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SEPARATION AGREEMENT AND GENERAL RELEASE
This Agreement (this "AGREEMENT") is entered into as of March 17,
1999, between Hybrid Networks, Inc., a Delaware corporation (the "COMPANY"),
and Xxxxxxx X. Xxxxxxx ("EMPLOYEE").
RECITALS
A. Whereas, the Company has employed Employee as its President and
COO;
B. Whereas Employee wishes to end his employment relationship with
the Company as of March 31, 1999 (the "TERMINATION DATE"), and he
and the Company wish to provide for termination of that
relationship by mutual agreement in a way which will preserve the
goodwill that exist between them.
Now, therefore, in consideration of the premises and mutual promises
herein contained, the parties agree as follows:
1. TERMS OF SEPARATION
A. Employee's employment ends as of the Termination Date. The
Company will deliver on March 17, 1999, to Employee a check based
on the gross amount set forth in part 1 of EXHIBIT A hereto for
accrued salary, reimbursable expenses, accrued but unused vacation
pay and any other similar payments due and owing to Employee up to
the Termination Date, adjusted for applicable withholding and
deductions..
B. ON March 17, 1999, the Company will deliver to Employee a
check based on the gross amount set forth in part 2 of
EXHIBIT A as agreed upon in the Modification of Retention
Bonus Agreement 2D representing severance pay.
C. Employee will have 90 days after the Termination Date to
exercise Employee's vested options. Employee's vested
options are those options that have vested as of the
Termination Date. The vesting of Employee's options will
cease as of the Termination Date, except as indicated below
in this Sections 1.C. If the company is successful in
selling itself or its assets prior to April 1, 2000,
Employee will receive the full bonus as provided for under
paragraph 2C in the Modification of Retention Bonus
Agreement. If the Company is successful in selling itself
or its assets prior to April 1, 2000, vesting of the
Additional Stock Options referred to in paragraph 2B of the
Modification of Retention Bonus Agreement will accelerate
and Employee will be able to exercise those options within
60 days after the sale.
D. The Company offers to extend the health insurance coverage
it currently provides Employee pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") at
Employee's expense. Employee will have 60 days from the
Termination Date to notify the Company in writing of his
election to continue coverage pursuant to COBRA
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E. The Company will continue to provide Employee, during the
period commencing on the Termination date and ending
June 30, 1999, access to the Company's server for e-mail
receipt and transmittal. Employee warrants that he has
returned to the Company any and all property and data of
the Company of any type whatsoever that was in his
possession, custody or control.
F. The parties acknowledge that Employee is bound by the
Proprietary Information and Inventions Agreement, which he
signed when he commenced employment with the Company, and
that Employee has had access to and has become acquainted
with various non-public, confidential or trade secret
information of the Company, including, but not limited to
information referred to in the PII Agreement as
"Proprietary Information" and records of the Company that
are regularly used in the operation of the Company's
business, that affect the success, profitability and good
will of the Company and that are not known or available to
persons outside the Company, and other nonpublic,
confidential or trade secret information of the Company
(collectively, the "PROPRIETARY INFORMATION"). With
respect to such Proprietary Information Employee agrees:
(i) That all Proprietary Information and documents,
memoranda, reports, files, correspondence and records that relate to the
Company's business that Employee had contact with remain the Company's sole
property;
(ii) That Employee will continue to abide by the terms
and conditions of the attached PII Agreement to the extent that such terms
and conditions provide for continuing obligations after termination of his
employment;
(iii) That he will not directly or indirectly disclose
any of this Proprietary Information, or use it in any way, either during the
term of this Agreement or at any time thereafter, except as authorized in
writing by the Company;
(iv) That he has delivered and returned to the Company
all written or graphic records that he knows, suspects or should know contain
Proprietary Information.
