EXHIBIT 10.4
SEVERANCE AGREEMENT AND RELEASE
RECITALS
This Separation Agreement and Release (the "Agreement") is made by and
between Netgear, Inc. (the "Company") and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Executive").
WHEREAS, Executive was employed by the Company;
WHEREAS, Executive and the Company entered into an Employment Agreement on
November 14, 2003;
WHEREAS, Executive signed the Company's Employee Invention Assignment and
Proprietary Information Agreement (the "Proprietary Information Agreement");
WHEREAS, the Company granted Executive options to purchase shares of the
Company's common stock (the "Options") subject to the terms and conditions of
the Company's 2003 Stock Plan (the "Plan") and related stock option agreement
covering such Options (the Plan and stock option agreement, including any
exhibits thereto, shall be referred to as the "Stock Agreement");
WHEREAS, Executive's employment with the Company terminated on October 29,
2004 (the "Termination Date");
WHEREAS, the Parties wish to resolve any and all disputes, claims,
complaints, grievances, charges, actions, petitions and demands that the
Executive may have against the Company as defined herein, including, but not
limited to, any and all claims arising out of, or related to, Executive's
employment with, or separation from, the Company;
NOW THEREFORE, in consideration of the promises made herein, the Parties
hereby agree as follows:
COVENANTS
1. Consideration.
(a) (i) Cash. The Company shall pay Executive twenty-six (26) weeks
of his current base salary in the total amount of Ninety-Five Thousand Dollars
only ($95,000.00), less applicable withholdings (the "Severance Payments").
These Severance Payments will be made to Executive in installments on a
semi-monthly basis in accordance with the Company's regular payroll practices.
The first installment payment will be made on the first regular pay date
following the Effective Date of this Agreement.
(ii) Termination of Severance Payments. Executive acknowledges
and agrees that should he accept employment with any of the following of the
Company's competitors, his severance payments shall cease immediately: (1)
Linksys Group, (2) Dlink Systems, Inc., (3) Dell Computer Corporation,
Networking Division, (4) 3Com Corporation, (5) Hewlett Packard Company,
Networking Division, and (6) Cisco Systems, Inc. Executive agrees that if he
accepts an offer of employment from any of the above referenced companies within
six (6) months following the Effective Date of this Agreement, he shall notify
the Company not later than 48 hours following his acceptance of any such
employment offer, whether written or oral.
(b) Stock. Executive shall continue to vest under the Stock Agreement
until April 30, 2005 (the "Termination of Vesting Date"). Executive shall be
eligible to exercise any vested options until July 29, 2005, which is ninety
(90) days following the Termination of Vesting Date.
(c) COBRA. Executive's health insurance benefits will cease at the
end of October 2004, subject to Executive's right to continue his health
insurance under COBRA. The Company shall reimburse Executive for the payments he
makes for COBRA coverage for a period of six (6) months beginning on November 1,
2004 and concluding on April 30, 2005. The Company shall make these COBRA
reimbursement payments to Executive within ten (10) days following his provision
to the Company of documentation substantiating his payments for COBRA coverage.
Executive's participation in all other benefits and incidents of employment
(including, but not limited to, vacation and paid time off) ceased on the
Termination Date.
2. Confidential Information. Executive shall continue to comply with the
terms and conditions of the Proprietary Information Agreement, and maintain the
confidentiality of all of the Company's confidential and proprietary
information. Executive shall also return to the Company all of the Company's
property and confidential and proprietary information by the Effective Date of
this Agreement.
3. Payment of Salary. Executive acknowledges and represents that the
Company has paid all salary, wages, bonuses, accrued vacation, housing
allowances, relocation costs, interest, severance, outplacement costs, fees,
stock, stock options, vesting, commissions and any and all other benefits and
compensation due to Executive.
