Exhibit 10.6
 
SEPARATION AGREEMENT AND RELEASE
 
This Separation Agreement and Release (the “Agreement”) is made by and between
Avanex Corporation (the “Company”) and John Tyler (“Employee”). The Company and
Employee are jointly referred to herein as the “Parties.”
 
WHEREAS, Employee is employed by the Company;
 
WHEREAS, Employee signed an Employment, Confidential Information, Invention
Assignment and Arbitration Agreement with the Company on October 31, 2001 (the
“Confidentiality Agreement”);
 
WHEREAS, the Company and Employee have entered into a stock option agreement
dated November 5, 2001 granting Employee options (the “Options”) to purchase
shares of the Company’s Common Stock subject to the terms and conditions of the
Company’s 1998 Stock Plan and the stock option agreement, including any
amendments thereto (the “Stock Option Agreement”), which Options are further
described in Section 3 below;
 
WHEREAS, Employee’s employment with the Company shall be terminated effective
January 28, 2003, due to business necessity as part of a reduction in force (the
“Termination Date”);
 
WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints,
grievances, charges, actions, petitions and demands that Employee may have
against the Company, including, but not limited to, any and all claims arising
or in any way related to Employee’s employment with or separation from the
Company;
 
NOW THEREFORE, in consideration of the mutual promises made herein subsequent to
the Termination Date, the Parties hereby agree as follows:
 
1. Employment. Employee’s employment with the Company shall terminate as of the
end of the day on the Termination Date.
 
2. Consideration.
 
(a) Severance Payment.
 
(i) In consideration for the execution by Employee of this Agreement, the
Company agrees to pay to Employee an amount equal to five thousand seven hundred
and seventy ($5,770), less applicable withholding, on a bi-weekly basis in
accordance with the Company’s regular payroll practices, for a period of six (6)
months.
 
(ii) The first payment under subsection (i) will be made by the Company on the
first regular pay date following the Effective Date of this Agreement, as
defined below.

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(b) Employer COBRA Payments. Employee’s health insurance benefits with the
Company shall cease on January 31, 2003, subject to Employee’s right to continue
his health insurance under COBRA. If Employee elects to continue his group
health insurance coverage pursuant to COBRA after the Termination Date, Employee
must continue to pay that portion of the premium for his group health insurance
coverage that he was required to pay as an active employee before the
termination of his employment. However, the Company agrees to pay for the
remaining portion of COBRA coverage (excluding Employee’s portion) for a period
of six (6) months beginning the first day of the new month after the Termination
Date, provided Employee timely elects and pays his portion of COBRA coverage and
otherwise remains eligible for COBRA Coverage.
 
(c) Severance Plan. Employee shall be a participant in the Avanex Corporation
Severance Plan (the “Severance Plan”). In that regard, this Agreement shall
constitute a “Supplement” (as defined in the Severance Plan) and the benefits
and payments payable under the Severance Plan shall be limited to the payments
and benefits set forth in this Agreement. The releases provided in this
Agreement fully satisfy the provisions of Section 5.1.3 of the Severance Plan
requiring the execution of a waiver and release of certain described claims.
 
3. Stock. The Parties agree that, as of the Termination Date, Employee holds
Options to purchase 130,000 shares of the Company’s Common Stock, of which
Options to purchase 37,916 shares are vested as of the Termination Date. The
exercise of Employee’s vested shares shall continue to be governed by the terms
and conditions of the Company’s 1998 Stock Plan and the Stock Option Agreements.
Except as set forth in the first sentence of this Section 3, Employee
acknowledges that he holds no other options or rights to acquire any securities
of the Company.
 
4. Benefits. Except as provided in this Agreement, all benefits and incidents of
employment, including but not limited to the accrual of paid time off, shall
cease on the Termination Date.
 
5. Payment of Salary. Employee acknowledges and represents that the Company has
paid all salary, wages, bonuses, accrued paid time off, interest, fees, stock,
stock options, vesting, commissions and any and all other benefits and
compensation due to Employee as of the Effective Date of this Agreement,
including but not limited to any and all wages and benefits and other payments
due, if any, pursuant to Worker Adjustment and Retraining Notification Act
(“WARN”) and/or California Labor Code Sections 1400-1408. Employee acknowledges
and represents that Company will have paid all severance pay and benefits due to
Employee once the benefits outlined in Section 2(a) and (b) have been provided
to Employee.
 
