SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS
This Separation Agreement and Release (“Agreement”) is entered into between Kelyn Brannon (“Employee”) and Calix, Inc., a Delaware corporation (collectively with its past and present officers, directors, shareholders, affiliates, successors, assigns, agents, employees and representatives, the “Company”) , effective eight days after Employee’s signature (the “Effective Date”), unless Employee revokes Employee’s acceptance as provided in Paragraph 5(h), below. In consideration of the covenants set forth below and other good and valuable consideration the parties agree as follows:
1. Separation of Employment .
(a) Separation Date . Employee and the Company acknowledge and agree that Employee’s status as an officer and employee of the Company terminated effective March 4, 2011 (“Separation Date”). Employee resigns all positions with the Company and its subsidiaries as of the Separation Date.
(b) Payment of Final Wages . Employee acknowledges and agrees that as of the Separation Date, the Company has paid Employee (1) all salary, bonuses, commissions and variable compensation owed to the Employee through the Separation Date (subject to applicable tax withholding), (2) all accrued but unused vacation and floating days of Employee at Employee’s final rate of pay (subject to applicable tax withholding), and (3) all unreimbursed business expenses incurred and submitted by Employee prior to the Separation Date. The Company will reimburse any remaining expenses upon timely submission by Employee according to Company policy.
(c) SEC Reporting . Employee further acknowledges that to the extent required by the Securities Exchange Act of 1934, as amended, Employee will have continuing obligations under Section 16(a) and 16(b) of such act to report her transactions in Company common stock for six months following the termination of Employee’s status as an officer of the Company (it being agreed Employee shall be solely responsible for such forms). Employee shall be released from the Company’s Insider Trading Compliance Program effective on the Separation Date, in reliance on Employee’s representation that she does not presently possess material non-public information regarding the Company.
2. Severance Benefits . In consideration for the release of claims set forth below and other obligations under this Agreement, and provided this Agreement is signed by Employee and not revoked under paragraph 5(h) below, the Company agrees to provide the following severance benefits to Employee. Employee acknowledges and agrees that the severance benefits set forth in this Section 2 include all severance benefits payable to Employee under the Calix,
Page 1 of 9
Inc. Executive Change in Control and Severance Plan, effective July 20, 2010 (“Plan”), and no additional benefits will be payable under the Plan, any other agreement with or plan or arrangement of the Company or otherwise, except as set forth in this Section 2.
(a) The Company will pay Employee a lump sum cash payment in the amount of: $285,000, which is equal to the sum of 12 months of Employee’s base salary as in effect as of the Separation Date; plus $141,200, which is equal to the sum of Employee’s 2010 target bonus opportunity; plus $142,500, which is equal to the sum of Employee’s 2011 target bonus opportunity.
(b) As of the Effective Date, each outstanding equity award that Employee holds as of the Separation Date will vest and, if applicable, become exercisable to the same extent such equity award would have vested had Employee continued to remain employed by the Company for 12 months after the Separation Date. Each vested option to purchase Company common stock held by Employee will remain exercisable in accordance with the agreement evidencing such option; and
(c) Subject to the requirements of the Internal Revenue Code of 1986, as amended, the Company will pay, or, at its election, reimburse Employee for, premiums for health insurance coverage to the same extent it paid health insurance premiums on Employee’s behalf as of immediately prior the Separation Date, if Employee elects to continue health insurance pursuant to the Consolidated Omnibus Budget Reconciliation Act (“ COBRA ”) (this health coverage is generally referred to as “ Company-Paid Premiums ”). Company-Paid Premiums will continue for 12 months; provided, however, that the Company-Paid Premiums will terminate earlier if Employee cancels the underlying coverage or such coverage otherwise ends sooner because Employee become eligible for and elect health coverage with another employer. If Employee’s Company-Paid Premiums included dependents immediately prior to the Separation Date, the Company will continue to pay for the premiums of such dependents after the Separation Date to the same extent, and for the same duration, as are paid by the Company for Employee unless Employee elects otherwise.
(d) The severance payments set forth in Section 2(a) shall be paid on the Company’s first regular payroll date after the Effective Date.
(e) Employee understands and agrees that all payments under this Agreement will be subject to appropriate tax withholding as and to the extent required by law. To the extent any taxes may be payable by Employee for the benefits provided to Employee by this Agreement beyond those withheld by the Company, Employee agrees to pay those amounts and to indemnify and hold the Company and the other released entities harmless for any tax claims or penalties, and associated attorneys’ fees and costs, resulting from any failure by Employee to make required payments.
3. Release of Claims . In consideration for the obligations of the Company set forth in this Agreement, Employee, on behalf of Employee and Employee’s heirs, executors, administrators and assigns, fully and forever releases the Company and its current and former officers, directors, employees, investors, stockholders, administrators, attorneys, predecessor and successor corporations and assigns (“Releasees”), of and from any claim, duty, obligation or
Page 2 of 9
cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess arising from any omissions, acts or facts that have occurred up until and including the date of this Agreement including, without limitation:
(a) any and all claims relating to or arising from Employee’s employment relationship with the Company and the termination of that relationship, including but not limited to any claims for wages, salary, bonus, compensation, deferred compensation, or other cash payments;
(b) any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of shares of the capital stock of the Company;
(c) any and all claims for wrongful discharge of employment; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; negligence; defamation; personal injury, or any claims arising out of any other agreement, incident or relationship between the parties prior to the execution of this Agreement; and
(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 Equal Pay Act, the False Claims Act, the Worker Adjustment and Retraining Notification Act, the Fair Labor Standards Act, the Sarbanes-Oxley Act of 2002, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the California Fair Employment and Housing Act, the California Labor Code, the Rehabilitation Act of 1973, California Family Rights Act, California Business & Professions Code Section 17200, Executive Order 11126, Title 42 of the United States Code, the Employee Retirement Income Security Act of 1974, and any family and medical leave acts.
(e) Employee does not release the following claims:
(i) claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law;
(ii) claims for workers’ compensation insurance benefits under the terms of any worker’s compensation insurance policy or fund of the Company;
(iii) claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of COBRA;
(iv) claims to any benefit entitlements vested as the date of Employee’s employment termination, pursuant to written terms of any Company employee benefit plan;
(v) claims for indemnification under California Labor Code Section 2802, the Company’s Certificate of Incorporation, the Company’s Bylaws, Delaware General Corporation Law or other applicable law, and under the terms of any policy of insurance purchased by the Company; and
Page 3 of 9
(vi) Employee’s right to bring to the attention of the Equal Employment Opportunity Commission claims of discrimination; provided, however, that Employee does release Employee’s right to secure any damages for alleged discriminatory treatment.
(f) Employee agrees that the release set forth in this Section 3 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 or specified under this Agreement.
4. Civil Code Section 1542 . Employee represents that Employee is not aware of any claim by Employee other than the claims that are released by this Agreement. Employee acknowledges that Employee has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITO