Exhibit 10.1
SEVERANCE AGREEMENT AND RELEASE
THIS SEVERANCE AGREEMENT AND RELEASE is made this 4th day of November, 2008, by
and between Benjamin Preston (“Employee”) and RCN Telecom Services, Inc.
(“Employer” or “Company”), together with each and every one of its predecessors,
successors, directors, officers, employees and agents, whether present or former
(collectively the “Releasees”).
WHEREAS, Employee had been employed by Employer until November 4, 2008
(“Separation Date”);
WHEREAS, the parties desire that Employee’s separation be on an amicable basis;
In consideration of the mutual covenants and obligations contained herein,
Employee and Employer, each intending to be legally held bound, agree as
follows:
1. Consideration. In consideration for the releases and other covenants set
forth in this Severance Agreement and Release, the Company agrees:
a. To pay the Employee his base salary through November 7, 2008;
b. To pay Employee as severance the gross amount of $187,500 less applicable
withholdings (“Severance Payment”), with such amount to be paid in the form of a
lump sum payment no later November 30, 2008.
c. The Employer will continue the Employee’s participation in all medical,
dental and vision plans in which the Employee was enrolled as of the Separation
Date. The Company will continue the coverage and pay that portion of the premium
paid by the Company during Employee’s employment for the shorter period of
twelve (12) months, or until such time as Employee becomes eligible for benefit
coverage through another employer or otherwise (“Benefits Expiration Date”).
Employee’s aggregate portion of the costs for any such continued benefits
through the Benefits Expiration Date shall be deducted in a lump sum from the
Severance Payment. Employee is obligated to inform the Company within 10 days of
becoming eligible for benefit coverage through another employer or otherwise,
with all medical, dental and vision plan coverage ending as of the last day of
the month as of which the Employee obtains other benefit coverage. Beginning on
the date that the Company no longer provides subsidized benefit coverage
pursuant to this section 1(b), the Employee shall be eligible for health
insurance coverage pursuant to the terms of the Consolidated Omnibus Budget
Reconciliation Act of 1985( “COBRA”);
d. Company shall pay Employee his 2008 annual bonus pursuant to Company’s 2008
Short Term Incentive Plan (“Bonus Plan”) attributable to Employee’s employment
with the Company for the period from January 1, 2008 through Separation Date.
The parties agree and acknowledge that the Employee’s annual bonus target is
forty percent (40%) of Employee’s eligible wages from January 1, 2008 through
Separation Date. The Employee’s bonus payment will be based on calculations as
defined in the Bonus Plan as in effect on the Separation Date. The Company shall
pay the bonus payment to the Employee at the time in the same form and under the
same terms that the Company generally makes payment to the employees of the
Company under the Bonus Plan.

 

 

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e. Employee will continue to vest in all options to purchase the Company’s
common stock, $0.01 par value per share (the “Options”) made to Employee
pursuant to the 2005 Stock Compensation Plan (the “Plan”) through March 31,
2009. The Options shall terminate at 5 p.m. EST on June 30, 2009 (the “Equity
Cancellation Date”), except that the Employee remaining an employee of the
Company shall not be a condition to the continued effectiveness of such awards
under the Plan through the Equity Cancellation Date. Any vested, unexercised,
Options awarded to Employee under the Plan and outstanding following the Equity
Cancellation Date will no longer be exercisable as of the Equity Cancellation
Date and shall be cancelled and of no further force or effect. In addition,
Employee will continue to vest in all shares of restricted stock and Restricted
Stock Units granted pursuant to the Plan through March 31, 2009; provided,
however, that any performance-based shares or units scheduled to vest during
this time period will only vest in accordance with the performance based
criteria as described under the Plan. All Restricted Stock Units and shares of
restricted stock that have not vested as of March 31, 2009 will be cancelled on
that date and of no further force or effect. The Employee will be responsible
for any federal, state and local tax due and owing on the value of the
Restricted Stock Units and shares of restricted stock as of each vesting date.
Employee agrees that, but for his or her execution of this Agreement, he or she
would not be entitled to receive the consideration set forth above.
2. Acknowledgement. Employee acknowledges that he or she has received all
compensation due from Employer, including all vacation pay and other
compensation due. Employee acknowledges that, if applicable, he or she has
received proper compensation for any overtime hours worked. Employee
acknowledges that he or she has been granted any leave time to which he or she
believes he or she was entitled under the Family and Medical Leave Act or other
laws.
3. Employee’s Release. Employee, on behalf of himself or herself, and on behalf
of his or her descendants, dependents, heirs, executors, administrators,
assigns, and successors hereby generally releases and discharges the Releasees
from any and all suits, causes of action, complaints, obligations, demands, or
claims of any kind, whether in law or in equity, direct or indirect, known or
unknown, suspected or unsuspected (hereinafter “claims”), which Employee ever
had or now has against the Releasees, or any one of them, arising out of or
relating to any matter, thing or event occurring up to and including the date of
this Severance Agreement and Release. Employee’s release specifically includes,
but is not limited to:
a. any and all claims for wages and benefits including, without limitation,
salary, stock, options, commissions, royalties, license fees, health and welfare
benefits, severance pay, vacation pay, and bonuses;

