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EXHIBIT 10.8
EMPLOYMENT SEPARATION AGREEMENT AND
GENERAL RELEASE OF LEGAL RIGHTS
This agreement and legal release ("Agreement") is entered into between
Formus Communications, Inc., (hereinafter the "Company") and Xxxx Xxxxxxxx.
The purpose of this Agreement is to facilitate Xx. Xxxxxxxx'x separation from
employment with the Company by providing him with severance pay and other
considerations in exchange for him giving up any legal rights he may have in
connection with his employment and separation from employment.
I. RECITALS
1. Xx. Xxxxxxxx is currently employed by the Company as its Chief Executive
Officer pursuant to a letter agreement dated July 1, 1998 (the "Letter
Agreement").
2. Xx. Xxxxxxxx and the Company also entered into a Stock Option Agreement
dated July 1, 1998 (the "Stock Option Agreement").
3. Xx. Xxxxxxxx and the Company now desire to terminate their
employer/employee relationship through this Agreement, to resolve completely
any and all issues related to that relationship, to incorporate certain terms
contained in the Letter Agreement, and to modify certain terms contained in the
Stock Option Agreement.
II. AGREEMENT
In consideration of the promises set forth below, Xx. Xxxxxxxx and the
Company agree as follows:
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1. Resignation. Xx. Xxxxxxxx will resign his employment with the Company, and
with any affiliate of the Company by which he may have been employed, including
all officer and Board of Directors positions, with the exception of his position
as a member of the Board of Directors of Formus Communications, Inc. Xx.
Xxxxxxxx shall remain a member of the Company's Board of Directors subject to
immediate removal at any time at the sole discretion of a majority of the other
members of that board effective December 31, 1999 (the "Separation Date"). Xx.
Xxxxxxxx'x last day of work shall be December 1, 1999, and the time between this
date and the Separation Date shall be deemed to be vacation. Xx. Xxxxxxxx agrees
to execute and deliver any other documents and take any other actions reasonably
requested by the Company to further evidence the transaction contemplated by
this Agreement.
2. Severance Pay. The Company shall continue to pay Xx. Xxxxxxxx'x salary in
the gross amount of $420,000 per annum, less customary and required withholding
in twenty-four equal payments on the Company's regularly scheduled pay dates,
commencing January 1, 2000 and ending December 31, 2000 (the "Salary
Continuation Period").
3. Benefits Continuation. In addition to the severance payments described
above, Xx. Xxxxxxxx may elect to continue to participate in the Company's
medical, dental and Long Term Disability plans for a maximum of eighteen months.
If Xx. Xxxxxxxx elects to participate in these plans, the Company will continue
to pay the same portion of the premium it pays on behalf of its regular
employees for a period of twelve months, provided Xx. Xxxxxxxx continues to pay
his share of these premiums. If Xx. Xxxxxxxx becomes eligible for medical,
dental or Long Term Disability benefits through another employer, Xx. Xxxxxxxx
will no longer be eligible to continue participating in the Company's plans, and
if this occurs during the twelve-month period in which the Company is paying a
portion of the premiums for Xx. Xxxxxxxx, the obligation of the Company to pay
these premiums will cease.
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4. Post Employment Office Support and Executive Coaching. The Company shall pay
for administrative/secretarial office support and executive coaching assistance
in an amount not to exceed $25,000, provided the assistance is obtained within
twelve months following the Separation Date. Invoices for these services shall
be sent directly to the Company and the Company shall pay the service provider
directly as they are incurred.
5. Relocation Assistance. In the event Xx. Xxxxxxxx elects to relocate and sell
his home in the Denver metropolitan area, the Company will pay reasonable and
customary closing costs associated with the sale of that home, so long as the
sale occurs within twelve months following the Separation Date.
6. Modification of Stock Option Agreements. Subject to approval by the
Company's Board of Directors, the Company and Xx. Xxxxxxxx hereby modify
paragraphs 2, 3, 5(d) and 6(c) of the Stock Option Agreement as provided in
this paragraph. As of the Separation Date, Xx. Xxxxxxxx shall become vested in
an additional 250,000 shares, in addition to those in which he is vested
pursuant to paragraph 2 of the Stock Option Agreement. The parties agree that
as of the Separation Date, this acceleration of the vesting of the Option means
that Xx. Xxxxxxxx shall be vested in 625,000 shares as of the Separation Date.
