November 28, 2007 VIA FEDERAL EXPRESS [OR HAND DELIVERY] Mr. Douglas J. Glader Dear Doug: This letter summarizes the terms of your separation from employment with Procera Networks, Inc. (the “Company”).
Exhibit
10.9
November
28, 2007
VIA
FEDERAL EXPRESS [OR HAND
DELIVERY]
Xx.
Xxxxxxx X. Xxxxxx
Dear
Xxxx:
This
letter summarizes the terms of your separation from employment with Procera Networks, Inc. (the
“Company”).
1. Employment
Status and Final Payments.
(a) Separation Date and Board
Resignation. Your last day of work with the Company and your
employment termination date was November 2, 2007 (the “Separation
Date”). Effective as of the Separation Date, you are no longer an
officer or employee of the Company, and, as part of this Agreement, you will
resign as a Director on the Company’s Board of Directors (the
“Board”). No later than the date you sign this Agreement, you agree
to sign and return to the Chairman of the Board a resignation letter
memorializing the resignation of your Board membership in the form attached
hereto as Exhibit
A.
(b) Accrued Salary and
Vacation. The Company has paid you all accrued salary, and all
accrued and unused vacation, earned through the Separation Date, subject to
standard payroll deductions and withholdings. You were entitled to these
payments by law.
(c) Expense
Reimbursements. You shall submit, within thirty (30) days
after the Separation Date, expense reports to the Company seeking reimbursement
for any business expenses incurred through the Separation Date. The
Company will reimburse you for these business expenses, pursuant to its standard
policies and practices, within fifteen (15) business days after the submission
of your expense report.
2. Severance
Benefits. If
you timely sign, date and return this fully executed Agreement to the Company,
and allow the releases contained herein to become effective, the Company will
provide you with the following as your sole severance benefits (the “Severance
Benefits”):
(a) Severance
Payments. The Company acknowledges that the termination of
your employment was an “Involuntary Termination Other Than For Cause” for the
purposes of your Employment Agreement with the Company dated September 17, 2003
(the “Employment Agreement”), and you will receive severance pay in the form of
continuation of your base salary in effect as of the Separation Date for
eighteen (18) months following the Separation Date (the “Severance
Payments”). The Severance Payments will be subject to standard
payroll deductions and withholdings. Except as otherwise set
forth in Section 2(c) below, the Severance Payments will be paid in
substantially equal installments on the Company’s normal payroll schedule over
the eighteen (18) month period following the Separation Date; provided, however, that no
Severance Payments will be made prior to the Effective Date of this Agreement
(as defined in Section 12 herein). Each installment of the Severance
Payments will be deemed a separate “payment” for purposes of Section 409A of the
Internal Revenue Code.
(b) Health Insurance. Although the
Company is not otherwise obligated to do so, if you timely elect to continue
medical, dental and/or vision insurance coverage after the Separation Date in
accordance with the provisions of the federal COBRA law, state law, and the
Company’s health insurance plans, the Company shall pay, on your behalf, the
monthly premium payments necessary to continue your current health insurance
coverage (for you and your covered dependents) pursuant to COBRA for a maximum
of eighteen (18) months following the Separation Date; provided, however, that, the
Company’s obligation to continue to pay your monthly premium payments ceases
immediately if you become eligible for group health insurance coverage as a
result of new employment at any time within eighteen (18) months after the
Separation Date (and you agree to provide prompt
written notice to the Company in such an event).
(c) “Specified Employee”
Status. The Company has determined that you are a "specified
employee" of the Company as defined in Section 409A(a)(2)(B)(i) of the Internal
Revenue Code and that the Severance Payments are, subject to certain statutory
exceptions, subject to a six month delay of payment pursuant to Section
409A(a)(2)(B)(i). Accordingly, in reliance on Treasury Regulation
1.409A-1(b)(4) regarding payments that qualify as short-term deferrals, on the
first regular payroll pay day following the Effective Date, the Company will pay
you, in a lump sum, the Severance Payments that you would have otherwise
received on or prior to such date under the original schedule but for the delay
(pursuant to Section 12) in the effectiveness of this Agreement, and will
continue to pay you the installments of the Severance Payments as originally
scheduled until the last regular payroll pay date on or before March 15,
2008. Thereafter, no Severance Payments will be made until May 3,
2008 (that is, the date that is six months and one day after the Separation
Date), at which time the Company will pay you the Severance Payments that you
would have received after March 15, 2008 and on or prior to May 3, 2008 in a
lump sum, with the balance of the Severance Payments made thereafter as
originally scheduled. In reliance on the Treasury Regulation
1.409A-1(b)(9)(v)(B) regarding certain medical reimbursements, the Company will
pay the COBRA premium payments set forth in Section 2(b) above as originally
scheduled above.
