EXHIBIT (e)(5)
[LETTERHEAD OF CYPRESS COMMUNICATIONS, INC.]
CONFIDENTIAL
December 14, 2001
X. Xxxxx Xxxxxx
Chairman and Chief Executive Officer
Cypress Communications, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
RE: SEVERANCE AGREEMENT
Dear Xxxxx:
This letter sets forth the terms of the modifications to which we have
agreed concerning your current and future employment. For the consideration set
forth below and for other good and valuable consideration, you and Cypress
Communications, Inc. ("Cypress") agree as follows:
1. Termination of Employment Agreement. The Employment Agreement between
Cypress Communications, Inc. and X. Xxxxx Xxxxxx dated May 31, 2000 (the
"Employment Agreement"), is herby terminated effective December 7, 2001, and
both parties hereby disclaim, waive and relinquish any and all rights,
obligations, liabilities and consideration due or owing thereunder.
2. Terms of Continued Employment. You will continue in your current
capacity as Chairman and Chief Executive Officer of Cypress at the discretion of
the Board of Directors. During such time you will receive salary at the
annualized rate of $400,000.00 (Four Hundred Thousand Dollars). Any stock option
grant(s) previously made to you shall remain in effect and shall be governed by
the terms set forth in such grants and the applicable stock option plan(s).
Letter to X. Xxxxx Xxxxxx
December 14, 2001
Page 2
3. Separation Payment. Subject to the eligibility requirements set forth
hereinafter, Cypress will pay to you, a Separation Payment equal to $400,000.00
(Four Hundred Thousand Dollars) less standard deductions and withholdings.
a. Eligibility. You will receive the Separation Payment in the
event that: (i) your employment with Cypress is involuntarily
terminated "without cause", (ii) you resign for "good reason", (iii)
upon a "change in control" by the approval of the stockholders of any
plan or proposal for the liquidation or dissolution of the Company and
(aa) your employment with Cypress is involuntarily terminated "without
cause" or (bb) you resign for "good reason", or (iii) upon a "change in
control" other than by the approval of the stockholders of any plan or
proposal for the liquidation or dissolution of the Company. Receipt of
the Separation Payment is also contingent upon your execution and
delivery to Cypress of a Separation Agreement, Release and Promise Not
to Sue (the "Release") in the form attached as Exhibit "A" to this
letter.
b. Timing of Separation Payment. The Separation Payment shall be
paid in four equal quarterly installments beginning on the first of
each quarter following the termination of your employment. However, in
the event that there is a "change in control" other than by the
approval of the stockholders of any plan or proposal for the
liquidation or dissolution of the Company, the Separation Payment shall
be paid to you not in four equal quarterly installments, but in one
lump sum within ten (10) days after the effective date of the "change
in control."
c. Change in Control. As used herein, the term change in control
shall be defined in the same manner as set forth in Section 15 (c) of
the 2000 Cypress Communications, Inc. Stock Option and Incentive Plan.
d. Resignation. As used herein, a resignation shall be for "good
reason" if you resign following any reduction in your base salary,
assignment to you of duties that are inconsistent with your position as
Chairman and Chief Executive Officer of Cypress, relocation of your
office to a location outside of the Atlanta metropolitan area, or a
diminution in your title.
e. Involuntary Termination Without Cause. An involuntary
termination without cause is any termination of employment initiated by
Cypress for reasons other than "for cause" as hereinafter defined. As
used herein, the term termination for "cause" means that Cypress,
acting in good faith based upon information then known to the company,
determines that you have (i) engaged in or committed willful
misconduct, gross negligence, theft, fraud or other illegal conduct,
(ii) refused or demonstrated unwillingness to perform normal job duties
or performed such duties in an unsatisfactory manner, (iii) undertaken
any willful act that is likely to and which does in fact have the
effect of injuring the reputation, business or a business relationship
of the company, or (iv) violated any fiduciary duty or other duty of
loyalty; provided, however, that with respect to violations under
clauses (ii), (iii) or (iv), your
Letter to X. Xxxxx Xxxxxx
December 14, 2001
Page 3
employment cannot be terminated for "cause" unless the company gives
you written notice of its intent to terminate your employment and the
reasons for such termination and you do not cure same within thirty
days after receiving such notice. In the event your employment is
terminated for "cause," you shall receive only that compensation earned
through the date of such termination and no further.
4. Employment At Will. Commencing as of the date hereof, your employment
is at will. In other words, either party may terminate the employment
relationship with or without cause or notice at any time, subject to the terms
of this letter agreement.
5. Confidentiality. The terms of this offer are strictly confidential.
6. Successors and Assigns. The terms and conditions of this letter
agreement shall be binding upon Cypress, its heirs, executors, administrators,
purchasers, successors and assigns.
