Exhibit 10.5
SETTLEMENT AGREEMENT AND RELEASE
THIS SETTLEMENT AGREEMENT AND RELEASE (the "Agreement") is made by and
between VINA Technologies, Inc., a Delaware corporation (the "Company"), and
Xxxxxx X. Xxxxx ("Employee").
WHEREAS, the Company and Employee have had a business relationship wherein
Employee has been an officer of Company;
WHEREAS, Employee has been granted stock options pursuant to certain stock
option agreements, copies of which are attached hereto (the "Stock Option
Agreements") between Employee and the Company to purchase (i) an aggregate of
200,000 shares of Company common stock pursuant to options granted on May 5,
1998 (the "May 1998 Options"); and (ii) an aggregate of 730,200 shares of
Company common stock pursuant to options granted after May 5, 1998 (the
"Subsequent Options"); and
WHEREAS, the Company and Employee have mutually agreed to terminate the
employment relationship;
NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (collectively referred to as the "Parties") hereby agree as
follows:
1. Resignation. Employee resigns from his position as the Company's
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Executive Vice President effective July 16, 2001.
2. Consideration. The Company agrees to provide Employee with the following
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consideration, as well as that set forth in paragraphs 3 and 5 below:
(a) The Company shall pay Employee an aggregate of six months salary ninety
two thousand five hundred dollars ($92,500 ), less applicable withholdings,
payable pro rata on the 1st day of each month over the next six months.
(b) Employee's stock options shall vest or expire as follows:
(i) The May 1998 Options shall accelerate and vest with respect to all
two hundred thousand (200,000) of the shares subject to the May 1998
Options as of the Effective Date of this Agreement. These options shall
expire on the date three months after the termination of the Independent
Contractor Agreement.
(ii) The options granted pursuant to the Subsequent Options shall
accelerate and vest with respect to such number of shares as would have
vested between the Effective Date of this Agreement and the date six months
(6) following the Effective Date of this Agreement if Employee were still
employed by the Company during such period. On the Effective Date of this
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Agreement, all options not vested pursuant to this paragraph or otherwise
shall immediately expire. All vested options shall expire on the date three
months after the termination of the Independent Contractor Agreement .
3. Consulting. During the period commencing with the Effective Date and
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terminating on January 17, 2002, unless terminated earlier pursuant to the terms
of the Consulting Agreement (the "Consulting Period"), attached hereto as
Exhibit A (the "Consulting Agreement") which is hereby incorporated by
reference, Employee shall serve as a consultant to the Company, providing
consultation services to, and reporting to, the Chief Executive Officer of the
Company as provided in the Independent Contractor Agreement.
4. Stock Option Agreements. Except as otherwise provided in paragraph 2,
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Employee's stock options shall continue to be subject to the terms and
conditions of the applicable stock incentive plan and the applicable stock
option agreements between Employee and the Company.
5. Benefits. Employee shall have the right to convert his health insurance
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benefits to individual coverage pursuant to COBRA. Should Employee so elect and
remain eligible, the Company shall pay Employee's health care premiums, up to a
maximum of 100% of the cost of Employee's health care premiums prior to his
termination, through January 15, 2002; provided, however, that if Employee
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secures alternative employment that provides health insurance benefits before
this date, Employee shall promptly notify the Company in writing, and the
Company's reimbursement obligation under this paragraph shall immediately cease.
6. Confidential Information and Non-Competition. Employee shall continue to
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maintain the confidentiality of all confidential and proprietary information of
the Company and shall continue to comply with the terms and conditions of the
Confidentiality Agreement between Employee and the Company, which remains in
full force and effect.
7. Payment of Salary. Employee acknowledges and represents that the Company
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has paid all salary, wages, bonuses, accrued vacation, commissions, stock
options and any and all other benefits and compensation due to Employee, except
as otherwise provided for in this Agreement and other than those solely related
to Employee's role as a director of the Company.