 

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b. any and all claims for wrongful discharge, breach of contract (whether
express or implied), or for breach of the implied covenant of good faith and
fair dealing;
c. any and all claims for alleged employment discrimination on the basis of age,
race, color, religion, sex, national origin, veteran status, disability and/or
handicap, pregnancy, childbirth or related medical conditions, marital status
and any and all other claims in violation of any federal, state or local
statute, ordinance, judicial precedent or executive order, including but not
limited to claims under the following statutes: Title VII of the Civil Rights
Act of 1964, 42 U.S.C. §2000e et seq., the Civil Rights Act of 1866, 42 U.S.C.
§1981, the Age Discrimination in Employment Act, 29 U.S.C. §621 et seq., the
Older Workers Benefit Protection Act, 29 U.S.C. §626(f), the Americans with
Disabilities Act, 42 U.S.C. §12101 et seq., the Family and Medical Leave Act of
1993, 29 U.S.C. §2601 et seq., the Employee Retirement Income Security Act of
1974, 29 U.S.C. §1001 et seq., the Virginia Human Rights Act, Virginia Code §
2.1-714 et seq., or any comparable statute of any other state, country, or
locality;
d. any and all claims under any federal, state or local statute or law;
e. any and all claims in tort (including but not limited to any claims for
misrepresentation, defamation, interference with contract or prospective
economic advantage, intentional or negligent infliction of emotional distress,
duress, loss of consortium, invasion of privacy and negligence); and
f. any and all claims for attorneys’ fees and costs.
4. Effect of Release. Employee understands that this release extends to all of
the aforementioned claims and potential claims which arose on or before the date
of this Severance Agreement and Release, whether now known or unknown, suspected
or unsuspected, and his or her participation as a member of any class asserting
any such claims, and that these constitute essential terms of this Severance
Agreement and Release. Employee further understands and acknowledges the
significance and consequence of this Severance Agreement and Release and of each
specific release and waiver, and expressly consents that this Severance
Agreement and Release shall be given full force and effect according to each and
all of its express terms and provisions, including those relating to unknown and
unsuspected claims, demands, obligations, and causes of action, if any, as well
as those relating to any other claims, demands, obligations or causes of action
herein above-specified. Neither this release nor the promise not to sue set out
below should be construed, however, to prevent Employee from filing a claim
based on rights that cannot be waived as a matter of law, such as, but not
limited to, claims for vested benefits under ERISA.
5. Covenant Not to Sue. Employee affirms that no charge, complaint or action
exists in any forum brought by or on behalf of Employee against the Releasees
and that Employee has not assigned any existing or potential claim that Employee
purports to release to any third party. Further, Employee, on behalf of himself
or herself, and his or her descendants, dependents, heirs, executors,
administrators, assigns, and successors covenants that Employee will not at any
time hereafter commence, maintain, or in any way cause, or advise to be

 

