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EXHIBIT 10.1
SEVERANCE AGREEMENT AND GENERAL RELEASE
This Severance Agreement and General Release (the "Agreement") is entered
into between Xxxx Xxxxxx ("Employee") and Next Level Communications, Inc. ("Next
Level" or the "Company") as of December 4, 2000.
WHEREAS, by mutual agreement Employee's employment as Chief Executive
Officer and President terminated effective as of December 4, 2000.
WHEREAS, it is the desire of the parties for Employee to continue to
serve as Chairman of the Company's Board of Directors until March 31, 2001.
NOW, THEREFORE, for and in consideration of the mutual promises and
undertakings herein set forth, the parties agree:
1. SEVERANCE OF EMPLOYMENT
(a) Employee's employment with the Company ceased as of the close of
business on December 4, 2000 (the "Termination Date"). Employee shall continue
to serve as the Chairman of the Company's Board of Directors (the "Board") until
March 31, 2001 or such earlier time as determined by the Board, and Employee
shall be paid a fee of $10,000 per month for such services during any such
partial or full month.
(b) Through December 4, 2003, the Company will pay for Employee's health,
dental and vision coverage that is substantially similar to the coverage
currently provided to Employee. Except as otherwise set forth in this Agreement
or pursuant to the terms of the Company's employee benefit plans in which
Employee currently participates, Employee will not be entitled to any other
employee benefits after December 4, 2000.
(c) The stock option agreements related to Employee's Next Level stock
options shall be amended and restated as of the date hereof in the form attached
as Exhibit A to this Agreement.
(d) The Company and Employee acknowledge and reaffirm the terms of
Employee's stock option grants dated January 10, 1997 and November 3, 1997, as
set forth in the stock option grant notices and stock option agreements attached
hereto as Exhibit B.
(e) On or before February 15, 2001, Employee will receive payment of his
2000 bonus under the Company's Annual Incentive Plan as if he had remained an
employee of the Company through the time of such payment.
(f) The Company agrees to defend and indemnify Employee against any and
all claims or causes of action of any type asserted against him arising from any
alleged actions or omissions on his part in the course and scope of his service
to the Company as an officer, director or employee to the same extent he was so
entitled on the Termination Date and to the extent permitted under Delaware law.
In addition, for a period of six years from the date that Employee is no longer
an officer or director of the Company (the "Coverage Period"), the Company shall
include Employee as a named insured on any and all directors and officers
liability insurance policies maintained by the Company sufficient to provide
coverage to him for any acts or omissions on his part during his service to the
Company as an officer or director (the
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"Coverage"). During the Coverage Period, the Company shall provide Employee with
documentation sufficient to verify the Coverage, at a minimum, within thirty
(30) days after he ceases to be a director of the Company, on or before January
31 of each calendar year during the Coverage Period, and within thirty (30) days
after any change in insurance carrier providing the Coverage.
2. ADDITIONAL COVENANTS
Employee acknowledges and reaffirms his obligations to the Company
pursuant to his Proprietary Information and Inventions Agreement, a copy of
which is attached hereto as Exhibit C.
3. GENERAL RELEASE
Except for the rights and obligations created by this Agreement, Employee
hereby releases, acquits and forever discharges Next Level and its subsidiary
corporations and/or successors, assigns, partners, employees, agents, officers,
trustees, stockholders, attorneys and insurers ("Releasees") from any claims,
expenses, debts, demands, costs, contracts, liabilities, obligations, actions
and causes of action of every nature, whether known or unknown, whether in law
or in equity, which he had or has or may claim to have by reason of any and all
matters from the beginning of time to the date he signs this Agreement,
including, but not limited to, claims for wrongful termination, breach of
contract, breach of the implied covenant of good faith and fair dealing, fraud,
misrepresentation, intentional and negligent infliction of emotional distress,
reimbursement of employee expenses, reimbursement of medical expenditures,
violation of civil rights, defamation, conspiracy, claims for severance pay,
claims for workers' compensation benefits, claims under the Labor Code of the
State of California, claims under the federal Wage and Hours laws and claims for
discrimination based on race, color, national origin, sex, religion, sexual
preference, marital status, medical condition, age and/or disability, under
federal and state law. Employee also releases and discharges any and all claims,
rights and/or remedies under the Age Discrimination in Employment Act of 1967,
as amended, the Employee Retirement Income Security Act of 1974, as amended, and
any other federal, state or local statute or regulation which relates to his
employment or its termination. Employee agrees to file no suit or other action
alleging any such claim, demand or cause of action. Employee acknowledges that
he has been advised to seek advice of legal counsel before signing this
Agreement. Employee acknowledges that he has been advised to seek advice of
legal counsel before signing this Agreement, that he has had at least twenty-one
(21) days to review and consider it and that he understands he can rescind this
Agreement within seven (7) days of signing it.
