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EXHIBIT 10.35
SEPARATION AGREEMENT
THIS AGREEMENT, effective as of February 16, 2000 (the "Effective
Date"), is by and between COYOTE NETWORK SYSTEMS, INC., a Delaware corporation
("Coyote"), and XXXXX X. XXXXXXX.
RECITALS
A. Xx. Xxxxxxx has been employed by Coyote since 1995 and has served as
Chairman and Chief Executive Officer since November 1996, with a current
contract dated April 11, 1998, and Xx. Xxxxxxx is a member of Coyote's Board of
Directors.
B. Effective January 27, 2000, Xx. Xxxxxxx relinquished his duties as
Chief Executive Officer and, pursuant to the terms and conditions hereof, Xx.
Xxxxxxx is hereby retiring as Coyote's Chairman and as a member of Coyote's
Board of Directors.
C. In recognition of his many years of leadership and service, it is the
desire of Coyote to provide to Xx. Xxxxxxx certain severance and other benefits,
on the terms and conditions as set out herein.
D. It is the desire of the parties to resolve any and all issues between
them with respect to Xx. Xxxxxxx'x employment and retirement.
AGREEMENTS
In consideration of the mutual covenants set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Xx. Xxxxxxx'x employment as Chairman of Coyote and as a member of
Coyote's Board of Directors with Coyote shall terminate effective seven (7) days
after the submission of Coyote's 10Q, for the quarter ended December 31, 1999.
2. Coyote shall pay to Xx. Xxxxxxx xxxxxxxxx pay through March 31, 2003
at his present salary pursuant to the Employment Agreement dated as of April 1,
1998 between Coyote and Xx. Xxxxxxx, as modified by Coyote's Board of Directors
on January 24, 2000 (the "Employment Agreement"); provided, however, in lieu of
the $150,000 to be paid on June 24, 2000, Coyote shall grant to Xx. Xxxxxxx
200,000 immediately vested options to purchase Coyote common
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stock for $5.00/share ("Severance Options"). All such severance payments shall
be subject to all applicable deductions and withholdings. In connection with the
Severance Options, Xx. Xxxxxxx acknowledges that they will not be available for
exercise until such time as the Company's shareholders approve and authorize a
sufficient number of shares of common stock to permit exercise of the options
and in the event the shareholders fail to authorize additional shares by March
1, 2003, the options will be void. The Company agrees to use its best efforts to
obtain shareholder authorization of additional shares and further authorization
of an additional 2,000,000 shares in the Company's Nonqualified Employee Stock
Option Plan.
3. Coyote shall provide medical benefits to Xx. Xxxxxxx through June 30,
2006 pursuant to the terms of the Employment Agreement, and further agrees to
promptly pay all past expenses and loans owing Xx. Xxxxxxx.
4. In consideration for past services and services to be provided
pursuant to paragraph 9 below, Coyote shall transfer to Xx. Xxxxxxx the cell
phone and laptop computer currently provided by Coyote.
5. Coyote shall transfer and assign to Xxxxxxx Xxxxxxx the two insurance
policies on the life of Xx. Xxxxxxx and the related Met Life shares of stock
which are proceeds of such insurance policies. Coyote shall continue to pay all
premiums relating to such policies through June 30, 2001.
6. Xx. Xxxxxxx shall be subject to the normal non-employee black-out
provisions with respect to all Coyote options held by Xx. Xxxxxxx.
7. As a former officer and director, Xx. Xxxxxxx shall continue to be
indemnified by Coyote, to the fullest extent permitted under the General
Corporations Law of Delaware and covered under any director and officer's
liability insurance coverage of Coyote in place from time to time.
8. Coyote and Xx. Xxxxxxx agree that neither party shall make any
disparaging statements concerning the other or his or its business activities.
9. Xx. Xxxxxxx shall, upon reasonable request by Coyote, make himself
reasonably available and otherwise fully cooperate with Coyote regarding
questions or information which is known or may be known by Xx. Xxxxxxx
concerning Coyote or its business including, without limitation, Wildfire,
Ericsson, Systeam, European business and all lawsuits. In addition, in
consideration of the severance payments and other benefits to be provided by
Coyote to Xx. Xxxxxxx hereunder, Xx. Xxxxxxx hereby agrees to perform such
consulting services as Coyote may reasonably request from time to time, and as
mutually agreed upon,
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and to undertake to confer with representatives of Coyote as Coyote may
reasonably request from time to time, and as mutually agreed upon, from the
Effective Date through March 31, 2003. Such consulting activities are expected
to vary from 10-40 hours per month and will not exceed approximately 40 to 50
hours per month and are expected to lessen over time.
10. Xx. Xxxxxxx acknowledges that in the course of his employment with
Coyote he received confidential information concerning Coyote and its business.
Xx. Xxxxxxx shall keep such information confidential and further agrees not to
disclose such information to third parties without the prior written consent of
Coyote. Xx. Xxxxxxx represents that has returned to Coyote all such information
in his possession of which he has knowledge and he has not taken or retained any
such information in any form other than any such information directly related to
the activities he has agreed to perform under paragraph 9 above. Xx. Xxxxxxx
further represents that he has returned all other Coyote property in his
possession. Xx. Xxxxxxx also agrees not to contact or solicit any information
regarding Coyote's business from employees, customers or suppliers other than in
relation to the activities described in paragraph 9 above.
11. This Agreement shall bind and benefit the heirs, personal
representatives, administrators, successors, and assigns of the parties hereto.
12. This Agreement shall constitute the entire agreement between the
parties and supersedes all prior representations, understandings, and agreements
of the parties with respect thereto. Any waiver or amendment of any provision of
this Agreement shall be effective only if in writing and signed by the parties
hereto.
13. Except for the payments and obligations expressed or adopted in this
Agreement, each party waives and fully releases the other from any claims,
demands, or causes of action, known or unknown, arising prior to the date
hereof.
14. This Agreement shall be governed by the laws of the State of
California.
COYOTE NETWORK SYSTEMS, INC.
BY /s/ Xxxxx X. XxXxxxxxxx
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Its Chief Executive Officer
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/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
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