EXHIBIT 10.30
October 9, 2002
Xx. Xxxx Xxxxxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx XX 00000
Dear Xxxx:
This letter agreement (this "Agreement") will confirm the
agreement between you and Focal Communications Corporation, Inc. (together with
its direct and indirect subsidiaries, the "Company"), as follows:
1. SEPARATION FROM THE COMPANY
By signing this Agreement you acknowledge that the termination of
your employment with the Company will be effective on October 9, 2002 (the
"Separation Date"). As of the Separation Date, you will no longer be employed by
the Company and will no longer be required to fulfill any of the duties and
responsibilities associated with your position of employment with the Company.
2. SEVERANCE ARRANGEMENTS
In exchange for your execution of this Agreement, including the
Release in paragraph 3 and the additional agreements in paragraph 4, the Company
agrees to the following:
(a) For a period of twenty-six (26) weeks commencing on the
Separation Date (the "Severance Period"), you will receive your
salary at the same rate of pay as your salary in effect
immediately prior to the Separation Date (I.E., $250,000 per
annum). Such payments, subject to applicable withholding, will be
made on a monthly basis.
(b) During the Severance Period, you will receive the same, if
possible, or comparable medical benefits to those provided to you
by the Company immediately prior to the Separation Date; you will
continue to be responsible for the employee contribution portion.
After the Severance Period, you will be eligible to continue your
medical benefits pursuant to COBRA.
(c) Within ten (10) days after the Separation Date, the Company will
pay to you in cash the amount of $115,384.62, less appropriate
tax withholdings. This amount represents twenty-four (24) weeks
of unused vacation pay.
(d) You may keep the laptop provided to you by the Company.
(e) You will be retained by the Company as an outside consultant for
a minimum six month term commencing on the Separation Date, or
such longer term as may be mutually agreed. During the period in
which you are retained as a consultant:
(i) you will provide to the Company and its Chief Executive
Officer up to 30 hours per calendar month (or such
greater number of hours as is requested by the Company
and reasonably agreed to by you) of such consulting and
advisory services as the Chief Executive Officer shall
from time to time reasonably direct, subject to your
receipt of reasonable notice concerning the timing for
your consulting responsibilities;
(ii) you will receive a consulting payment of $10,000 per
month, which will cover up to 30 hours of consulting
services in each such calendar month; if the number of
hours of consulting services provided in any month
exceeds 30 hours, such excess hours will be billed and
you will be paid at a rate of $250 per hour; hours worked
in any particular day will be rounded to the next whole
hour and will be recorded and submitted to the Company in
good faith by you; hours do not carry over from one month
to the next;
(iii) you will receive the same, if possible, or comparable
medical benefits to those provided to you by the Company
immediately prior to the Separation Date; you will
continue to be responsible for the employee contribution
portion; and
(iv) you will be provided use of an executive office at
Focal's Chicago headquarters.
Your service as a consultant will terminate upon your death,
resignation, or termination by the Board or the Company's Chief
Executive Officer; PROVIDED that upon any termination by the
Board or the Company's Chief Executive Officer, you will be
entitled to receive the consulting payments and continuation of
benefits described in clauses (ii) and (iii) of the preceding
sentence until the end of the six-month term in which such
termination occurs. Your retention by the Company as a consultant
will be as an independent contractor, and will not give rise to
any employment relationship with the Company.
(g) Promptly after the Separation Date, the Company will reimburse
you for all reasonable out-of-pocket fees and expenses of one
legal counsel to you incurred prior to the date hereof in
connection with the review, negotiation, and execution of this
letter agreement.
(h) You will be eligible for a "Success Fee" of $100,000, contingent
upon the Company's consummation of a capital restructuring,
subject to your assistance in the following areas:
(i) Providing a lead role with WorldCom settlement
discussion;
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(ii) Negotiating with Nortel Networks on compromise of
the take-or-pay equipment purchase contract;
(iii) Assisting in overall network expense reduction
initiative;
(iv) Identifying network savings opportunities through
specific contract negotiations.
Such Success Fee will be payable, if at all, at the conclusion of
any capital restructuring by the Company at the same time that a
similar end-of-process, success-based fee is paid to the
Company's financial restructuring advisor.
