exv10w77



 





	 	 	 
	EXHIBIT 10.77

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SEPARATION AGREEMENT



THIS SEPARATION AGREEMENT (“Agreement”) is made and entered into this 22nd day
of October 2003, by and between Pac-West Telecomm, Inc., a California
corporation (the “Company”), and Wallace W. Griffin (“Executive”).



WHEREAS, pursuant to a mutually approved 2001 plan for the orderly transition
of executive leadership, it was contemplated that Executive would remain as CEO
of the Company through November of 2003, while transitioning responsibilities
to his successor; and



WHEREAS, the transition of responsibilities having been successfully completed
earlier than planned, the board of Company and Executive agreed that it would
be in the best interests of the Company to replace Executive as CEO of the
Company effective July 1, 2003; and



NOW, THEREFORE, in consideration of the mutual agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Executive do hereby agree as follows:



1. Termination. As of the Effective Date (as that term is defined in Section
11) Executive shall terminate all employment with the Company and hereby
resigns effective as of that date from any and all other positions with the
Company or any affiliate thereof (it being understood that Executive shall
continue to serve out his term as a director of the Company). As of the
Effective Date, the Executive Agreement, dated as of December 1, 2001, by and
between the Company and Executive shall be terminated and deemed to be null and
void, except that Sections 6, 7, 8, 9 and 10 of that Executive Agreement are
hereby incorporated herein and shall remain in full force and effect.



2. Separation Payment. The Company shall pay to Executive a severance payment
totaling $467,667, less applicable withholding and payroll taxes. This payment
is subject to Executive’s continued compliance with Sections 6, 7, 8, 9 and 10
of the Executive Agreement as incorporated herein and Section 9 b. of this
Agreement. Executive acknowledges that all the payments under this Agreement do
not constitute pensionable compensation. Subject to all of the same conditions
and deductions noted above and in the next sentence, the Company shall make a
second severance payment to Executive on or before December 31, 2006 in the
amount of $210,000; provided that the obligation of Company to make such
payment shall be reduced on a dollar for dollar basis by amounts received by
Executive pursuant to Section 6 of this Agreement. In no event shall the second
severance payment be owing to Executive should he be unable to serve as a
director of the company at any time prior to September 30, 2006 due to death,
disability or his own actions.



3. Options. The Company shall take all action necessary to cause all
outstanding unvested options previously granted to Executive to vest as of the
Effective Date and to extend the post termination of employment period to
exercise such options to be extended to the expiration date of the grant of
such options.



4. Other Benefits. All other Company benefits of Executive shall be determined
as if Executive voluntarily resigned as of the Effective Date. The policy of
life insurance presently maintained by the
Company on the life of Executive shall be transferred to Executive who shall be
responsible for paying future premiums falling due with respect to such policy.



5. Reimbursement of Expenses. The Company shall reimburse Executive for all
unreimbursed expenses properly incurred by Executive in the course of the
performance of his duties on or prior to the Effective


 









 








	 	 	 
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Date provided that such
expenses are reasonably documented and submitted to the Company.



6. Compensation as Director and Board Chairman. For so long as he is a member
of the Board of Directors of Company, Executive shall receive the sum of
$20,000.00 per year payable in quarterly installments of $5000.00 as
compensation for board service together with stock option grants on the same
terms extended to outside directors. For so long as Executive serves as
Chairman of the Board of Directors he shall receive $50,000.00 per year payable
in quarterly installments of $12,500.00 for performing the duties of Board
Chairman and making himself available to assist the CEO of the corporation on
special projects as reasonably requested by the CEO. Such payments shall
commence with respect to the fourth calendar quarter of 2003.



7. Business Expenses and Support. During the term of his service as Board
Chairman at the Company’s expense:





	 		 	(a) Executive will have full use of his former Company office in
Stockton, California (including a part-time administrative
assistant);
	 
	 		 	(b) Executive will be provided with a home computer and a laptop and
e-mail service;
	 
	 		 	(c) Company will continue to provide existing telephone service,
including home and wireless services currently provided to Executive
on the same terms such service is provided to the CEO;
	 
	 		 	(d) Executive will be provided continued use, at Company expense, of
the Lexus owned by the Company that he presently uses. At the earlier
of conclusion of his board service or three years from the Effective
Date, title to the vehicle shall be transferred to Executive and
upkeep, maintenance and insurance shall become the responsibility of
Executive.
	 
