SEPARATION AGREEMENT AND GENERAL RELEASE
THIS SEPARATION AGREEMENT AND GENERAL RELEASE (hereinafter "AGREEMENT")
is made and entered into by and between Xxxxxxx X. Xxxxxxx ("Xxxxxxx") and Path
1 Network Technologies Inc. ("EMPLOYER"), and inures to the benefit of each of
EMPLOYER's current, former and future parents, subsidiaries, related entities,
employee benefit plans and EMPLOYER's and their fiduciaries, predecessors,
successors, officers, directors, shareholders, agents, employees and assigns.
RECITALS
X. Xxxxxxx has been, for a period of time, an employee of
EMPLOYER, most recently as its Chief Financial Officer;
X. Xxxxxxx has agreed to tender his resignation with EMPLOYER the
earlier of either July 22, 2002, or the date upon which EMPLOYER hires a new
Chief Financial Officer (referred to herein as the "Resignation Date"), and
EMPLOYER has agreed to accept Xxxxxxx'x resignation upon its tender, subject to
the terms and conditions set forth herein;
X. Xxxxxxx has also agreed that, beginning on May 20, 2002 and
continuing through the Resignation Date (the "Transition Period"), he will
perform transition support for EMPLOYER, according to the following schedule: up
to ten (10) hours per week through June 7, 2002 and no more than four (4) hours
per week thereafter, as reasonably requested by EMPLOYER, and that during the
Transition Period, Xxxxxxx agrees to continuation of the twenty percent (20%)
reduction in his salary, in effect since January 2002, and a cessation,
effective May 20, 2002, of vesting of all granted stock options (the "Modified
Salary Terms"), which transition support and Modified Salary Terms are accepted
by EMPLOYER, subject to the terms and conditions hereof;
X. Xxxxxxx and EMPLOYER wish permanently to resolve any and all
potential disputes arising out of Xxxxxxx'x employment with EMPLOYER or the
cessation of that employment.
NOW, THEREFORE, for and in consideration of the execution of this
AGREEMENT and the mutual covenants contained in the following paragraphs,
EMPLOYER and Xxxxxxx agree as follows:
1. Incorporation of Recitals. The Recitals and identification of the
parties to, and beneficiaries of, this AGREEMENT are incorporated by reference
as though fully set forth herein.
2. No Admission of Liability. The parties agree that this AGREEMENT, and
performance of the acts required by it, does not constitute an admission of
liability, culpability, negligence or wrongdoing on the part of anyone, and will
not be construed for any purpose as an admission of liability, culpability,
negligence or wrongdoing by any party and/or by any party's current, former or
future parents, subsidiaries, related entities, predecessors, successors,
officers, directors, shareholders, agents, employees and assigns.
3. Severance Benefit. Subject to Section 13, below, EMPLOYER agrees that, upon
the expiration of the seven-day period following Xxxxxxx signing this AGREEMENT
without revocation of this AGREEMENT, it will pay to Xxxxxxx severance in the
form of continued salary payment, according to the Modified Salary Terms, from
the Resignation Date through the earlier of August 23, 2002 or the date Xxxxxxx
begins full-time employment or equivalent service with another company (the
"Severance Benefit"), less applicable withholding taxes. The Severance Benefit
shall be paid in installments, corresponding with EMPLOYER's regular payroll
schedule.
4. Duties During Transition Period. Xxxxxxx agrees that during the Transition
Period he will assist EMPLOYER in both its Finance/Administration and
Manufacturing/Operations areas, including specifically by helping EMPLOYER
complete its operating plan (with updated revenue projection numbers), rendering
all EMPLOYER financial spreadsheets accessible and usable to designated
employees of EMPLOYER, and assisting EMPLOYER in such other areas and manners as
are reasonably requested.
5. At-Will Status. Nothing in this AGREEMENT is intended to modify the at-will
nature of Xxxxxxx'x employment with EMPLOYER. Specifically, EMPLOYER reserves
the right to effect Xxxxxxx'x separation prior to the Resignation Date. Such
separation will not alter EMPLOYER's obligations - including for Severance
Benefit and Section 9 premium reimbursement benefit - set forth herein, provided
that the separation is not the result of Xxxxxxx'x material breach of any
provision of this AGREEMENT.