As an Option Holder, as that term is defined in the Stock Option Agreement, Xx.
Xxxxxxxx shall have the right to exercise the Options in which he is vested as
of his Separation Date within five years following the date of his Separation
but not thereafter, provided there is no change in control (as defined in
paragraph 5 of the Stock Option Agreement) prior to the exercise of the Option.
If a change in control or an underwritten public offering of the Common Stock
of the Company that is registered under the Securities Act of 1933, as amended,
occurs before the end of the five-year period, the Option
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shall terminate on the earlier of 90 days following the change in control or
underwritten public offering of the Common Stock, or the end of the five-year
period. If a change in control occurs within 365 days of the Separation Date,
then Xx. Xxxxxxxx shall become vested in an additional portion of the Options in
accordance with the schedule attached as Exhibit A. Paragraph 3 of the Stock
Option Agreement will be modified as follows: The outstanding loan shall be
repayable the earlier of (i) the date on which the Option Holder sells any of
the stock secured by the load in an amount proportionate to the amount of the
stock sold, and (ii) in its entirety, five years from the date of the loan, or
(iii) in its entirety within 90 days after Formus Communications stock becomes
publicly traded. The parties agree that the exercise and ownership of any shares
under the Stock Option Agreement shall be subject to all of the terms and
conditions of the Employee Stockholders Agreement Dated August 1, 1997, a copy
of which is attached as Exhibit C.
7. Confidential Information, Covenant Not to Compete, and Non-Solicitation. Xx.
Xxxxxxxx acknowledges that paragraph 6 of the Letter Agreement imposes certain
obligations on him regarding confidentiality, competition, discoveries and
non-solicitation. Xx. Xxxxxxxx and the Company incorporate paragraph 6 of the
Letter Agreement by reference, a copy of which is attached as Exhibit D, and
acknowledge and agree that the obligations contained therein survive the
termination of Xx. Xxxxxxxx'x employment.
8. Approval of Press Release. Xx. Xxxxxxxx and the Company shall agree on the
contents of a press release to be issued by the Company regarding Xx. Xxxxxxxx'x
separation from the Company.
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9. Release of Legal Rights. (a) Xx. Xxxxxxxx, on behalf of himself, his heirs,
successors and assigns, does hereby fully and forever release, relieve and
discharge the Company, its affiliates, successors and assigns, and its former,
present and future officers, directors, shareholders, agents, employees,
insurors and representatives of and from any and all known claims,
controversies, liabilities, demands, debts, causes of action, promises, acts,
agreements, and damages of whatever kind or nature, whether negligent or
intentional, known or unknown, common law or statutory, suspected or
unsuspected, foreseen or unforeseen, now existing or hereafter arising,
including particularly but not by way of limitation, all matters arising out of
his employment with the Company or the termination thereof, EXCEPT for the
rights and obligations contained in this Agreement and EXCEPT for the rights
and obligations created by the Stock Option Agreements, as modified herein.
10. It is the intent of Xx. Xxxxxxxx to settle and compromise all possible
claims addressed in this Agreement, now pending or based in whole or in part on
acts or omissions whether or not expressly occurring prior to the effective
date of this Agreement, or future effects of such acts or omissions, including
but not limited to any civil rights claims arising under Title VII of the Civil
Rights Act of 1964, as amended, the Colorado Anti-Discrimination Act, the Equal
Pay Act, THE AGE DISCRIMINATION IN EMPLOYMENT ACT, and all other federal, state
and local discrimination laws; any tort and contract claims including, but not
limited to, claims for wrongful discharge, breach of implied contract,
promissory estoppel, fraud, negligent misrepresentation, defamation, and
negligent or intentional infliction of emotional distress; and all claims for
compensation and benefits, other than those created by this Agreement.
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11. Right to Revoke. Xx. Xxxxxxxx may revoke this Agreement within seven days
following the Receipt Date by returning to the Company a copy of the first page
of the Agreement on which he has written "rescinded," the date of his rescission
and his signature.
12. References. Xx. Xxxxxxxx shall list only Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx and
Xxxxx Xxx Xxxxxx as references in connection with any efforts to find
alternative employment. In the event that Xx. Xxxxxxxx lists any other person as
a reference, he shall be deemed to have agreed that the person or person so
listed are personal references, and that neither the Company nor any of its
affiliates shall be liable to information provided by them concerning Xx.