	 		 	(e) Reimbursement of expenses reasonably incurred on behalf of the
corporation as approved by the audit committee of the board of
directors.




8. Mutual General Release. The parties hereto hereby release each other as
follows:





	 		 	(a) Subject to the condition that the Effective Date shall have
occurred, the Company and its affiliates hereby release and forever
discharge Executive of and from any and all claims, demands, actions,
causes of action, charges, suits, debts, liabilities, covenants,
contracts, agreements and promises, of any kind or nature whatsoever,
which the Company and its affiliates may have or assert against
Executive arising out of or relating to any event or action which
occurred prior to the date hereof, provided, however, that the
Company and its affiliates do not hereby release, and instead
expressly reserve, (i) any claims which they may have against
Executive pursuant to the terms hereof, and (ii) any claims or rights
which the Company may have against Executive arising out of
Executive’s gross negligence or intentional misconduct, and (iii)
any claims or rights which the Company and its affiliates may have as
a result of any guarantee which the Company and its affiliates have
given to any third party for the benefit of Executive prior to the
date hereof, including without limitation any mortgages or security
interests associated therewith.
	 
	 		 	(b) Executive hereby releases and forever discharges the Company and
its respective affiliates, and all of the current and former
shareholders, members, directors, officers, managers, employees,
independent contractors, trustees, beneficiaries, attorneys,




 









 











	 	 	 
	EXHIBIT 10.77

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	 		 	representatives and agents of each of the foregoing from any and all
claims, demands, actions, causes of actions, charges, suits, debts,
liabilities, covenants, contracts, agreements and promises, of any
kind or nature whatsoever, which Executive may have or assert against
any of them, arising out of or relating to (i) any event or action
which occurred prior to the date hereof, and (ii) Executive’s
employment or termination of employment with the Company, including
without limitation any and all claims under the Age Discrimination in
Employment Act (29 U.S.C. 621 et seq.), Title VII of the Civil Rights
Act of 1964, as amended (42 U.S.C. 2000e et seq.), Sections 1981
through 1988 of Title 42 of the United States Code (42 U.S.C.
1981-88), the Americans with Disabilities Act (42 U.S.C. 12101 et
seq.), the Fair Labor Standards Act (29 U.S.C. 201 et seq.), the
California Fair Employment and Housing Act, or any other federal,
state or local law, ordinance, statute or regulation dealing with
employment; any and all claims for compensation of any type
(including but not limited to wages, salary, bonuses, commissions),
vacation pay or benefits; and any and all claims based on any
contract (express or implied), tort, wrongful discharge or
retaliatory discharge theory, defamation, intentional infliction of
emotional distress or any other common law claims.
	 
	 		 	(c) The parties expressly waive and relinquish all rights and
benefits afforded by Section 1542 of the Civil Code of the State of
California with respect to the releases provided herein, and do so
understanding and acknowledging the significance of such specific
waiver of Section 1542. Section 1542 of the Civil Code of the State
of California states 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.”






	 	 	 	Thus, notwithstanding the provisions of Section 1542, and for the
purpose of implementing the releases provided herein, the parties
expressly acknowledge that this Agreement is intended to include in
its effect, without limitation other than the express limitations set
forth herein, all claims which either party does not know or suspect
to exist in such party’s favor at the time of execution hereof, and
that this Agreement contemplates the extinguishment of any such
claims. The parties acknowledge and agree that the foregoing waiver
of the provisions of Section 1542 has been expressly bargained for by
each of the parties in the negotiation of this Agreement.




9. Certain Covenants.





	 		 	(a) The terms of Sections 6, 7, 8, 9, and 10 of the Executive
Agreement and Section 8 and 9 (b) of this Agreement shall survive
this Agreement and remain fully enforceable in the manner set forth
in Section 11 of the Executive Agreement, which is hereby
incorporated herein.
	 