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commenced or prosecuted, or permit to be filed by any other person on her
behalf, any grievance, charge, action (including any class action), suit, or
proceeding (judicial or administrative) against Employer, except as such waiver
is specifically prohibited by law or regulation. Although this Agreement does
not prevent Employee from filing a charge with the Equal Employment Opportunity
Commission (or similar state agency) or participating in an investigation
conducted by the Commission (or similar state agency), any claims for personal
relief, including reinstatement or monetary damages, would be barred.
6. Remedies. All remedies at law or in equity shall be available to the
Releasees for the enforcement of this Severance Agreement and Release. This
Severance Agreement and Release may be pleaded as a full bar to the enforcement
of any claim that Employee may assert against the Releasees.
7. No Admissions. Neither the execution of this Severance Agreement and Release
by the Releasees, nor the terms hereof, constitute an admission by the Releasees
of liability to Employee.
8. No Disparagement. Employee agrees to refrain from making disparaging comments
about the Releasees, and further agrees not to disrupt the Releasees’ business
activities in any manner whatsoever
9. Confidentiality. Employee shall not disclose or publicize the terms or fact
of this Severance Agreement and Release, directly or indirectly, to any person
or entity, except to his or her accountant, attorney, spouse, and to others as
required by law.
10. Cooperation. Employee agrees to cooperate fully and promptly with any
inquiries he gets from the Company, its Board of Directors, or any committee
thereof pertaining to any and all matters relating to the management,
operations, and/or financial affairs of the Company. Such cooperation shall
include truthful interviews as requested by the Company and the providing of all
requested documents, electronic data and/or other information.
11. Confidentiality; Non-Solicitation. In consideration for the consideration
which Employee has or will receive from the Company under this Agreement,
Employee agrees to be bound by the Restrictive Covenants set forth below.
a. Definitions. Capitalized terms used herein will have the meanings set forth
in the preamble of this Agreement, or as set forth below:
(1) “Proprietary Information” means confidential, proprietary, business and
technical information or trade secrets of the Company or of any parent,
subsidiary or affiliate of the Company which are not generally known or
accessible to the public. Such Proprietary Information shall include, but shall
not be limited to, the following items and information relating to the following
items: (a) computer codes or instructions (including source and object code
listings, program logic algorithms, subroutines, modules or other subparts of
computer programs and related documentation, including program notation),
computer processing systems and techniques, all computer inputs and outputs
(regardless of the media on which stored or located), hardware and software
configurations, designs, architecture and interfaces, (b) business research,
studies, procedures and costs, (c) financial data, (d) policy

 

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information, (e) sales and marketing data, methods, plans and efforts, and
market research information, (f) the identities of the Company’s actual and
prospective customers (including identifying information such as name, address
and telephone number), contractors and suppliers, (g) the terms of contracts and
agreements with customers, contractors and suppliers, (h) the needs and
requirements of, and the Company’s course of dealing with, actual or prospective
customers, contractors and suppliers, (i) personnel information, and (j) pricing
information. Failure by the Company to mark any of the Proprietary Information
as confidential or proprietary shall not affect its status as Proprietary
Information under the terms of this Agreement.
(2) “Restricted Period” means the nine month period following the Employee’s
Separation Date.
(3) “Restrictive Covenants” means the provisions contained in Section 11 of this
Agreement.
b. Non-Solicitation. Employee shall not, during the Restricted Period, influence
or attempt to influence any person to either (1) terminate or modify any
employment, consulting, director, agency or other arrangement with the Company,
or (2) employ or retain, or arrange to have any other person or entity employ or
retain, any person who has been employed or retained by the Company as an
Employee, consultant, agent or director of the Company at any time during the
Restricted Period.
c. Confidentiality. Employee recognizes and acknowledges that the Proprietary
Information is a valuable, special and unique asset of the business of the
Company. As a result, both during the period of Employee’s employment and
thereafter, Employee shall not, without the prior written consent of the
Company, for any reason either directly or indirectly divulge to any third party
or use for his own benefit, or for any purpose other than the exclusive benefit
of the Company, any Proprietary Information revealed, obtained or developed in
the course of his employment by the Company, except as may be required by law.
If Employee or any of his or her representatives become legally compelled to
disclose any of the Proprietary Information, Employee will provide the Company
with prompt written notice so that the Company may seek a protective order or
other appropriate remedy. Employee also recognizes that Employee continues to be
bound by the Company’s Code of Conduct and its provisions concerning
confidentiality.
d. Property. All right, title and interest in and to Proprietary Information
shall be and remain the sole and exclusive property of the Company. Employee
shall not make, retain, remove, disclose and/or distribute any copies of any
documents, records, notebooks, files, correspondence, reports, memoranda or
similar materials of or containing Proprietary Information, or other materials
or property of any kind belonging to the Company for any reason whatsoever and
shall not divulge to any third person the nature of and/or contents of any of
the foregoing or of any other oral or written information to which he may have
had access or with which for any reason he may have become familiar. Upon the
termination of his or her employment with the Company, Employee shall leave with
or return to the Company all originals and copies of the foregoing then in his
possession, whether prepared by Employee or by others.

