Exhibit 10.32
SEPARATION AGREEMENT
Agreement, dated as of March 22, 2001 by and between Nx Networks, Inc., 13595
Dulles Technology Drive, Herndon, Virginia 20171 ("Nx Networks"), and Gregory
McNulty, 18200 Rose Orchard Court, Morgan Hill, California 95037 (the
"Executive").
BACKGROUND:
The Executive has served as the Executive Vice President of Worldwide
Sales and Marketing for Nx Networks since January 2000. In connection with the
Executive's joining Nx Networks, the Executive and Nx Networks entered into an
Employment Agreement dated as of January 4, 2001 (the "Employment Agreement").
By mutual agreement between the Executive and Nx Networks, the Executive has
agreed to resign as an employee and officer of Nx Networks effective on March
22, 2001 (the "Effective Date"). The Executive's agreement to resign is based
upon terms agreed to between him and Nx Networks that supersede certain
provisions of the Employment Agreement. Accordingly, to memorialize the terms
upon which the Executive has agreed to resign from Nx Networks, and Nx Networks
has agreed to accept such resignation, the parties are entering into this
Agreement.
1. RESIGNATION
Executive hereby resigns as Executive Vice President for Worldwide Sales
and Marketing of Nx Networks as of the close of business on the Effective Date.
2. SEVERANCE PAYMENTS AND BENEFITS
(a) SEVERANCE PAYMENTS. Nx Networks will continue to pay the Executive
his present base salary of $200,000 per year through the Effective Date, in
accordance with Nx Networks' standard semi-monthly payroll practices. On the
Effective Date, Nx Networks will also pay to the Executive the value of his
accrued but unused vacation time.
(b) OPTIONS. Provided that Executive has not exercised his revocation
rights under Section 6, and notwithstanding the terms and conditions of any
stock option agreement between Nx Networks and the Executive to the contrary,
on the Effective Date, all unvested stock options held by the Executive that
would be vested on the Effective Date but for the Executive's election to
participate in the stock option repricing program, shall immediately vest and
shall be exercisable for a period ending on the later of:
o 90 days after the Effective Date;
o 90 days after the date the Executive ceases to be a member of Nx
Networks' Business Advisory Board; or
o March 31, 2002 if the Company removes the Executive from the
Business Advisory Board without cause.
Nx Networks and the Executive agree that on the Effective Date the Executive
will hold vested options to purchase 250,000 shares of Nx Networks' common
stock.
(c) LIMITATION ON STOCK SALES. During the two year period after the
Effective Date, the Executive shall not, without the written consent of Nx
Networks, sell in any calendar month an aggregate amount of shares of Nx
Networks' common stock (whether Executive holds such shares as of the Effective
Date or subsequently acquires them by means of the exercise of options) in
excess of 125,000 shares. The limitations of this Section 2(c) shall terminate,
however, if the average closing price for such common stock exceeds $10 per
share for a 10 trading day period. The Executive also agrees that he will not
sell any Nx Networks securities prior to July 1, 2001.
(d) COMPANY BENEFITS. The Executive shall be entitled to continue to
participate in all medical, health and life insurance plans at the same benefit
level at which he was participating as of the Effective Date until the earlier
of:
o October 30, 2001; or
o the date the Executive accepts employment with another entity.
(e) VESTING AND PAYOUT OF THE 401(K) PLAN. The Executive is vested in a
portion of the Nx Networks matching contribution to his account in the 401(k)
Plan. The Executive may elect either a lump-sum distribution or a direct
rollover of his amounts (including the vested portion of the matching
contributions) under the Nx Networks employee savings incentive plan, in
accordance with the governing plan documents and applicable IRS requirements.
(f) WITHHOLDING OF TAXES. Nx Networks may withhold from any benefits or
compensation payable under this Agreement all federal, state, city or other
taxes as may be required pursuant to any law or governmental regulation or
ruling.
