exv10w54



 






Exhibit 10.54




CHANGE OF CONTROL AGREEMENT




     This Change of Control Agreement (the “Agreement”) is made and entered into effective
as of March 2, 2005 by and between John Trewin (the “Executive”) 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 Compensation Committee of
the Board (the “Committee”) recognizes that such consideration can be a distraction to the
Executive, an executive officer of the Company, and can cause the Executive to consider alternative
employment opportunities. The Committee has determined that it is in the best interests of the
Company and its shareholders to assure that the Company will have the continued dedication and
objectivity of the Executive, notwithstanding the possibility, threat or occurrence of a Change of
Control (as defined below) of the Company.



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



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



     D. To accomplish the foregoing objectives, the Committee of Directors has directed the
Company, upon execution of this Agreement by the Executive, to agree to the terms provided in this
Agreement.



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



     A. Term of Agreement. This Agreement shall terminate upon the earlier of: (a) the
termination of Executive’s employment for any reason prior to, and not in connection with, a Change
of Control, (b) three (3) years from the effective date of this agreement; 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 Executive acknowledge that the Executive’s
employment is and shall continue to be at-will, as defined under applicable law. If the
Executive’s employment terminates for any reason, including (without limitation) any termination
prior to, and not in connection with, a Change of Control, the Executive 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 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
Executive’s employment is terminated (an “Involuntary Termination”) by the surviving entity
without Cause (as defined below); or (2) the Executive resigns under circumstances that constitute
a Resignation for Good Reason (as defined below) within two (2) years following a Change of
Control; Executive 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
Executive shall govern such stock options and are incorporated herein by reference.




          2. Severance Pay. Executive 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 two times his or her current year salary and target bonus , adjusted as follows: If the
total sum of two times current salary and target bonus is equal to or over 20% of three times
the executive’s “base amount” determined for purposes of IRC Section 280G, the executive will
receive a gross up for taxes imposed on the executive pursuant to IRC Section 4999; if the total
sum of two times current salary and target bonus is less than 20% of three times the executive’s
“base amount” determined for purposes of IRC Section 280G, the amount payable under this Plan is
capped at 2.99 times the executive’s “base amount” determined for purposes of IRC Section 280G.




          3. COBRA Continuation Coverage. Executive’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.
Executive 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”). Executive 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 Executive is eligible for severance benefits under this
Agreement at the time of the termination of employment and Executive 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 two (2) years; provided that such payments shall not
include COBRA coverage with respect to the Company’s Section 125 health care reimbursement plan.
If after eighteen (18) months or any other time prior to the expiration of two (2) years, the
Executive (and his or her eligible dependents) are no longer eligible for COBRA (or CalCOBRA)
coverage, Executive will be paid a monthly amount equal to the amount the Company paid for his or
her COBRA coverage for the last month of COBRA (or CalCOBRA) coverage, and no more, for the
remainder of the two (2) year period. Notwithstanding the foregoing, if at anytime prior to the
exhaustion of the two (2) years, Executive 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




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COBRA, as determined by Covad, whether or not Executive 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, Executive (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 Executive 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 Executive’s responsibility, not the Company’s or a
Subsidiary’s.



          4. Other Terminations. The Executive shall not be entitled to receive any benefits
under this Agreement in the event the Executive’s employment terminates: (1) for any reason other
than those described in Section 2.C.; (2) prior to, and not in connection with, the occurrence of a
Change of Control; or (3) after the two (2) 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 Executive 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 Executive is under
age forty (40), or executing the General Release of All Claims, a copy of which is attached as
Exhibit B, within forty-five (45) days after the termination date (or any longer period required
under the Older Workers Benefit Protection Act) if the Executive 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
Executive’s duties (other than on account of disability) which habitual neglect materially
adversely affects performance of Executive’s duties and continues for 30 days following receipt of
notice from the Committee of Directors of the Company (if Executive is an employee of the Company),
or the Committee of Directors of a Subsidiary (if Executive 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 Executive in good faith to have been in or not
opposed to the interest of the Company and its Subsidiaries (without intent to gain,



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directly or indirectly, a profit to which Executive was not legally entitled); (3) any act or
omission with respect to which a determination could properly have been made by the Committee of
Directors that Executive 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 member of the Committee of directors, 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 Executive’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 Executive 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:



          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 Committee 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 Committee 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.




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     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 Executive’s employment before the date of a Change of Control, and if the Executive 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,
Executive’s resignation as a result of, and within 30 days following:



          1. Executive’s position (including offices, titles, reporting requirements and
responsibilities), authority and duties are not commensurate in all material respects with the
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. Executive is requested to principally perform services at a location more than 40 miles
from the location Executive 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 Executive’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 executives of the Company (if Executive is an employee of Company) or a Subsidiary (if
Executive is an employee of a Subsidiary); or




          4. There is any material reduction in welfare and fringe benefits available to Executive
compared to the welfare and fringe 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.