Xxxxxxxx.
13. Confidentiality. Xx. Xxxxxxxx agrees that this Agreement is confidential and
that he shall not disclose or reveal to any person the existence of this
Agreement or its terms, other than to his tax consultant or legal advisor, who
shall have agreed for the benefit of the Company, in writing, prior to
disclosure to keep the information confidential. The Company likewise
acknowledges that the terms of this Agreement are confidential, although the
Company may disclose this Agreement to its auditors and shareholders and to
potential investors in connection with their due diligence investigations.
14. No Admission. This Agreement shall not, under any circumstances, be
construed as evidence of or an admission by either party as to the validity,
nature or extent of any claims or evidence as to either party's positions,
claims or defenses, it being the express intent of the parties to resolve all
past and present disputes between them.
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15. Successors and Assigns. This Agreement shall inure to the benefit of and
shall be binding upon the successors, including any trustee in bankruptcy,
assigns, heirs, and personal representatives of the parties to this Agreement.
16. Integration. Other than as is specifically stated herein, this Agreement
expresses the entire agreement of the parties hereto relative to the subject
matter of this Agreement. All prior discussions and negotiations have been and
are merged and integrated into and are superseded by this Agreement.
17. Counterparts and Facsimiles. This Agreement may be executed and delivered in
counterparts, each of which, when so executed and delivered, shall be an
original, but such counterparts together shall constitute but one and the same
instrument. Signatures made via facsimile shall be binding.
18. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Colorado.
19. No Reliance. Xx. Xxxxxxxx acknowledges that he is not relying on any
information provided to him by the Company, or on any obligation of the Company
to provide information to him, in connection with his decision to execute this
Agreement. Xx. Xxxxxxxx assumes all risk that the facts and law may be different
than understood by him.
20. Severability. In the event that any material provision of this Agreement is
found to be invalid or unenforceable, the remainder of this Agreement shall be
fully enforceable.
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21. Modifications. This Agreement shall not be modified except in a writing
signed by the parties or their authorized representatives.
22. Arbitration. Every dispute concerning, relating to or involving the
enforcement, interpretation or effect of this agreement shall be resolved
through binding arbitration to be conducted in the Denver, Colorado metropolitan
area, pursuant to the rules of the American Arbitration Association, before a
single arbitrator selected by agreement of the parties from a list provided by
the American Arbitration Association, or as otherwise agreed. In the event the
parties cannot agree on a single arbitrator, each party shall select one
arbitrator who shall then jointly select a third arbitrator. This three-person
panel shall then resolve the underlying dispute. Judgment on the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof.
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23. Miscellaneous. The parties represent, warrant and agree with each other
that:
o this Agreement has been carefully read by the parties;
o the contents of this Agreement are known and understood by the
parties;
o this Agreement is signed freely and willingly by each person executing
this Agreement;
o no promise has been made except as expressly set forth in this
Agreement;
o Xx. Xxxxxxxx has been advised to consult with his attorney prior to
executing this Agreement; and
o the Company gave Xx. Xxxxxxxx 21 days within which to consider this
Agreement.
Nov. 30, 1999 /s/ XXXX XXXXXXXX
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Date XXXX XXXXXXXX
FORMUS COMMUNICATIONS, INC.
11/30/99 By: /s/ XXXXXXX X. XXXXXX
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Date
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EXHIBIT A
If Change of Control occurs between: Total of 375,000 Unvested Options
eligible for acceleration:
January 1, 2000-January 31, 2000 12/12ths
February 1, 2000 and February 29, 2000 11/12ths
March 1, 2000 and March 31, 2000 10/12ths
April 1, 2000 and April 30, 2000 9/12ths
May 1, 2000 and May 31, 2000 8/12ths
June 1, 2000 and June 30, 2000 7/12ths
July 1, 2000 and July 31, 2000 6/12ths
August 1, 2000 and August 31, 2000 5/12ths
September 1, 2000 and September 30, 2000 4/12ths
October 1, 2000 and October 31, 2000 3/12ths
November 1, 2000 and November 30, 2000 2/12ths
December 1, 2000 and December 31, 2000 1/12th
After January 1, 2001 0
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