3. Equity. You currently
have 4,126,970 fully vested shares of restricted stock in the
Company. This Agreement shall not have any affect on your ownership
of this restricted stock.
4. Bonus. On October 17,
2007, the Company’s
Compensation Committee recommended and the Board approved a $50,000 bonus
payment to you for the Company’s past performance. Such amount will
be paid in a lump sum on or before November 9, 2007. The payment set
forth in this Section 4 is intended to be a separate payment (as defined in
Treasury Regulation 1.409A-2(b)(2)) from the payments described in Section 2(a)
above for purposes of the “short term deferral rule” under Treasury Regulations
Section 1.409A-1(b)(4).
5. Other
Compensation Or Benefits.
You acknowledge that, except as expressly provided in this Agreement, you have
not earned and will not receive from the Company any additional compensation
(including base salary, bonus, incentive compensation, or equity), severance, or
benefits before or after the Separation Date (including without limitation any
severance benefits set forth in your Employment Agreement), with the exception
of any vested right you may have under the express terms of a written
ERISA-qualified benefit plan (e.g., 401(k) account) or any vested
options.
6. right
of Survivorship. In the event of your death
prior the full payment to you of the Severance Benefits, the Company agrees to
continue to pay the Severance Benefits in accordance with this Agreement to your
heirs, and in such case this Agreement shall bind and inure to the
benefit of your heirs.
7. Return
Of Company Property. Within twenty (20) days after the
Separation Date, you agree to return to the Company all Company documents (and
all copies thereof) and other Company property which you have in your possession
or control, including, but not limited to, Company files, notes, drawings,
records, plans, forecasts, reports, studies, analyses, proposals, agreements,
financial information, research and development information, sales and marketing
information, customer lists, prospect information, pipeline reports, sales
reports, operational and personnel information, specifications, code, software,
databases, computer-recorded information, tangible property and equipment
(including, but not limited to, computers, facsimile machines, mobile
telephones, servers), credit cards, entry cards, identification badges and keys;
and any materials of any kind which contain or embody any proprietary or
confidential information of the Company (and all reproductions thereof in whole
or in part). You agree that you will make a diligent search to locate
any such documents, property and information. If you have used any
personally owned computer, server, or e-mail system to receive, store, review,
prepare or transmit any Company confidential or proprietary data, materials or
information, within twenty (20) days after the Separation Date, you shall
provide the Company with a computer-useable copy of such information and then
permanently delete and expunge such Company confidential or proprietary
information from those systems; and you agree to provide the Company access to
your system as requested to verify that the necessary copying and/or deletion is
done. Your timely compliance with this paragraph is a condition
precedent to your receipt of the severance benefits provided under this
Agreement. Notwithstanding the foregoing, it is agreed that you may
keep the Company-provided laptop in your possession, so long as the Company
confidential or proprietary information has been permanently deleted and
expunged from it.
8. Proprietary
Information Obligations. You agree to refrain from any use or
disclosure of the Company’s confidential or proprietary information or materials
(including, but not limited to, sales and marketing information, customer
information, product and manufacturing information, financial information,
personnel and compensation information, and operational and training
information). Additionally, you reaffirm your obligation to comply
with any Company Proprietary Information and Inventions Agreement you may have
previously signed.
9. Nondisparagement. You agree not to
disparage the Company, its officers, directors, employees, shareholders, and
agents, and the Company (through its officers and directors) agrees not to
disparage you, in any manner likely to be harmful to his/its business, business
reputation, or personal reputation; provided that you and Company will respond
accurately and fully to any question, inquiry or request for information when
required by legal process.
10. Cooperation
and Assistance. You agree that
you will not voluntarily provide assistance, information or advice, directly or
indirectly (including through agents or attorneys), to any person or entity in
connection with any claim or cause of action of any kind brought against the
Company, nor shall you induce or encourage any person or entity to bring such
claims. However, it will not violate this Agreement if you testify
truthfully when required to do so by a valid subpoena or under similar
compulsion of law. Further, you agree to voluntarily cooperate with
the Company if you have knowledge of facts relevant to any threatened or pending
litigation against the Company by making yourself reasonably available without
further compensation for interviews with the Company’s counsel, for preparing
for and providing deposition testimony, and for preparing for and providing
trial testimony. Company, however, agrees to reimburse you for your
reasonable out-of-pocket expenses incurred in providing such cooperation,
provided such expenses are approved in advance in writing by the
Company.
