Employment Agreement - Brocade Communications Systems Inc. and James LaLonde
Attached is the employment offer letter originally given to James LaLonde
by Brocade Communications Systems, Inc. (the "Company") in connection with his
initial employment. Subsequent to such time, the Company agreed with Mr. LaLonde
that Mr. LaLonde's title was Vice President, Worldwide Field Sales, his base
salary was $200,000, and his incentive target for fiscal year 2004 was $250,000.
On May 12, 2004, the Company entered into a Settlement Agreement and Release,
which is attached. Mr. LaLonde is no longer employed by the Company.
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[BROCADE LOGO(R)]
BROCADE
March 31,2003
James LaLonde
The Waterfront
17th floor Tower III
Flat F
Hong Kong
Re: Transfer of Employment to Brocade Communications Systems, Inc. ("Brocade
USA")
Dear James,
We are writing this letter to you, in conjunction with Brocade Hong Kong Limited
("Brocade HK"), to inform you that Brocade HK will transfer your employment to
Brocade Communications Systems, Inc. ("Brocade USA") effective April 1, 2003, in
accordance with your promotion to Vice President, International Sales, and the
compensation and relocation details provided to you by Greg Reyes on December
13,2002.
This purpose of this letter is to inform you that your employment with Brocade
HK will terminate on March 31, 2003. Brocade Communications Systems, Inc.
("Brocade USA") joins in this letter to offer you employment with it, effective.
April 1, 2003.
Your compensation will remain the same, less applicable withholding, in
accordance with Brocade's normal US payroll procedures. As a US employee, you
are also eligible to receive certain employee benefits; the details of these
employee benefits are attached.
You agree that, during the term of your employment with Brocade US, you will not
engage in any other employment, occupation,consulting or other business activity
directly related to the business in which Brocade US is now involved or becomes
involved during the term of your employment, nor will you engage in any other
activities that conflict with your obligations to Brocade US.
As a Brocade US employee, you will be expected to abide by Brocade US rules and
standards, as outlined in Brocade US Employee Handbook. As a condition of your
employment, you will also be required to sign and comply with an Employment,
Confidential Information, Invention Assignment and Arbitration Agreement which
requires, among other provisions, the assignment of patent rights to any
invention made during your employment at Brocade US, and non-disclosure of
proprietary information. The Agreement also provides that in the event of any
dispute or claim relating to or arising out of our employment relationship, you
and Brocade US agree that all such disputes shall be fully and finally resolved
by binding arbitration. However, we agree that this arbitration provision shall
not apply to any disputes or claims relating to or arising out of the misuse or
misappropriation of Brocade US's trade secrets or proprietary information.
Your employment with Brocade US is "at will" and may be terminated by either the
employee or employer at any time, for any reason. Nothing in this offer is to be
construed as a contract of employment for any specific length of time. Except
for the Employee Invention Assignment and Confidentiality Agreement, and any
rights in employee benefits generally offered to employees of Brocade US, this
offer represents the entire agreement related to your employment with Brocade US
and supersedes all prior or contemporaneous oral or written Communications and
representations.
This letter, along with any agreements relating to proprietary rights between
you and Brocade US, set forth the terms of your employment with Brocade US and
supersede any prior representations or agreements, whether written or oral. This
letter including, but not limited to, its at-will employment provision, may not
be modified or amended except by a written agreement, signed by Brocade US Vice
President of Human Resources and yourself.
BROCADE COMMUNICATIONS SYSTEMS, INC.
1745 Technology Drive, San Jose, CA 95110
T.408.487.8000 F 408.487.8101
<PAGE>
For purposes of federal immigration law (Immigration Reform and Control Act of
1986), you are required to provide documentary evidence of your eligibility for
employment in the United States. Please bring the appropriate documentation, as
listed on the enclosed 1-9 Form, with you on your first day. Such documentation
must be provided to us within 3 (three) business days of your date of transfer,
or our employment relationship with you may be terminated.
Sincerely,
BROCADE COMMUNICATIONS SYSTEMS, INC.
By: /S/ Stephanie Jensen
--------------------
Stephanie Jensen
VP, Human Resources
I acknowledge receipt of the original of this letter terminating my employment
as stated above and confirm that I will accept the offer of new employment with
Brocade Communications Systems, Inc. In consideration of Brocade Communications
Systems, Inc. having procured the offer of employment on terms the same as my
present employment, I hereby release Brocade HK from any claim whatsoever which
I may have against it in relation to the termination of my employment and
transfer to Brocade Communications Systems, Inc. other than in respect of
accrued and outstanding salary (if any) for the current month of employment.
