, entitled
under any of the Company's group hospitalization, health, dental care, and/or
sick-leave plans; life, other insurance and/or death benefit plans; travel
and/or accident insurance plans; deferred compensation plans; capital
accumulation programs; retirement income and/or pension plans; supplemental
pension plans; excess benefit plans; stock option, short- and long-term
disability programs; and other present and future group employee benefit plans
and programs for which the Company's key employees, including you, are or shall
become eligible. Nothing in this Agreement shall require the Company to adopt
any such plans or programs or to maintain any benefits thereunder at any
specific level. You shall be entitled to participate in or receive benefits
under any employment benefit plan or arrangement made available by the Company
in the future to its executives and key management employees, subject to, and on
a basis consistent with, the terms, conditions and overall administration of
such plan or arrangement and at a level generally commensurate with such other
executives and key management employees. As of the Effective Date you shall be
entitled to a combined vacation and sick leave in the amount of 15 days per
year, consistent with Company policies.
5. Options. Effective as of the Effective Date, the Company will grant you
options to purchase 500,000 shares of Common Stock of the Company with an
exercise price per share equal to the fair market value (closing price) on your
first day of employment, pursuant to the terms of the Stock Option Agreement
attached as Exhibit A hereto.
6. Severance.
(a) Termination Other Than for Cause. In the event that the Company
shall terminate you as an employee other than for "cause" (as such term is
hereinafter defined), you will be entitled to receive an amount equal to your
monthly base salary as of the date of such termination ("Termination Date"),
payable monthly until the earlier to occur of (i) nine (9) months from the
Termination Date and (ii) your commencing full-time employment, or a
substantially full-time consulting position, with another person or entity other
than the Company; but only if you execute and do not revoke a General Release in
the form attached hereto as Exhibit B. If you commence part-time employment or a
part-time consulting position, the amount the Company is obligated to pay
pursuant to the preceding sentence shall be reduced by the amount you earn from
such part-time employment or from your part-time consulting position. You will
also be entitled to continue to receive all medical and life insurance benefits
that you were receiving at the Termination Date, for such period.
(b) Termination for Cause. If you are terminated for cause or if you
terminate your employment with the Company, you shall only receive your base
salary owing to you through the Termination Date and shall not be entitled to
any additional payments from the Company.
(c) Cause. For purposes of this Agreement, the term "cause" shall mean
(i) an act of embezzlement or conversion to your own use of any property or
business opportunity of the Company; (ii) your willful misfeasance or
nonfeasance of duly intended to injure or materially injuring the reputation,
business, or business relationships of the Company; (iii) your conviction upon a
charge of any crime involving moral turpitude or upon conviction of, or
indictment for, or entering of a guilty plea or plea of no contest with respect
to, a felony; (iv) your failure, neglect, or refusal to substantially perform
your duties and responsibilities following written notice from the Company
specifically identifying the manner in which you have not substantially
performed your duties; (v) your abuse of alcohol or drugs (legal or illegal)
that, in the Board's sole and absolute judgment, is deemed to materially impair
your ability to perform your duties hereunder; or (vi) your material breach of
any of the covenants contained in this letter.
(d) Release. You agree that, in consideration of the severance payment
to be made to you under Paragraph 5(a) of this letter, you will execute the
general release annexed hereto as Exhibit B, which you understand is a condition
to your receiving such payment.
7. Covenants.
(a) Restrictions Upon Termination Within Three Years of Effective Date.
