CONFIDENTIAL SEVERANCE AND GENERAL RELEASE AGREEMENT
Exhibit 10.32
THIS CONFIDENTIAL SEVERANCE AND GENERAL RELEASE AGREEMENT (this “Agreement”) is entered into
as of the last date set forth on the signature page hereto, and is made effective as of October 10,
2008 (the “Effective Date”), by and between Xxxxxx X. Xxxxxx (“Employee”) and Mindspeed
Technologies, Inc., a Delaware corporation (“Mindspeed”).
RECITALS
WHEREAS, Employee is currently employed by Mindspeed as Senior Vice President, Communications;
WHEREAS, Employee and Mindspeed wish to arrange for Employee’s separation from employment with
Mindspeed on mutually agreeable terms and conditions as set forth in this Agreement;
ACCORDINGLY, the parties agree as follows:
1. Termination. Employee will cease active full-time employment with Mindspeed on the
Effective Date. Mindspeed and Employee agree to affect a thoughtful and professional business
transition. Employee agrees to provide transitional assistance to Mindspeed beginning October 11,
2008 by working through November 14, 2008 on a half-time basis at half salary ($2,403.846/week) to
prepare for FY08Q4 earnings release and follow up meetings. Employee will cease active employment
entirely on the November 14, 2008.
2. Resignation. As of the Effective Date, Employee hereby resigns his position as an
officer of Mindspeed and as a director or officer in each of Mindspeed’s subsidiaries for which he
holds an office or offices.
3. Settlement Sum. In consideration of Employee’s representations and releases in
this Agreement, Mindspeed will provide Employee with salary continuation pay at Employee’s current
salary level of $4,807.69 per week (less applicable withholdings) for twelve (12) months beginning
on November 15, 2008 and continuing through November 13, 2009 (the “Salary Continuation Period”).
The salary continuation payments will be made in accordance with Mindspeed’s bi-weekly payroll
schedule. Employee will not accrue additional vacation hours after November 14, 2008. During the
Salary Continuation Period, Mindspeed will continue to (a) pay the premiums for Employee’s coverage
under Mindspeed’s group medical, dental, and vision insurance plans, which coverage may be
provided under COBRA at Mindspeed’s election subject to Employee’s payment of any employee
contributions that would have applied if Employee had remained an officer of the Company; and (b)
pay the costs of Employee’s annual executive physical examination, health club membership, two (2)
airline
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clubs, and financial counseling benefits, to the same extent as if Employee had remained an
officer of Mindspeed during such period. In addition, Company will reimburse (not to exceed a
total of $1,000) membership fees in three (3) professional organizations (PRSA, IABC, NIRI).
Participation in Mindspeed’s long term disability insurance coverage, Mindspeed’s Group Personal
Excess Liability Coverage, and participation in Mindspeed’s 401(k) plan end on November 14, 2008.
Employee agrees to be available to provide limited consulting services to assist with FY09Q1
earnings release and call. Following the conclusion of the Salary Continuation Period, Employee
will be placed on unpaid leave through February 12, 2010 (the “Unpaid LOA Period”), during which
time he will not accrue further pay, vacation or other compensation. During the Unpaid LOA Period,
Mindspeed will continue to (a) pay the premiums for Employee’s continued coverage under Mindspeed’s
group medical, dental, and vision insurance plans, which coverage may be provided under COBRA at
Mindspeed’s election subject to Employee’s payment of any employee contributions that would have
applied if Employee had remained an officer of the Company; and (b) pay the costs of Employee’s
annual executive physical, health club membership, two (2) airline clubs, and financial counseling
benefits to the same extent as if Employee had remained an officer of Mindspeed during such period.
Additionally, Mindspeed will provide Employee with outplacement assistance for a period of six (6)
months following November 14, 2008 at Mindspeed’s expense through Right Management Consultants, or
a similar firm, at the selected firm’s office location. The foregoing payments and benefits will
be referred to collectively as the “Settlement Sum,” and the parties hereto agree that the
Settlement Sum provides Employee with full recompense for any and all claims for lost or unpaid
wages, benefits, damages, interest and any other claim related to Employee’s employment or to the
separation of such employment.