2. MUTUAL RELEASE
Employee and his representatives, heirs, successors and assigns
do hereby completely release and forever discharge the Company, its
affiliates, present and former shareholders, officers, directors, agents,
employees, attorneys, successors and assigns from all claims, rights,
demands, actions, obligations, liabilities and causes of action he may have
had or now have, known or unknown, to pursue any remedies available to him
whether based on tort, contract (express or implied) or any federal, state or
local law, statute or regulation, including, but not limited to, matters that
could have been raised in a civil action, 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 under Title
VII of the 1964 Civil Rights Act, as amended, the California Fair Employment
and Housing Act, the Age Discrimination in Employment Act, the Older Worker
Benefit Protection Act and any other laws and/or regulations relating to
employment or employment discrimination. Notwithstanding the foregoing,
Employee does not
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release any claims based on obligations created by or reaffirmed in the Pll
Agreement, the Indemnity Agreement entered into between the Company and
Employee (the "INDEMNITY AGREEMENT") or this Agreement, including, without
limitation, the obligations of the Company under the Indemnity Agreement to
provide indemnification and a defense for Employee as set forth therein,
whether or not such claims have already arisen or arise after the date hereof.
The Company and its successors and assigns do hereby completely
release and forever discharge Employee and his representatives, heirs,
attorneys, successors and assigns from all claims, rights, demands, actions,
obligations, liabilities and causes of action the Company may have had or now
have, known or unknown, to pursue any remedies available to the Company
whether based on tort, contract (express or implied) or any federal, state or
local law, statute or regulation, including, but not limited to, matters that
could have been raised in a civil action, any employment laws, including but
not limited to, claims of breach of contract, breach of the covenant of good
faith and fair dealing, fraud, violation of public policy, defamation,
physical injury, emotional distress, claims under Title VII of the 1964 Civil
Rights Act, as amended, the California Fair Employment and Housing Act, the
Age Discrimination in Employment Act, the Older Worker Benefit Protection Act
and any other laws and/or regulations relating to employment.
Notwithstanding the foregoing, the Company and its successors and assigns do
not release any claims based on obligations created by or reaffirmed in the
PII Agreement, the Indemnity Agreement or this Agreement, including, without
limitation, the obligations referred to in Section 1.F above, whether or not
such claims have already arisen or arise after the date hereof.
3. SECTION 1542 WAIVER
Based on information currently available to the Company and
Employee, as applicable, (i) the Company is not aware that Employee has
committed any wrongdoing or has participated in the preparation and filing
with any government agency of any report or final prospectus or registration
statement that is incorrect or incomplete or in the preparation and issuance
of any public announcement or any filing with any government agency which at
the time thereof Employee knew or should have known to be incorrect or
incomplete, and (ii) Employee is not aware that the Company has committed any
wrongdoing or has prepared and filed with any government agency any report or
final prospectus or registration statement that is incorrect or incomplete or
in the preparation and issuance of any public announcement or any filing with
any government agency which at the time thereof the Company knew or should
have known to be incorrect or incomplete.
Notwithstanding the foregoing, each party understands that,
except for any claims referred to in the last sentence of the first paragraph
of Section 2 or in the last sentence of the second paragraph of Section 2
(the "EXCEPTED CLAIMS"), such party releases not only claims presently known
to such party, but also all unknown or unanticipated claims, rights,
demands, actions, obligations, liabilities and causes of action of every kind
and character that would otherwise come within the scope of the release and
as described in the preceding sections. Each party understands that such
party may hereafter discover facts different from what such party now
believes to be true, which if known, could have materially affected this
Agreement, but such party nevertheless waives any claims or rights based on
different or additional facts, other than any Excepted Claims. Except for
the Excepted Claims, each party knowingly and voluntarily waives any and all
rights or benefits that such party may now have, or in the future may have,
under the terms of section 1542 of the California Civil Code, 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.