6. Wages and Vacation Time Paid. Xxxxxxx acknowledges that EMPLOYER has agreed
to pay him for all accrued and unused vacation time (which vacation time the
parties agree totals three (3) weeks as of May 20, 2002) at Xxxxxxx'x 2001 base
salary rate, on the Resignation Date. The parties acknowledge and agree that
there will be no further accrual of vacation time by Xxxxxxx during the
Transition Period.
7. Resignation Script. During the Transition Period, the parties will
work cooperatively on the preparation of resignation scripts for use by EMPLOYER
and Xxxxxxx to describe Xxxxxxx'x separation from EMPLOYER, which scripts shall
be used following the Resignation Date.
8. Reference Requests. EMPLOYER agrees that if it is contacted by prospective
employers of Xxxxxxx without prior notice from Xxxxxxx of such contact, EMPLOYER
will release information concerning the dates of Xxxxxxx'x employment and the
last position held, and will state that EMPLOYER's company policy is to release
only such information. In the event that Xxxxxxx provides EMPLOYER with advance
notice of a prospective employer's request for a reference, EMPLOYER will
respond to the reference request according to the mutually-acceptable
resignation script described in Section 7, above.
9. Premium for COBRA Continuation. Subject to Section 13, and in addition to the
Severance Benefit described above in Section 3, as further consideration for the
Releases granted herein, EMPLOYER agrees that in the event that Xxxxxxx makes a
timely election to continue his participation in EMPLOYER's group health
insurance plan beyond the Resignation Date, pursuant to the terms of the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"), EMPLOYER will
reimburse Xxxxxxx for all continuation premiums he pays to maintain coverage
through the earlier of August 31, 2002 or the date Xxxxxxx begins full-time
employment or equivalent service with another company. Nothing herein shall
limit the right of EMPLOYER to change the provider and/or the terms of its group
health insurance plan at any time hereafter.
10. Extension of Exercise Period. As further consideration for the Release
granted herein, EMPLOYER agrees to extend the period within which Xxxxxxx must
exercise all vested options to three (3) years after the Resignation Date.
11. Retention of Equipment. Xxxxxxx will be allowed to retain his laptop
computer, provided that all EMPLOYER software, documents and materials are first
copied onto EMPLOYER's server, then deleted from the laptop. Xxxxxxx shall be
allowed to retain copies of only his Outlook directory, calendar file, and
personal folder.
12. Major Press Releases and Regulatory Filings. The parties agree that, should
EMPLOYER prepare any major press releases or regulatory filings during the
Transition Period, said press releases or regulatory filings shall first be
provided to Xxxxxxx as CFO, for his review and approval.
13. Xxxxxxx'x General Release. Xxxxxxx for himself, his spouse, heirs,
executors, administrators, assigns and successors, fully and forever releases
and discharges EMPLOYER and each of its current, former and future parents,
subsidiaries, related entities, employee benefit plans and its and their
fiduciaries, predecessors, successors, affiliates, officers, directors,
shareholders, agents, employees and assigns (collectively, "Releasees"), with
respect to any and all claims, liabilities and causes of action, of every
nature, kind and description, in law, equity or otherwise, which have arisen,
occurred or existed at any time prior to the signing of this AGREEMENT,
including, without limitation, any and all claims, liabilities and causes of
action identified in Section 13 and arising out of or relating to Xxxxxxx'x
employment with EMPLOYER or the cessation of that employment. In the event that
this AGREEMENT is executed by Xxxxxxx prior to the Resignation Date, Xxxxxxx
agrees that on the Resignation Date he will sign the document entitled
"Supplemental Waiver and General Release," attached hereto as Exhibit "A," and
incorporated herein as a material part of this AGREEMENT. Unless and until
Xxxxxxx signs Exhibit A and the seven-day revocation period applicable to the
Supplemental Release expires without revocation of the Supplemental Release,
EMPLOYER will not be obligated to pay Xxxxxxx the Severance Benefit described in
Section 3, or the Section 9 premium reimbursement, beyond the Resignation Date;
Xxxxxxx will, however, retain all consideration he received from EMPLOYER during
the Transition Period.