4. Release of Claims. Executive agrees that the consideration provided in
this Agreement represents settlement in full of all outstanding obligations owed
to Executive by the Company and its current and former officers, directors,
employees, agents, investors, attorneys, shareholders, administrators,
affiliates, divisions, subsidiaries, and predecessor and successor corporations
and assigns (collectively the "Releasees"). Executive hereby and forever
releases the Releasees from any claim, complaint, charge, duty, obligation or
cause of action relating to any matters of any kind, whether presently known or
unknown, suspected or unsuspected, that Executive may possess against any of the
Releasees arising from any omissions, acts or facts that have occurred until and
including the Effective Date of this Agreement, including, without limitation:
(a) any and all claims relating to or arising from Executive's
employment with the Company, or the termination of that employment;
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(b) any and all claims relating to, or arising from, Executive's
right to purchase, or actual purchase of, shares of Company stock, including,
but not limited to, 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 under the law of any jurisdiction, including,
but not limited to, wrongful discharge of employment; constructive discharge
from 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 the California Labor
Code;
(e) any and all claims for violation of the federal, or any state,
constitution;
(f) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination;
(g) any claim for any loss, cost, damage, or expense arising out of
any dispute over the non-withholding or other tax treatment of any of the
proceeds received by Executive as a result of this Agreement; and
(h) any and all claims for attorney fees and costs.
The Company and Executive agree 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. This release does not extend to any obligations
incurred under this Agreement.
5. Acknowledgement of Waiver of Claims Under ADEA. Executive acknowledges
that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Executive and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
the ADEA after the Effective Date of this Agreement. Executive acknowledges that
the consideration given for this waiver and release Agreement is in addition to
anything of value to which Executive was already entitled. Executive further
acknowledges that he has been advised by this writing that:
(a) he should consult with an attorney prior to executing this
Agreement;
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(b) he has up to twenty-one (21) days within which to consider this
Agreement;
(c) he has seven (7) days following his execution of this Agreement
to revoke this Agreement;
(d) this ADEA waiver shall not be effective until the revocation
period has expired; and,
(e) nothing in this Agreement prevents or precludes Executive from
challenging or seeking a determination in good faith of the validity of this
waiver under the ADEA, nor does it impose any condition precedent, penalties or
costs for doing so, unless specifically authorized by federal law.
6. Civil Code Section 1542. Executive represents that he is not aware of
any claims against any of the Releasees. Executive acknowledges that he has been
advised to consult with legal counsel and is familiar with the provisions of
California Civil Code Section 1542, which provide 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.
Executive, being aware of this code section, agrees to expressly waive any
rights he may have thereunder, as well as under any other statute or common law
principles of similar effect.
7. No Pending or Future Lawsuits. Executive represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Executive also represents that he does not intend to bring any claims on
his own behalf or on behalf of any other person or entity against the Company or
any other person or entity referred to herein.
8. Application for Employment. Executive understands and agrees that, as
a condition of this Agreement, he shall not be entitled to any employment with
the Company, its subsidiaries, or any successor, and he hereby waives any
alleged right of employment or re-employment with the Company, its subsidiaries
or related companies, or any successor.
9. Confidentiality. Executive agrees to maintain in complete confidence
the existence of this Agreement, the contents and terms of this Agreement and
the consideration for this Agreement (hereinafter collectively referred to as
"Separation Information"). Except as required by law, Executive may disclose
Separation Information only to his immediate family members, the Court in any
proceedings to enforce the terms of this Agreement, Executive's counsel, his
accountant and any professional tax advisor to the extent that they need to know
the Separation Information in order to provide advice on tax treatment or to
prepare tax returns, and must prevent disclosure of any Separation Information
to all other third parties. Executive agrees that he will not publicize,
directly or indirectly, any Separation Information.
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10. No Cooperation. Executive agrees that he will not knowingly 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
party against any of the Releasees, unless under a subpoena or other court order
to do so. Executive agrees both to immediately notify the Company upon receipt
of any such subpoena or court order, and to furnish, within three (3) business
days of its receipt, a copy of such subpoena or court order to the Company. If
approached by anyone for counsel or assistance in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints against any of the Releasees, Executive shall state no more than that
he cannot provide counsel or assistance.