By: /S/ James LaLonde
-----------------
James LaLonde
Enclosures:
Copy of December 13,2002 International Sales VP position compensation,
transfer, and relocation details
Brocade Employee Invention Assignment and Confidentiality Agreement
1-9 Form
W-4 Form
EDD - Employee Withholding Allowance Certificate
Direct Deposit Authorization Form
US Benefit Packet Information
<PAGE>
[BROCADE LOGO]
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release ("Agreement") is made by and between
Brocade Communications Systems, Inc. ("Brocade" or the "Company"), and James
LaLonde ("Employee").
WHEREAS, Employee is employed by the Company;
WHEREAS, the Company and Employee have entered into an employee invention
assignment and confidentiality agreement (the "Confidentiality Agreement");
WHEREAS, Employee has entered into the stock option agreements, identified
on the Personnel Option Status Schedule attached hereto, granting Employee the
option to purchase shares of the Company's common stock subject to the terms and
conditions of the Company's stock option plans (the "Stock Plans") and the
respective stock option agreements (the "Option Agreements");
WHEREAS, the Company and Employee have decided to terminate Employee's
employment;
WHEREAS, the Parties, and each of them, wish to resolve any and all
disputed claims, complaints, grievances, charges, actions, petitions and demands
that Employee has or may have against the Company as defined, herein, including,
but not limited to, any and all claims arising from or in any way related to
Employee's employment relationship, or termination of his employment, with the
Company;
NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (collectively referred to as "the Parties") hereby agree as
follows:
1. Release from Regular Duties and Termination.
(a) Employee is released from his regular duties as Vice President,
Worldwide Field Sales effective as of April 30, 2004 (the "Release Date").
(b) For purposes of this Agreement, Employee's employment with the
Company shall terminate on the earlier of (i) October 31, 2004, or (ii) the
termination of Employee's employment as provided in Section 2(a) or 2(b) below
(such earlier date, the "Termination Date").
2. Consideration. As consideration for this Agreement, the Company will
provide the following benefits to Employee:
(a) During the period commencing on the Release Date and ending on
the Termination Date (the "Transition Period"), (i) Employee shall transition
his regular duties to personnel identified by the Company, (ii) shall complete
the "Advisory Project" as detailed in the attached Exhibit A, (iii) the Company
shall pay to Employee a semi-monthly total gross compensation amount of $22,500,
less applicable withholding, in accordance with Brocade's normal payroll
procedures, and (iv) Employee shall continue to receive medical, dental and
vision health insurance benefits. Employee shall not be entitled to any sales
commissions or bonus for activities during the term of this Agreement. If
Employee moves his household possessions back to Japan before the end of the
Transition Period, and
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to the extent moving expenses are not reimbursed by a new employer, Company
shall, upon delivery of documentation verifying the expense, reimburse
reasonable moving expenses for household items in an amount not to exceed
$65,000. Notwithstanding the foregoing, Employee acknowledges and agrees that in
the event that Employee violates any terms of this Agreement during the
Transition Period, (i) Employee's employment with Company shall be immediately
terminated; (ii) all benefits under this Agreement immediately end (e.g., base
salary, medical, dental and vision health insurance benefits, vesting of stock
options, reimbursement of moving expenses); and (iii) Employee shall refund a
dollar amount equal to the strike price of stock options that vested during the
Transition Period and the closing price of Brocade stock on the date of the
breach.
(b) Subject to the terms of Section 2(a), the Parties agree that
Employee's stock options will continue to vest until the Termination Date;
provided, however, that the exercise of any stock options shall continue to be
subject to the terms and conditions of the Stock Plans and Option Agreements, as
applicable.
(d) Subject to the terms of Section 2(a) above and subject to
Employee's right to continue his health insurance under COBRA, Employee's health
insurance benefits will cease at the end of the month in which the Termination
Date occurs. Employee's participation in all other benefits incident to his
employment with the Company will cease on the Termination Date.
3. Confidential Information.
(a) Employee shall continue to maintain the confidentiality of all
confidential and proprietary information of the Company and shall not disclose
to any person, firm or corporation without written authorization of the Board of
Directors of the Company, any Confidential Information of the Company.
