SEPARATION AND SETTLEMENT AGREEMENT
THIS SEPARATION AND SETTLEMENT AGREEMENT dated as of August 4, 2000, (this
"Agreement") is between FirstWorld Communications, Inc. a Delaware corporation,
and its subsidiaries ("FirstWorld") and Xxxxxx X. Xxxxxxx ("Xxxxxxx"), whose
address is 0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
RECITALS
A. FirstWorld and Xxxxxxx entered into an Employment Agreement dated as
of November 9, 1998 (as amended, the "Employment Agreement").
B. FirstWorld and Xxxxxxx have mutually agreed that it would be in both
of their interests to terminate the Employment Agreement, and the employment
relationship between them.
C. In connection with the termination of the Employment Agreement and the
employment relationship, FirstWorld and Xxxxxxx desire to release each other
from any and all obligations or legal right either may owe to the other, except
for the specific rights and obligations identified in this Agreement.
D. The entering into this Agreement is not an admission on either party's
part of any wrongdoing or actual liability owed to the other.
E. Except as specifically provided below, it is intended that this
Agreement be construed in the broadest possible manner, in accordance with the
parties' express intention that all disputes between them arising out of or in
any way connected to Xxxxxxx' employment with FirstWorld be forever resolved.
This includes all potential and actual claims under both federal and state law,
the Employment Agreement and under the company benefit plans including the
Employee Stock Option Agreement referred to in Sections 2(c) and 4. Xxxxxxx
shall retain no rights with respect to his employment except for any rights he
may have under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") and any rights specifically granted by this Agreement.
THEREFORE, in consideration of the mutual promises, covenants and other
considerations set forth below, Xxxxxxx and FirstWorld agree as follows:
AGREEMENT
1. Resignation. Xxxxxxx hereby resigns his employment with FirstWorld,
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and his position as an officer of FirstWorld Communications, Inc. and any
affiliated entity effective as of the close of business on August 4, 2000 (the
"Termination Date"). FirstWorld shall issue a press release announcing that
FirstWorld has accepted the resignation of Xxxxxxx.
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2. Consideration. In consideration for Xxxxxxx' resignation of
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employment, position as an officer, and any related positions, the
confidentiality provisions, the releases and other agreements set forth in this
Agreement, FirstWorld agrees as follows:
To pay Xxxxxxx the following:
(a) The sum of $42,499.98, less applicable taxes and other
withholdings, as Severance Pay under the Employment Agreement
(which represents the gross amount of base salary through October
31, 2000). Payments will be made through October 31, 2000 in
equal installments in accordance with the FirstWorld's regularly
scheduled payroll dates for exempt employees.
(b) FirstWorld will agree to pay to Xxxxxxx 80% of the COBRA premium
required for continuance of coverage under FirstWorld's Medical,
Dental and Vision plans from September 1, 2000 through the
earlier of October 31, 2000 or at the time Xxxxxxx withdraws from
COBRA coverage under those plans, less required withholdings.
Payments will be made through October 31, 2000 in equal
installments in accordance with FirstWorld's regularly scheduled
payroll dates for exempt employees. It is Xxxxxxx' responsibility
to properly and timely elect COBRA coverage, if desired, and to
pay these amounts to the plans under the COBRA procedures of
those plans.
(c) Solely for the purpose of determining vesting under FirstWorld's
stock option plans, Xxxxxxx' termination date will be November 9,
2000. Employee shall be entitled to exercise his vested stock
options on or prior to December 9, 2000 under his Employee Stock
Option Agreements dated April 15, 1999, December 31, 1999 and
March 6, 2000, and each such employee stock option agreement
hereby is deemed amended to reflect such change. Xxxxxxx
understands that this extension may adversely affect his tax
consequences under such options. Xxxxxxx shall have no rights as
to options not vested on or before November 9, 2000, and no
rights as to vested options not exercised toon or before December
9, 2000.