4. CONFIDENTIALITY
Employee and the Company understand and agree that this
Agreement and each of its terms, and the negotiations surrounding it, are
confidential and will not be disclosed by Employee or the Company, to any
entity or person, for any reason, at any time, without the prior written
consent of the other party, except (i) as required by law or regulatory
authority (including governmental taxing agencies and the company's
disclosure obligations, as reasonably interpreted by the company) or by
lawful process (provided that Employee will give written notice to the
Company of any such process sufficiently in advance of disclosure that the
Company will have the reasonable opportunity to contest the disclosure) or
(ii) to the parties' respective legal advisors, accountants or tax advisors
(or, in the case of Employee, spouse), provided that such person be informed
of and agree to be bound by this confidentiality obligation.
5. NON-ADMISSION
The parties understand and agree that this Agreement is not and
will not be deemed or construed at any time or for any purpose as an
admission of liability by the Company or by Employee. The liability for any
and all claims is expressly denied by the Company and by Employee.
6. INTEGRATION
The parties understand and agree that the preceding sections
recite the sole consideration for this Agreement; that no representation or
promise has been made by Employee, the Company or any other party concerning
the subject matter of this Agreement, except as expressly set forth in this
Agreement or the PII Agreement; and that all agreements and understandings
between the parties concerning the subject matter of this Agreement are
embodied and expressed in this Agreement and the PII Agreement. This
Agreement and the PII Agreement will supersede all prior agreements and
understandings between Employee and the Company, whether written or oral,
express or implied, with respect to the engagement, employment, termination
and compensation of Employee.
7. AMENDMENTS; WAIVER
This Agreement may not be modified, amended, or terminated
except by an instrument in writing, signed by each of the parties. No
failure to exercise and no delay in exercising any right, remedy or power
under this Agreement will operate as a waiver thereof, and no single or
partial exercise of any right, remedy or power under this Agreement will
preclude any other or further exercise thereof, or the exercise of any other
right, remedy or power provided herein or by law or in equity.
8. ASSIGNMENT; SUCCESSORS AND ASSIGNS
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This Agreement will be binding upon and will inure to the
benefit of the parties and their respective heirs, successors, attorneys and
permitted assigns. This Agreement will not benefit any other person or
entity except as specifically enumerated in this Agreement.
9. SEVERABILITY
If any provision of this Agreement, or its application to any
person, place or circumstance, is held by an arbitrator or a court of
competent jurisdiction to be invalid, unenforceable or void, such provision
will be enforced to the greatest extent permitted by law, and the remainder
of this Agreement and provision as applied to other persons, places and
circumstances will remain in full force and effect.
10. GOVERNING LAW
This Agreement will be governed by and construed in accordance
with the law of the State of California.
11. CONSIDERATION PERIOD
Employee acknowledges he has read and understands this
Agreement and that his signature below is completely voluntary. Employee
also acknowledges that the Company has offered him the opportunity to take up
to 21 days to consider this Agreement but that he has elected to execute and
deliver this Agreement before such 21-day period has elapsed and that he
waives his rights to consider this Agreement for such 21-day period.
Employee further acknowledges that he has been told by the Company that he
has the right to consult with an attorney about this Agreement, that he was
encouraged by the Company to consult with an attorney of his own choosing
concerning the waivers contained in this Agreement, that he has done so and
that the waivers he has made are knowing, conscious and with full
appreciation that he may never pursue any of the rights he has waived.
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IN WITNESS WHEREOF, the parties have executed and delivered as of the
first date set forth above.
Employee: The Company:
HYBRID NETWORKS, INC.
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx By:
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Xxxx X. Xxxxxxxxx
Chairman & Chief Executive Officer
EXHIBIT A
1. Gross amount paid to Employee: $9184.18 and amount for accrued salary,
reimbursable expenses and accrued but unused vacation pay through
March 31, 1999.
2. Gross severance pay to Employee: $42,499.98, an amount equal to 3 months'
base salary, not including bonus.
