exv10w1



 







Exhibit 10.1




CHANGE OF CONTROL AGREEMENT




     This Change of Control Agreement (the “Agreement”) is made and entered into effective
as of August 1, 2006, by and between Patrick Bennett (the “Employee”) and Covad
Communications Group, Inc. and its subsidiaries (the “Company”).



     Section 1. RECITALS.



     A. It is expected that the Company from time to time will consider the possibility of
acquisition by another entity, or that a change in control may otherwise occur with or without the
approval of the Company’s Board of Directors (the “Board”). The Company recognizes that
such consideration can be a distraction to the Employee and can cause the Employee to consider
alternative employment opportunities. The Company has determined that it is in the best interests
of the Company to assure that the Company will have the continued dedication and objectivity of the
Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined
below) of the Company.



     B. The Company believes that it is in the best interests of the Company to provide the
Employee with an incentive to continue his or her employment with the Company and to motivate the
Employee to maximize the value of the Company upon a Change of Control.



     C. The Company believes that it is imperative to provide the Employee with certain benefits
upon a Change of Control and, under certain circumstances, upon termination of the Employee’s
employment in connection with a Change of Control, which benefits are intended to provide the
Employee with financial security and sufficient encouragement to remain with the Company
notwithstanding the possibility of a Change of Control.



     Section 2. AGREEMENT. In consideration of the mutual covenants contained in this Agreement,
and in consideration of the continuing employment of Employee by the Company, the parties agree as
follows:



     A. Term of Agreement. This Agreement shall terminate upon the earlier of: (a) the
termination of Employee’s employment for any reason prior to, and not in connection with, a Change
of Control, (b) October 4, 2007; or (b) the date that all obligations of the parties hereto with
respect to this Agreement have been satisfied.



     B. At-Will Employment. The Company and the Employee acknowledge that the Employee’s
employment is and shall continue to be at-will, as defined under applicable law. If the Employee’s
employment terminates for any reason, including (without limitation) any termination prior to, and
not in connection with, a Change of Control, the Employee shall not be entitled to any payments or
benefits, other than as provided by this Agreement, or as may otherwise be available in accordance
with applicable law and the terms of the Company’s established employee plans and written policies
at the time of termination.



     C. Separation Benefits Upon Certain Events Following Change of Control. If: (1) the
Employee’s employment is terminated (an “Involuntary Termination”) by the surviving entity



 









 







without Cause (as defined below); or (2) the Employee resigns under circumstances that
constitute a Resignation for Good Reason (as defined below) within one (1) year following a Change
of Control; Employee shall be entitled to the following separation benefits:



          1. Stock Options and Restricted Stock. The terms of the 1997 Stock Plan and the terms
of any agreement with respect to stock options granted for the Company’s securities held by the
Employee shall govern such stock options and are incorporated herein by reference.



          2. Severance Pay. Employee shall be entitled to receive an amount (less any severance
pay received under any other applicable severance plan in effect) equivalent to the total sum of
one year current salary and target bonus subject to all applicable taxes capped at 2.99 times the
Employee’s “base amount” determined for purposes of IRC Section 280G.



          3. COBRA Continuation Coverage. Employee’s existing coverage under the Company’s
group health plan (and, if applicable, the existing group health coverage for his or her eligible
dependents) will end on the last day of the month in which his or her employment terminates.
Employee and his or her eligible dependents may then be eligible to elect temporary continuation
coverage under the Company’s group health plan in accordance with the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”). Employee and his or her eligible dependents will
be provided with a COBRA election form and notice which describe his or her rights to continuation
coverage under COBRA. If Employee is eligible for severance benefits under this Agreement at the
time of the termination of employment and Employee timely elects COBRA continuation coverage, then
the Company will pay for COBRA coverage for him or her and, if applicable, his or her eligible
dependents for one (1) year; provided that such payments shall not include COBRA coverage with
respect to the Company’s Section 125 health care reimbursement plan. Notwithstanding the
foregoing, if at anytime prior to the exhaustion of the one (1) year, Employee commences employment
with an employer that offers health benefits substantially equal to or better than the health
benefit coverage offered by Company to him or her pursuant to COBRA, as determined by Covad,
whether or not Employee elects to receive such other health benefits, the payment by the Company of
the COBRA coverage cost will terminate as of his or her commencement of such employment. After such
period of Company-paid COBRA coverage, Employee (and, if applicable, his or her eligible
dependents) may continue COBRA coverage at his or her own expense in accordance with COBRA (or
CalCOBRA). No provision of this Agreement will affect the continuation coverage rules under COBRA.
Therefore, the period during which Employee must elect to continue the Company’s group health plan
coverage under COBRA, the length of time during which COBRA coverage will be made available to him
or her, and all his or her other rights and obligations under COBRA will be applied in the same
manner that such rules would apply in the absence of this Agreement. Any such election is
Employee’s responsibility, not the Company’s or a Subsidiary’s.