3. Employment Benefits.
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(a) On or before August 15, 2000, FirstWorld shall pay Xxxxxxx for
his accrued but unused vacation time as of August 4, 2000, less
normal and customary deductions for income, employment and other
tax withholding.
(b) FirstWorld will permit Xxxxxxx to continue participation in
FirstWorld's Medical, Dental and Vision benefit plans at Xxxxxxx'
present level through and including August 31, 2000, at which
time all such benefits shall be terminated. Xxxxxxx shall retain
any rights to continuation coverage under such Plans as he and
his dependents may have under COBRA. FirstWorld agrees to pay to
Xxxxxxx 80% of the COBRA premium pursuant to the
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terms referenced in paragraph 2(b) above.
(c) No additional time for vacation or sick leave shall accrue after
Termination Date. Xxxxxxx' participation in the 401(k),
FirstWorld's Quarterly Bonus Plan and Employee Stock Purchase
Plan shall cease as of the Termination Date. Employee's
participation in the Company's benefit programs for Basic Life
Insurance, Accidental Death and Dismemberment Insurance ("AD&D"),
Optional Life, Short Term Disability benefits, Long Term
Disability Insurance, and any participation in the Flexible
Spending Medical or Dependent Care programs and Employee
Assistance Program, will terminate as of the Termination Date,
subject to COBRA continuation rights, if any, required by law.
4. Stock Options. Xxxxxxx shall have no further rights to any stock
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options or shares, except as stated above in paragraph 2(c) of this Agreement.
5. Confidential Information, Ownership of Documents. Xxxxxxx
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acknowledges his obligations under paragraph 8 of the Employment Agreement and
agrees that all provisions of that paragraph shall remain in effect.
6. General Release. Except as specifically provided herein to the
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contrary, Xxxxxxx, for himself, his heirs, his personal representatives,
assigns, attorneys, insurers, agents and representatives, releases and
discharges FirstWorld, its assigns, present and future affiliates and
subsidiaries, past, present, and future officers, directors, employees,
shareholders, independent contractors, attorneys, insurers, and any and all
other persons or entities that are now or may become liable to Xxxxxxx due to
the acts or omissions of FirstWorld, of and from any and all actions, causes of
actions, claims, demands, costs and expenses, including attorneys' fees, of
every kind and nature whatsoever, in law or in equity, whether now known or
unknown, that Xxxxxxx, or any person acting under him, may now have, or claim at
any future time to have, based in whole or in part upon any act or omission
occurring prior to the effective date of this Agreement without regard to
present actual knowledge of such acts or omissions, including specifically, but
not by way of limitation, matters which may arise at common law, such as breach
of contract, expressed or implied, promissory estoppel, wrongful discharge,
tortious interference with contractual rights, infliction of emotional distress,
defamation, or under Federal, State or Local Laws, such as, but not necessarily
limited to the Fair Labor Standards Act, the Employee Retirement Income Security
Act, the National Labor Relations Act, Title VII of the Civil Rights Act of
1964, the Age Discrimination and Employment Act, the Rehabilitation Act of 1973,
the Equal Pay Act, the Americans With Disabilities Act, and the Colorado Civil
Rights Act; provided however, that Xxxxxxx does not release FirstWorld from any
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obligations, nor waives any rights, under the Indemnification Agreement dated as
of July 20, 1999, between FirstWorld and Xxxxxxx. Such Indemnification
Agreement shall remain in full force and effect. In addition, Xxxxxxx shall
continue to be covered by FirstWorld's Director and Officer Policy, in
accordance with the terms of that policy, for the periods he served in such
capacities.
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7. Covenant Not to Xxx. Xxxxxxx covenants never to institute or
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participate in any administrative proceeding, suit or action, at law or in
equity, against FirstWorld by reason of any claim released in this Agreement.
8. Denial of Liability. Xxxxxxx and FirstWorld each understand and agree
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that this Agreement shall not be construed as an admission of liability on the
part of any person, firm, corporation, or other entity released, liability being
expressly denied.