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     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 Executive shall be addressed to the Executive at the home address that the Executive 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 Executive 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 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.
Notwithstanding the foregoing, 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 described above as subject to these arbitration
provision, 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.




          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




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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.




     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 Executive’s rights hereunder shall inure to the benefit of,
and be enforceable by, the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.



     B. No Duty to Mitigate. The Executive 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 Executive 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 Executive
and by an authorized officer of the Company (other than the Executive). 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



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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.



     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), and an affiliate may assign its rights under
this Agreement to another affiliate of the Company or to the Company; 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 Executive.



     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.



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     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.	 	 	 	John Trewin
	 
	 	 	 	 	 	 
	By:

	 	/s/ Deborah Perry
	 	 	 	/s/ John Trewin
	

	 	 
	 	 	 	 
	

	 	Deborah Perry
	 	 	 	John Trewin
	

	 	Senior Vice President, Organizational

Transformation
	 	 	 	Senior Vice President and Chief
Financial Officer






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Exhibit A




GENERAL RELEASE OF ALL CLAIMS




     In consideration of the payments and benefits to be received by me,                                                             [employee name] under
the Covad Communications Group, Inc. Executive Severance Plan on behalf of myself, my heirs,
executors, administrators, successors, and assigns, hereby make the following agreements and
acknowledgements:



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 Group,
Inc., 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 (1) my employment with the Company
and the termination thereof, including but not limited to 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, claims for unpaid wages, salaries
and commissions, claims under Title VII of the 1964 Civil Rights Act, as amended, the California
Fair Employment and Housing Act, the Equal Pay Act of 1963, the California Labor Code including
Section 1197.5 thereof, the Americans with Disabilities Act, the Civil Rights Act of 1866, the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), WARN, and any other local,
state and federal laws and regulations relating to employment, except 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, or
analogous law of any other state, 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].



     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 participate in such cases. I understand that by signing this Agreement I will be precluded
from such participation, 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.



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.




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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 an 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 in the County of Santa Clara,
California, or, at my option, in the County where I reside at the time the dispute arises, 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. In reaching a decision, the arbitrator shall adhere to relevant
law and applicable precedent, and shall have no power to vary there from. 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.




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.




VIII. Effective Date




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          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 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.



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:





		
	  	Kristin Ming, Benefits Analyst, 110 Rio Robles, San Jose, California 95134-1813

Fax: (408) 952-7404






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Exhibit B




GENERAL RELEASE OF ALL CLAIMS





     In consideration of the payments and benefits                                         [amount of benefit] to be received by me,
                             [employee name] under the Covad Communications Group, Inc. Executive Severance Plan on behalf of
myself, my heirs, executors, administrators, successors, and assigns, hereby make the following
agreements and acknowledgements:



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 Group,
Inc., 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 (1) my employment with the Company
and the termination thereof, including but not limited to 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, claims under Title VII of the 1964
Civil Rights Act, as amended, the California Fair Employment and Housing Act, the Equal Pay Act of
1963, the California Labor Code including Section 1197.5 thereof, the Age Discrimination in
Employment Act of 1967, as amended, the Americans with Disabilities Act, the Civil Rights Act of
1866, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), WARN, and any
other local, state and federal laws and regulations relating to employment, except any claims I may
have for unemployment and workers’ compensation insurance.



     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, or
analogous law of any other state, 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].



     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 participate in such cases. I understand that by signing this Agreement I will be precluded
from such participation, 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.



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.




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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 an 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 in the County of Santa Clara,
California, or, at my option, in the County where I reside at the time the dispute arises, 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. In reaching a decision, the arbitrator shall adhere to relevant
law and applicable precedent, and shall have no power to vary there from. 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.




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;




3









 






	 	c.  	I have been provided a notice by the Company, as required by the Older Workers Benefit
Protection Act of 1990, that contains information about individuals covered under the Plan,
eligibility factors for participation in the Plan, the time limits applicable to the Plan,

the job titles and ages of the employees in my organizational unit designated to participate
in the Plan and the job titles and ages of the employees in the same organizational unit who
have not been designated to participate in the Plan.
	 
	 	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 Covad, 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




          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:





		
	  	Kristin Ming, Benefits Analyst, 110 Rio Robles, San Jose, California 95134-1813

Fax: (408) 952-7404





4









 








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.



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:





		
	  	Kristin Ming, Benefits Analyst, 110 Rio Robles, San Jose, California 95134-1813

Fax: (408) 952-7404






5