Employee acknowledges familiarity and understanding of section 1542 of
the California Civil Code, 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.
To the extent that section 1542 or any similar law or statute may
otherwise apply to the foregoing release, Employee hereby waives and
relinquishes as to all matters released hereunder all rights and benefits that
he has, or may have, under Section 1542 of the California Civil Code, or under
the laws of California or any other jurisdiction to the same or similar effect.
4. EMPLOYEE'S SPECIFIC RELEASE
Employee acknowledges that he is entitled to no salary, wages, bonuses,
commissions, accrued vacation pay, insurance or other compensation from any
Releasee except as specifically set forth herein.
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5. NO CLAIMS AGAINST EMPLOYEE
Next Level represents that as of the date this Agreement is signed on its behalf
the Company is not aware of any facts that would give rise to any claim or cause
of action of any type Next Level might have against Employee.
6. COVENANT NOT TO COMPETE
During the period commencing on December 4, 2000 and ending on the date
that is one (1) year from the Termination Date (the "Non-Competition Period"),
Employee shall not, unless acting in accordance with the Company's prior written
consent (which consent may be withheld in the Company's sole and absolute
discretion), be engaged as a director, officer, employer, employee or partner
with any business or organization engaged in developing or marketing switched
digital broadband access products (the "Business") in any area in which the
Business is conducted.
7. NON-SOLICITATION/NON-DISPARAGEMENT
Employee agrees that he will not, and will use reasonable efforts to
ensure that his attorneys, agents or other representatives do not, take any
action or make or publish any statement, whether oral or written, which
disparages in any way, directly or indirectly, the Company or any employees,
principals, directors or affiliates of the Company. The Company agrees that its
officers and directors will not take any action or make or publish any
statement, whether oral or written, which disparages in any way, directly or
indirectly, the Employee in his business or personal reputation.
8. BREACH BY EMPLOYEE
In the event of a breach by Employee of any of the provisions of this
Agreement, the Company's obligation to disburse all compensation payments and
benefits otherwise payable to Employee shall cease. The existence (or not) of
any such breach shall be determined by binding arbitration, conducted by a
single arbitrator, administered by Judicial Arbitration and Mediation Services
("JAMS") pursuant to the applicable JAMS arbitration rules. The Company shall
not terminate any compensation or benefits to Employee under this Agreement
pending the outcome of such arbitration.
9. DEATH
In the event of Employee's death before March 31, 2001, his estate (or
designated beneficiary by will or other testamentary instrument) shall receive
the unpaid portion of his compensation in accordance with the terms of this
Agreement, including but not limited to the fees stated in paragraph 1(a) above
through March 31, 2000; provided, however, that Employee's estate and/or other
beneficiary shall only be entitled to exercise Employee's stock options to the
extent vested as of the date of his death, and then only pursuant to the terms
and conditions of the applicable stock option grants and the stock option
agreements as described in paragraphs 1(c) and 1(d) above.
10. WITHHOLDING
Any amounts payable under this Agreement shall be subject to any
applicable state, federal or local income and employment tax withholding
obligations.
11. SUCCESSORS
This Agreement shall be binding on Employee and the Company as well as
their respective successors and assigns.
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12. PARTIES' FULL UNDERSTANDING
Each party represents and warrants that it has had the opportunity to
discuss this agreement with the party's attorney, that each party has carefully
read and understands each provision hereof and that each party is entering into
this Agreement voluntarily.
13. SOLE AGREEMENT
This Agreement is the only, sole, entire and complete agreement of the
parties relating in any way to the subject matter hereof. No statements,
promises or representations have been made by any party to any other, or relied
upon, and no consideration has been offered, promised, expected or held out
other than as expressly provided herein.
14. CONSTRUCTION
The language of all parts of this Agreement shall in all cases be
construed as a whole, according to its fair meaning, and not strictly for or
against either party. The headings of each paragraph are for convenience only
and are not part of the Agreement. This agreement may be amended only in a
writing signed by the parties hereto.
15. APPLICABLE LAW
This Agreement shall be governed by and interpreted and construed in
accordance with the laws of the State of California applicable to contracts
entered into and to be performed wholly within California by California
residents. If any provision of this Agreement shall, for any reason, be adjudged
by any court of competent jurisdiction to be invalid or unenforceable, in whole
or in part, such judgment shall not affect, impair or invalidate the remainder
of the Agreement.
16. COUNTERPARTS
This Agreement may be executed and delivered in two or more counterparts
each of which when so executed and delivered shall be the original, but such
counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this instrument on the
dates indicated below.
Xxxx Xxxxxx Next Level Communications, Inc.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Zar
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Dated: December 4, 2000 Title: Chief Administrative Officer
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Dated: December 4, 2000
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