14. Knowing Waiver of Employment-Related Claims. Xxxxxxx understands and agrees
that, with the exception of potential claims identified in the last sentence of
this Section 13, he is waiving any and all rights he may have had, now has, or
in the future may have, to pursue against any of the Releasees any and all
remedies available to him under any employment-related causes of action,
including without limitation, claims of wrongful discharge, breach of contract,
breach of the covenant of good faith and fair dealing, fraud, violation of
public policy, defamation, discrimination, personal injury, physical injury,
emotional distress, claims under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, the Americans With
Disabilities Act, the Federal Rehabilitation Act, the Family and Medical Leave
Act, the California Fair Employment and Housing Act, the California Family
Rights Act, the Equal Pay Act of 1963, the provisions of the California Labor
Code and any other federal, state or local laws and regulations relating to
employment, conditions of employment (including wage and hour laws) and/or
employment discrimination. Claims not covered by the release and waiver
provisions of this AGREEMENT are (i) claims for unemployment insurance benefits,
and (ii) claims under the California Workers' Compensation Act.
15. Waiver of Civil Code ss. 1542. Xxxxxxx expressly waives any and all rights
and benefits conferred upon him by Section 1542 of the Civil Code of the State
of California, which states as follows:
"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."
Xxxxxxx expressly agrees and understands that the Release given by him pursuant
to this AGREEMENT applies to all unknown, unsuspected and unanticipated claims,
liabilities and causes of action which he may have against EMPLOYER or any of
the other Releasees.
16. EMPLOYER's Release. EMPLOYER for itself and each of its current, former and
future parents, subsidiaries, related entities, employee benefit plans and their
fiduciaries, predecessors, successors, affiliates, officers, directors,
shareholders, agents, employees and assigns, fully and forever releases and
discharges Xxxxxxx, his spouse, heirs, executors, administrators, assigns and
successors, with respect to any and all claims, liabilities and causes of
action, of every nature, kind and description, in law, equity or otherwise,
which have arisen, occurred or existed at any time prior to the signing of this
AGREEMENT, including, without limitation, any and all claims, liabilities and
causes of action arising out of or relating to Xxxxxxx'x employment with
EMPLOYER or the cessation of that employment. Notwithstanding the foregoing,
EMPLOYER does not release any claims it may have against Xxxxxxx for
embezzlement, fraud or use and/or disclosure of EMPLOYER's confidential
information, which has damaged EMPLOYER. EMPLOYER represents that, as of the
date of this AGREEMENT, it is aware of no facts giving rise to any claims
against Xxxxxxx for embezzlement, use and/or disclosure of EMPLOYER's
confidential information, or fraud against EMPLOYER.
17. Severability of Release Provisions. The parties agree that if any provision
of the releases given by them under this AGREEMENT (or, if applicable, of the
Supplemental Release) is found to be unenforceable, it will not affect the
enforceability of the remaining provisions and the courts may enforce all
remaining provisions to the extent permitted by law.
18. Promise to Refrain from Suit or Administrative Action. Xxxxxxx promises and
agrees that he will never xxx EMPLOYER or any of the other Releasees, or
otherwise institute or participate in any legal proceedings against EMPLOYER or
any of the other Releasees, with respect to any claim covered by the release
provisions of this AGREEMENT (or, if applicable, of the Supplemental Release),
including but not limited to claims arising out of Xxxxxxx'x employment with
EMPLOYER or the termination of that employment, unless he is compelled by legal
process to do so. Xxxxxxx also represents and warrants that he does not believe
he has the basis to file, nor does he intend to file, any charge or claim with
any administrative agency, including the United States Equal Employment
Opportunity Commission and the California Department of Fair Employment and
Housing.
19. Confidentiality of Agreement. Xxxxxxx promises and agrees that, until
EMPLOYER discloses this AGREEMENT to regulators, unless compelled by legal
process he will not disclose to others and will keep confidential the terms of
this AGREEMENT, including the amounts referred to herein, except that he may
disclose this information to his spouse and to his attorneys, accountants and
other professional advisors to whom the disclosure is necessary to accomplish
the purposes for which Xxxxxxx has consulted such professional advisors. Xxxxxxx
expressly promises and agrees that, until EMPLOYER discloses this AGREEMENT to
regulators, unless compelled by legal process he will not disclose to any
present or former employees of EMPLOYER the terms of this settlement.