4. Stock Plans. Upon the termination of Employee’s employment from Mindspeed at the
close of business on the last day of the Unpaid LOA Period (the “Termination Date”), all stock
options for Mindspeed stock that have been granted to Employee under any of Mindspeed’s or the
other company’s stock plans and which are not vested as of the Termination Date, shall immediately
expire and shall not be exercisable under any circumstances. Any such options that are vested as
of the Termination Date shall be exercisable for a period of three (3) months following the
Termination Date and shall expire and shall not be exercisable at the end of such period if they
are not exercised within that period. All unearned restricted stock as of the Termination Date,
together with any dividends thereon, shall be forfeited, and Employee shall have no further rights
of any kind or nature with respect thereto. Employee’s Mindspeed stock option and restricted stock
awards outstanding as of the Effective Date are detailed in the attached Schedule A.
5. No Section 16 Reporting. Employee understands and agrees that, as of November 14,
2008, Employee shall no longer be a Section 16 officer of Mindspeed and all such reporting by
Mindspeed on Employee’s behalf shall cease.
6. Mindspeed Proprietary Information. Employee represents, understands and agrees
that he is subject to that certain Employment Agreement, dated January 1, 1999,
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regarding Mindspeed’s proprietary information, which he executed in connection with his
employment with Mindspeed, and that the provisions which survive his employment are enforceable and
remain in full force and effect. Employee represents, as a material inducement to Mindspeed to
enter into this Agreement, that he has not and will not disclose, use or misappropriate any
confidential, proprietary or trade secret information of Mindspeed to the press, customers,
analysts, investors or competitors. This representation includes, but is not limited to, product
roadmaps, customer lists, design wins and employee lists. Mindspeed acknowledges that Employee’s
employment with competitors, in and of itself, will not constitute disclosure. Mindspeed further
acknowledges that the act of meeting with a Mindspeed customer, in and of itself, will not
constitute disclosure, use or misappropriation of Mindspeed proprietary information.
7. Termination of Agreement. That certain change of control Employment Agreement,
dated as of June 10, 2008 by and between Mindspeed and Employee, shall be terminated, and no longer
in effect as of the Effective Date.
8. Non-Solicit. During the Salary Continuation Period and Unpaid LOA and for a period
of twelve (12) months after Employee’s Termination Date, Employee shall not directly or indirectly
solicit or assist any other company or person in soliciting any Mindspeed employee to leave
Mindspeed and join another company.
9. No Further Claims. Employee agrees that he is not entitled to receive, and will
not claim, any additional right, benefit, payment or compensation, including but not limited to,
any claim for wages, benefits, damages, interest, attorneys fees and costs, other than what is
expressly set forth in Section 3, and hereby expressly waives any right to additional rights,
benefits, payments or compensation. Employee further acknowledges that Mindspeed makes this
Agreement without any admission of liability, and agrees, to the extent permissible by law, that he
will not defame, disparage or make false or deceptive allegations against Mindspeed, whether to the
press, employees, customers, investors or otherwise. In the event of Employee’s breach of this
Section 9, Mindspeed may immediately terminate Employee’s employment for cause, and Employee shall
forfeit any unpaid remainder of the Settlement Sum. For their part, the specific Mindspeed
executives aware of this Agreement, Xxxxx X. Xxxxx, Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxxx, agree not
to defame, disparage or make false or deceptive allegations against Employee, whether to the press,
employees, customers, investors or otherwise, or furthermore to knowingly allow other Mindspeed
employees to defame or disparage Employee. Employee should direct all prospective employment
inquiries or requests for employment references to either Xx. Xxxxx or Xx. Xxxxxx.