          4. Other Terminations. The Employee shall not be entitled to receive any benefits
under this Agreement in the event the Employee’s employment terminates: (1) for any reason other
than those described in Section 2.C.; (2) prior to, and not in connection with, the



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occurrence of a Change of Control; (3) for Cause; or (4) after the one (1) year period following the effective date
of a Change of Control.



          5. Execution of Release of Claims. The payment of the benefits listed herein is
conditioned on the Employee executing the General Release of All Claims, a copy of which is
attached as Exhibit A, within five (5) days after the termination date if the Employee is under age
forty (40), or executing the General Release of All Claims, a copy of which is attached as Exhibit
B, within the period after the termination date that is designated in the release (or any longer
period required under the Older Workers Benefit Protection Act) if the Employee is age forty (40)
or over (and does not revoke the agreement to the terms of the release within any applicable
revocation period).



     Section 3. DEFINITION OF TERMS. The following terms referred to in this Agreement shall have
the following meanings:



     A. “1934 Act”: the Securities Exchange Act of 1934, as amended, and the regulations
thereunder.



     B. “Beneficial
Owner”: as defined in Rule 13d-3 of the SEC under the 1934 Act.



     C. “Cause”: defined as any of the following: (i) conviction of any felony which
includes as an element of the crime a premeditated intention to commit the act, (ii) serious
misconduct involving dishonesty in the course of employment, or (iii) habitual neglect of
Employee’s duties (other than on account of disability) which habitual neglect materially adversely
affects performance of Employee’s duties and continues for 30 days following receipt of notice from
the Company (if Employee is an employee of the Company), or a Subsidiary (if Employee is an
employee of a Subsidiary), which specifically identifies the nature of the habitual neglect and the
duties that are materially adversely affected and states that, if not cured, such habitual neglect
constitutes grounds for termination; except that Cause shall not mean: (1) bad judgment or
negligence other than habitual neglect of duty; (2) any act or omission believed by Employee in
good faith to have been in or not opposed to the interest of the Company and its Subsidiaries
(without intent to gain, directly or indirectly, a profit to which Employee was not legally
entitled); (3) any act or omission with respect to which a determination could properly have been
made by the Company that Employee met the applicable standard of conduct for indemnification or
reimbursement under such employer’s by-laws, any applicable indemnification agreement, or
applicable law, in each case in effect at the time of such act or omission; or (4) any act or
omission with respect to which notice of termination is given more than 12 months after the
earliest date on which any officer of the Company, not a party to the act or omission, knew or
should have known of such act or omission. “Cause” for purposes of this Agreement shall also mean
Employee’s death or “Disability” defined as any medically determinable physical or mental
impairment that has lasted for a continuous period of not less than six months and can be expected
to be permanent or of indefinite duration, and that renders Employee unable to perform the
essential functions of his or her job even with reasonable accommodation.



     D. “Change
of Control”: shall include the occurrence of any of the following events:



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        1. Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the total voting power represented by the Company’s then outstanding
voting securities; or



               2. A change in the composition of the Board of Directors of the Company occurring within a
two-year period as a result of which fewer than a majority of the directors are “Incumbent
Directors.” “Incumbent Directors” shall mean directors who either (A) are directors of the Company
as of the date hereof, or (B) are elected, or nominated for election, to the Board of Directors
with the affirmative votes (either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for election as a director without objection to
such nomination) of at least a majority of the Incumbent Directors at the time of such election or
nomination; or



               3. The consummation of (A) a merger or consolidation of the Company with any other entity,
other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or the entity that controls the
Company or such surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity or the entity that
controls the Company or such surviving entity outstanding immediately after such merger or
consolidation, or (B) the sale or disposition by the Company of all or substantially all the
Company’s assets; or



               4. The shareholders approve a plan of complete liquidation of the Company.



     E. “Code”: The Internal Revenue Code of 1986, as amended, and the regulations
thereunder.



     F. “Effective
Date”: means the first date on which a Change of Control occurs during
the Agreement Term. Despite anything in this Agreement to the contrary, if the Company terminates
the Employee’s employment before the date of a Change of Control, and if the Employee reasonably
demonstrates that such termination of employment (a) was at the request of a third party who had
taken steps reasonably calculated to effect the Change of Control or (b) otherwise arose in
anticipation of the Change of Control, then “Effective Date” shall mean the date immediately before
the date of such termination of employment.