20. Promise to Maintain Confidentiality of EMPLOYER's Confidential Information.
Xxxxxxx acknowledges that due to the position he has occupied and the
responsibilities he has had at EMPLOYER, he has received confidential
information concerning EMPLOYER's products, procedures, customers, sales,
prices, contracts, and the like. Xxxxxxx hereby promises and agrees that, unless
compelled by legal process, he will not disclose to others and will keep
confidential all information he has received while employed by EMPLOYER
concerning its products and procedures, the identities of its customers, sales,
prices, the terms of any of its contracts with third parties, and the like.
Xxxxxxx agrees that a violation by him of the foregoing obligation to maintain
the confidentiality of EMPLOYER's confidential information will constitute a
material breach of this AGREEMENT. Xxxxxxx specifically confirms that he will
continue to be subject to and to comply with the terms of the proprietary
information agreement previously executed by Xxxxxxx with EMPLOYER.
21. Integrated Agreement. The parties acknowledge and agree that no promises or
representations were made to them which do not appear written herein and that
this AGREEMENT contains the entire agreement of the parties on the subject
matter thereof. The parties further acknowledge and agree that parol evidence
shall not be required to interpret the intent of the parties.
22. Voluntary Execution. The parties hereby acknowledge that they have
read and understand this AGREEMENT and that they sign this AGREEMENT voluntarily
and without coercion.
23. Waiver, Amendment and Modification of AGREEMENT. The parties agree that no
waiver, amendment or modification of any of the terms of this AGREEMENT shall be
effective unless in writing and signed by all parties affected by the waiver,
amendment or modification. No waiver of any term, condition or default of any
term of this AGREEMENT shall be construed as a waiver of any other term,
condition or default.
24. Representation by Counsel. The parties represent that they have had the
opportunity to be represented in negotiations for, and the preparation of, this
AGREEMENT by counsel of their own choosing, and that they have entered into this
AGREEMENT based upon their own judgment and not in reliance upon any
representations or promises made by the other party, other than those contained
within this AGREEMENT. Xxxxxxx confirms that Xxxxxxx Phleger & Xxxxxxxx LLP and
its lawyers are representing EMPLOYER and are not representing him.
25. California Law. The parties agree that this AGREEMENT and its terms
shall be construed under California law.
26. Severability of AGREEMENT. The parties further agree that if any of the
facts or matters upon which they now rely in making this AGREEMENT hereafter
prove to be otherwise, this AGREEMENT will nonetheless remain in full force and
effect.
27. Period to Consider Terms of AGREEMENT. Xxxxxxx acknowledges that this
AGREEMENT was presented to him on June 13, 2002 and that he is entitled to have
21 days' time in which to consider the AGREEMENT. Xxxxxxx acknowledges that he
has obtained the advice and counsel from the legal representative of his choice
and executes this AGREEMENT having had sufficient time within which to consider
its terms. Xxxxxxx represents that if he executes this AGREEMENT before 21 days
have elapsed, he does so voluntarily, upon the advice and with the approval of
his legal counsel, and that he voluntarily waives any remaining consideration
period.
28. Revocation of AGREEMENT. Xxxxxxx understands that after executing this
AGREEMENT, he has the right to revoke it within seven (7) days after his
execution of it. Xxxxxxx understands that this AGREEMENT will not thereafter be
effective and enforceable unless the seven-day revocation period passes and
Xxxxxxx does not revoke the AGREEMENT in writing. Xxxxxxx understands that this
AGREEMENT may not be revoked after the seven-day revocation period has passed.
Xxxxxxx understands that any revocation of this AGREEMENT must be made in
writing and delivered to EMPLOYER at 0000 Xxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxxxxxx 00000, within the seven-day period.
Dated: June 18, 2002 /s/ Xxxxxxx X. Xxxxxxx
------------- ----------------------
Xxxxxxx X. Xxxxxxx
PATH 1 NETWORK TECHNOLOGIES INC.