Please execute this letter agreement in the space provided below and
returning it to me at Cypress Communications, Inc., Fifteen Piedmont Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000. Please feel free to contact me if you have
any questions.
Yours very truly,
CYPRESS COMMUNICATIONS, INC.
By: /s/ X. Xxxxxxx Xxxxx
-------------------------------
X. Xxxxxxx Xxxxx
Vice Chairman
Xxxxxx and accepted this 17th day of December, 2001.
/s/ X. Xxxxx Xxxxxx
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X. XXXXX XXXXXX
EXHIBIT "A"
FORM OF SEPARATION AGREEMENT,
RELEASE AND PROMISE NOT TO SUE
------------------------------
(including ADEA release)
This Separation Agreement, Release and Promise Not to Sue (hereinafter
referred to as "Release") is given on this _____ day of ________________,
200___, by X. XXXXX XXXXXX ("Employee"), in favor of and for the benefit of
CYPRESS COMMUNICATIONS, INC., and all of its subsidiaries, divisions, related
companies, affiliates, owners, directors, officers, managers, employees, agents,
attorneys and successors ("Cypress").
For the consideration contained in this Release, Xxxxxxx and Employee
hereby agree on their own behalf and on behalf of their heirs, executors,
administrators, successors and assigns as follows:
1. Resignation. Employee's employment will terminate effective
________________, 200___.
2. Consideration. This Release is given in consideration of the following:
(a) Separation Payment. Cypress will (i) pay Employee's
salary/wages and continue Employee's health insurance through the Resignation
Date and (ii) pay Employee a separation payment equal to one years' salary,
i.e., Four Hundred Thousand and No/100 Dollars ($400,000.00), minus standard
deductions and withholdings (the "Separation Payment"). Subject to paragraphs
7(c) and 7(d) below, Cypress will pay the Separation Payment to Employee in four
equal quarterly installments, commencing with a payment in the amount of One
Hundred Thousand and No/100 Dollars ($100,000.00) on the Resignation Date, and,
thereafter, in the same amount on the last day of each subsequent calendar
quarter until extinguished, provided, however, that Cypress will pay Employee
the entire Separation Payment or any remaining balance thereof within ten (10)
days after a "change of control," as defined in Section 15(c) of the Cypress
Communications, Inc. 2000 Stock Option and Incentive Plan. Wages and benefits
will be paid in the ordinary course of business.
(b) Release and Promise Not to Xxx. Employee forever discharges
and knowingly, voluntarily and unconditionally releases Cypress from and forever
promises not to sue Cypress on any and all claims, demands, rights and causes of
action Employee now has or may have against Cypress up to the date Employee
signs this Release, including, but not limited to, claims of money, demands,
rights and causes of action arising under the Employment Agreement between
Cypress Communications, Inc. and X. Xxxxx Xxxxxx dated May 31, 2000 (the
"Employment Agreement"), the company's Executive Officer Severance Plan, or any
other company compensation or bonus plan, or any Minutes, correspondence or
other documents relating thereto (excluding the 2000
Exhibit A, Page 1
Stock Option and Incentive Plan (the "Stock Option Plan")); Title VII of the
Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991; the Age
Discrimination in Employment Act (ADEA); the Employee Retirement Income Security
Act of 1974 (ERISA); the Americans With Disabilities Act (ADA); the Family and
Medical Leave Act (FMLA); the Fair Labor Standards Act (FLSA); or any other
federal law, state law, municipal law, common law, or action arising in equity,
or in contract, or in tort, including, but not limited to, all wrongful
discharge claims, all claims relating to any contracts of employment, express or
implied, all claims for breach of the covenant of good faith and fair dealing,
express or implied, all other laws, regulations, or ordinances relating to
employment discrimination, and all claims for attorney's fees and costs.
Employee acknowledges and agrees that this Release terminates and extinguishes
any all claims, demands, rights and causes of action Employee now has or may
have against Cypress under the Employment Agreement between Employee and Cypress
or any other compensation or separation plan or agreement relating to Employee's
employment, except for the Stock Option Plan.
5. Accord and Satisfaction. Employee acknowledges that the payment of the
monies and continuation of benefits set forth in paragraph 2(a) is in full
accord and satisfaction of any and all claims Employee has or may have against
Cypress up to the date Employee signs this Release, including, without
limitation, claims related to Employee's employment, the elimination of
Employee's position with Cypress, and the termination of Employee's employment.
Employee acknowledges the amounts and continuation of benefits in paragraph 2(a)
above to be in addition to the amounts to which Employee would be otherwise
entitled as an employee of Cypress. Employee acknowledges these amounts to be
sufficient consideration for this Release.
6. No Admission of Wrongdoing or Liability. The payment of the monies and
continuation of benefits set forth in paragraph 2(a) shall not in any way be
construed as an admission by Cypress of any wrongdoing or liability in
connection with the employment of Employee, the elimination of Employee's
position with Cypress, or the termination of Employee's employment. No statement
in this Release or payment made pursuant to this Release constitutes, nor should
it be deemed to constitute, an admission by Cypress of any violation of law or
any wrongdoing whatsoever.