"Confidential Information" means any Company proprietary information, technical
data, trade secrets or know-how, including, but not limited to, research,
product plans, products, services, customer lists and customers (including, but
not limited to, customers of the Company on whom Employee called or with whom
Employee became acquainted during the term of his employment), markets,
software, developments, inventions, processes, formulas, technology, designs,
drawings, engineering, hardware configuration information, marketing, finances
or other business information disclosed to him by the Company either directly or
indirectly in writing, orally or by drawings or observation of parts or
equipment. Employee further understands that Confidential Information does not
include any of the foregoing items which have become publicly known and made
generally available through no wrongful act of his or of others who were under
confidentiality obligations as to the item or items involved or improvements or
new versions thereof.
(b) Employee shall return, and shall not utilize other than for
company business, all the Company property, including, but not limited to, any
devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, materials, equipment, computer
source code or other documents, or reproductions of any of the aforementioned
items, and confidential and proprietary information in his possession to the
Company on the Release Date.
(c) Employee represents that he has complied with all the terms of
the Confidentiality Agreement, including the reporting of any inventions and
original works of authorship (as defined therein), conceived or made by him
(solely or jointly with others) covered by the Confidentiality Agreement.
Employee further represents and agrees that he will abide by his obligation
under the Confidentiality Agreement to assist the Company in the preparation of
assignments of intellectual property rights created while Employee was employed
by the Company.
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(d) Employee agrees to keep confidential the fact that his role with
the company has changed until after the Brocade earnings release in May,
currently anticipated to be on May 19. The only individuals that you can speak
with about this are Greg Reyes and Mike Vescuso.
4. Noncompetition. In consideration of Employee's unique access to the
Company's strategic plans, customer lists, contact lists, product plans and
technical information regarding existing products, Employee agrees that during
the Transition Period, Employee will not, directly or indirectly, accept
employment with or provide any consulting, advisory or similar services to
McData Corporation, Cisco Systems, Hewlett-Packard Company, IBM Corporation,
Dell Inc. or EMC Corporation.
5. Payment. Employee acknowledges and represents that the Company will
have paid all salary, wages, bonuses, accrued vacation, and any and all other
benefits due to Employee upon receipt of the payments and benefits earned during
the term of this Agreement pursuant to Section 2 above.
6. Release of Claims. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company. Employee, on behalf of himself, and his respective heirs, family
members, executors and assigns, hereby fully and forever releases the Company
and its past, present and future officers, agents, directors, employees,
investors, shareholders, administrators, affiliates, divisions, subsidiaries,
parents, predecessor and successor corporations, and assigns, from, and agrees
not to sue or otherwise institute or cause to be instituted any legal or
administrative proceedings concerning any claim, duty, obligation or cause of
action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that he may possess arising from any omissions, acts
or facts that have occurred up until and including the Termination Date
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;
(b) any and all 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 claims for wrongful discharge of employment;
termination in violation of public policy; discrimination; breach of contract,
both express and implied; breach of a covenant of good faith and fair dealing,
both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; 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; and
conversion;
(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 Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, The Worker
Adjustment and Retraining Notification Act, the California Fair Employment and
Housing Act, the California Warn Act and Labor Code section 201, ET SEQ. and
section 970, ET SEQ. and all amendments to each such Act as well as the
regulations issued thereunder;
(e) any and all claims for violation of the federal, or any state,
constitution;
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(f) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination;
(g) any claim for any loss, cost, damage, or expense arising out of
any dispute over the non-withholding or other tax treatment of any of the
proceeds received by Employee as a result of this Agreement; and
(h) any and all claims for attorneys' fees and costs.
Employee agrees that the release set forth in this section 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 under this
Agreement. Employee acknowledges and agrees that any breach of this paragraph
shall constitute a material breach of this Agreement and in the case of a breach
by Employee, shall entitle the Company immediately to recover the consideration
discussed in paragraph 2 above. Employee shall also be responsible to the
Company for all costs, attorneys' fees and any and all damages incurred by the
Company (a) enforcing the obligation, including the bringing of any suit to
recover the monetary consideration, and (b) defending against a claim or suit
brought or pursued by Employee in violation of this provision.
7. Civil Code Section 1542. Employee represents that he is not aware of
any claims against the Company other than the claims that are released by this
Agreement. Employee acknowledges that he 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 CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIS MUST HAVE MATERIALLY AFFECTED HIS SEPARATION WITH THE
DEBTOR.
Employee, being aware of said code section, agrees to expressly waive any
rights he may have thereunder, as well as under any other statute or common law
principles of similar effect.
8. No Pending or Future Lawsuits. Employee represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Employee also represents that he does not intend to bring any claims on
his own behalf or on behalf of any other person or entity against the Company or
any other person or entity referred to herein.