In consideration of the amounts to be paid to you by the Company and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged if your employment
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with the Company or any of its affiliates or subsidiaries terminates for any
reason (other than death or termination by the Company without cause) within
three (3) years of the Effective Date, for a period of one (1) year beyond the
"Termination Date" you shall not directly or indirectly, for yourself or on
behalf of or in conjunction with any other person, company, partnership,
business, group, venturer, or other entity (each, a "Person"):
(i) be employed by or otherwise associated, as a technician, officer,
director, shareholder, owner, partner, joint venturer, or in a managerial
capacity, whether as an employee, independent contractor, consultant,
advisor, or sales representative, of the CIENA Corporation ("CIENA");
(ii) employ or solicit any person who is, on the Termination Date, or
has been, within one year prior to the Termination Date, an employee of the
Company or any affiliate or subsidiary; or
(iii) call upon any Person who or that is, on the Termination Date,
or has been, within one year prior to the Termination Date, a customer of
the Company or an affiliate or a subsidiary for the purpose of
(A) soliciting or selling services in competition with services that the
Company or an affiliate or a subsidiary offers or has under development on
the Termination Date, or (B) causing any such customers to refrain from
doing business with or patronizing the Company or an affiliate or a
subsidiary.
(b) Permitted Investments. The foregoing covenants shall not be deemed
to prohibit you from acquiring as an investment not more than one percent of the
capital stock of CIENA.
(c) Severability. The covenants in this Paragraph 7 are severable and
separate, and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. If any provisions of this Paragraph 7 relating
to the time period of the restrictive covenants shall be declared by a court of
competent jurisdiction to exceed the maximum time period that such court deems
reasonable and enforceable, said time period shall be deemed to be, and
thereafter shall become, the maximum time period that such court deems
reasonable and enforceable and this letter shall automatically be considered to
have been amended and revised to reflect such determination.
(d) Independence. The existence of any claim or cause of action against
the Company, whether predicated on this letter or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants
contained in this Paragraph 7. It is specifically agreed that the periods of
time stated at the beginning of this Paragraph 7, during which the agreements
and covenants made by you in this Paragraph 7 shall be effective, shall be
computed by excluding from such computation any time during which you are in
violation of any provision of this Paragraph 7.
(e) Your Agreement. You have carefully read and considered the
provisions of this Paragraph 7 and, having done so, agree that the restrictive
covenants in this Paragraph 7
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impose a fair and reasonable restraint on you and you are reasonably required to
comply with such covenants to protect the interests of the Company.
(f) Injunctive Relief. You acknowledge that any remedy at law for breach
of the provisions of this letter may be inadequate, and that, in the event of a
breach of this Paragraph 7 by you, any remedy at law would be inadequate in that
any such breach would cause irreparable competitive harm to the Company.
Consequently, in addition to any other relief that may be available, a court may
order temporary and permanent injunctive relief, including, without limitation,
specific performance, and other equitable relief, without the necessity of the
enforcing party proving actual damages and without regard to the adequacy of any
remedy at law to prevent or redress the violation of any of Employee's
obligations under this Paragraph 7.
8. Miscellaneous.
(a) Employee-at-Will Status. You expressly acknowledge that you are an
employee-at-will of the Company, subject to the Company's obligation to pay
severance pursuant to Paragraph 6.
(b) No Prior Agreements. You hereby represent and warrant to the Company
that the execution of this letter by you, your employment by the Company, and
the performance of your duties hereunder will not violate or be a breach of any
agreement with a former employer, client, or any other Person. Further, you
agree to indemnify and hold harmless the Company, its affiliates, or
subsidiaries and each of the officers and representatives of the Company, each
affiliate and each subsidiary for any claim, including, but not limited to,
reasonable attorneys' fees and expenses of investigation, of any such third
party that such third party may now have or may hereafter come to have against
the Company or its subsidiaries or affiliates, based upon or arising out of any
non-competition agreement, secrecy, or other agreement between you and such
third party.
(c) Assignment; Binding Effect. You understand that you have been
selected for employment by the Company on the basis of your personal
qualifications, experience, and skills. You agree, therefore, that you cannot
assign or delegate all or any portion of your performance hereunder. This letter
may not be assigned or transferred by the Company without your prior written
consent. Subject to the preceding two sentences, this letter shall be binding
upon, inure to the benefit of, and be enforceable by the parties hereto and
their respective heirs, legal representatives, successors, and assigns.