9. Covenant of Nondisparagement. Xxxxxxx covenants never to disparage or
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speak ill of FirstWorld or any of its products, services, affiliates,
subsidiaries, officers, directors, employees or shareholders. FirstWorld will
not knowingly issue any statements that, or authorize any of its officers or
directors to disparage or speak ill of Xxxxxxx. Nothing in this paragraph will
preclude either Xxxxxxx or FirstWorld, its officer, directors, employees and
representatives, from providing truthful testimony and consultation related to
any judicial, governmental or other legal proceeding.
10. Confidentiality. Xxxxxxx agrees that he shall not divulge, disclose,
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or make available in any manner, or to any person or entity, other than his
legal counsel, financial adviser or immediate family member, the terms of this
Agreement, except to the extent necessary for the payment of federal and state
income taxes, if any, or pursuant to a subpoena in any judicial or governmental
proceeding, provided however, that should Xxxxxxx be served with a subpoena
requiring disclosure he will provide FirstWorld's general counsel with notice of
the subpoena within one business day and shall not disclose any information
until at least five business days after giving such notice so that FirstWorld
may take the necessary action to seek a protective order if it so desires.
11. Continued Cooperation and Further Assurances. FirstWorld and Xxxxxxx
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shall execute such further documents or take such further action as necessary to
further the purposes of this Agreement. Xxxxxxx agrees to make himself
reasonably available to FirstWorld to furnish full and truthful information
concerning any events, which took place during his employment, and to furnish
full and truthful consultation concerning any potential or actual litigation
relating to FirstWorld. Should Xxxxxxx be contacted by any person concerning
any pending or potential litigation relating to FirstWorld, Xxxxxxx shall
immediately notify FirstWorld's general counsel.
12. Nonreliance. Xxxxxxx and FirstWorld agree that they expressly assume
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all risk that the facts or law may be, or become, different than the facts or
law as presently believed by them; provided that the individual executing below
on behalf of FirstWorld represents and warrants that he is duly authorized to
execute and bind FirstWorld to this Agreement, and that this Agreement is the
valid and binding agreement of FirstWorld.
13. Governing Law. This Agreement shall governed by the laws of the State
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of Colorado and may be enforced in any court of competent jurisdiction.
14. Specific Performance. The provisions of paragraphs 9, 10 and 11 of
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this Agreement may be enforced by an action for specific performance without
requiring the posting of a bond.
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15. Definitions. Capitalized terms in this Agreement that are not
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otherwise defined shall have the same meaning as in the Employment Agreement.
16. Signatures. By their signatures below, each party to this Agreement
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represents that he or it has read this Agreement in full, has voluntarily
entered into this Agreement upon advice of legal counsel, or with the full
opportunity to consult legal counsel, agrees that it is in his or its best
interest to enter into this Agreement, agrees that he or it believes that this
Agreement represents a fair and reasonable resolution of the differences between
the parties and agrees to all of the terms and conditions specified in this
Agreement.
17. Entire Agreement. This Agreement represents the entire agreement
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between the parties, and this Agreement may not be modified or otherwise amended
without a document, in writing, subscribed to by each of the parties.
18. Counterparts and Facsimiles. This Agreement may be executed in
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counterparts and shall be effective upon the date of the last signature.
Facsimile signatures shall be treated the same as original signatures.
19. Review. Xxxxxxx acknowledges that he has been advised by FirstWorld
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to consult with an attorney. Xxxxxxx has twenty-one (21) days after the date
this Agreement is tendered to sign this Agreement. Xxxxxxx agrees to read and
understand this Agreement prior to signing. Xxxxxxx will have seven (7) days
following signing the Agreement to revoke it, and the Agreement will not become
effective until the seven (7) day revocation period has expired. Such
revocation must be in writing and received by the FirstWorld prior to the end of
the revocation period.
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxx 8/21/00
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Date
FIRSTWORLD COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx 8/21/00
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Name: /s/ Xxxxx X. Xxxxxxx Date
Title: Executive Vice President
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