(g) BUSINESS ADVISORY BOARD. The Executive will join the Business Advisory
Board of Nx Networks upon the Effective Date, and he will sign an advisory board
agreement to that effect. The Executive will not be entitled an initial grant of
options upon joining the Business Advisory Board, but as provided in the
agreement he will be entitled to an additional grant of 2,500 options for every
meeting of the Business Advisory Board he attends.
(h) NO OTHER PAYMENTS. Except as specifically provided herein or as
otherwise may be required by law, the Executive shall not be entitled to receive
any other payments, benefits or severance amounts from Nx Networks following the
Effective Date, whether pursuant to the Employment Agreement or otherwise.
3. RETURN OF EQUIPMENT
On or before the Effective Date, the Executive will return to Nx Networks all
equipment, files and other property of Nx Networks (whether tangible or in
electronic format) in the Executive's possession or control.
2
4. CONTINUATION OF CERTAIN PORTIONS OF THE EMPLOYMENT AGREEMENT
Sections 5, 6, 7 and 16 of the Employment Agreement shall remain in full
force and effect from and after the date of this Agreement. It is agreed,
however, for purposes of Section 6 that the "Restricted Period" shall be 12
months.
5. MISCELANEOUS
(a) REMEDY. If the Executive violates or threatens to violate, either
directly or indirectly, any of the acts described in section 2(c) or 4 of this
Agreement, it is agreed that Nx Networks shall have the right to seek and shall
be entitled to full injunctive relief, to be issued by any competent court. The
foregoing remedies shall not be deemed to limit or prevent the exercise by Nx
Networks of any or all further rights and remedies that may be available to Nx
Networks hereunder or at law or in equity.
(b) NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered, sent by facsimile or when mailed
by United States registered or certified mail, return receipt requested, postage
prepaid, addressed to such address as provided herein or sent to such other
address or facsimile number as each party may furnish to the other in writing
from time to time in accordance with this Section 5(b).
(c) APPLICABLE LAW. This Agreement is entered into under, and shall
be governed for all purposes by, the laws of the Commonwealth of Virginia
without giving effect to any choice of law principles.
(d) NO WAIVER. No failure by either party hereto at any time to give notice
of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall (i) be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or subsequent
time or (ii) preclude insistence upon strict compliance in the future.
(e) SEVERABILITY. If a court of competent jurisdiction determines that any
provision of this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect and such invalid or
unenforceable provision shall be reformulated by such court to preserve the
intent of the parties hereto.
(f) ASSIGNMENT AND DELEGATION. This Agreement is binding on the Executive and
Nx Networks and their successors and assigns; PROVIDED, HOWEVER, that the rights
and obligations of Nx Networks under this Agreement may be assigned or delegated
to a successor entity by Nx Networks.
(g) ENTIRE AGREEMENT. Except as otherwise specifically provided herein, this
Agreement constitutes the entire agreement of the parties with regard to the
subject matter hereof, contains all the covenants, promises, representations,
warranties and agreements between the parties with respect to the Executive's
resignation from Nx Networks and supersedes all prior employment, severance or
agreements between the Executive and Nx Networks or any of its predecessors or
3
affiliates, including, but not limited to, the Employment Agreement. Any
modification of this Agreement will be effective only if it is in writing and
signed by the party to be charged.
6. EXECUTIVE ACKNOWLEDGEMENTS
The Executive acknowledges that:
(a) He has read and understands the terms of this Agreement and has
voluntarily agreed to these terms without coercion or undue persuasion by
Nx Networks or any officer, director or other agent thereof;
(b) He has been encouraged by Nx Networks to seek competent legal counsel
in his review and consideration of this Agreement and its terms; and
(c) He has been given the opportunity to consider entering into this
Agreement for twenty-one days, and if he should execute this Agreement
prior to the expiration of the 21-day consideration period, he waives his
right to consider the Agreement for twenty-one days, and
(d) He may revoke this Agreement within seven days of the day he executes
it. The Executive agrees to give notice of such revocation by certified
mail to the attention of Nx Networks' General Counsel at the address
provided above. This Agreement shall not be effective until the expiration
of the 7-day revocation period without revocation by the Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
NX NETWORKS, INC.
By:_____________________________________
____________________________________
Gregory McNulty
4