exv10w33



 



EXHIBIT 10.33


CIENA CORPORATION

SEPARATION AGREEMENT AND RELEASE



     THIS SEPARATION AGREEMENT AND RELEASE (the “Agreement”) is made as of this
9th day of December, 2002 (the “Effective Date”), by and between CIENA
Corporation, a Delaware corporation (together with its affiliates and
subsidiaries, the “Corporation”) and Michael O. McCarthy III (the “Executive”).


     WHEREAS, Executive is currently employed by the Corporation as Senior Vice
President Worldwide Sales and Support; and


     WHEREAS, Executive desires to voluntarily resign his employment with the
Corporation, and the Corporation desires to accept such resignation, on the
terms and conditions set forth herein.


     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:


1.     Resignation. Executive shall be deemed to have voluntarily resigned from
employment with the Corporation on February 28, 2003. In connection therewith,
the Parties agree that Executive’s last day of employment with the Corporation
shall be February 28, 2003 (the “Termination Date”).


2.     Consideration. Upon execution of this Agreement, Executive will be entitled
to the following:


     2.1 During the period from the Effective Date up to and including the
Termination Date:


               (a)     The Corporation will continue to pay Executive his regular base salary
in effect as of the Effective Date (less any deductions and withholdings
required by law or authorized by Executive) in installments every two weeks in
arrears into a bank account designated by Executive.


               (b)     The Corporation will continue (i) to provide Executive with the health
and welfare benefits currently selected by Executive, at the same rate(s) paid
by active employees as of the Termination Date, which rate(s) may be adjusted
from to time, and (ii) to pay the Corporation’s portion of such benefits, with
Executive’s portion of such benefits to be deducted from the salary payments
set forth in Section 2.1(a).


               (c)     Executive will remain eligible to participate in the Corporation’s
401(k) Plan, Employee Stock Purchase Plan, Corporation-paid Short Term and Long
Term Disability, Corporation-paid Life and Accidental Death & Dismemberment
Insurance, Optional Universal Life and Dependent Life Insurance, and Flexible
Spending Accounts.


               (d)     The Corporation will continue the vesting of all outstanding unvested
options to purchase Corporation common stock registered in the name of
Executive, in accordance with the terms of the applicable Corporation stock
option plan and any federal, state and local rules and regulations. Executive
will not be entitled to any new grants of stock options after the Effective
Date.


               (e)     The Corporation will reimburse Executive for any reasonable
business-related expenses incurred by Executive, consistent with Corporation
policy, up to and including to the Termination Date.


               (f)     The Corporation will provide Executive with an office and secretarial
support, the


 






 




location and scope of which will be mutually agreed.


               (g)     The Corporation will provide Executive with a Corporation business
card, with a title mutually agreed by Executive and the Corporation’s Chief
Executive Officer.


     2.2     On or following the Termination Date:


               (a)     The Corporation will provide Executive with a lump sum severance
payment of fifteen (15) months of his regular base salary, in the total amount
of $437,500 (less any deductions and withholdings required by law or authorized
by Executive), payable on the next regularly scheduled pay date following the
Termination Date. The Corporation will also pay Executive for any accrued and
unused Personal Leave days for the 2003 calendar year on a prorated basis of
1.25 days for each full month worked in that calendar year, up to a maximum of
ten (10) days. Rolled-over Personal Leave days from the 2002 calendar year are
included in this maximum pay out. The Corporation will also pay Executive for
any amounts accumulated under the Employee Stock Purchase Plan toward the March
2003 purchase.


               (b)     Executive will be eligible to continue the health and welfare benefits
currently selected by Executive through COBRA. In the event Executive elects
to continue such benefits through COBRA, and to the extent that such benefits
are available under applicable law, the Corporation will continue to pay the
Corporation’s portion of such benefits for a period of up to fifteen (15)
months following the Termination Date; thereafter, Executive will be
responsible for the full cost of the COBRA premium.


               (c)     Executive’s participation in the Corporation’s 401(k) Plan will end on
the Termination Date, although Executive will be entitled to any vested
benefits that he may have under the Corporation’s 401(k) Plan in accordance
with the terms of such Plan. All other benefits, including but not limited to
Employee Stock Purchase Plan, Corporation-paid Short Term and Long Term
Disability, Corporation-paid Life and Accidental Death & Dismemberment
Insurance, Optional Universal Life and Dependent Life Insurance, and Flexible
Spending Accounts, will end on the Termination Date. Any conversion and/or
continuation rights that Executive may have regarding such insurance will be in
accordance with the terms of the applicable insurance policies.


               (d)     All of Executive’s stock options will cease vesting on the Termination
Date, according to the terms of the plan under which Executive’s stock options
were granted. Executive must elect to exercise the vested portion of his stock
options in accordance with the applicable plan, or they will terminate in their
entirety.


     (e)     The Corporation will reimburse Executive for the reasonable calendar
year 2002 tax return preparation services provided by the Corporation through
PricewaterhouseCoopers.