     G. “Resignation
For Good Reason”: shall mean, subject to the right of either party to
arbitrate a dispute with respect thereto in accordance with the terms of this Agreement, Employee’s
resignation as a result of, and within 30 days following:



          1. Employee’s position (including offices, titles, reporting requirements and
responsibilities), authority and duties are not commensurate in all material respects with the



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principal position, authority and duties held by, exercised by and assigned to him or her at any
time during the 90-day period immediately before the effective date of the Change of Control;



          2. Employee is requested to principally perform services at a location more than 40 miles from
the location Employee was performing them during the 90-day period immediately before the effective
date of the Change of Control;



          3. A reduction of ten percent (10%) or more in the level of Employee’s base salary, bonus,
stock options or employee benefits (in the aggregate), other than a reduction implemented with his
or her consent or a reduction that is equivalent to a reduction in base salaries, bonus
opportunities, stock options and/or employee benefits (in the aggregate), as applicable, imposed on
peer Employees of the Company (if Employee is an employee of Company) or a Subsidiary (if Employee
is an employee of a Subsidiary); or



          4. There is any material reduction in welfare and benefits available to Employee compared to
the welfare and benefits available to him or her in the year prior to the effective date of the
Change of Control.



     H. “SEC”: the Securities and Exchange Commission.



     I. “Subsidiary”
or “Subsidiaries”: any corporation as defined in Section
424(f) of the Code with the Company being treated as the employer corporation for purposes of this
definition, and any partnership or limited liability company in which Group or any Subsidiary has a
direct or indirect interest (whether in the form of voting power or participation in profits or
capital contribution) of 50% or more. The determination of Subsidiary status shall be made, in the
case of a Change of Control, at the time of the occurrence of the event constituting a Change of
Control; and in the case of an event relating to employment status or benefits, at the time such
event occurs.



     J. “Voting
Securities”: means securities of a corporation that are entitled to vote
generally in the election of directors of such corporation.



     Section 4. NOTICE & ARBITRATION



     A. Notice. Notices and all other communications contemplated by this Agreement shall
be in writing and shall be deemed to have been duly given when personally delivered or when mailed
by U.S. registered or certified mail, return receipt requested and postage prepaid. Mailed notices
to the Employee shall be addressed to the Employee at the home address that the Employee most
recently communicated to the Company in writing. In the case of the Company, mailed notices shall
be addressed to its corporate headquarters, 110 Rio Robles, San Jose, CA 95134, and all notices
shall be directed to the attention of Senior Employee in charge of Human Resources.



     B. Arbitration and Dispute Resolution.



          1. In the event disputes arise between them (other than claims that Employee may have for
workers’ compensation or unemployment insurance benefits, or claims based on



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any state or federal
law that have been determined by the controlling judicial authority of appropriate jurisdiction not
to be arbitrable pursuant to pre-dispute arbitration agreements such as this arbitration provision), both Parties will be bound by this arbitration clause which provides
for final and binding arbitration for disputes arising out of or relating to the Employee’s
employment with the Company, the termination of Employee’s employment, and/or any agreements
previously or hereafter entered into between Employee and the Company. The parties shall arbitrate
such disputes under the most recently issued National Rules for the Resolution of Employment
Disputes of the American Arbitration Association. All disputes shall be resolved by a single
arbitrator, who shall be an attorney duly admitted to practice in California, selected by the
Company and the Employee.



          2. Once the arbitration has commenced, both the Company and the Employee shall have the right
to conduct normal civil discovery, the extent and quantity of such shall be subject to the
discretion of the selected arbitrator. The arbitrator shall have the exclusive authority to
resolve any issues relating to the arbitrability of the dispute or the validity or interpretation
of this arbitration provision, to rule on motions to dismiss and/or motions for summary judgment
applying the standards governing such motions under the California Code of Civil Procedure, and
shall be empowered to award either Party any remedy at law or in equity that the prevailing party
would otherwise have been entitled to had the matter been litigated in court. The arbitrator shall
issue a decision or award in writing, stating the essential findings of fact and conclusions of
law. Judgment on the award rendered by the arbitrator may be entered in any court having
jurisdiction. Costs shall be allocated such that Employee will not incur any costs other than that
which would be incurred to file a civil action in the Superior Court for the State of California or
other court with proper jurisdiction over the dispute.



          3. BOTH THE COMPANY AND THE EMPLOYEE EXPRESSLY WAIVE ANY RIGHT THAT EITHER PARTY HAS OR MAY
HAVE TO A CIVIL JURY TRIAL. ONLY AN ARBITRATOR, NOT A JUDGE OR JURY, WILL DECIDE ANY SUCH DISPUTE.
BOTH PARTIES AGREE THAT NO ACTION MAY BE BROUGHT IN COURT EXCEPT ACTIONS TO COMPEL ARBITRATION, TO
OBTAIN THE DISMISSAL OF ACTIONS FILED IN COURT IN CONTRAVENTION OF THIS ARBITRATION AGREEMENT, OR
TO SEEK PROVISIONAL RELIEF AS MAY BE ALLOWED BY STATE OR FEDERAL LAW.