	 		 	(b) Unless specifically approved in writing by the Board of Directors
or its’ Audit Committee, the Executive shall not, for a period of
three years from the date of this Agreement (the “Non-Compete
Period”), for himself or on behalf of any other persons, firm,
partnership, corporation, or other entity, engage, directly or
indirectly, either as an officer, director, employee, partner,
consultant, individual proprietor, agent, or otherwise (including,
but not limited to, as an owner or shareholder), in any business
which (A) provides telecommunication services of the type provided
any time prior to the end of the




 









 











	 	 	 
	EXHIBIT 10.77

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	 	 	 	Non-Compete Period by the Company
and any of its affiliates (including, without limitation, (i)
switched local service, (ii) switched long-distance service, (iii)
dedicated transport services, (iv) collocate and interconnect
services and (v) date switched services and including, without
limitation, telecommunication services of the type provided by the
Company and any of its affiliates to information service providers)
or (B) provides services of the type which the Company and any of its
affiliates have taken significant actions prior to the end of the
Non-Compete Period to begin providing or of the type the Company or
any of its affiliates have indicated that they plan to begin
providing in any business plan or similar document delivered to
Executive at any time prior to the end of the Non-Compete Period, in
each case within any of the Restricted Territories (as defined
below); provided that the restrictions set forth in this Section 9(b)
shall not prohibit Executive from being a passive owner of not more
than 5% of the outstanding stock of any class of a corporation which
is publicly traded; and provided further that the restrictions set
forth in this paragraph shall not restrict the activities of
Executive to the extent Executive has received the consent of the
Board of Directors of the Company to such activities.
	 
	 		 	(c) In consideration of the performance by Executive of the
obligations set forth in the covenants set forth and referred to in
this Section 9, Executive shall be paid $65,000.00 annually payable
in quarterly installments of $16,250.00 in arrears commencing on
December 31, 2003, and on the last day of March, June, September and
December thereafter through and including September 30, 2006.




For purposes of this Agreement, “Restricted Territories” shall mean any states
or comparable jurisdictions in which the Company or its Subsidiaries are
engaged in business prior to the end of the Non-Compete Period or have taken
significant actions to begin engaging in business during that period,
including, but not limited to, such states or comparable jurisdictions located
within the United States of America, Canada and Mexico. Executive acknowledges
that the geographic restrictions set forth above are reasonable and necessary
to protect the good will of the Company’s business.



10. Non-Disparagement. Except as may be required by law, Executive shall not
engage or cause others to engage in any act detrimental to the Company or any
of its respective affiliates, or to any of their respective current or former
shareholders, members, directors, officers, managers, employees, independent
contractors, trustees, beneficiaries, attorneys, representatives or agents, and
he shall not make or cause others to make any written or oral statement which
disparages any of such parties. Except as may be required by law, and subject
to the occurrence of the Effective Date, the
Company shall not engage or cause others to engage in any act detrimental to
Executive and shall not make or cause others to make any written or oral
statement which disparages Executive.



11. Knowing and Voluntary Release. Executive acknowledges that he has had the
opportunity to be represented by legal counsel with respect to this Agreement
and that he has taken all steps he deems necessary to assure that his waiver of
rights under this Agreement is knowing and voluntary in accordance with the
provisions of the Older Workers Benefits Protection Act of 1990 (“OWBPA”).
Executive further acknowledges that he has read and understands all the terms
and conditions of this Agreement and that he has had an opportunity to consider
this Agreement for up to twenty-one (21) days before signing it. Executive
shall have the right, throughout the seven (7) days after signing and
delivering this Agreement, to revoke his signature and his agreement to be
bound by the terms of this Agreement. This Agreement shall become effective, if
not sooner revoked by Executive by sending written notice to the Company at the
address set forth in Section 15 below, on the later of the eighth (8th) day
after Executive signs and delivers this Agreement to the Company or October 25,
2003 (the “Effective Date”).