9. Application for Employment. Employee agrees that he shall not seek,
apply for or accept reemployment with the Company. Employee understands and
agrees that, as a condition of this Agreement, he shall not be automatically
entitled to any employment with the Company, its subsidiaries, or any successor,
and he hereby waives any right, or alleged right, of employment or re-employment
with the Company.
10. Confidentiality. Employee agrees to use his best efforts to maintain
in confidence the existence of this Agreement, the contents and terms of this
Agreement, and the consideration for this Agreement (hereinafter collectively
referred to as "Separation Information"). Employee agrees to take every
reasonable precaution to prevent disclosure of any Separation Information to
third parties, other than Employee's legal counsel, if any, and agrees that
there will be no publicity, directly or indirectly, concerning any Separation
Information. Employee agrees to take every precaution to disclose Separation
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Information only to those attorneys, accountants, governmental entities, and
family members who have a reasonable need to know of such Separation
Information. The Parties agree that if the Company proves that Employee breached
this Confidentiality provision, it shall be entitled to an award of its costs
spent enforcing this provision, including all reasonable attorneys' fees
associated with the enforcement action, without regard to whether the Company
can establish actual damages from the breach by Employee.
11. No Cooperation. Employee agrees he will not act in any manner that
might damage the business of the Company. Employee agrees that he will not
counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against the Company and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so. Employee further agrees both to
immediately notify the Company upon receipt of any court order, subpoena, or any
legal discovery device that seeks or might require the disclosure of production
of the existence or terms of this Agreement, and to furnish, within (3) three
business days of its receipt, a copy of such subpoena or legal discovery device
to the Company.
12. Non-Disparagement. Employee agrees that Employee will refrain from
making any incorrect or disparaging statements about the Company, its products
or services, its officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns. In response to inquiries from prospective employers
regarding Employee, the Company's Human Resources Department will provide no
other information other than Employee's dates of employment and positions held
with the Company. With Employee's express written consent, the Company will
confirm Employee's final annual base salary rate.
13. Non-Solicitation. Employee agrees that for a period of one year
following the Termination Date Employee will not directly or indirectly solicit,
induce, recruit or encourage any employee of the Company to terminate his or her
employment with the Company, or take away or hire such employees, or attempt to
solicit, induce, recruit, encourage, take away or hire employees of the Company,
either for himself or any other person or entity. Employee further agrees that
Employee will refrain from tortuously interfering with the contracts and
relationships of the Company and its officers, directors, employees, investors,
shareholders, administrators, affiliates, divisions, subsidiaries, predecessor
and successor corporations, and assigns.
14. No Admission of Liability. Employee understands and acknowledges that
this Agreement constitutes a compromise and separation of disputed claims. No
action taken by the Company, either previously or in connection with this
Agreement shall be deemed or construed to be (a) an admission of the truth or
falsity of any claims heretofore made or (b) an acknowledgment or admission by
the Company of any fault or liability whatsoever to Employee or to any third
party.
15. Attorneys' Fees. In the event that either Party brings an action to
enforce or effect its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including the costs of mediation,
arbitration, litigation, court fees, plus reasonable attorneys' fees, incurred
in the connection with such an action.
16. No Knowledge of Wrongdoing. Employee represents that he has no
knowledge of any wrongdoing involving improper or false claims against a federal
or state governmental agency, or any other wrongdoing that involves Employee or
other present or former Company employees.
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17. Tax Consequences. The Company makes no representation or warranties
with respect tot the tax consequences of the payment of any sums to Employee
under the terms of this Agreement. Employee agrees and understands that he is
responsible for payment, if any, of local, state and/or federal taxes on the
sums paid hereunder by the Company and any penalties or assessments thereon.
Employee further agrees to indemnify and hold the Company harmless from any
claims, demands, deficiencies, penalties, assessments, executions, judgments, or
recoveries by any government agency against the Company for any amounts claimed
due on account of Employee's failure to pay federal or state taxes or damages
sustained by the Company by reason of any such claims, including reasonable
attorneys' fees.
18. Indemnification. Employee agrees to indemnify and hold harmless the
Company from and against any and all loss, costs, damages or expenses,
including, without limitation, attorneys' fees or expenses incurred by the
Company arising out of the breach of this Agreement by Employee, or from any
false misrepresentation made herein by Employee, or from any action or
proceeding which may be commenced, prosecuted or threatened by Employee or for
Employee's benefit, upon Employee's initiative, or with Employee's aid or
approval, contrary to the provisions of this Agreement. Employee further aggress
that in any such action or proceeding, this Agreement may be pled by the Company
as a complete defense, or may be asserted by way of counterclaim or cross-claim.