          4. Although all claims arising between the parties are subject to arbitration, unless
otherwise prohibited by applicable law, each party retains the right to file, in a court of
competent jurisdiction, an application for provisional injunctive and/or equitable relief in
connection with a claim relating to this Agreement, including any claims relevant to the
application for provisional relief, and shall not be obligated to post a bond or other security in
seeking such relief unless specifically required by law. Although a court may grant provisional
injunctive and/or equitable relief, the arbitrator shall at all times retain the power to grant
permanent injunctive relief, or any other final remedy.



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     Section 5. MISCELLANEOUS PROVISIONS.



     A. Successors. Any successor to the Company (whether direct or indirect and whether
by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of
the Company’s business and/or assets shall assume the obligations under this Agreement and agree
expressly to perform the obligations under this Agreement in the same manner and to the same extent
as the Company would be required to perform such obligations in the absence of a succession. The
terms of this Agreement and all of the Employee’s rights hereunder shall inure to the benefit of,
and be enforceable by, the Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.



     B. No Duty to Mitigate. The Employee shall not be required to mitigate the amount of
any payment contemplated by this Agreement (whether by seeking new employment or in any other
manner), nor, except as otherwise provided in this Agreement, shall any such payment be reduced by
any earnings that the Employee may receive from any other source.



     C. Waiver. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and
by the Chief Executive Officer of the Company. No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition or provision at
another time.



     D. Whole Agreement. No agreements, representations or understandings (whether oral or
written and whether express or implied) which are not expressly set forth in this Agreement have
been made or entered into by either party with respect to the subject matter hereof. This
Agreement supersedes any agreement of the same title and/or concerning similar subject matter dated
prior to the date of this Agreement, and by execution of this Agreement both parties agree that any
such predecessor agreement shall be deemed null and void.



     E. Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California without reference to conflict of
laws provisions.



     F. Severability. If any term or provision of this Agreement or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective as to such jurisdiction to the extent of
such invalidity or unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions of this Agreement or the application of such terms and provisions to
circumstances other than those as to which it is held invalid or unenforceable, and a suitable and
equitable term or provision shall be substituted therefore to carry out, insofar as may be valid
and enforceable, the intent and purpose of the invalid or unenforceable term or provision.



     G. Legal Fees and Expenses. The parties shall each bear their own expenses, legal
fees and other fees incurred in connection with this Agreement.




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     H. No Assignment of Benefits. The rights of any person to payments or benefits
under this Agreement shall not be made subject to option or assignment, either by voluntary or
involuntary assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor’s process, and any action in violation of this subsection
(h) shall be void.



     I. Employment Taxes. All payments made pursuant to this Agreement will be subject to
withholding of applicable income and employment taxes unless otherwise expressly noted.



     J. Assignment by the Company. The Company may assign its rights under this Agreement
to an affiliate (including a parent or subsidiary) without Employee’s consent, and an affiliate may
assign its rights under this Agreement to another affiliate of the Company or to the Company
without Employee’s consent; provided, however, that no assignment shall be made if the net worth of
the assignee is less than the net worth of the Company at the time of assignment. In the case of
any such assignment, the term “Company” when used in a section of this Agreement shall mean the
corporation that actually employs the Employee.



     K. 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, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year first above written.



	 	 	 	 	 	 	 
	Covad Communications Group, Inc.	 	 	Patrick Bennett	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Charles Hoffman
 

Charles Hoffman

President and Chief Executive Officer
	 	 	/s/ Patrick Bennett

 
	 






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Exhibit A




GENERAL RELEASE OF ALL CLAIMS




     I,                                                                   
               [employee name], hereby make on behalf of myself,
my heirs, executors,
administrators, successors, and assigns, the following agreements and acknowledgements in
consideration of the payments and benefits                                          [amount of benefit] to be received by me under the Covad
Communication Company Severance Plan (the “Plan”):



     I. Release and Waiver of All Claims




     A. I hereby agree that I fully and forever discharge, waive and release any and all claims and
causes of action of any kind that I may have had or now have against Covad Communications Company,
and any of its affiliates, predecessors, successors, parents, subsidiaries or assigns and any of
their respective officers, directors, agents, employees, and representatives (collectively, the
“Company” or “Covad”) arising out of or relating in any way to my employment with the Company and
the termination thereof, including but not limited to: (1) claims of wrongful discharge, breach of
contract, breach of the covenant of good faith and fair dealing, violation of public policy,
defamation, personal injury, infliction of emotional distress, negligence, fraud, retaliation and
claims for unpaid wages, salaries, bonuses and commissions; (2) claims under Title VII of the 1964
Civil Rights Act, as amended, the Equal Pay Act of 1963, 42 U.S.C. § 1981, the Americans with
Disabilities Act, the Civil Rights Act of 1866, the Employee Retirement Income Security Act of
1974, as amended, Workers Adjustment and Retraining Notification Act, Family Medical and Leave Act,
and any other federal laws and regulations relating to employment; (3) any laws and regulations of
California and its local governments relating to employment including but not limited to the
California Fair Employment and Housing Act, the California Labor Code including Section 1197.5
thereof, and the California Family Rights Act; and (4) any analogous laws and regulations of any
state other than California and the local governments of each such state; and excluding any claims
I may have for unemployment and workers’ compensation insurance benefits.



