Exhibit 10.1
SEPARATION AGREEMENT AND MUTUAL
RELEASES
This Separation Agreement and Mutual
Releases (“Agreement”) is made by and between Michael
Ricci (“Employee”) and Ikanos Communications, Inc. (the
“Company”) (collectively referred to as the
“Parties” or individually referred to as a
“Party”).
WHEREAS, Employee was employed by
the Company as President and Chief Executive Officer and continues
to serve as a member of the Board of Directors;
WHEREAS, the Company and Employee
entered into an offer letter on May 1, 2007 (the “Offer
Letter”), which was amended by the Company’s Board of
Directors on June 12, 2008 (the
“Amendment”);
WHEREAS, Employee signed an
Employment, Confidential Information, Invention Assignment and
Arbitration Agreement with the Company (the “Confidentiality
Agreement”);
WHEREAS, the Company and Employee
have entered into Stock Option Agreements, granting Employee the
option to purchase shares of the Company’s common stock
subject to the terms and conditions of the Company’s 1999
Stock Plan and the Stock Option Agreements, and the Company and
Employee have entered into Restricted Stock Unit Agreements,
granting Employee restricted stock units payable in shares of the
Company’s common stock subject to the terms and conditions of
the Company’s 1999 Stock Plan and the Restricted Stock Unit
Agreements (collectively the “Stock
Agreements”);
WHEREAS, Employee’s employment
with the Company ceased effective close of business on
July 25, 2008 (the “Separation Date”);
and
WHEREAS, the Parties wish to resolve
any and all disputes, claims, complaints, grievances, charges,
actions, petitions, and demands, except as provided below, that
each may have against the other and any of the Releasees as defined
below, including, but not limited to, any and all claims arising
out of or in any way related to Employee’s employment,
membership on the Board of Directors and/or separation from the
Company;
NOW, THEREFORE, in consideration of
the mutual promises made herein, the Company and Employee hereby
agree as follows:
1. Consideration .
a. Already Accrued/ Due
Obligations . Whether or not Employee signs this Agreement, the
Parties recognize that Employee is already entitled to (and the
Company agrees to timely provide, as agreed is legally required)
all Company benefits (of any and all kinds), Company equity (in all
forms), and reimbursement of business expenses, all in accordance
with the terms of the applicable pre-existing Company plans and
agreements (except as modified by the Agreement), that have been
earned or accrued up to and including the Separation Date (or later
if allowed and/or required by the underlying Company plan(s),
policy(ies) or pre-existing agreement(s)).
b. Termination Basis . The
Company confirms that there was no “Cause” basis (as
defined in the Offer Letter) for his termination which it agrees
was due to a change in the Board’s strategic vision for the
Company and its belief that new skills to accomplish that vision
were needed.
c. Contractual Payment . The
Company agrees to pay Employee a lump sum equivalent to one year of
Employee’s base salary, for a total of three hundred ninety
thousand dollars ($390,000) Dollars, less applicable withholding.
This payment will be made to Employee within five (5) business
days after the Effective Date of this Agreement.
d. Additional Payments . In
consideration for Employee’s agreement to the release below
and to resign from the Board per its request; the Company agrees to
provide the following to the designated recipients at their
respective addresses for full physical receipt within five
(5) calendar days of the Effective Date:
i. The Company agrees to pay
Employee a lump sum one hundred seventy thousand dollars
($170,000), without any withholding. This payment will be made to
Employee within ten (10) business days after the Effective
Date of this Agreement. Employee understands and acknowledges that
the Company shall issue to him a Form 1099 in connection with said
payment.
ii. A second payment made payable
jointly to Pierce & Shearer LLP and Youngman,
Ericsson & Low, LLP in the actual amount of
twenty-five thousand dollars ($25,000). The Company
will timely and accurately issue to the Firms (Tax
I.D. #94-3410633 and #68-0129084, respectively) an IRS Form
1099 Misc. reflecting the payment toward the total actual cost
of Employee’s professionals’ work to help effectuate
this Agreement with the Company and its professional
advisors.
e. Acceleration of Vesting .
The Company agrees to immediately accelerate the vesting of all of
Employee’s outstanding equity awards (e.g. stock options and
restricted stock units), resulting in full vesting of all option
grants and restricted stock units resulting in Employee holding:
(a) fully vested options to purchase both 300,000 common
shares of the Company at $7.04 per share, and 125,000 common shares
of the Company at $3.57 per share; and (b) 37,500 fully-vested
restricted stock units. The exercise of Employee’s vested
options and the payment of Employee’s vested restricted stock
units shall continue to be governed by the terms and conditions of
the Company’s Stock Agreements, provided, however that
Employee shall have nine (9) months from the Separation Date
to exercise all vested options.
f. Electronic Devices .