Notwithstanding the foregoing, if you accept employment with a subsidiary or
affiliate of the Company, unless you and your new employer agree otherwise in
writing, this letter shall automatically be deemed to have been assigned to such
new employer (which shall thereafter be an additional beneficiary of the
covenants contained herein, as appropriate), such assignment shall be considered
a condition of employment by such new employer, and references to the "Company"
in this Agreement shall be deemed to refer to such new employer.
(d) Entire Agreement. This Agreement, the Proprietary Information and
Inventions Agreement and the Stock Option Agreement between the Company and you
contain the entire understanding between the parties hereto. To the extent that
you had any prior oral or written employment agreement or understanding with the
Company, this letter shall
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automatically supersede such agreement or understanding, and upon execution of
this letter by you and the Company, such prior agreement or understanding
automatically shall be deemed to have been terminated and shall be null and
void.
(e) Waiver. Either you or the Company may by written notice to the other
(i) extend the time for the performance of any of the obligations or other
actions of the other under this letter; (ii) waive compliance with any of the
conditions or covenants of the other contained in this letter; and (iii) waive
or modify performance of any of the obligations of the other under this letter.
Except as provided in the preceding sentence, no action taken pursuant to this
letter, including, without limitation, any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the party taking such action of
compliance with any representation, warranty, covenant, or agreement contained
herein. The waiver by any party hereto of a breach of any provision of this
letter shall not operate or be construed as a waiver of any preceding or
succeeding breach, and no failure by either party to exercise any right or
privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise that right or privilege at any subsequent time or times hereunder.
(f) Amendment. This letter may be terminated, amended, modified, or
supplemented only by a written instrument executed by you and the Company.
(g) Governing Law. The provisions of this letter shall be governed by
and construed in accordance with the law of the State of Maryland, regardless of
the law that might be applied under principles of conflict of laws.
(h) Consolidation, Merger, or Sale of Assets. Nothing in this letter
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation,
corporations, or partnership. Upon such a consolidation, merger, or transfer of
assets and the assumption by the acquirer of the Company's obligations under
this letter, the term "the Company," as used herein, shall mean such other
corporation or corporations, or partnership, and this letter shall continue in
full force and effect and such other corporation or corporations shall be liable
for all obligations of the Company under this letter.
(i) No Duty to Mitigate. Except as otherwise provided herein, you shall
not be required to mitigate the amount of any payment provided for in this
letter by seeking other employment or otherwise, nor shall any amounts received
from other employment or otherwise by you offset in any manner the obligations
of the Company hereunder.
(j) No Attachment. Except as required by law, no right to receive
payments under this letter shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
the execution, attachment, levy, or similar process or assignment by operation
of law, and any attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.
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(k) General Creditor. All payments required hereunder shall be made from
the Company's general assets and you shall have no rights greater than the
rights of a general creditor of the Company, except as required by law.
(l) Notices. All notices and other communications required or permitted
to be given under this letter shall be in writing and shall be deemed to have
been duly given if delivered personally or sent by certified mail, return
receipt requested, first-class postage prepaid, or by overnight delivery
service, fee prepaid, to the parties to this letter at the following addresses:
if to the Company at:
CORVIS Corporation
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
And
if to you, at your home address as set forth above
or to such other address as either party to this letter shall have last
designated by notice to the other party. All such notices and communications
shall be deemed to have been received on the earlier of the date of receipt or
the third business day after the date of mailing thereof.
(m) Venue. You irrevocably consent to the jurisdiction of the courts
located in the State of Maryland to resolve any claim or controversy relating to
this letter. Each proceeding shall be heard by federal or state courts located
in the State of Maryland.
(n) Paragraph and Other Headings. The paragraph and other headings
contained in this letter are for reference purposes only and shall not affect
the meaning or interpretation of this letter.
(o) Withholding of Taxes. The Company may withhold from amounts required
to be paid to you hereunder any applicable federal, state, local, and other
taxes with respect thereto; provided, however, that the Company shall promptly
pay over the amounts so withheld to the appropriate taxing bodies and provide to
you appropriate statements on forms prescribed for such purposes on the amounts
so withheld.