     B. I hereby agree that I fully and forever waive any and all rights and benefits conferred
upon me by the provisions of Section 1542 of the Civil Code of the State of California, which
states as follows: “[a] general release does not extend to claims which the creditor [i.e.,
employee] 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 [i.e., the
Company],” and by any analogous law of any state other than California.



     C. I understand that various lawsuits have been brought against the Company alleging fraud
and/or other legal violations relating to transactions in the Company’s securities, and that some
of those cases have been brought as purported class actions on behalf of various classes of persons
who acquired such securities. I have made my own determination as to whether I wish to consult
with the law firms purporting to represent such classes, and as to whether I am eligible to
and wish to pursue claims against the Company in connection with such cases. I understand



 









 




that by
signing this Agreement I will be precluded from pursuing such claims, and will be waiving any
rights I might otherwise have had as a result of such lawsuits.




          I agree and understand that if, hereafter, I discover facts different from or in addition to
those which I now know or believe to be true, that the waivers of this General Release of All
Claims (“General Release”) shall be and remain effective in all respects notwithstanding such
different or additional facts or the discovery thereof.




     II. Confidential Information & Company Employees




          I hereby agree and understand that:




     A. I am required to return to the Company immediately upon my termination of employment all
Company Information, including but not limited to notebooks, notes, manuals, memoranda, records,
diagrams, blueprints, bulletins, formulas, reports, computer programs, or other data or
memorializations of any kind, as well as any Company property or equipment, that I have in my
possession or under my control. I further agree and understand that I am not entitled or
authorized to keep any portions, summaries or copies of Company Information, and that I am under a
continuing obligation to keep all Company Information confidential and not to disclose it to any
third party in the future. I understand that the term “Company Information” includes, but is not
limited to, the following:




	 	•	 	Trade secret, information, matter or thing of a confidential, private or secret
nature, connected with the actual or anticipated products, research, development or business
of the Company or its customers, including information received from third parties under
confidential conditions; and
	 
	 	•	 	Other technical, scientific, marketing, business, product development or financial
information, the use or disclosure of which might reasonably be determined to be contrary to
the interests of the Company.





     B. I am prohibited for a period of one (1) year after the termination of my employment, from
soliciting for employment, whether as an employee, independent contractor, or agent, any Company
employee; and for that same time period I am prohibited from encouraging or otherwise enticing any
Company employee to terminate his or her employment with the Company.



     C. The promises and agreements of this Section II. are a material inducement to the Company to
provide me with the payments and benefits under the Plan and that, for the breach thereof, the
Company will be entitled to pursue its legal and equitable remedies against me, including, without
limitation, the right to immediately cease payments made pursuant to the Plan and/or seek
injunctive relief; provided, however, this General Release will remain in full force and effect.



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      III. Entire Agreement




          I agree and understand that this General Release contains the entire agreement between the
Company and me with respect to any matters referred to in the General Release, and supersedes any
and all previous oral or written agreements.




      IV. No Admission




          I agree and understand that neither the fact nor any aspect of this General Release is
intended, should be deemed, or should be construed at any time to be any admission of liability or
wrongdoing by either myself or the Company.




      V. Severability




          I agree and understand that if any provision, or portion of a provision, of this General
Release is, for any reason, held to be unenforceable, that such unenforceability will not affect
any other provision, or portion of a provision, of this General Release and this General Release
shall be construed as if such unenforceable provision or portion had never been contained herein.