8. Release of Claims. Employee agrees that the foregoing consideration
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represents settlement in full of all outstanding obligations owed to Employee by
the Company, other than those solely related to Employee's role as a director of
the Company or as a consultant to the Company. Employee, on behalf of himself,
and his respective heirs, family members, executors and assigns, hereby fully
and forever releases the Company and its respective officers, directors,
employees, investors, shareholders, administrators, affiliates, divisions,
parents, subsidiaries, predecessor and successor corporations, and assigns,
from, and agrees not to xxx concerning, any claim, duty, obligation or cause of
action relating to any matters of any kind (excepting any claims for
indemnification, claims for vested benefits, claims solely related to Employee's
role as a director of the Company, and claims for breach of this Agreement),
whether presently known or unknown, suspected or unsuspected, that he may
possess arising from any omissions, acts or facts that have occurred up until
and including the Effective Date of this Agreement including, without
limitation:
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(a) Any and all claims relating to or arising from Employee's employment
relationship with the Company and the termination of that relationship;
(b) Any and all claims relating to, or arising from, Employee's right to
purchase, or actual purchase of shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary
duty, breach of duty under applicable state corporate law, and securities fraud
under any state or federal law;
(c) Any and all claims for wrongful termination of employment; termination
in violation of public policy; discrimination; breach of contract, both express
and implied; breach of a covenant of good faith and fair dealing, both express
and implied; promissory estoppel; negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage; unfair
business practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment; and conversion;
(d) Any and all claims for violation of any federal, state or municipal
statute, including, but not limited to, Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of
1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act,
the Employee Retirement Income Security Act of 1974, The Worker Adjustment and
Retraining Notification Act, Older Workers Benefit Protection Act, the
California Fair Employment and Housing Act, and Labor Code section 201, et seq.
and section 970, et seq.;
(e) Any and all claims for violation of the federal, or any state,
constitution;
(f) Any and all claims for attorneys' fees and costs;
(g) Any and all claims arising under the agreements governing Employee's
employement, including, but not limited to, claims for employment benefits,
compensation, severance payments, fringe benefits, stock options, vacation or
disability payments, pension accrual and any claims for contribution or
indemnification; and
(h) Any and all claims relating to the tax obligations for which Employee
may become liable as a result of this Agreement or the payment of the
consideration referred to above.
Employee agrees that the release set forth in this section shall be and
remain in effect in all respects as a complete general release as to the matters
released.
In consideration for the promises and covenants contained herein, the
Company hereby releases and discharges Employee from any claims, liabilities and
actions, known or unknown, which it may now have or claim to have or may ever
have had or claimed to have against the Employee, including, but not limited to,
claims arising directly or indirectly out of any act or omission by Employee
from the date of his employment with the Company through and including the date
of execution of this Agreement, and all other possible claims and/or actions
relating to any alleged violations of any contracts of employment, or any other
contracts, express or implied, any torts of whatsoever kind or nature, alleged
violations of any federal or state statutes, laws or constitutions, the
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California Civil Code, the California Labor Code, California Business and
Professions Code and all other codes of the State of California and of the
United States which it may have arising directly or indirectly out of any act or
omission on your part occurring on or before the date of execution of this
Agreement.
9. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges
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that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that the waiver and
release is knowing and voluntary. Employee and the Company agree that the waiver
and release does not apply to any rights or claims that may arise under ADEA
after the Effective Date of the Agreement. Employee acknowledges that the
consideration given for the waiver and release in this Agreement is in addition
to anything of value to which Employee was already entitled. Employee further
acknowledges that he has been advised by this writing that (a) he should consult
with an attorney prior to executing the Agreement; (b) he has at least
twenty-one (21) days within which to consider the Agreement; (c) he has at least
seven (7) business days following his execution of the Agreement to revoke the
Agreement; and (d) the Agreement shall not be effective until the revocation
period has expired.
10. Civil Code Section 1542. The Parties represent that they are not aware
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of any claims against each other other than the claims that are released by this
Agreement. Moreover, the Parties agree and represent that it is within their
contemplation that they may have claims against each other of which, at the time
of the execution of this Agreement, they have no knowledge or suspicion, but
that this Agreement extends to claims in any way based upon, connected with or
related to the matters described in paragraphs 8 and 9, whether or not known,
claimed or suspected by them. The Parties acknowledge that they are familiar
with the provisions of California Civil Code Section 1542, which provides 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.
The Parties, being aware of said code section, agree to expressly waive any
rights they may have thereunder, as well as under any other statute or common
law principles of similar effect.
11. Confidentiality. Employee and the Company agree to use their best
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efforts to maintain in confidence the existence of this Agreement, the contents
and terms of this Agreement, and the consideration for this Agreement
(hereinafter collectively referred to as "Settlement Information"). The parties
further agree to take every reasonable precaution to prevent disclosure of any
Settlement Information to third parties, and agree that there will be no
publicity, directly or indirectly, concerning any Settlement Information.