6. Release of Claims.
 
(a) Employee agrees that the foregoing consideration 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, divisions, subsidiaries,
predecessor and successor corporations and assigns (the “Releasees”). Employee
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 or facts that have occurred up until and including the Effective Date of
this Agreement including, without limitation:

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(i) any and all claims relating to or arising out of Employee’s employment
relationship with the Company and the termination of that relationship;
 
(ii) 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;
 
(iii) any and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; harassment; retaliation; 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;
conversion; and disability benefits;
 
(iv) 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 Americans with Disabilities Act of 1990;
the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Employee Retirement Income
Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the
Family and Medical Leave Act; the California Fair Employment and Housing Act;
and the California Labor Code, including California Labor Code Sections
1400-1408;
 
(v) any and all claims for violation of the federal, or any state, constitution;
 
(vi) any and all claims arising out of any other laws and regulations relating
to employment or employment discrimination;
 
(vii) 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
 
(viii) any and all claims for attorneys’ fees and costs, except as otherwise
provided in this Agreement.
 
(b) Employee acknowledges and agrees that any breach of any provision of this
Agreement or the Confidentiality Agreement shall constitute a material breach of
this Agreement and shall entitle the Company to immediately recover and/or cease
the severance benefits provided to Employee under this Agreement.
 
(c) Employee agrees that the releases set forth in this section shall be and
remain in effect in all respects as a complete general release as to the matters
released, to the maximum extent provided by law. These releases do not extend to
any obligations incurred under this Agreement.

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7. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he
is waiving and releasing any rights he may have under the Age Discrimination in
Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and
voluntary. Employee and the Company agree that this waiver and release does not
apply to any rights or claims that may arise under ADEA after the Effective Date
of this Agreement. Employee acknowledges that the consideration given for this
waiver and release Agreement is in addition to anything of value to which
Employee was already entitled. Employee further acknowledges that he has been
advised by this writing that:
 
(a) he should consult with an attorney prior to executing this Agreement;
 
(b) he has up to forty-five (45) days within which to consider this Agreement;
 
(c) he has been advised in writing by the Company of the class, unit, or group
of individuals covered by the severance program, any eligibility factors for the
program, any time limits applicable to the program, and the job titles and ages
of all individuals who participated and did not participate in the program, as
reflected in Exhibit A and Exhibit B, attached hereto;
 
(d) he has seven (7) days following his execution of this Agreement to revoke
the Agreement;
 
(e) this Agreement shall not be effective until the revocation period has
expired; and
 
(f) nothing in this Agreement prevents or precludes Employee from challenging or
seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties or costs from doing
so, unless specifically authorized by federal law.
 
8. Civil Code Section 1542/ Unknown Claims. Employee represents that he is not
aware of any claim by him other than the claims that are released by this
Agreement. Employee acknowledges that he has had the opportunity to be 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 HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT 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.
 
9. 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 any of the Releasees. 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.

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10. Application for Employment. Employee understands and agrees that, as a
condition of this Agreement, he shall not be entitled to any employment with the
Company, and he hereby waives any right, or alleged right, of employment or
re-employment with the Company. Employee further agrees that he will not apply
for employment with the Company.
 
11. Confidentiality. Employee agrees to maintain in complete 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”). Except as required by law, Employee may disclose
Separation Information only to his immediate family members, the court in any
proceedings to enforce the terms of this Agreement, Employee’s legal counsel,
his accountant and any professional tax advisor to the extent that they need to
know the Separation Information in order to provide advice on tax treatment or
to prepare tax returns, and must prevent disclosure of any Separation
Information to all other third parties. Employee agrees to take every reasonable
precaution to prevent disclosure of Separation Information to third parties, and
agrees that he will not publicize, directly or indirectly, any Separation
Information.
 
12. Trade Secrets and Confidential Information/Company Property. Employee shall
continue to maintain the confidentiality of all confidential and proprietary
information of the Company and shall continue to comply with the terms and
conditions of the Confidentiality Agreement between Employee and the Company. By
signing this Agreement, Employee represents and declares under penalty of
perjury under the laws of the State of California that he has returned all
Company property.
 
13. No Cooperation. Employee agrees that he will not knowingly encourage or
counsel any attorneys or their clients in the presentation or prosecution of any
disputes, differences, grievances, claims, charges, or complaints by any third
party against any of the Releasees, unless under a subpoena or other court order
to do so. Employee agrees both to immediately notify the Company upon receipt of
any such subpoena or court order, and to furnish, within three (3) business days
of its receipt, a copy of such subpoena or court order to the Company. If
approached by anyone for counsel in the presentation or prosecution of any
disputes, differences, grievances, claims, charges, or complaints against any of
the Releasees, Employee shall state no more than that he cannot provide counsel
or encouragement.
 