 









 








	 	 	 
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12. Indemnification. The Company agrees that as of the Effective Date, it shall
indemnify, defend and hold Executive harmless from and against any and all
loss, cost, damage, liability and expense (including without limitation
reasonable attorneys’ fees) suffered, sustained or incurred by Executive in
connection with third party claims arising out of Executive’s good faith
actions or omissions as the Chief Executive Officer of the Company. Executive
agrees that he shall indemnify, defend and hold the Company and its affiliates,
and their respective current or former shareholders, members, directors,
officers, managers, employees, independent contractors, trustees,
beneficiaries, attorneys, representatives and agents, harmless from and against
any and all loss, cost, damage, liability and expense (including without
limitation reasonable attorneys’ fees) suffered, sustained or incurred by any
such party in connection with third party claims arising out of Executive’s
gross negligence or intentional misconduct as the Chief Executive Officer of
the Company.



13. Waiver. Failure to insist upon strict compliance with any of the terms or
provisions hereof shall not be deemed a waiver of such term or provision, and
any waiver or relinquishment of any right or remedy hereunder at any one or
more times shall not be deemed a waiver or relinquishment of such right or
remedy at any other time or times.



14. Benefit. The rights and obligations of Executive hereunder are personal to
him, and are not subject to voluntary or involuntary alienation, transfer or
assignment. The rights and obligations of the Company hereunder shall inure to
the benefit of and be binding upon the Company and its successors and assigns.
The parties acknowledge that each of the Company, the respective affiliates of
the Company, and each of the current and former shareholders, members,
directors, officers, managers, trustees, beneficiaries, attorneys, employees,
independent contractors, representatives and agents of the Company and its
affiliates is intended to be a third party beneficiary hereof, and each shall
have the right to enforce the terms hereof.



15. Notices. All notices necessary or desirable to be served hereunder shall be
in writing and shall be: (i) personally delivered, or (ii) sent by certified
mail, return receipt requested, postage prepaid, to the address for the
intended recipient set forth below, or (iii) sent by facsimile telecopier to
the facsimile telecopy number for the intended recipient set forth below, as
follows:





	 	 	(a) If to the Company:
	 
	 	 	Pac-West Telecomm, Inc.

1776 W. March Lane #250

Stockton, CA 95207

Attn: General Counsel

Telecopier: (209) 926-4444
	 
		 	(b) If to Executive:
	 
	 	 	Mr. Wallace W. Griffin

3672 Arrowhead Ct.

Stockton, CA 95219
	 
	 	 	Telecopier: [209-870-8010 ]




or to such other address or facsimile telecopy number as either party hereto
may designate for itself or himself from time to time in a written notice
served upon the other party hereto as provided herein. Any notice sent by mail
as provided above shall be deemed delivered on the second (2nd) business day
next




 









 








	 	 	 
	EXHIBIT 10.77

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following the postmark date which it bears. Any notice sent by facsimile
telecopier as provided above shall be deemed delivered when sent.



16. Confidentiality. Executive acknowledges that he has had access to
confidential information of the Company and its respective affiliates, and of
their respective current and former shareholders, members, directors, officers,
managers, independent contractors, trustees, beneficiaries, representatives,
employees and agents, as a result of his employment by the Company. Executive
hereby agrees not to use such confidential information personally or for the
benefit of others. Executive further agrees not to disclose to anyone any such
confidential information at any time in the future so long as such information
remains confidential.



17. Entire Agreement. This Agreement contains the entire agreement between the
Company and Executive with respect to the subject matter hereof, and may not be
modified or rescinded except pursuant to a written instrument signed by the
party against whom enforcement is sought.



18. Governing Law. This Agreement and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with the laws of the
State of California, without regard to the laws of the any other jurisdiction.
Any suit, claim or other legal proceeding arising out of or relating to
Executive’s engagement hereunder, the termination of Executive’s engagement
hereunder, or this Agreement shall be brought exclusively in the federal or
state courts located in San Joaquin County, California and for such purpose
Executive and the Company hereby submit to personal jurisdiction in the State
of California and to venue in such courts.




* * * *



IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.



	 	 	 	 	 
	 	PAC-WEST TELECOMM, INC.

a California corporation

 	 
	 	By:  	/s/ Sam Plum
 	 
	 	 	Sam Plum 	 
	 	 	Chairman, Compensation Committee
	 
	 	



 	 
	 		/s/ Wallace W. Griffin
 	 
	 	 	Wallace W. Griffin