11. No
Admissions. You understand and agree
that the promises and payments in consideration of this Agreement shall not be
construed to be an admission of any liability or obligation by the Company to
you or to any other person, and that the Company makes no such
admission.
12. Release of
Claims.
a. General Release. In
exchange for the consideration under this Agreement to which you would not
otherwise be entitled, you hereby generally and completely release the Company
and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns (collectively, the “Company Released Parties”) of and
from any and all claims, liabilities and obligations, both known and unknown,
that arise out of or are in any way related to events, acts, conduct, or
omissions occurring prior to or on the date that you sign this Agreement
(collectively, the “Company Released Claims”).
b. Scope of
Release. The Released Claims include, but are not limited
to: (a) all claims arising out of or in any way related to your
employment with the Company, or the termination of that employment; (b) all
claims related to your compensation or benefits from the Company, including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (c) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (d) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys’ fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990, the
federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”),
the California Labor Code (as amended), and the California Fair Employment and
Housing Act (as amended).
c. Excluded
Claims. Notwithstanding the foregoing, the following are not
included in the Released Claims (the “Excluded Claims”): (a) any rights or
claims for indemnification you may have pursuant to any written indemnification
agreement with the Company to which you are a party, the charter, bylaws, or
operating agreements of the Company, or under applicable law; (b) any
rights which are not waivable as a matter of law; (c) any claims arising from
the breach of this Agreement; or (d) any rights or claims that you may have
resulting from unknown errors related to accounting for your 401(k) retirement
savings plan. In addition, nothing in this Agreement prevents you
from filing, cooperating with, or participating in any proceeding before the
Equal Employment Opportunity Commission, the Department of Labor, or the
California Department of Fair Employment and Housing, except that you hereby
waive your right to any monetary benefits in connection with any such claim,
charge or proceeding. You hereby represent and warrant that, other
than the Excluded Claims, you are not aware of any claims you have or might have
against any of the Released Parties that are not included in the Released
Claims.
d. Release by the Company. The
Company hereby generally and completely releases you of and from any and all
claims, liabilities, and obligations, both known and unknown, arising out of or
in any way related to events, acts, conduct or omissions occurring at any time
prior to or at the time the Company signs this Agreement; provided, however,
that that this release shall not extend to: (1) any claims that may
arise out of any events, acts, conduct or omissions occurring after this
Agreement is executed, including without limitation any claims for breach of
this Agreement; (2) any claims arising at any time out of your obligations to
protect the Company’s proprietary information, including without limitation any
claims arising from your obligations under your Confidentiality Agreement,
claims arising under the California Uniform Trade Secrets Act, or common law
claims arising from these obligations; or (3) any claims arising from any
actions by you during your employment with the Company which were outside of
your authority or outside of the course and scope of your
employment.
13. ADEA
Waiver. You hereby acknowledge
that you are knowingly and voluntarily waiving and releasing any rights you may
have under the ADEA, and that the consideration given for the waiver and release
you have given in this Agreement is in addition to anything of value to which
you were already entitled. You further acknowledge that you have been
advised by this writing, as required by the ADEA, that: (a) your
waiver and release do not apply to any rights or claims that may arise after the
date you sign this Agreement; (b) you should consult with an attorney prior to
signing this Agreement (although you may voluntarily decide not to do so); (c)
you have twenty-one (21) days to consider this Agreement (although you may
choose voluntarily to sign this Agreement sooner); (d) you have seven (7) days
following the date you sign this Agreement to revoke this Agreement (in a
written revocation sent to and received by the Board); and (e) this
Agreement will not be effective until the date upon which the revocation period
has expired, which will be the eighth day after you sign this Agreement (the
“Effective Date”).
14. Section
1542 Waiver. In giving the
release herein, which includes claims which may be unknown to you at present,
you acknowledge that you have read and understand Section 1542 of the California
Civil Code, which reads as follows:
“A
general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.”
You
hereby expressly waive and relinquish all rights and benefits under that section
and any law of any other jurisdiction of similar effect with respect to your
release of claims herein, including but not limited to your release of unknown
claims.
15. Representations. You
hereby represent that you have been paid all compensation owed and for all hours
worked, have received all the leave and leave benefits and protections for which
you are eligible pursuant to the Family and Medical Leave Act, the California
Family Rights Act, or otherwise, and have not suffered any on-the-job injury for
which you have not already filed a workers’ compensation claim.
16. Dispute
Resolution.