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EMPLOYEE CONFIDENTIALITY AND INVENTIONS AGREEMENT
In consideration of and as part of the terms of my employment or
continued employment by Hybrid Networks, Inc. ("Hybrid"), I agree as follows:
1. PURPOSE OF AGREEMENT. I understand that Hybrid is engaged in a
continuous program of research, development, marketing and other activities
in connection with its business. I further understand and agree that Hybrid
has a critical interest in preserving and protecting its proprietary
information, its rights in inventions and in all related intellectual
property. Accordingly, I am entering into this Employee Confidentiality and
Inventions Agreement ("Agreement") as a condition of my employment or
continued employment by Hybrid.
2. NON-DISCLOSURE OF CONFIDENTIAL OR PROPRIETARY INFORMATION. I
acknowledge and agree that while employed by Hybrid I will have access to
confidential or proprietary information relating to the business and
operations of Hybrid. Such confidential or proprietary information consists
of all business information (1) that is not generally known to, and cannot be
readily ascertained by others, (2) that has actual or potential economic
value to Hybrid, and (3) that is treated as confidential by Hybrid. By way
of illustration, confidential or proprietary information includes, but is not
limited to, written and unwritten information concerning present and
prospective products, services, sales and marketing concepts and methods,
customer lists, costs, profits, market studies, and matters of a technical
nature including know-how, methods, techniques, computer programs, computer
hardware, computer software and documentation, research projects and studies,
compilations, and personnel data about employees of Hybrid, including
salaries, and other information of a similar nature. Confidential or
proprietary information also includes any information belonging to third
parties, including customers and suppliers of Hybrid, who may have disclosed
confidential information to me during my employment with Hybrid.
I will at all times, both during my employment and thereafter, keep
and hold all such confidential or proprietary information in strictest
confidence and trust. I will not at any time use or disclose any such
information without the prior written consent of Hybrid, except as may be
necessary to perform my duties for the benefit of Hybrid.
3. RETURN OF CONFIDENTIAL OR PROPRIETARY INFORMATION AND OTHER
MATERIALS. Upon termination of my employment with Hybrid, or at the request
of Hybrid at any time prior to termination of my employment, I will promptly
deliver to Hybrid all documents and materials of any nature relating to my
work with Hybrid. Further, I will not take with me or keep any documents,
materials or copies containing any Hybrid confidential or proprietary
information.
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4a. NON-COMPETITION DURING EMPLOYMENT. While employed by Hybrid, I
agree not to engage in any employment, consulting, or business activity,
other than for Hybrid, relating to any line of business in which Hybrid is
engaged or which would otherwise conflict with my obligations to Hybrid.
5. NO SOLICITATION DURING EMPLOYMENT. I agree that during my
employment with Hybrid I will not, directly or indirectly, either for myself
or any other person or entity, induce or influence any person who is engaged
as an employee, agent, independent contractor, or otherwise by Hybrid to
terminate his or her employment or engagement with Hybrid. I further agree
that during my employment with Hybrid I will not approach or solicit in any
manner, either for myself or any other person or entity, any customer of
Hybrid to cease doing business with Hybrid or to do business with me or with
any other person or entity.
6. NO SOLICITATION AFTER EMPLOYMENT. I agree that for a period of
one year following the termination of my employment with Hybrid, for whatever
reason, I will not directly or indirectly solicit any person employed or
otherwise engaged by Hybrid to terminate his or her employment or engagement
with Hybrid. I further agree that for a reasonable period of time after the
termination of my employment, which I agree is a period of one year, I will
not directly or indirectly solicit any customer of Hybrid to the extent the
identity of the customer constitutes a trade secret or is proprietary or
confidential information as defined in Paragraph 2 of this Agreement.
7. DISCLOSURE AND OWNERSHIP OF INVENTIONS. For purposes of this
Agreement the term "inventions" means any and all creations, artworks,
discoveries, improvements, technical developments, or inventions whether or
not patentable, and all related know-how, designs, mask works, trademarks,
formulae, processes, manufacturing techniques, ideas, artworks, software or
trade secrets. I agree to promptly disclose in confidence to Hybrid all
inventions that I make or conceive, either alone or jointly with others,
during the period of my employment, whether or not in the course of my
employment, and whether or not such inventions are patentable, copyrightable
or protectable as trade secrets.