All payments and other arrangements under this Section 2 (the
"Severance Arrangements") will be subject to any applicable withholding
obligations of the Company under applicable laws.
Such Severance Arrangements will not be paid or become effective until
this agreement becomes effective and enforceable. You understand and agree that
you will not receive the payments and benefits described in this paragraph 2
unless you execute this Agreement and do not breach this Agreement.
Such Severance Arrangements shall not be considered compensation for
purposes of any employee benefit plan, program, policy or arrangement maintained
or hereafter established by the Company or any of its affiliates. You understand
that the Severance Arrangements made to you represent consideration for signing
this Agreement (including the Release set forth in paragraph 3) and, except for
your earned and unused vacation pay, are salary, wages or benefits in excess of
what you were already entitled. You also acknowledge and represent that, except
for any unpaid salary for pay periods up to the Separation Date and for your
earned and unused vacation pay, you have already received everything to which
you were entitled by virtue of your employment relationship with the Company.
3A. RELEASE BY YOU
(a) You (for yourself, your heirs, assigns or executors) release and
forever discharge the Company, any of its affiliates, and its and
their directors, officers, agents and employees from any and all
claims, suits, demands, causes of action, contracts, covenants,
obligations, debts, costs, expenses, attorneys' fees, liabilities
of whatever kind or nature in law or equity, by statute or
otherwise whether now known or unknown, vested or contingent,
suspected or unsuspected, and whether or not concealed or hidden,
which have existed or may have existed, or which do exist,
through the date this letter agreement becomes effective and
enforceable, ("Claims") of any kind, including those which relate
in any way to your employment with the Company or the termination
of that employment, except for those arising out of the
performance of this letter agreement, your rights under the
employee benefit plans of the Company (including your rights
under COBRA and your 401(k) plan) and your rights to accrued,
unused vacation and sick leave. Such released Claims include,
without in any way limiting the generality of the foregoing
language, any and all allegations, claims, or violations, arising
under: Title VII or the Civil Rights Act of 1964, as amended; the
Civil Rights Act of 1991; the Americans with Disabilities Act of
1990; the Equal Pay Act of 1963, as
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amended; the Family and Medical Leave Act of 1993; the Civil
Rights Act of 1866, as amended; the Worker Adjustment Retraining
and Notification Act, as amended; the Employee Retirement Income
Security Act of 1974, as amended; any applicable Executive Order
Programs; the Fair Labor Standards Act, as amended; or their
state or local counterparts (including the Illinois Human Rights
Act, as amended); or under any other federal, state or local
civil or human rights law; or under any other local, state, or
federal law, regulation or ordinance; or under any public policy,
contract, or tort, or under common law; or arising under any
policies, practices, or procedures of the Company; or arising out
of any contract or agreement with the Company (other than under
this Agreement); or any claim for wrongful discharge, breach of
contract, infliction of emotional distress, or defamation; or any
claim for costs, fees, or other expenses, including attorneys'
fees incurred in these matters; PROVIDED that such released
Claims specifically exclude any claims under the Age
Discrimination in Employment Act of 1967, as amended (including
the Older Workers Benefit Protection Act).
(b) In signing this Release you acknowledge that you intend that it
shall be effective as a bar to each and every one of the Claims
hereinabove mentioned or implied. You expressly consent that this
Release shall be given full force and effect according to each
and all of its express terms and provisions, including those
relating to unknown and unsuspected Claims (notwithstanding any
state statute that expressly limits the effectiveness of a
general release of unknown, unsuspected and unanticipated
Claims), if any, as well as those relating to any other Claims
hereinabove mentioned or implied. You acknowledge and agree that
this waiver is an essential and material term of this Release and
without such waiver the Company would not have made the Severance
Payments described in paragraph 2. You further agree that in the
event you bring your own Claim in which you seek damages against
the Company, or in the event you seek to recover against the
Company in any Claim brought by a governmental agency on your
behalf, this release shall serve as a complete defense to such
Claims. You further agree that you are not aware of any pending
charge or complaint against the Company of the type described in
paragraph 3A(a) as of the execution of this Release.