Employee and the Company agree to take every precaution to disclose Settlement
Information only to those attorneys, accountants, government entities and family
members who have a reasonable need to know of such Settlement Information.
Nothing in this paragraph 11 shall be construed as hindering the Company's
ability to make any disclosures necessary or appropriate, in the Company's sole
judgement, pursuant to applicable securities laws.
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12. No Cooperation. Employee agrees he will not act in any manner that
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might damage the business of the Company. Employee agrees that he will not
counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third xxxxx against the Company and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so.
13. Non-Disparagement. Employee agrees to refrain from any defamation,
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libel or slander of the Company and its respective officers, directors,
employees, investors, shareholders, administrators, affiliates, divisions,
subsidiaries, predecessor and successor corporations, and assigns, or tortious
interference with the contracts and relationships of the Company and its
respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns. The Company agrees to refrain from making any
disparaging remarks concerning the Employee, or the Employee's past performance
as an Employee and Director of the Company.
14. No Admission of Liability. The Parties understand and acknowledge that
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this Agreement constitutes a compromise and settlement of disputed claims, and
is made to buy peace and for no other reason. No action taken by the Parties
hereto, or either of them, either previously or in connection with this
Agreement shall be deemed or construed to be (a) an admission of the truth or
falsity of any claims heretofore made or (b) an acknowledgement or admission by
either party of any fault or liability whatsoever to the other party or to any
third party.
15. Employment Activities. During the period of time beginning on the
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Effective Date and ending on July 16, 2002, Employee agrees not to hire, and not
otherwise to solicit directly or indirectly, any current employees of the
Company for employment elsewhere. Company agrees that, except as set forth in
the Independent Contractor Agreement, Employee is not precluded from seeking
employment opportunities elsewhere at any time after the Effective Date.
16. Costs. The Parties shall each bear their own costs, expert fees,
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attorneys' fees and other fees incurred in connection with this Agreement.
17. Arbitration. To the maximum extent permitted by law, Employee and the
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Company agree that, except as noted below, any controversy, claim or dispute
arising out of or related to Employee's employment or the termination thereof
("claims") shall be arbitrated in accordance with the following procedure:
(a) Any and all claims shall be submitted to final and binding arbitration
before the American Arbitration Association ("AAA") in Newark, California. Such
arbitration shall be in accordance with the AAA's then current version of the
National Rules for the Resolution of Employment Disputes. The arbitrator shall
be selected in accordance with the AAA's selection procedures in effect at the
time. Either party may initiate arbitration proceedings by filing a demand for
arbitration with the AAA in San Francisco, California.
(b) The arbitrator shall have the authority to grant any relief authorized
by law.
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(c) The arbitrator shall have exclusive authority to resolve all claims
covered by this arbitration agreement, and any dispute relating to the
interpretation, applicability, enforceability or formation of this arbitration
agreement, including, but not limited to, any claim that all or any part of this
arbitration agreement is void or voidable. Any issues involving the
arbitrability of a dispute shall be governed by the Federal Arbitration Act, 9
U.S.C. ss. 1 et seq.
(d) The Company will pay all arbitration fees, deposits and administrative
costs assessed by the AAA. The arbitrator shall have power to award attorneys'
fees, expert witness fees and costs according to statute, or according to a
separate written agreement between the parties, or the National Rules for the
Resolution of Employment Disputes of the AAA, but shall have no other power to
award attorneys' fees, costs or expert witness fees.
(e) The claims covered by the above include, but are not limited to, claims
for wrongful termination, unpaid wages or compensation, breach of contract,
torts, violation of public policy; claims for harassment or discrimination
(including, but not limited to, race, sex, religion, national origin, age,
marital status, medical condition, disability, or sexual orientation); claims
for benefits (except where an employee benefit or pension plan specifies a
procedure for resolving claims different from this one); claims for physical or
mental harm or distress, or any other employment-related claims under any
federal, state or other governmental law, statute, regulation or ordinance,
including, but not limited to, Title VII of the Civil Rights Act of 1965, the
Americans With Disabilities Act, the Age Discrimination in Employment Act, the
California Fair Employment and Housing Act, and any other statutes or laws
relating to an employee's relationship with the employer; and claims related to
the agreements governing Employee's employment with the Company. However, claims
for workers' compensation benefits and unemployment compensation benefits are
not covered by this arbitration agreement, and such claims may be presented to
the appropriate court or government agency.