I acknowledge that all inventions that (1) are developed using
equipment, supplies, facilities or trade secrets of Hybrid, (2) result from
work performed by me for Hybrid, or (3) relate to Hybrid's business or
current or anticipated research and development, will be the sole and
exclusive property of Hybrid. I hereby irrevocably assign any and all rights
I may claim to any such inventions to Hybrid. I acknowledge and agree that
any copyrightable works prepared by me within the scope of my employment are
"works for hire" under the Copyright Act and that Hybrid will be considered
the author and owner of such copyrightable works. I agree to execute
documents and take all other appropriate actions to assist Hybrid in
obtaining and enforcing any patents, copyrights, mask work rights, trade
secret rights, and other legal protections for Hybrid's inventions or
confidential or proprietary information.
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8. LABOR CODE SECTION 2870 NOTICE. Notwithstanding Paragraph 8,
above, I understand and acknowledge that I will not be required to assign to
Hybrid the rights to any inventions that are developed entirely on my own
time, without using Hybrid's equipment, supplies, facilities or trade secret
information, and that otherwise fully qualify under the provisions of
California Labor Code Section 2870. I understand and agree, however, that I
will be required in all events to disclose all inventions made solely or
jointly with others during the term of my employment with Hybrid, in
accordance with California Labor Code Section 2871. I acknowledge that a copy
of California Labor Code Sections 2870, 2871 and 2872 are attached to this
Agreement.
9. NON-DISCLOSURE OF FORMER EMPLOYER'S CONFIDENTIAL INFORMATION. I
certify that my performance of the terms of this Agreement, and of my duties
as an employee of Hybrid, will not breach any existing agreement I may have
with any former employer or other party. I certify that I will not bring
with me to Hybrid or use in the performance of my duties for Hybrid any trade
secret or proprietary information belonging to any former employer or other
party.
10. NOTIFICATION. I authorize Hybrid to notify my past, present or
future employers of the terms of this Agreement and my responsibilities under
this Agreement.
11. INJUNCTIVE RELIEF. I acknowledge and agree that while employed
by Hybrid I will have access to confidential or proprietary information and I
will render personal services of a special, unique and extraordinary
character. I agree that the restrictive covenants set forth in this
Agreement are reasonable and necessary for the adequate protection of the
affairs and business of Hybrid, that a breach of a covenant could affect the
successful conduct of Hybrid's business and its goodwill, and that it would
be difficult or impossible to determine adequate or appropriate monetary
damages in the event of any breach of these obligations. In recognition of
these facts, I consent and agree that if I violate any of these restrictive
covenants, Hybrid is entitled to injunctive relief, restraining me from
committing or continuing any violation of these covenants. Such injunctive
relief will be in addition to any other rights and remedies that are
available to Hybrid under this Agreement or otherwise.
12. SEVERABILITY. If any part of this Agreement is determined to be
invalid or unenforceable, that part will be amended to achieve as nearly as
possible the same effect as the original provision, and the remainder of this
Agreement will remain in full force and effect.
13. GOVERNING LAW. This Agreement will be governed by and construed
in accordance with the laws of the Unites States and the State of California
as applied to agreements entered into and performed entirely within
California between California residents.
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14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties relating to the covered subject matters and
supersedes all prior or simultaneous representations, discussions,
negotiations and agreements, whether written or oral. This Agreement may be
modified only in writing and only with the written consent of both parties.
DATED: APR 16, 1999 /s/ Xxxxxxx X. Xxxxxxx
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[SIGNATURE]
XXXXXXX X. XXXXXXX
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[TYPE OR PRINT EMPLOYEE'S NAME]
DATED: APRIL 16, 1999 HYBRID NETWORKS, INC.
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By /s/ Xxxxxx X. Xxxxxxxxx
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[SIGNATURE]
Vice President, Finance
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[TYPE OR PRINT EMPLOYEE'S NAME]
XXXXXX X. XXXXXXXXX
VICE PRESIDENT, FINANCE