7. Notice of Rights.
(a) Employee understands and acknowledges that Employee has the
right to consult with an attorney, and Employee acknowledges that Employee is
hereby advised to consult with an attorney prior to executing this Release.
(b) Employee understands and acknowledges that for a period of at
least forty-five (45) days from the date Employee receives this Release Employee
has the right to deliberate upon whether to sign this Release and agree to the
terms of this Release. Employee understands, however, that Employee does not
have to utilize the full forty-five (45) day deliberation period, and that the
forty-five (45) day deliberation period ends immediately upon Employee signing
this Release.
Exhibit A, Page 2
(c) Employee declares that Employee freely and willingly gives
this Release and was not forced in any manner to sign it. Employee understands
that if Employee wishes to revoke this Release, Employee has seven (7) days from
the date Employee signs the Release in which to make such a revocation, and the
Release is not effective or enforceable until the seven (7) day revocation
period has expired. Employee agrees that in order to make this revocation,
Employee shall do so by sending via facsimile and by mailing notice of the
revocation via certified mail to: Xx. Xxxxxxx X. Xxxxx, Director, Human
Resources, Cypress Communications, Inc., 00 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000. The revocation so made shall be deemed effective on the date
faxed and mailed to Xx. Xxxxx provided that the revocation notice is sent via
facsimile and mailed within seven (7) days from the date Employee signs the
Release.
(d) Employee acknowledges that Employee has received the Statement
of Rights under the ADEA, including Schedule 1 providing a list of job titles
and ages of all individuals who have been selected for this employment
termination program, and Schedule 2 providing the ages of all individuals in the
same job classification or organizational unit who have not been selected for
this employment termination program.
8. Entire Agreement. This Release, along with any other existing written
agreements relating to confidentiality, solicitation of customers, or
competition, which shall remain in full force and effect simultaneously with
this Release under the terms of those other agreements, constitutes the entire
agreement between Employee and Cypress pertaining to the subject matter
contained in it and supersedes any and all prior and/or contemporaneous
agreements, representations, or understandings, written or oral. It is expressly
understood and agreed that this Release, along with any other existing written
agreements relating to confidentiality, solicitation of customers, or
competition, may not be altered, amended, modified or otherwise changed in any
respect whatsoever except in writing duly executed by the undersigned and an
authorized representative of Cypress.
9. Contract. This Release is a contract between Employee and Cypress and
not merely a recital.
10. Confidentiality. Employee agrees that Employee will not in any way
communicate or discuss the terms of this Release, including, but not limited to,
the amount paid to Employee, with any person other than Employee's attorney, tax
preparer and immediate family. "Immediate family" is defined as Employee's
spouse and children, as applicable. Employee agrees that Employee will inform
these persons of the confidential nature of this Release. In the event Employee
breaches the confidentiality provision set forth in this paragraph, the parties
agree that Cypress may present this Release to a court of competent jurisdiction
to obtain injunctive and/or monetary relief, including liquidated damages.
11. Applicable Law. The laws of the state of Georgia shall govern the
interpretation and performance of this Release should any dispute arise
concerning or related to this Release. Furthermore, Employee expressly agrees to
submit to the
Exhibit A, Page 3
jurisdiction of the Courts of the State of Georgia and agrees that the venue of
any action or proceeding arising out of or relating to the terms of this Release
shall be in either the United States District Court for the Northern District of
Georgia or the Superior Court of the Atlanta Judicial Circuit in and for Xxxxxx
County, Georgia.
12. Severability. It is understood and agreed that the provisions of this
Release are severable and, should any provision or provisions hereof be found
unenforceable, the other provisions shall remain fully valid and enforceable.
13. Breadth of Release. This Release is intended to fully, completely, and
forever resolve all disputes based upon events, omissions, or acts occurring on
or prior to its execution as well as all other issues or claims in any way
arising out of or connected with the prior employment of Employee with Cypress
and its predecessors or the termination of that employment.
14. Acknowledgement. Employee acknowledges that Employee has carefully read
this Release, which is comprised of four (4) pages in its entirety, and that
Employee fully understands its provisions and its final and binding effect, and
that Employee is freely, willingly and voluntarily signing this Release and was
not forced in any manner to sign it.
--------------------------
X. Xxxxx Xxxxxx
--------------------------
DATE
Sworn to and subscribed before me
this day of , 2001.
------ ---------------
Notary Public
My commission expires:
FOR CYPRESS COMMUNICATIONS:
By:
------------------------------------
X. Xxxxxxx Xxxxx
Chairman and Chief Executive Officer
Exhibit A, Page 4