Dated: June 14, 2002 By: /s/ Xxxxxxxxx X. Xxxx
------------- ---------------------
Xxxxxxxxx X. Xxxx
President and Chief Executive Officer
EXHIBIT "A"
SUPPLEMENTAL WAIVER AND GENERAL RELEASE
This Supplemental Waiver and General Release (the
"Supplemental Release") is executed by Xxxxxxx X. Xxxxxxx ("Xxxxxxx"), for the
benefit of his former employer, Path 1 Network Technologies Inc. ("Employer"),
and is intended to be a material part of the consideration proffered by Xxxxxxx
and received by Employer under that certain Separation Agreement and General
Release (the "Release Agreement").
X. Xxxxxxx executed the Release Agreement on June 18,
2002;
B. The Resignation Date (as defined in the Release
Agreement) occurred after Xxxxxxx'x execution of the Release Agreement;
C. Pursuant to Section 12 of the Release Agreement,
Xxxxxxx agreed to execute this Supplemental Release, under the circumstances
described in Recital B.
NOW THEREFORE, in exchange for his continued receipt of the
Severance Benefit and premium reimbursement for the period beyond the
Resignation Date (as described in the Release Agreement), Xxxxxxx reaffirms and
represents as follows:
1. Xxxxxxx for himself, his spouse, heirs, executors,
administrators, assigns and successors, fully and forever releases and
discharges Employer and each of its current, former and future parents,
subsidiaries, related entities, employee benefit plans and its and their
fiduciaries, predecessors, successors, affiliates, officers, directors,
shareholders, agents, employees and assigns (collectively, "Releasees"), with
respect to any and all claims, liabilities and causes of action, of every
nature, kind and description, in law, equity or otherwise, which have arisen,
occurred or existed at any time prior to the signing of this Supplemental
Release, including, without limitation, any and all claims, liabilities and
causes of action arising out of or relating to Xxxxxxx'x employment with
Employment or the cessation of that employment (except as provided in the last
sentence of Section 13 of the Release Agreement).
2. With the exception of potential claims identified in the
last sentence of Section 13 of the Release Agreement, Xxxxxxx is waiving any and
all rights he may have had, now has, or in the future may have, to pursue
against any of the Releasees any and all remedies available to him under any
employment-related causes of action, including without limitation, claims of
wrongful discharge, breach of contract, breach of the covenant of good faith and
fair dealing, fraud, violation of public policy, defamation, discrimination,
personal injury, physical injury, emotional distress, claims under Title VII of
the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment
Act, the Americans With Disabilities Act, the Federal Rehabilitation Act, the
Family and Medical Leave Act, the California Fair Employment and Housing Act,
the California Family Rights Act, the Equal Pay Act of 1963, the provisions of
the California Labor Code and any other federal, state or local laws and
regulations relating to employment, conditions of employment (including wage and
hour laws) and/or employment discrimination.
3. Xxxxxxx expressly waives any and all rights and benefits
conferred upon him by Section 1542 of the Civil Code of the State of California,
which states as follows:
"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."
Xxxxxxx expressly agrees and understands that the Release given by him pursuant
to this Supplemental Release applies to all unknown, unsuspected and
unanticipated claims, liabilities and causes of action which he may have against
Employer or any of the other Releasees.
4. Xxxxxxx represents and warrants that, as of the date he
executes this Supplemental Release, he does not believe he has the basis to
file, nor does he intend to file, any charge or claim with any administrative
agency, including the United States Equal Employment Opportunity Commission and
the California Department of Fair Employment and Housing, regarding his
employment with Employer, or the cessation of that employment.
5. Sections 20 through 28 of the Release Agreement are
incorporated by reference and included in this Supplemental Release, in each
case reading "Supplemental Release" for "AGREEMENT." As to Section 21 of the
Release Agreement now incorporated herein, Xxxxxxx confirms that the Release
Agreement is not superseded. As to Section 27 of the Release Agreement now
incorporated herein, the 21-day period begins on the Resignation Date -
provided, that the Severance Benefit and premium reimbursement will not be
delivered until after the seven-day period following such signature has expired
without revocation of the Supplemental Release.
Dated: June 18, 2002 By: /s/ Xxxxxxx X. Xxxxxxx
--------------- ---------------------------------------
Xxxxxxx X. Xxxxxxx