To ensure rapid and economical resolution of any disputes regarding this
Agreement, the parties hereby agree that any and all claims, disputes or
controversies of any nature whatsoever arising out of, or relating to, this
Agreement, or its interpretation, enforcement, breach, performance or execution,
your employment with the Company, or the termination of such employment, shall
be resolved, to the fullest extent permitted by law, by final, binding and
confidential arbitration in San Jose, CA conducted before a single arbitrator by
JAMS, Inc. (“JAMS”) or its successor, under the then applicable JAMS arbitration
rules. The parties
each acknowledge that by agreeing to this arbitration procedure, they waive the
right to resolve any such dispute, claim or demand through a trial by jury or
judge or by administrative proceeding. You will have the right
to be represented by legal counsel at any arbitration proceeding. The arbitrator
shall: (i) have the authority to compel adequate discovery for the
resolution of the dispute and to award such relief as would otherwise be
available under applicable law in a court proceeding; and (ii) issue a written
statement signed by the arbitrator regarding the disposition of each claim and
the relief, if any, awarded as to each claim, the reasons for the award, and the
arbitrator’s essential findings and conclusions on which the award is
based. The arbitrator, and not a court, shall also be authorized to
determine whether the provisions of this paragraph apply to a dispute,
controversy, or claim sought to be resolved in accordance with these arbitration
procedures. Nothing in this Agreement is intended to prevent either
you or the Company from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any arbitration. It is
further agreed that Company will pay any costs or fees (including but not
limited to JAMS filing fees and arbitrator fees) with respect to any arbitration
hereunder to the extent they exceed the costs or fees which you would have to
incur to prosecute and/or defend such claims in a court of law.
17. Miscellaneous. This
Agreement constitutes the complete, final and exclusive embodiment of the entire
agreement between you and the Company with regard to its subject
matter. It is entered into without reliance on any promise or
representation, written or oral, other than those expressly contained herein,
and it supersedes any other such promises, warranties or representations,
including without limitation any promises or representations regarding severance
benefits contained in your Employment Agreement. This Agreement may
not be modified or amended except in a writing signed by both you and a duly
authorized officer of the Company. This Agreement will bind the
heirs, personal representatives, successors and assigns of both you and the
Company, and inure to the benefit of both you and the Company, their heirs,
successors and assigns. If any provision of this Agreement is
determined to be invalid or unenforceable, in whole or in part, this
determination will not affect any other provision of this Agreement and the
provision in question will be modified so as to be rendered
enforceable. This Agreement will be deemed to have been entered into
and will be construed and enforced in accordance with the laws of the State of
California without regard to conflict of laws principles. Any
ambiguity in this Agreement shall not be construed against either party as the
drafter. Any waiver of a breach of this Agreement shall be in writing
and shall not be deemed to be a waiver of any successive breach. This
Agreement may be executed in counterparts and facsimile signatures will suffice
as original signatures.
18. Attorneys’
fees and
Costs. In the event that any party hereto files an action
and/or arbitration proceeding to enforce, interpret and/or remedy a breach of
this Agreement, the prevailing party shall be entitled to recover his/its
reasonable attorneys’ fees and costs.
If this
Agreement is acceptable to you, please sign below and return the original to
me. You have twenty-one (21) calendar days to decide whether you
would like to accept this Agreement, and the Company’s offer contained herein
will automatically expire if you do not sign it within this timeframe and return
the fully signed Agreement promptly thereafter.
We wish
you the best in your future endeavors.
Sincerely,
|
Procera
Networks, Inc.
|
||
|
By:
|
/s/ Xxxx Xxxxxx
|
|
|
Xxxx Xxxxxx
|
||
|
VP
Finance
|
||
|
I
have read, understand and agree fully to the foregoing
Agreement:
|
||
|
:
|
/s/ Xxxxxxx X.
Xxxxxx
|
|
|
Xxxxxxx X. Xxxxxx
|
||
|
November 29, 2007
|
||
|
Date
|
||
November
_____, 2007
|
Chairman,
Board of Directors
|
|
|
Procera
Networks, Inc.
|
|
|
000X
Xxxxxx Xx.
|
|
|
Xxx
Xxxxx, XX 00000
|
|
Re: Resignation
from Board
Dear
_________:
I hereby
confirm in writing my resignation as a member of the Board of Directors of
Procera Networks, Inc., effective as of ____________________. I will
execute any further documents necessary to effectuate my resignation from the
Board.
I wish
the Board and everyone at Procera the best of success in the
future.
Sincerely,
|
/s/
Xxxxxxx X. Xxxxxx
|
||
|
Xxxxxxx X. Xxxxxx
|
Date
|