11. Breach. Executive acknowledges and agrees that any breach of Section 4
("Release of Claims"), Section 6 ("Civil Code Section 1542"), or Section 9 ("No
Cooperation") by Executive shall constitute a material breach of the Agreement
and shall entitle the Company immediately to recover the severance payments and
benefits provided in Section 1 hereof. This provision is not intended to render,
and does not render, any other breach of this Agreement immaterial.
12. Non-Disparagement. Executive agrees to refrain from any defamation,
libel or slander of the Company, or tortious interference with the contracts and
relationships of the Company. All inquiries by potential future employers of
Executive will be directed to the Human Resource Department. Upon inquiry, the
Company will only state the following: Executive's last position and dates of
Employment, and any other information and/or documentation legally required to
be disclosed.
13. Non-Solicitation. Executive agrees that for a period of twelve (12)
months immediately following the Effective Date of this Agreement, Executive
shall not directly or indirectly solicit, induce, recruit or encourage any of
the Company's employees to leave their employment. Executive also agrees not to
recruit or hire the Company's employees to work for Executive or any other
person or entity.
14. No Admission of Liability. The Parties understand and acknowledge that
this Agreement constitutes a compromise and settlement of disputed claims. No
action taken by the Parties, previously or in connection with this Agreement,
shall be construed to be: (a) an admission of the truth or falsity of any claims
made, or (b) an admission by either party of any fault or liability whatsoever
to the other party or to any third party.
15. Costs. The Parties shall each bear their own costs, expert fees,
attorney fees and other fees incurred in connection with this Agreement.
16. Arbitration. The Parties agree that any and all disputes arising out
of, or relating to, the terms of this Agreement, their interpretation, and any
of the matters herein released, shall be subject to binding arbitration in Santa
▇▇▇▇▇ County before the American Arbitration Association under its National
Rules for the Resolution of Employment Disputes. The Parties agree that the
prevailing party in any arbitration shall be entitled to injunctive relief in
any court of competent jurisdiction to enforce the arbitration award. The
Parties agree that the prevailing party in any arbitration shall be awarded its
reasonable attorney fees and COSTS. This section will not prevent either party
from seeking injunctive relief (or any other provisional remedy) from any court
having
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jurisdiction over the Parties and the subject matter of their dispute relating
to Executive's obligations under this Agreement and the agreements incorporated
herein by reference.
17. No Representations. Each party represents that it has had the
opportunity 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.
18. Severability. In the event that any provision in this Agreement
becomes or is 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 so long as the remaining provisions remain intelligible
and continue to reflect the original intent of the Parties.
19. Entire Agreement. This Agreement, the Proprietary Information
Agreement, and the Stock Agreement represent the entire agreement and
understanding between the Company and Executive concerning the subject matter of
this Agreement and Executive's relationship with the Company, and supersede and
replace any and all prior agreements and understandings between the Parties
concerning the subject matter of this Agreement and Executive's relationship
with the Company.
20. No Waiver. The failure of any party to insist upon the performance of
any of the terms and conditions in this Agreement, or the failure to prosecute
any breach of any of the terms and conditions of this Agreement, shall not be
construed as a waiver of such terms or conditions. This entire Agreement shall
remain in full force and effect as if no such forbearance or failure of
performance had occurred.
21. No Oral Modification. Any modification or amendment of this Agreement,
or additional obligation assumed by either party in connection with this
Agreement, shall be effective only if placed in writing and signed by Executive
and the Company's Chief Executive Officer.
22. Governing Law. This Agreement shall be governed by the laws of the
State of California, without regard for choice of law provisions.
23. Effective Date. This Agreement is effective after it has been signed
by both parties and after eight (8) days have passed following the date
Executive signed the Agreement (the "Effective Date").
24. Counterparts. This Agreement may be executed in counterparts, and each
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.
25. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and with the full intent of releasing all claims, and without any
duress or undue influence by any of the Parties. The Parties acknowledge that:
(a) They have read this Agreement;
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(b) They have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;
(c) They 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.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates set
forth below.
Dated: 11/8/04 By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
NETGEAR, Inc.
Dated: 11/3/04 By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual
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