19. Arbitration. The Parties agree that any and all disputes arising out
of the terms of this Agreement, their interpretation, and any of the matters
herein released, including any potential claims of harassment, discrimination or
wrongful termination shall be subject to binding arbitration, to the extent
permitted by law, in Santa Clara, California, before the American Arbitration
Association under its National Rules for the Resolution of Employment Disputes.
THE PARTIES AGREE AND HEREBY WAIVE THEIR RIGHTS TO A JURY TRIAL AS TO MATTERS
ARISING OUT OF THE TERMS OF THIS AGREEMENT AND ANY MATTERS HEREIN RELEASED TO
THE EXTENT PERMITTED BY LAW. The Parties agree that the prevailing party in any
arbitration shall be entitled to injunctive relief in any court of competent
jurisdiction to enforce the arbitration award, provided, however, that this
arbitration provision shall not apply to any claims for injunctive relief by
either of the Parties. The Parties further agree that the prevailing party in
any arbitration shall be entitled to recover from the other party all legal
costs and attorneys fees associated with the dispute.
20. Authority. The Parties represent and warrant that they have the
capacity to act on their own behalf of all who might claim through each of them
to bind such parties to the terms and conditions of this Agreement. The Parties
warrant and represent that there are no liens or claims of lien or assignments
in law or equity or otherwise of or against any of the claims or courses of
action released herein.
21. No Representations. Employee represents that he has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither party has
relied upon any representations or statements made by the other party hereto
which are not specifically set forth in this Agreement.
22. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
23. Entire Agreement. This Agreement, the Option Agreements, the Stock
Plan and the Confidentiality Agreement represent the entire agreement and
understanding between the Company and, and supersede and replace any and all
prior agreements and understandings concerning Employee's relationship with the
Company and his compensation by the Company.
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24. No Oral Modification. This Agreement may only be amended in writing
signed by Employee and the (i) Chief Executive Officer or (ii) Vice President,
Human Resources of the Company.
25. Governing Law. This Agreement shall be deemed to have been executed
and delivered within the State of California, and it shall be construed,
interpreted, governed, and enforced in accordance with the laws of the State of
California, without regard to choice of law principles.
26. Effective Date. Employee has ten (10) days from the Release Date to
consider this Agreement, and to return an executed copy to the Company. The date
of receipt by the Chief Executive Officer or the Vice President, Human Resources
of Company will be the effective date of this Agreement.
27. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
28. Successors and Assigns. This Agreement shall inure to the benefit of,
and shall be binding upon, the successors and assigns of the Company.
29. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
(a) They have read this Agreement;
(b) They understand the terms and consequences of this Agreement and
of the releases it contains; and
(c) They are fully aware of the legal and binding effect of this
Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.
Brocade Communications Systems, Inc.
Dated: May 12, 2004 By /s/ Gregory L. Reyes
-------------------------------------------
Gregory L. Reyes
CEO and Chairman of the Board
James LaLonde, an individual
Dated: May 12, 2004 /s/ James LaLonde
-------------------------------------------
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EXHIBIT A:
Advisory Project - James Lalonde
During this period, James will report to the VP HR who will monitor the process
of providing coaching and support to the new WW sales leader to ensure an
effective transition and smooth assimilation of the field sales force structure
and function. James will assist with transition and implementation of Ops
Excellence initiative in Q3/Q4 `04. Key areas of focus include:
o Review and monitor plans to minimize revenue risk as we implement POR for
Field Sales
o Review and monitor cross-functional interlock with OEM Sales and Marketing
POR's to ensure that plan execution is integrated across the three
functions
o Review and monitor field communication plans to make sure that field sales
management, regional OEMs, and end user customers receive detailed
communication checklists to minimize confusion or concern with the
transition of field sales relationships
o Cooperate with the new WW sales leader to transfer your knowledge of field
employees, regional OEM and customer relationships and contacts during the
transition period.
o Quarterly check points in Q3 and Q4 with the VP of HR to monitor and
evaluate the quality of the coaching and support.
o Two weeks before the end of Q4 James will prepare a white paper for me
detailing what actions have been completed and what actions are still
outstanding relative to the Field sales Ops Excellence transition and
execution actions, as well as any open field employee or customer issues.
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