10. Release. In exchange for the Settlement Sum, Employee agrees to, and by signing
this Agreement does, waive and release all claims (known and unknown) which he might otherwise have
had against Mindspeed and each of its past and present employees, officers, directors, agents,
representatives, attorneys, insurers, related entities, assigns, successors, and predecessors of
Mindspeed, and all persons acting by, through, under or in concert with any of
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them (collectively, the “Releasees”), from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action,
suits, rights, demands, costs, losses, debts and expenses (including back wages, and attorneys’
fees and costs actually incurred) of any nature whatsoever, known or unknown, suspected or
unsuspected, including, but not limited to, rights arising out of alleged violations of any
contract, express or implied (including but not limited to any contract of employment, partnership,
independent contractor, fiduciary, special or confidential relationship); any covenant of good
faith and fair dealing (express or implied); any tort, including fraud and deceit, negligent
misrepresentation, promise without intent to perform, conversion, breach of fiduciary duty,
defamation, libel, slander, invasion of privacy, negligence, intentional or negligent infliction of
emotional distress, malicious prosecution, abuse of process, intentional or negligent interference
with prospective economic advantage and conspiracy; any “wrongful discharge” and “constructive
discharge” claims; any claims relating to any breach of public policy; any violations or breaches
of corporate by-laws; any legal restrictions on Mindspeed’s right to terminate employees or take
other employment actions; or any federal, state, local, municipal or other governmental statute,
regulation or ordinance, including, without limitation, Title VII of the Civil Rights Act of 1964,
the California Fair Employment and Housing Act, the Americans with Disabilities Act, and the Age
Discrimination in Employment Act (collectively “Claim” or “Claims”) arising prior to the execution
of this Agreement.
11. Waiver. Employee expressly waives and relinquishes all rights and benefits
afforded by Section 1542 of the Civil Code of the State of California, and does 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 or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.”
Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing a full
and complete release and discharge of all Releasees, Employee expressly acknowledges that this
Agreement is intended to include in its effect, without limitation, all Claims which Employee does
not know or suspect to exist in his favor against the Releasees, or any of them, at the time of
execution hereof, and that this Agreement contemplates the extinguishment of any such Claim or
Claims. If Employee hereafter institutes any legal action against the Releasees, and each of them
(except to enforce the specific provisions of this Agreement or for any future cause of action
unrelated to Employee’s employment with Mindspeed or its predecessor companies), Mindspeed shall be
entitled to payment from Employee of all costs, expenses and attorney’s fees incurred as a result
of such legal action.
12. No Other Promises. This Agreement contains all of the terms, promises,
representations and understandings made between the parties. Employee agrees that no
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promises, representations or inducements have been made to him which caused him to sign this
Agreement other than those which are expressly set forth above herein.
13. Confidentiality. Employee represents and agrees that, with the exception of any
civil judicial action where disclosure of this Agreement is ordered by the court, or where
disclosure is compelled by law or government audit, he has and will keep the nature, terms and
existence of this Agreement and the Settlement Sum strictly confidential, and that he has not and
will not disclose, discuss or reveal any information concerning the nature, terms and existence of
this Agreement and the Settlement Sum to any other person, entity or organization, except that
Employee may disclose this information to his legal counsel, spouse and professional accountant.
Employee is to advise Mindspeed of any request or demand for disclosure in any civil judicial
action immediately upon learning of it so Mindspeed will be afforded a full opportunity to
intervene, to object and to take any other action necessary to protect the confidentiality of this
Agreement and the Settlement Sum. Employee acknowledges and agrees that Mindspeed is permitted to
disclose this Agreement and the Settlement Sum in order to comply with any Securities and Exchange
Commission or stock exchange disclosure requirements.
14. Representations. Employee acknowledges that he has been advised to carefully
consider all of the provisions in this Agreement before signing it. Employee represents,
acknowledges and agrees that he has fully discussed all aspects of this Agreement with his
attorneys to the full extent he so desired; that Employee has carefully read and fully understands
all of the provisions of this Agreement; that Employee has taken as much time as he needs for full
consideration of this Agreement; that Employee fully understands that this Agreement releases all
of his claims, both known and unknown, against the Releasees; that Employee is voluntarily entering
into this Agreement; and that Employee has the capacity to enter into this Agreement.
15. Age Discrimination. Employee understands that he has a period of forty five (45)
days to review and consider his release of his claims of age discrimination under the Age
Discrimination in Employment Act (“ADEA”) before signing this Agreement. Employee further
understands that he may use as much or as little of this forty five (45) day period as he wishes to
prior to signing this Agreement. Employee also understands that after he signs this Agreement he
is given seven (7) days within which to revoke the portion of this Agreement releasing his claims
under the ADEA. Such revocation, to be valid, must be in writing and received by Mindspeed within
the seven (7) day revocation period.
16. No Other Representations. Employee represents and acknowledges that in executing
this Agreement, he does not rely and has not relied upon any representation or statement not set
forth in this Agreement made by Mindspeed, the Releasees, or by any of their agents,
representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.