(p) Severability of Terms. If, for any reason, any provision of this
letter is held invalid, such invalidity shall not affect any other provision of
this letter not held so invalid, and each such other provision shall, to the
full extent consistent with law, continue in full force and effect. If any
provision of this letter shall be held invalid in part, such invalidity shall in
no way affect the rest of such provision not held so invalid, and the rest of
such provision, together with all other provisions of this letter, shall to the
full extent consistent with law continue in full force and effect.
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(q) Counterparts. This letter may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
Please acknowledge your understanding of, and agreement with, the foregoing
by signing your name in the space indicated below, whereupon this letter will
become a binding agreement upon the parties.
Very truly yours,
CORVIS CORPORATION
/s/ Xxxxx X. Xxxxx
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By: Xxxxx X. Xxxxx
Its: President and Chief Executive Officer
Agreed to and acknowledged as of the date first written above:
/s/ Xxxx X. Xxxxxxxx
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Xx. Xxxx X. Xxxxxxxx
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EXHIBIT B
FORM OF GENERAL RELEASE
The undersigned (hereinafter the "Terminated Employee") hereby
releases, discharges and acquits CORVIS Corporation (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 the Terminated Employee 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 related to the termination of the Terminated Employee's employment
with the Company or in any way related to the employment relationship between
the Terminated Employee 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 to the Age Discrimination in Employment Act, Americans with
Disabilities Act of 1992, the Civil Rights Act of 1969, 29 U.S.C. Section 621
et seq. and any other applicable law, statute, code or ordinance. It is the
-- ---
intention of the Terminated Employee in executing this General Release that the
general release provided for herein shall be effective as a bar to each and
every claim, demand and cause of action hereinabove specified, and shall extend
to claims that the Terminated Employee does not know or suspect to exist in his
or her favor at the time of executing this General Release, which if known by
the Terminated Employee might have materially affected his or her entering into
this General Release.
The Terminated Employee acknowledges that he or she is aware that he or
she may hereafter discover facts different from or in addition to those he or
she now knows or believes to be true with respect to the matters herein released
and the Terminated Employee agrees that this General Release shall be and remain
in effect in all respects as a complete general release notwithstanding any such
different or additional facts.
The Terminated Employee acknowledges that he or she has been advised to
consult with an attorney prior to signing this General Release and that he or
she has in fact consulted with an attorney, that the Terminated Employee
understands that he or she is not waiving any claims that may arise after the
date of this General Release, that the Terminated Employee has been given a
period of at least 21 days in which to consider whether to enter into this
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General Release, and that the Terminated Employee is entering into this General
Release of his or her own free will.
The Terminated Employee further acknowledges and understands that he or
she may revoke this General Release within 7 days from the date it is executed
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by him or her and that this General Release shall not become effective or
enforceable until that 7-day period has expired. Such a revocation will
immediately void all of the promises and obligations set forth in this General
Release and Sections of that certain letter agreement dated as of January 3,
2002 between the Company and the Terminated Employee, including but not limited
to any of the Company's obligations to remit the sums set forth therein.
/s/ Xxxx X. Xxxxxxxx
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Xx. Xxxx X. Xxxxxxxx
November 18, 0000
Xxxx Xxxxxxxx
Xxxxxx Corporation
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Re: Salary Reduction
Dear Xxxx:
In response to recent market conditions, our Board of Directors has
determined that it is necessary for Corvis to make a change in its compensation
policies. This policy change will result in the reduction of your salary by ten
(10%) percent from its current level.
This letter will have the effect of amending your employment agreement
to provide for this reduced salary; however, except as expressly set forth
herein, it does not modify any other terms of your employment agreement. This
letter does not modify your employment status with Corvis in any way; you will
continue to be an employee-at-will. By signing in the space provided below, and
in consideration of your continued employment and this year's annual option
grant, you will have agreed to this amendment to your employment agreement, and
to accept this salary reduction and waive any and all potential claims against
the company, its officers, directors and employees, arising therefrom.
Should you have any additional questions regarding the foregoing,
please feel free to contact me.
Sincerely,
/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
Chairman and CEO
Agreed and Accepted:
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