               (f)     The Corporation will pay Executive the monies allocated by Executive
pursuant to the Corporation’s Management Deferred Compensation Plan in the
manner previously selected by Executive and allowed by the Plan.


     (g)     Executive will promptly return all Corporation property, including all
keys, security cards and any files, documents and/or records prepared for or by
the Corporation. Notwithstanding the foregoing, Executive will be entitled to
retain his current laptop computer, docking station and related computer
accessories, provided that, on or before the Termination Date, Executive will
provide such equipment to the Corporation in order for the Corporation (i) to
confirm such computer does not contain any confidential and proprietary
information of the Corporation, and (ii) to ensure a proper transfer of the
software licensed by the Corporation to Executive.


 






 


               (h)     The Corporation will make available to Executive both reasonable
outplacement assistance and access to the Corporation’s Employee Assistance
Program (EAP).


     2.3 Except as expressly provided herein, Executive will not be entitled to
any other or further compensation, remuneration, rights or benefits from the
Corporation, and the Corporation will have no further obligation or liability
therefor.


     2.4 References. Any request for a reference concerning Executive shall be
referred either to Gary Smith or Rebecca Seidman or such other person as agreed
by the Corporation and Executive (the “Reference Designee”). The Reference
Designee shall provide a positive reference to Executive upon request in the
form attached hereto as Exhibit A. If an oral reference is requested, the
Reference Designee shall provide an oral reference consistent with Exhibit A.
No other information about Executive will be provided to any prospective
employer of Executive, except as required by law or with the written permission
of Executive.


3.     Executive Obligations.


     3.1 Proprietary Information. Executive acknowledges and agrees that he
shall continue to be bound by the obligations set forth in the Proprietary
Information, Inventions and Non-Solicitation Agreement dated September 2, 1997,
between Executive and the Corporation (the “Proprietary Information
Agreement”), including but not limited to Executive’s obligation not to
disclose to any third party any Corporation trade secrets and/or confidential
and proprietary information. In connection therewith, on or before the
Termination Date, Executive shall and deliver to the Corporation the
Termination Certification attached as Annex B to the Proprietary Information
Agreement.


     3.2 Non-Competition and Non-Solicitation. Executive acknowledges and
agrees that, for a period of twelve (12) months from October 22, 2002, he shall
be bound by the obligations set forth in Section 9 of his Proprietary
Information Agreement; provided, however, that (i) the Company agrees to waive
the provisions of Section 9(c), and (ii) the Company agrees to limit the scope
of Section 9(b) to only the following companies (and their affiliates,
subsidiaries, successors and assigns): Alcatel, Cisco, Corvis, Fujitsu,
Infinera Lucent, Movaz, Nortel, Sycamore Tellabs and Tellium and further agrees
that the scope of Section 9(b) shall only apply for six months with the
exception of Movaz and Infinera, as to which it shall apply for twelve months.
Notwithstanding the foregoing, (i) nothing herein shall be construed to
restrict Executive’s right to take a position as General Counsel, and (ii) the
Corporation will consider reasonable requests made in writing by Executive for
waiver of this Section 3.2.


     3.3 Confidentiality. Executive agrees to keep this Agreement, the terms
of this Agreement and the existence of this Agreement strictly confidential.
Executive shall not disclose the same to any third party, except to immediate
family members, and to his attorneys and/or accountants for the purpose of
rendering legal and/or financial advice (and only on the condition that they
maintain such confidentiality), and except as may be required by law or as may
be necessary to enforce the terms of this Agreement. Notwithstanding the
foregoing, if asked about this Agreement, Executive may state in substance that
he has reached a mutually satisfactory agreement with the Corporation.


4.     Release.


     4.1 In consideration for this Agreement and the benefits contained herein,
Executive, on behalf of himself and his heirs, representatives, successors and
assigns, hereby releases, waives and fully discharges the Corporation and its
affiliates, subsidiaries, officers, directors, employees, agents,
representatives, successors and assigns (collectively, the “Corporation et
al.”), absolutely, unconditionally and irrevocably, from, against and in
respect of any and all claims, actions, suits, proceedings, demands, judgments,
costs and expenses (including attorneys’ fees and court costs), liabilities,
obligations or


 






 




damages of any kind or nature whatsoever, whether asserted or unasserted,
mature or contingent, known or unknown, which Executive ever had, now have or
may have against the Corporation et al., from the beginning of time up to the
date of this Agreement, directly or indirectly relating to or arising out of
his employment and employment relationship with the Corporation et al. and the
separation thereof, including but not limited to any claims of wrongful
termination, constructive discharge, defamation, infliction of emotional
distress, breach of express or implied contract, fraud, misrepresentation or
liability in any other theory of tort or contract (whether at law, in equity or
otherwise), claims of any kind that may be brought in any court or
administrative agency, any claims brought under Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Fair Labor Standards Act, the
Rehabilitation Act, the Age Discrimination in Employment Act, the Americans
with Disabilities Act, the Employee Retirement Income Security Act, the Family
and Medical Leave Act, the Equal Pay Act, or any other federal, state or local
law relating to employment, business expenses, employee benefits or the
termination of employment. Further, Executive hereby forever releases the
Corporation et al. from any liability or obligation to reinstate or reemploy
him in any capacity, and waives any right to future employment with the
Corporation. It is expressly agreed and understood that this release is a
GENERAL RELEASE.