(f) Notwithstanding this agreement to arbitrate, neither party waives the
right to seek through judicial process, preliminary injunctive relief to
preserve the status quo or prevent irreparable injury before the matter can be
heard in arbitration.
(g) The arbitrator shall issue a written arbitration decision stating the
arbitrator's essential findings and conclusions upon which any award is based. A
party's right for review of the decision is limited to grounds provided under
applicable law.
(h) The parties agree that the arbitration shall be final and binding and
any arbitration award shall be enforceable in any court having jurisdiction to
enforce this arbitration agreement.
BY AGREEING TO THIS BINDING ARBITRATION PROVISION, BOTH THE COMPANY AND
EMPLOYEE GIVE UP ALL RIGHTS TO TRIAL BY JURY, EXCEPT AS EXPRESSLY PROVIDED
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HEREIN.
18. Authority. The Company represents and warrants that the undersigned has
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the authority to act on behalf of the Company and to bind the Company and all
who may claim through it to the terms and conditions of this Agreement. Employee
represents and warrants that he has the capacity to act on his own behalf and on
behalf of all who might claim through him to bind them to the terms and
conditions of this Agreement. Each Party warrants and represents that there are
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no liens or claims of lien or assignments in law or equity or otherwise of or
against any of the claims or causes of action released herein.
19. No Representations. Employee represents that he has had the opportunity
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to consult with an attorney, and has carefully read and understands the scope
and effect of the provisions of this Agreement. Neither party has relied upon
any representations or statements made by the other party hereto which are not
specifically set forth in this Agreement. Employee and the Company understand
that after signing this Agreement, they cannot proceed against any person
mentioned in it with respect to or on account of the matters referred to it. The
parties further covenant not to xxx each other, or to participate or aid in any
suit or proceeding (or to execute, seek to impose, collect or recover upon, or
otherwise enforce or accept any judgment, decision, award, warrant or
attachment) upon any claim released by them under paragraphs 8, 9 and 10 above.
20. Severability. In the event that any provision hereof becomes or is
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declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
21. Entire Agreement. This Agreement (and the Independent Contractor
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agreement attached hereto) represents the entire agreement and understanding
between the Company and Employee and the complete, final and exclusive
embodiment of their agreements concerning Employee's separation from the
Company, and supersedes and replaces any and all prior and contemporaneous
agreements, representations and understandings concerning Employee's
relationship with the Company and his compensation by the Company, except for
the Confidentiality Agreement, the Independent Contractor Agreement and the
Company's 2000 Stock Incentive Plan referenced herein. This Agreement is
executed without reliance on any promise, warranty or representations by any
party or any representative of any party other than those expressly contained in
this Agreement. Notwithstanding the provisions of California Evidence Code
Section 1152.5, this Agreement is admissible for purposes of enforcement.
22. No Oral Modification. This Agreement may not be altered, amended,
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modified or otherwise changed in any respect or particular except by a writing
signed by Employee and one of the Company's executive officers. Any such
writing, which shall specifically refer to this Agreement, must be ratified by
the Board of Directors.
23. Governing Law. This Agreement shall be governed by the laws of the
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State of California.
24. Effective Date. The Effective Date of this Agreement is eight business
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days after it has been signed by both Parties provided that Employee has not
revoked the Agreement pursuant to Section 9 hereof.
25. Execution and Revocation Periods. Employee has twenty-one (21) days
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after actual receipt of this Agreement in which to consider and execute this
Agreement. Employee has a period of seven (7) days following the execution of
this Agreement in which to revoke this Agreement. This Agreement will not become
effective or enforceable until the revocation period has expired.
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26. Counterparts. This Agreement may be executed in counterparts, and each
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counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
27. Voluntary Execution of Agreement. This Agreement is executed
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voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
(a) They have read this Agreement;
(b) They have been represented in the preparation, negotiation, and
execution of the Agreement by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;
(c) They know and understand the terms and consequences of this Agreement
and of the releases it contains; and
(d) They are fully aware of the legal and binding effect of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.
VINA TECHNOLOGIES, INC.,
a Delaware corporation
Dated: 8/22/01 By /s/ Xxxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Vice President, Finance and
Chief Financial Officer
XXXXXX X. XXXXX, an individual
Dated: 8/27/01 /s/ Xxxxxx X. Xxxxx
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