      VI. Dispute Resolution




          I hereby agree and understand that any and all disputes regarding any alleged breach of this
General Release shall be settled by final and binding arbitration before a single, neutral
arbitrator in the County of Santa Clara, California, or in the County where I reside at the time
the dispute arises, at my option, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association, or its successor, and judgment upon
the award rendered may be entered in any court with jurisdiction. I understand that this
arbitration clause applies to all claims, including claims under federal or state employment or
civil rights laws (other than claims for workers’ compensation or unemployment insurance benefits).
Unless another limitations period is expressly mandated by statute, to be timely, any dispute must
be referred to arbitration within twelve (12) months of the incident or complaint giving rise to
the dispute. Disputes not referred to arbitration within such twelve (12) month period shall be
deemed waived, and the arbitrator shall deny any untimely claims. I understand that the parties
shall be entitled to discovery sufficient to adequately arbitrate their claims, including access to
essential documents and witnesses, as determined by the arbitrator. In reaching a decision, the
arbitrator shall adhere to relevant law and applicable precedent, and shall have no power to vary
therefrom. The arbitrator shall issue a written decision making specific findings of fact and
stating conclusions of law. I understand that each party retains the right to file, in a court of
competent jurisdiction, an application for provisional injunctive and/or equitable relief in
connection with a claim relating to this General Release, and shall not be required to post a bond
or other security in seeking such relief unless specifically required by law. Although a court may
grant provisional remedies, the arbitrator shall at all times retain the power to grant permanent
injunctive relief, or any other final remedy. I understand that the Company will pay the costs of
arbitration in excess of the costs I would incur to bring such claim in a civil court.




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     VII. Time to Consider and Sign General Release




          I understand that I may have five (5) days after receipt of this General Release within which
I may review and consider, discuss with an attorney of my own choosing and at my own expense, and
decide whether or not to sign this General Release. I understand that, if I do not sign the
General Release within this five-day period, this General Release will not become effective and no
payments and benefits under the Plan will be provided to me.




     VIII. Effective Date




          I understand that this General Release becomes effective immediately upon signing it.




      IX. Miscellaneous Acknowledgements




     A. I hereby acknowledge that I understand that, but for my signing of this General Release, I
would not be entitled to nor would I be provided with any of the payments and benefits under the
Plan. I understand that no payments and benefits will be provided to me until this General Release
becomes effective. I understand further that, even if I did not sign this General Release, I would
still be entitled to:




          1. All wages, including any paid vacation, less applicable deductions, earned by me
through my termination date; and




          2. The opportunity, if I am eligible, to elect, at my sole expense, to continue to
participate in (and, if applicable, my dependents are eligible to elect to continue their
participation in) the group health insurance plans provided by the Company pursuant to the
terms and conditions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”).



     B. I hereby acknowledge that any agreement that I signed in connection with my employment with
the Company regarding employee inventions, authorship, proprietary and confidential information
shall remain in full force and effect following the termination of my employment.



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EMPLOYEE’S ACCEPTANCE OF GENERAL RELEASE



BEFORE SIGNING MY NAME TO THIS GENERAL RELEASE, I STATE THAT: I HAVE READ IT; I UNDERSTAND IT AND
KNOW THAT I AM GIVING UP IMPORTANT RIGHTS; I AM AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY
BEFORE SIGNING IT; AND I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.




Date delivered to employee                                         , 200____





Signed this                      day of                     , 200___



	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Employee’s Signature 	 
	 	 	 
	 
	 	 	 
	 	
 	 
	 	Employee’s Name (Printed) 	 
	 	 	 
	 



     Copies of the signed release or revocation letter should be mailed or faxed to:


Lesley Ngai

Covad Communications Company

Human Resources Dept.

110 Rio Robles

San Jose, California 95134

Fax: (408) 952-7404





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Exhibit B



GENERAL RELEASE OF ALL CLAIMS




     I,                                          [employee name], hereby make on behalf of myself, my heirs, executors,
administrators, successors, and assigns, the following agreements and acknowledgements in
consideration of the payments and benefits
                     [amount of benefit] to be received by me under the Covad
Communication Company Severance Plan (the “Plan”):



     I. Release and Waiver of All Claims




     A. I hereby agree that I fully and forever discharge, waive and release any and all claims and
causes of action of any kind that I may have had or now have against Covad Communications Company,
and any of its affiliates, predecessors, successors, parents, subsidiaries or assigns and any of
their respective officers, directors, agents, employees, and representatives (collectively, the
“Company” or “Covad”) arising out of or relating in any way to my employment with the Company and
the termination thereof, including but not limited to: (1) claims of wrongful discharge, breach of
contract, breach of the covenant of good faith and fair dealing, violation of public policy,
defamation, personal injury, infliction of emotional distress, negligence, fraud, retaliation and
claims for unpaid wages, salaries, bonuses and commissions; (2) claims under the Age Discrimination
in Employment Act of 1967, as amended, Title VII of the 1964 Civil Rights Act, as amended, the
Equal Pay Act of 1963, 42 U.S.C. § 1981, the Americans with Disabilities Act, the Civil Rights Act
of 1866, the Employee Retirement Income Security Act of 1974, as amended, Workers Adjustment and
Retraining Notification Act, Family Medical and Leave Act, and any other federal laws and
regulations relating to employment; (3) any laws and regulations of California and its local
governments relating to employment including but not limited to the California Fair Employment and
Housing Act, the California Labor Code including Section 1197.5 thereof, and the California Family
Rights Act; and (4) any analogous laws and regulations of any state other than California and the
local governments of each such state; and excluding any claims I may have for unemployment and
workers’ compensation insurance benefits.