(c) In signing this Release, you represent that you have made no
assignment or transfer of any right, claim, demand, cause of
action, or other matter covered by paragraph 3A(a) above.
(d) By signing this letter agreement, you acknowledge that you:
(1) have carefully read and fully understand all of the
provisions of this letter agreement, and understand that
you will be giving up important rights (including,
without limitation, rights under the Title VII of the
Civil Rights Act of 1964, as amended; the Equal Pay Act
of 1963; the Americans with Disabilities Act of 1990; and
the Employee Retirement Income Security Act of 1974, as
amended);
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(2) knowingly and voluntarily agree with and consent to all
of the terms set forth in this letter agreement, and
knowingly and voluntarily agree to be legally bound by
this letter agreement; and
(3) have been advised and encouraged by the Company to
consult with an attorney prior to signing this letter
agreement, and you have either done so or, after careful
reading and consideration, have chosen not to of your own
volition.
3B. RELEASE BY THE COMPANY.
(a) The Company for itself its affiliates, and its and their
directors, officers, agents and employees release and forever
discharge you, your heirs, assigns or executors from any and all
claims, suits, demands, causes of action, contracts, covenants,
obligations, debts, costs, expenses, attorneys' fees, liabilities
of whatever kind or nature in law or equity, by statute or
otherwise whether now known or unknown, vested or contingent,
suspected or unsuspected, and whether or not concealed or hidden,
which have existed or may have existed, or which do exist,
through the date this letter agreement becomes effective and
enforceable, ("Claims") of any kind, including those which relate
in any way to your employment with the Company or the termination
of that employment, except for those arising out of the
performance of this letter agreement. Such released Claims
include claims arising under any federal, state or local civil or
law, regulation or ordinance; or under any public policy,
contract, or tort, or under common law; or arising under any
policies, practices, or procedures of the Company; or arising out
of any contract or agreement with the Company (other than under
this Agreement); or any claim for costs, fees, or other expenses,
including attorneys' fees incurred in these matters.
(b) In signing this Release the Company acknowledges that it intends
that it shall be effective as a bar to each and every one of the
Claims hereinabove mentioned or implied. The Company expressly
consents that this Release shall be given full force and effect
according to each and all of its express terms and provisions,
including those relating to unknown and unsuspected Claims
(notwithstanding any state statute that expressly limits the
effectiveness of a general release of unknown, unsuspected and
unanticipated Claims), if any, as well as those relating to any
other Claims hereinabove mentioned or implied. The Company
acknowledges and agrees that this waiver is an essential and
material term of this Release. The Company further agrees that in
the event it brings its own Claim in which it seek damages
against you, or in the event it seeks to recover against you in
any Claim brought by a governmental agency on its behalf, this
release shall serve as a complete defense to such Claims. The
Company further agrees that it is not aware of any pending charge
or complaint against you of the type described in paragraph 3B(a)
as of the execution of this Release.
(c) In signing this Release, the Company represents that its has made
no assignment or transfer of any right, claim, demand, cause of
action, or other matter covered by paragraph 3B(a) above.
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(d) By signing this letter agreement, the Company acknowledges that
it:
(1) has carefully read and fully understand all of the
provisions of this letter agreement, and understands that
it will be giving up important rights;
(2) knowingly and voluntarily agrees with and consents to all
of the terms set forth in this letter agreement, and
knowingly and voluntarily agrees to be legally bound by
this letter agreement; and
(3) has been advised and encouraged by you to consult with an
attorney prior to signing this letter agreement, and it
has either done so or, after careful reading and
consideration, has chosen not to of its own volition.
4. ADDITIONAL AGREEMENTS
(a) You agree not to disparage the Company, or its past and
present investors, officers or employees, and to keep all confidential and
proprietary information about the past or present business affairs of the
Company confidential unless a prior written release from the Company is
obtained, or as such disclosure is required under applicable law (in which case
you will notify the Company in writing in advance of such disclosure). The
Company agrees that it will not disparage you, will upon your request deliver a
positive written reference regarding you for delivery to any future employer or
business relation, and will consult with you and obtain your reasonable approval
in preparing the initial press release or public statement regarding the
termination of your employment.