     Nothing contained herein shall be construed to affect or limit Executive’s
right to indemnification by the Corporation for acts or omissions in his
capacity as an officer of the Corporation, to the maximum extent provided under
the Corporation’s articles of incorporation or by-laws, as amended, any
agreement or other action of the Corporation providing for such
indemnification, or any applicable policy of insurance maintained by the
Corporation or applicable law.


     4.2 In consideration for this Agreement, the Corporation, on behalf of
itself and its affiliates, subsidiaries, officers, directors, employees,
agents, representatives, successors and assigns, hereby releases, waives and
fully discharges Executive and his agents, representatives, successors and
assigns, absolutely, unconditionally and irrevocably, from, against and in
respect of any and all claims, actions, suits, proceedings, demands, judgments,
costs and expenses (including attorneys’ fees and court costs), liabilities,
obligations or damages of any kind or nature whatsoever, whether asserted or
unasserted, mature or contingent, known or unknown, which the Corporation ever
had, now have or may have against the Executive from the beginning of time up
to the date of this Agreement, directly or indirectly relating to or arising
out of Executive’s employment and employment relationship with the Corporation
et al. and the separation thereof. It is expressly agreed and understood that
this release is a GENERAL RELEASE.


     4.3 Nothing in the above paragraphs will affect the ability of either
party to enforce rights or entitlements specifically provided for under this
Agreement, or any rights or claims that may arise after the date of this
Agreement. In the event that Executive should commence any litigation, action
or proceeding against the Corporation et al., except as it relates to the
enforcement of any rights he may have under this Agreement, Executive will be
obligated to repay the Corporation all benefits paid to him under this
Agreement and will be deemed to have breached this Agreement and will be liable
for any damages, costs and attorneys fees suffered by the Corporation as a
result of such breach.


5.     Adequate Consultation.


     Executive hereby expressly acknowledges and certifies that he has read
this Agreement carefully, that he has been advised by the Corporation and has
had the opportunity to consult with counsel before signing this Agreement if he
believed that was necessary, and that he has freely, voluntarily and knowingly
entered into this Agreement after due consideration. Executive acknowledges
and confirms that no promise or inducement has been offered to him by the
Corporation or any of its agents, except as expressly set forth herein, and
that he is not relying upon any such promise or inducement in entering into
this Agreement. Executive further acknowledges and confirms that the
consideration offered pursuant to this Agreement exceeds any payment, benefit
or other thing of value to which he would otherwise be entitled.

 






 




6.     No Admission of Liability.


     This Agreement shall not be deemed an admission of liability, or of a
violation of any application law, rule, regulation or order, of any kind.


7.     Miscellaneous.


     7.1 Entire Agreement. Except for the articles of incorporation, documents
and other actions and agreements expressly referenced in Section 4.1, this
Agreement sets forth the entire agreement and understanding between the parties
with respect to the subject matter hereof and supersedes all other previous
statements, communications, discussions and agreements of every kind and nature
between and them with respect to the subject matter hereof. No modification,
amendment or addition to this Agreement shall be binding unless in writing and
signed by all parties hereto.


     7.2 Binding Effect. This Agreement shall be binding upon, and shall inure
to the benefit of, the parties and their respective heirs, personal
representatives, legal representatives, successors and assigns.


     7.3 No Assignment. All rights under this Agreement are personal to the
Executive and, without the prior written consent of the Corporation, shall not
be assignable by the Executive other than by will or the laws of descent or
distribution.


     7.4 Waiver/Headings. No failure of either party to exercise any power
given to it hereunder or to insist upon strict compliance by the other with any
obligation or provisions hereunder, and no custom or practice of the parties at
variance with the terms hereunder shall constitute a waiver of the right to
demand exact compliance with the terms hereof. Waiver by a non-defaulting
party of any right arising from a default of the other party shall not affect
or impair the rights of the non-defaulting party with respect to any subsequent
default by the other party of the same or of a different nature. The headings
of the Sections of this Agreement are inserted for convenience of reference
only and do not form a part or affect the meaning hereof.


     7.5 Controlling Law. This Agreement shall in all respects be governed by,
and construed in accordance with, the laws of the State of Maryland, U.S.A.
(without regard to its principles of conflicts of laws).


     7.6 Severability. Any provision in this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.


     7.7 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together will constitute
one and the same instrument.


     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.



	 
	CIENA CORPORATION
	 
	By:      /s/ Gary B. Smith
	

Name: Gary B. Smith
	

Title:   President & CEO
	


	 
	 
	EXECUTIVE
	 
	/s/ Michael O. McCarthy III



Michael O. McCarthy III