     B. I hereby agree that I fully and forever waive any and all rights and benefits conferred
upon me by the provisions of Section 1542 of the Civil Code of the State of California, which
states as follows: “[a] general release does not extend to claims which the creditor [i.e.,
employee] 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 [i.e., the
Company],” and by any analogous law of any state other than California.



     C. I understand that various lawsuits have been brought against the Company alleging fraud
and/or other legal violations relating to transactions in the Company’s securities, and that some
of those cases have been brought as purported class actions on behalf of various classes of persons
who acquired such securities. I have made my own determination as to whether I wish to consult
with the law firms purporting to represent such classes, and as to whether I am eligible to and
wish to pursue claims against the Company in connection with such cases. I understand



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that by signing this Agreement I will be precluded from pursuing such claims, and will be waiving any
rights I might otherwise have had as a result of such lawsuits.



          I agree and understand that if, hereafter, I discover facts different from or in addition to
those which I now know or believe to be true, that the waivers of this General Release of All
Claims (“General Release”) shall be and remain effective in all respects notwithstanding such
different or additional facts or the discovery thereof.




     II. Confidential Information & Company Employees




          I hereby agree and understand that:




     A. I am required to return to the Company immediately upon my termination of employment all
Company Information, including but not limited to notebooks, notes, manuals, memoranda, records,
diagrams, blueprints, bulletins, formulas, reports, computer programs, or other data or
memorializations of any kind, as well as any Company property or equipment, that I have in my
possession or under my control. I further agree and understand that I am not entitled or
authorized to keep any portions, summaries or copies of Company Information, and that I am under a
continuing obligation to keep all Company Information confidential and not to disclose it to any
third party in the future. I understand that the term “Company Information” includes, but is not
limited to, the following:




	 	•	 	Trade secret, information, matter or thing of a confidential, private or secret
nature, connected with the actual or anticipated products, research, development or business
of the Company or its customers, including information received from third parties under
confidential conditions; and
	 
	 	•	 	Other technical, scientific, marketing, business, product development or financial
information, the use or disclosure of which might reasonably be determined to be contrary to
the interests of the Company.





     B. I am prohibited for a period of one (1) year after the termination of my employment, from
soliciting for employment, whether as an employee, independent contractor, or agent, any Company
employee; and for that same time period I am prohibited from encouraging or otherwise enticing any
Company employee to terminate his or her employment with the Company.



     C. The promises and agreements of this Section II. are a material inducement to the Company to
provide me with the payments and benefits under the Plan and that, for the breach thereof, the
Company will be entitled to pursue its legal and equitable remedies against me, including, without
limitation, the right to immediately cease payments made pursuant to the Plan and/or seek
injunctive relief; provided, however, this General Release will remain in full force and effect.



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     III. Entire Agreement




          I agree and understand that this General Release contains the entire agreement between the
Company and me with respect to any matters referred to in the General Release, and supersedes any
and all previous oral or written agreements.




     IV. No Admission




          I agree and understand that neither the fact nor any aspect of this General Release is
intended, should be deemed, or should be construed at any time to be any admission of liability or
wrongdoing by either myself or the Company.




     V. Severability




          I agree and understand that if any provision, or portion of a provision, of this General
Release is, for any reason, held to be unenforceable, that such unenforceability will not affect
any other provision, or portion of a provision, of this General Release and this General Release
shall be construed as if such unenforceable provision or portion had never been contained herein.




     VI. Dispute Resolution




          I hereby agree and understand that any and all disputes regarding any alleged breach of this
General Release shall be settled by final and binding arbitration before a single, neutral
arbitrator in the County of Santa Clara, California, or in the County where I reside at the time
the dispute arises, at my option, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association, or its successor, and judgment upon
the award rendered may be entered in any court with jurisdiction. I understand that this
arbitration clause applies to all claims, including claims under federal or state employment or
civil rights laws (other than claims for workers’ compensation or unemployment insurance benefits).
Unless another limitations period is expressly mandated by statute, to be timely, any dispute must
be referred to arbitration within twelve (12) months of the incident or complaint giving rise to
the dispute. Disputes not referred to arbitration within such twelve (12) month period shall be
deemed waived, and the arbitrator shall deny any untimely claims. I understand that the parties
shall be entitled to discovery sufficient to adequately arbitrate their claims, including access to
essential documents and witnesses, as determined by the arbitrator. In reaching a decision, the
arbitrator shall adhere to relevant law and applicable precedent, and shall have no power to vary
therefrom. The arbitrator shall issue a written decision making specific findings of fact and
stating conclusions of law. I understand that each party retains the right to file, in a court of
competent jurisdiction, an application for provisional injunctive and/or equitable relief in
connection with a claim relating to this General Release, and shall not be required to post a bond
or other security in seeking such relief unless specifically required by law. Although a court may
grant provisional remedies, the arbitrator shall at all times retain the power to grant permanent
injunctive relief, or any other final remedy. I understand that the Company will pay the costs of
arbitration in excess of the costs I would incur to bring such claim in a civil court.