(b) You agree that you will continue to be bound by the
following provisions of your Executive Stock Agreement and Employment Agreement,
dated as of November 27, 1996 and thereafter amended (your "Employment
Agreement") that survive termination of your employment: Section 4 relating to
restrictions on transfer, Section 5(g) relating to confidentiality, Section 6
relating to ownership of intellectual property, Section 7 relating to
noncompetition and nonsolicitation, Section 8 relating to notices, and Section 9
relating to miscellaneous provisions. Said provisions are attached to and a made
a part of this letter agreement as Exhibit A. In addition, notwithstanding
anything to the contrary in Section 7 of the Employment Agreement, you will
(without the payment of any additional consideration other than as set forth in
this letter Agreement) continue to be bound by the terms of such Section 7
during the Severance Period.
5. CONFIDENTIALITY OF THIS LETTER AGREEMENT
The contents of this letter agreement, including but not limited
to its financial terms, are strictly confidential. By signing this agreement you
agree and represent that you will maintain the confidential nature of the
agreement, except (a) to legal counsel, tax and financial planners, and
immediate family who agree to keep it confidential; (b) as otherwise required by
law, in which case you shall notify the Company in writing in advance of
disclosure; and (c) as necessary to enforce this letter agreement.
The Company agrees that it will keep the contents of this letter
agreement confidential, except (a) to its executive staff and governing bodies,
as necessary or appropriate,
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and to its outside counsel and auditors; (b) as otherwise required by law; and
(c) as necessary to enforce this letter agreement.
6. NO TRANSFER OR ASSIGNMENT
You and the Company agree that no interest or right you have or
any of your beneficiaries has to receive payment or to receive benefits under
this Agreement shall be subject in any manner to sale, transfer, assignment,
pledge, attachment, garnishment, or other alienation or encumbrance of any kind,
except as required by law. Nor may such interest or right to receive payment or
distribution be taken, voluntarily or involuntarily, for the satisfaction of the
obligations or debts of, or other claims against you or your beneficiary,
including for alimony, except to the extent required by law. Notwithstanding the
foregoing, if you die before receiving all of the payments and benefits
described in this agreement, they shall be provided to your widow, if she
survives you, otherwise to your estate.
7. NO ADMISSIONS
This letter agreement shall not be construed as an admission
of any wrongdoing either by the Company, its affiliates, or its and their
directors, officers, agents and employees or by you.
8. NO OTHER AGREEMENT
This letter agreement contains the entire agreement between you
and the Company. No part of this letter agreement may be changed except in
writing, executed by both you and the Company
9. GOVERNING LAW
This letter agreement shall be interpreted in accordance with the
laws of the State of Illinois. Whenever possible, each provision of this letter
agreement shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision shall be held to be prohibited or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating or affecting the remainder
of such provision or any of the remaining provisions of this letter agreement.
10. COUNTERPARTS
This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one
and the same Agreement.
11. INDEMNIFICATION
Prior to and after the Separation Date, the Company agrees to
indemnify, defend, and hold you harmless from and against any and all demands,
actions, claims, suits, liabilities, losses, damages, fees and expenses relating
to any acts or omissions to act in the course or scope of your duties you
performed or perform on behalf of the Company or any of its subsidiaries while
employed by it or while serving as an officer or on its Board, to pay any and
all fees and
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expenses that you may incur in defending against or seeking legal advice
regarding any claim arising in whole or in part out of any such acts or
omissions in advance by the Company prior to final disposition, subject to such
conditions as may be affirmatively prescribed by law, and to provide
indemnification and Directors and Officers liability insurance to you at least
to the same extent that it provides such indemnification and insurance to the
Directors and Officers of the Company. You will have the option to select your
own counsel or be represented by counsel for the Company. Your contractual
rights to indemnification hereunder shall be exclusive of any other rights to
indemnification and advancement of expenses provided under the Certificate of
Incorporation or By-Laws of the Company or any of its subsidiaries, or under
applicable law.
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Please indicate your agreement by signing this letter and returning it
to us.
Very truly yours,
FOCAL COMMUNICATIONS
CORPORATION, INC.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
Accepted and Agreed this _____ day of
________, 2002:
By:
--------------------------------
Xxxx Xxxxxxxx
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