Employee will receive free and clear title and ownership of both
the Company laptop computer, Blackberry and all associated
peripherals of both that Employee has been most recently using in
Employee’s Company work. Employee shall return his laptop and
Blackberry no later than the five business days following the
Effective Date and the Company shall have the right to remove all
Company-related files from such devices before delivering them back
to Employee within five business days following their receipt from
Employee.
g. COBRA . The Company shall
reimburse Employee for the payments Employee makes for
health-related coverage for himself and all his eligible dependents
under the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended (“COBRA”) at the level in effect at the time
of the Separation Date for a period of twelve (12) months
following such date, or until Employee and his eligible dependents
become eligible for substantially similar group health insurance
coverage, whichever occurs first, provided Employee timely elects
and pays for such COBRA coverage. COBRA reimbursements shall be
made by the Company to Employee consistent with the Company’s
normal expense reimbursement policy for such, provided that
Employee submits documentation to the Company substantiating his
payments for COBRA coverage.
2. Benefits .
Employee’s and his participating dependents’ health
insurance benefits shall cease on July 31, 2008, subject to
Employee’s and his dependents’ right to continue their
health insurance under COBRA. Except as otherwise stated in this
Agreement, Employee’s participation in all benefits and
incidents of employment, including, but not limited to, vesting in
stock options, and the accrual of bonuses, vacation, and paid time
off, ceased as of the Separation Date.
3. Payment of Salary and Receipt
of All Benefits . Employee acknowledges and represents that,
other than the consideration set forth in this Paragraph 1 of this
agreement Agreement, the Company has timely paid or provided all
salary, wages, bonuses, accrued vacation/paid time off, premiums,
leaves, housing allowances, relocation costs, interest, severance,
outplacement costs, fees, reimbursable expenses, commissions,
stock, stock options, vesting, and any and all other benefits and
compensation due to Employee.
4. Resignation from All Remaining
Positions . At the request of the Board of Directors (the
“Board”) and in partial consideration for the
Company’s commitment in this Agreement, Employee hereby
resigns from the Board of Directors of the Company and from any
other board positions with the Company, if any, that he currently
holds with the Company or any of its subsidiaries as of the
Effective Date.
5. Mutual Release of Claims .
Employee agrees that the foregoing consideration (timely payment/
providing of all of which to him being a condition precedent for
such) and other terms to his benefit in this Agreement, represents
settlement in full of all outstanding obligations owed to Employee
by the Company and its current and former officers, directors,
employees, agents, investors, attorneys, shareholders,
administrators, affiliates, benefit plans, plan administrators,
insurers, trustees, divisions, and subsidiaries, and predecessor
and successor corporations and assigns (collectively, the
“Company Releasees”). Employee, on his own behalf and
on behalf of his respective heirs, family members, executors,
agents, and assigns, hereby and forever releases the Releasees
from, and agrees not to sue concerning, or in any manner to
institute, prosecute, or pursue, 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 Employee may possess against any of the Releasees arising from
any omissions, acts, facts, or damages that have occurred up until
and including the Effective Date of this Agreement, including,
without limitation:
a. any and all such claims relating
to or arising from Employee’s employment relationship with
the Company and the termination of that relationship;
b. any and all such 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 such claims for
wrongful discharge of employment; termination in violation of
public policy; discrimination; harassment; retaliation; breach of
contract, both express and implied; breach of covenant of good
faith and fair dealing, both express and implied; promissory
estoppel; negligent or intentional infliction of emotional
distress; fraud; 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; conversion; and disability
benefits;
d. any and all such 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 Rehabilitation Act of 1973; the
Americans with Disabilities Act of 1990; the Equal Pay Act; the
Fair Labor Standards Act, except as prohibited by law; the Fair
Credit Reporting Act; the Age Discrimination in Employment Act of
1967; the Older Workers Benefit Protection Act; the Employee
Retirement Income Security Act of 1974; the Worker Adjustment and
Retraining Notification Act; the Family and Medical Leave Act,
except as prohibited by law; the Sarbanes-Oxley Act of 2002; the
California Family Rights Act; the California Labor Code, except as
prohibited by law; the California Workers’ Compensation Act,
except as prohibited by law; and the California Fair Employment and
Housing Act;
e. any and all such claims for
violation of the federal or any state constitution;
f. any and all such claims arising
out of any other laws and regulations relating to employment or
employment discrimination;
g. any such claim for any loss,
cost, damage, or expense arising out of any dispute over the
nonwithholding or other tax treatment of any of the proceeds
received by Employee as a result of this Agreement; and
h. any claims for attorneys’
fees and costs (except as detailed in Paragraph 1(d)
above).
The Company agrees to and does
hereby generally release and forever discharge Employee and his
heirs, family members, executors, agents, attorneys, successors and
assigns (collectively, the “Employee Releasees”) from
any claim, duty, obligation or cause of action relating to any
matter of any kind that the Company may possess against Employee
arising from any omissions, acts or facts and agrees not to sue
concerning any such claim, duty, obligation or cause of action
relating to any matters of any kind, whether present