14. Non-Disparagement. Employee agrees to refrain from any defamation, libel or
slander of the Releasees, and any tortious interference with the contracts,
relationships and prospective economic advantage of the Releasees. Employee
agrees that he shall direct all inquiries by potential future employers to the
Vice President of Human Resources.
 
15. No Admission of Liability. Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all potential
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 potential claims; or (b) an
acknowledgment or admission by the Company of any fault or liability whatsoever
to Employee or to any third party.

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16. Costs. The Parties shall each bear their own costs, attorneys’ fees and
other fees incurred in connection with the preparation of this Agreement.
 
17. 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, SHALL BE SUBJECT TO ARBITRATION IN ALAMEDA COUNTY, CALIFORNIA, BEFORE
THE AMERICAN ARBITRATION ASSOCIATION UNDER ITS NATIONAL RULES FOR THE RESOLUTION
OF EMPLOYMENT DISPUTES AND CALIFORNIA LAW. THE ARBITRATOR MAY GRANT INJUNCTIONS
AND OTHER RELIEF IN SUCH DISPUTES. THE DECISION OF THE ARBITRATOR SHALL BE
FINAL, CONCLUSIVE AND BINDING ON THE PARTIES TO THE ARBITRATION. 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. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY
DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. THIS
PARAGRAPH WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY
OTHER PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES
AND THE SUBJECT MATTER OF THEIR DISPUTE RELATING TO EMPLOYEE’S OBLIGATIONS UNDER
THIS AGREEMENT AND THE CONFIDENTIALITY AGREEMENT.
 
18. Tax Consequences. The Company makes no representations or warranties with
respect to the tax consequences of the payments provided to Employee or made on
his behalf under the terms of this Agreement.
 
19. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who
may claim through it to the terms and conditions of this Agreement. Employee
represents and warrants that he has the capacity to act on his own behalf and on
behalf of all who might claim through him to bind them to the terms and
conditions of this Agreement. Each Party warrants and represents 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 causes of action released herein.
 
20. 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. Employee has not relied upon any
representations or statements made by the Company which are not specifically set
forth in this Agreement.
 
21. Severability. In the event that any provision or any portion of 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 or portion of provision.
 
22. Attorneys’ Fees. The Parties agree that the prevailing party in any dispute
arising under the terms of this Agreement shall be entitled to its reasonable
attorneys’ fees and costs.

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23. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning Employee’s employment
with and separation from the Company and the events leading thereto and
associated therewith, and supersedes and replaces any and all prior agreements
and understandings concerning Employee’s relationship with the Company, with the
exception of the Confidentiality Agreement, the Company’s 1998 Stock Plan and
the Stock Option Agreements.
 
24. No Oral Modification. This Agreement may only be amended in writing signed
by Employee and the Company’s Chief Executive Officer.
 
25. Governing Law. This Agreement shall be governed by the laws of the State of
California without regard for choice of law provisions.
 
26. Effective Date. This Agreement will become effective after it has been
signed by both Parties and after seven days have passed since Employee signed
the Agreement. Each Party has seven days after that Party signs the Agreement to
revoke it.
 
27. Expiration Date. Employee has up to forty-five (45) days within which to
consider this Agreement. If Employee has not accepted this Agreement within
forty-five (45) days of the date he is presented with the Agreement, the
Agreement shall be revoked and expire by its own terms.
 
28. Counterparts. This Agreement may be executed in counterparts and by
facsimile, and each counterpart and facsimile 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.
 
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 have been represented in the negotiation and execution of this
Agreement by legal counsel of their own choice or have elected not to retain
legal counsel;
 
(c) they understand the terms and consequences of this Agreement and of the
releases it contains; and
 
(d) they are fully aware of the legal and binding effect of this Agreement.

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

 

       

AVANEX CORPORATION

Dated:

 

 

1/28/03

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By:

 

/s/ Walter Alessandrini

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Walter Alessandrini, President and CEO

                             

JOHN TYLER, an individual

Dated:

 

1/28/03

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/s/ John Tyler

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John Tyler

 

 

 

[Signature Page to Severance Agreement and Release]

 

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