EXHIBIT 10.51
SEPARATION AND SETTLEMENT AGREEMENT
THIS SEPARATION AND SETTLEMENT AGREEMENT dated as of July 3, 2000,
(this "Agreement") is between Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx") and FirstWorld
Communications, Inc. a Delaware corporation ("FirstWorld").
RECITALS
A. FirstWorld and Xxxxxxxx entered into an Employment Agreement
dated as of September 28, 1998 (as amended, the "Employment Agreement").
B. FirstWorld and Xxxxxxxx have mutually agreed that it would be in
both of their interests to terminate the Employment Agreement, the employment
relationship between them and Xxxxxxxx'x position on the First World Board of
Directors and related positions.
C. In connection with the termination of the Employment Agreement
and the employment relationship, FirstWorld and Xxxxxxxx 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 Xxxxxxxx'x 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
FirstWorld Stock Option Agreement. Xxxxxxxx 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, Xxxxxxxx and FirstWorld agree as follows:
AGREEMENT
1. Consideration. In consideration for Xxxxxxxx'x resignation of
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employment and position on the FirstWorld Board of Directors and related
positions, the confidentiality provisions, the non-compete provisions, the
releases and other agreements set forth in this Agreement, FirstWorld agrees as
follows:
(a) To pay Xxxxxxxx the following on or before July 10, 2000
(i) The sum of $420,000 as Severance Pay under the Employment
Agreement, less applicable taxes and other withholdings;
(ii) The sum $1,000,000 as the final installment of the
Equalization Payment under the Employment Agreement, less
applicable taxes and other withholdings; and
(iii) The sum of $8,415,000 as a Deferred Cash Bonus under the
Employment Agreement, less applicable taxes and other
withholdings.
(b) FirstWorld shall take the necessary steps to cause an additional
130,000 options of FirstWorld Common Stock to vest under the
Stock Option Agreement no later than July 10 2000, subject to the
terms and conditions of paragraph 5(f) of the Employment
Agreement.
2. Resignation. Xxxxxxxx hereby resigns his employment with
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FirstWorld, his position on the FirstWorld board of directors, his membership on
the chairman's committee, strategy and finance committee, options committee and
as an officer and director of any FirstWorld affiliated entity effective as of
July 3, 2000 (the "Termination Date"). FirstWorld shall issue a press release
announcing that Xxxxxxxx has resigned. that may include language to the effect
that Xxxxxxxx "has resigned to pursue other personal and professional
interests." The form of the press release shall be provided to Xxxxxxxx in
advance for his review and comment.
3. Employment Benefits. On July 15, FirstWorld shall pay Xxxxxxxx
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for his earned and unpaid salary as of July 3, 2000 and for his accrued but
unused vacation time as of July 3, 2000, less normal and customary deductions
for income, employment and other tax withholding. Xxxxxxxx shall retain any
rights he may have under the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA").
4. Confidential Information, Ownership of Documents: Non-
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Competition. Xxxxxxxx acknowledges his obligations under paragraph 10 of the
Employment Agreement and agrees that all provisions of that paragraph shall
remain in effect with the sole exception that the time period for noncompetition
under paragraph 10(c) of the Employment Agreement shall be for six months
following the date of Xxxxxxxx'x Termination Date rather than one year.
5. Stock Options. Except for the additional 130,000 stock options
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that FirstWorld shall cause to vest under paragraph 1(b) above and those options
that had previously vested (which the parties acknowledge to be 1,870,000 stock
options), Xxxxxxxx shall have no further rights to any stock options or shares,
including without limitation, any rights under paragraph 5(g) of the Employment
Agreement. The exercise of all vested options shall be subject to the terms and
conditions of paragraph 5(f) of the Employment Agreement.
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6. Mutual General Release. Except as specifically provided herein
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to the contrary, Xxxxxxxx, for himself, his heirs, his personal representatives,
assigns, and attorneys, and FirstWorld, for itself, its present and future
affiliates and subsidiaries, and each of their past, present, and future
officers, directors, employees, shareholders, independent contractors, insurers,
agents, representatives, assigns and attorneys, mutually release and discharge
the other, the other's heirs, personal representatives, 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 the other due to the acts or omissions of either Xxxxxxxx or
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 either of
them, or any person acting under any of them, 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 this release shall not be intended to and
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shall not release Xxxxxxxx from any claims for fraud, intentional misconduct or
gross negligence that may be brought by any third party (including derivative
actions brought by third parties on behalf of the company) or for claims by
FirstWorld, or any insurer of FirstWorld, seeking reimbursement or contribution
for any such claims, and provided further that neither FirstWorld nor Xxxxxxxx
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releases the other party from any obligations, nor waives any rights, under the
Indemnification Agreement dated as of July 20, 1999, between FirstWorld and
Xxxxxxxx. Such Indemnification Agreement shall remain in full force and effect,
and Xxxxxxxx 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.
7. Covenant Not to Xxx. Xxxxxxxx and FirstWorld and any affiliate
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each covenant with the other never to institute or participate in any
administrative proceeding, suit or action, at law or in equity, against each
other by reason of any claim released in this Agreement.
8. Denial of Liability. Xxxxxxxx and FirstWorld each understand and
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agree 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. References. Xxxxxxxx shall only list FirstWorld's human
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resources director for any reference for his employment with FirstWorld. In the
event FirstWorld's human resources director is contacted by any prospective
employer of Xxxxxxxx, FirstWorld shall
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provide to such employer only Xxxxxxxx'x title at FirstWorld, the dates of his
employment and his last salary level. Xxxxxxxx expressly assumes all risk
associated with listing any past or present FirstWorld employee other than the
human resources director.
10. Covenant of Nondisparagement. Xxxxxxxx covenants never to
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disparage or 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 Xxxxxxxx; FirstWorld shall
notify its executive and senior vice presidents, vice president of finance and
directors of the provisions of this paragraph. Nothing in this paragraph will
preclude either Xxxxxxxx or FirstWorld, its officer, directors, employees and
representatives, from providing truthful testimony and consultation related to
any judicial, governmental or other legal proceeding.
11. Confidentiality. Xxxxxxxx agrees that he shall not divulge,
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disclose, 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 Xxxxxxxx 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.
12. Continued Cooperation and Further Assurances. FirstWorld and
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Xxxxxxxx shall execute such further documents or take such further action as
necessary to further the purposes of this Agreement. For a period of thirty
days from the Termination Date, upon request, Xxxxxxxx shall provide reasonable
assistance and cooperation to assist in the transition of his duties and
responsibilities. Xxxxxxxx also 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
Xxxxxxxx be contacted by any person concerning any pending or potential
litigation relating to FirstWorld, Xxxxxxxx shall immediately notify
FirstWorld's general counsel.
13. Nonreliance. Xxxxxxxx and FirstWorld agree that they expressly
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assume 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/she is
duly authorized to execute and bind FirstWorld to this Agreement, and that this
Agreement is the valid and binding agreement of FirstWorld.
14. Governing Law. This Agreement shall governed by the laws of the
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state of Colorado and may be enforced in any court of competent jurisdiction.
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15. Specific Performance. The provisions of paragraphs 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.
16. 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.
17. Signatures. By their signatures below, each party to this
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Agreement 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.
18. 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.
19. 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.
XXXXXXX X. XXXXXXXX
________________________________________ ___________________
Date
FIRSTWORLD COMMUNICATIONS, INC.
By:_____________________________________ _______________________
Authorized Agent/Representative Date
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