 

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12. Rights and Remedies Upon Breach.
a. Specific Enforcement. Employee acknowledges that the Restrictive Covenants
are reasonable and necessary to protect the legitimate interests of the Company
and its affiliates and that the Company would not have entered into this
Agreement in the absence of such restrictions. Employee also acknowledges that
any breach by him or her, willfully or otherwise, of the Restrictive Covenants
will cause continuing and irreparable injury to the Company for which monetary
damages would not be an adequate remedy. Employee shall not, in any action or
proceeding to enforce any of the provisions of this Agreement, assert the claim
or defense that such an adequate remedy at law exists. In the event of any such
breach by Employee, the Company shall have the right to enforce the Restrictive
Covenants by seeking injunctive or other relief in any court, without any
requirement that a bond or other security be posted, and this Agreement shall
not in any way limit remedies of law or in equity otherwise available to the
Company. If an action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to recover,
in addition to any other relief, reasonable attorneys’ fees, costs and
disbursements.
b. Accounting. If Employee willfully breaches, or threatens to commit a breach
of any of the Restrictive Covenants, the Company will have the right and remedy
to require Employee to account for and pay over to the Company all compensation,
profits, monies, accruals, increments or other benefits derived or received by
Employee as the result of any action constituting a breach of the Restrictive
Covenants. This right and remedy will be in addition to, and not in lieu of, any
other rights and remedies available to the Company under law or in equity.
c. Judicial Modification. If any court determines that any of the Restrictive
Covenants, or any part thereof, is unenforceable because of the duration or
scope of such provision, such court shall have the power to modify such
provision and, in its modified form, such provision shall then be enforceable.
13. Disclosure of Restrictive Covenants. Employee agrees to disclose the
existence and terms of the restrictive covenants set forth in Section 11 to any
employer that Employee may work for during the Restricted Period. Employee
further agrees that the Company has the right to make such disclosure to any
future employer of Employee or for any other legitimate business purpose.
14. Enforceability. If any court holds the Restrictive Covenants unenforceable
by reason of their breadth or scope or otherwise, it is the intention of the
parties hereto that such determination not bar or in any way affect the right of
the Company to the relief provided above in the courts of any other jurisdiction
within the geographical scope of such Restrictive Covenants.
15. Essential Terms. Employee understands and acknowledges that the promises in
paragraphs 5, 8, 9, 10 and 11 are a material inducement for Releasees to enter
this Agreement and are of the essence of this Agreement. Employee therefore
agrees that if he or she should breach any of the provisions of the
aforementioned paragraphs, it will be a material breach of the Agreement,
entitling Employer (in addition to any other remedies available) to stop making
severance payments (if any are still outstanding), to costs and fees for
enforcement of the breached provision(s), and to the return of any payments made
to Employee under this Severance Agreement and Release, except that Employee may
retain (or be paid) $1,000 as consideration for the release. This Severance
Agreement and Release will in all other respects remain in full force and
effect.

 

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16. Advice of Counsel; Revocation Period. Employee is hereby advised to seek the
advice of counsel. Employee acknowledges that he is acting of his own free will,
that he has been afforded a reasonable time to read and review the terms of the
Severance Agreement and Release, and that he is voluntarily entering into this
Severance Agreement and Release with full knowledge of its provisions and
effects. Employee intends that this Severance Agreement and Release shall not be
subject to any claim for duress.
17. Fees and Costs. The parties shall bear their own attorneys’ fees and costs.
18. Entire Agreement. This Severance Agreement and Release contains the entire
agreement of the parties with respect to the subject matter hereof, supersedes
any prior agreements or understandings with respect to the subject matter
hereof, and shall be binding upon their respective heirs, executors,
administrators, successors and assigns.
19. Severability. If any term or provision of this Agreement shall be held to be
invalid or unenforceable for any reason, the validity or enforceability of the
remaining terms or provisions shall not be affected, and such term or provision
shall be deemed modified to the extent necessary to make it enforceable.
20. Amendments. Neither this Severance Agreement and Release nor any term hereof
may be orally changed, waived, discharged, or terminated, and may be amended
only by a written agreement between the parties hereto.
21. Governing Law. This Severance Agreement and Release shall be governed by the
laws of the Commonwealth of Virginia, without regard to the conflict of law
principles of any jurisdiction.
22. Legally Binding. The terms of this Severance Agreement and Release contained
herein are contractual, and not a mere recital.

 

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IN WITNESS WHEREOF, the parties, acknowledging that they are acting of their own
free will, have caused the execution of this Severance Agreement and Release as
of this day and year first written below.

          / s / Benjamin Preston           Benjamin Preston    
 
       
Date:
  November 4, 2008    
 
       
By:
  RCN TELECOM SERVICES, INC.    
 
        / s / Jennifer McGarey          
Name:
  Jennifer McGarey    
Title:
  Vice President, Human Resources    
Date:
  November 4, 2008    

 

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