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     VII. Waiver




          By signing this Agreement, I acknowledge that:





	 	a.	 	I have carefully read, and understand, this Agreement;
	 
	 	b.	 	I have been given forty-five (45) days to consider my rights and
obligations under this Agreement and to consult with an attorney;
	 
	 	c.	 	I have been provided a notice by the Company, as required by the
Older Workers Benefit Protection Act of 1990, that informed me about the
decisional units covered by the reduction in force program, the eligibility
factors for the reduction in force program, the factors used in selecting
employees for participation in the program, any time limits applicable to the
program, the job titles and ages of the employees in my decisional unit selected
for participation in the program and the job titles and ages of the employees in
the same decisional unit not selected for participation in the program.
	 
	 	d.	 	The Company advised me to consult with an attorney and/or any other
advisors of my choice before signing this Agreement;
	 
	 	e.	 	I understand that this Agreement is legally binding and by
signing it I give up certain rights;
	 
	 	f.	 	I have voluntarily chosen to enter into this Agreement and have not
been forced or pressured in any way to sign it;
	 
	 	g.	 	I knowingly and voluntarily release Company, including its
affiliates, predecessors, successors, parents, subsidiaries or assigns and any of
their respective officers, directors, agents, employees, and representatives from
any and all claims I may have, known or unknown, in exchange for the payments I
have obtained by signing this Agreement, and that these payments are in addition
to any payments I would have otherwise received if I did not sign this Agreement;
	 
	 	h.	 	The General Release in this Agreement includes a waiver and release
of all claims I may have under the Age Discrimination in Employment Act of 1967
(29 U.S.C. § 621 et seq.); and
	 
	 	i.	 	This Agreement does not waive any rights or claims that may arise
after this Agreement is signed and becomes effective, which is eight (8) days
after I sign it.





     VIII. Opportunity to Revoke and Effective Date




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          I understand that this General Release will not become effective until expiration of the
seventh (7) day after I sign it; provided that I do not revoke it during those seven (7) days, and
that for a period of seven (7) days after I sign this General Release, I may revoke it. I agree
and understand that if I decide to revoke this General Release after I sign it, I can do so only by
delivering a written notification of my revocation, no later than the seventh day after I sign this
General Release, to:



Lesley Ngai

Covad Communications Company

Human Resources Dept.

110 Rio Robles

San Jose, California 95134

Fax: (408) 952-7404




      IX. Miscellaneous Acknowledgements




     A. I hereby acknowledge that I understand that, but for my signing of this General Release and
failure to revoke it during seven (7) days thereafter, I would not be entitled to nor would I be
provided with any of the payments and benefits under the Plan. I understand that no payments and
benefits will be provided to me until this General Release becomes effective. I understand further
that, even if I did not sign this General Release or if I sign and then revoke it within seven (7)
days thereafter, I would still be entitled to:




          1. All wages, including any paid vacation, less applicable deductions, earned by me
through my termination date; and




          2. The opportunity, if I am eligible, to elect, at my sole expense, to continue to
participate in (and, if applicable, my dependents are eligible to elect to continue their
participation in) the group health insurance plans provided by the Company pursuant to the
terms and conditions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”).



     B. I hereby acknowledge that any agreement that I signed in connection with my employment with
the Company regarding employee inventions, authorship, proprietary and confidential information
shall remain in full force and effect following the termination of my employment.



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EMPLOYEE’S ACCEPTANCE OF GENERAL RELEASE



BEFORE SIGNING MY NAME TO THIS GENERAL RELEASE, I STATE THAT: I HAVE READ IT; I UNDERSTAND IT AND
KNOW THAT I AM GIVING UP IMPORTANT RIGHTS; I AM AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY
BEFORE SIGNING IT; AND I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.




Date delivered to employee                                         , 200___



Signed this                      day of                                         , 200___



	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Employee’s Signature 	 
	 	 	 
	 
	 	 	 
	 	
 	 
	 	Employee’s Name (Printed) 	 
	 	 	 
	 



     Copies of the signed release or revocation letter should be mailed or faxed to:



Lesley Ngai

Covad Communications Company

Human Resources Dept.

110 Rio Robles, San Jose, California 95134

Fax: (408) 952-7404





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