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17. No Admission of Liability. This Agreement shall not in any way be
construed as an admission by Mindspeed that it has acted wrongfully with respect to Employee
or any other person, or that Employee or any other person has any rights whatsoever against
Mindspeed. Mindspeed specifically disclaims any liability to or wrongful acts against Employee or
any other person, on the part of itself, its agents or its employees, past or present.
18. Compliance with Laws. Employee represents that he has fulfilled his ethical,
legal and professional responsibilities to Mindspeed, that he has not at any time known or been
complicit in any financial reporting certification or board action taken in anything other than the
best interest of Mindspeed stockholders, and that he is not aware of any liabilities, obligations,
noncompliance with legal requirements (including, but not limited to, noncompliance with The
Xxxxxxxx-Xxxxx Act or any applicable securities regulations) or exposure of any kind on the part of
Mindspeed that he has not, as of the date of this Agreement, brought to the attention of Mindspeed.
19. Severability. The provisions of this Agreement are severable, and if any part of
it is found to be unenforceable, the other sections shall remain fully valid and enforceable. This
Agreement shall survive the termination of any arrangements contained herein.
20. Governing Law. This Agreement is made and entered into in the State of
California, and shall in all respects be interpreted, enforced and governed by and under the laws
of the State of California.
21. Entire Agreement. This Agreement sets forth the entire agreement between the
parties hereto, and fully supersedes any and all prior agreements or understandings between the
parties hereto pertaining to the subject matter of this Agreement. This Agreement may not be
modified, waived, rescinded or amended in any manner, except by a writing executed by all parties
to this Agreement which clearly and specifically modifies, waives, rescinds or amends this
Agreement. This Agreement is intended to comply with the provisions of Internal Revenue Code
Section 409A (“Code Section 409A”) and, accordingly, the parties agree to amend this Agreement in
good faith to the extent necessary to make this Agreement comply with Code Section 409A; provided,
however, that Mindspeed makes no representation that the amounts payable under this Agreement will
comply with Code Section 409A and makes no undertaking to prevent Code Section 409A from applying
to the amounts payable under this Agreement or to mitigate its effects on any payments made under
this Agreement.
22. Successors and Assigns. This Agreement shall be binding upon Employee and upon
his respective heirs, administrators, representatives, executors, successors and assigns, and shall
inure to the benefit of Mindspeed and the other Releasees and their related entities. This
Agreement shall be binding on any successor entity to Mindspeed.
23. No Assignment of Claims. Employee represents and warrants that he has not
heretofore assigned or otherwise transferred or subrogated, or purported to assign, transfer or
subrogate, to any person or entity, any Claim or portion thereof, or interest therein he may have
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against the Releasees, and he agrees to indemnify, defend and hold the Releasees harmless from
and against any and all liability, loss, demands, claims, damages, costs, expenses or attorneys’
fees incurred by the Releasees as the result of any person or entity asserting any such right,
assignment, transfer or subrogation.
24. Execution in Counterparts. This Agreement may be executed in one or more
counterparts, any one of which shall be deemed to be the original even if the others are not
produced.
25. Joint Preparation of this Agreement. Each party has had the opportunity to
revise, comment upon and redraft this Agreement. Accordingly, it is agreed that no rule of
construction shall apply against any party or in favor of any party. This Agreement shall be
construed as if the parties jointly prepared this Agreement, and any uncertainty or ambiguity shall
not be interpreted against any one party and in favor of the other.
26. Further Actions. The parties hereto, without further consideration, shall execute
and deliver such other documents and take such other actions as may be necessary to achieve the
objectives of this Agreement. Employee further agrees to cooperate fully in the transition of
matters under his responsibility, and to make himself reasonably available, as necessary, to answer
questions or assist in such transitions.
PLEASE READ CAREFULLY. THIS CONFIDENTIAL SEVERANCE AND GENERAL RELEASE AGREEMENT INCLUDES A
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
Dated: October 27, 2008
|
By: /s/ | Xxxxxx Xxxxxx | ||
| Xxxxxx Xxxxxx | ||||
| MINDSPEED TECHNOLOGIES, INC. | ||||
Dated: November 3, 2008
|
By: /s/ | Xxxxx X. Xxxxx | ||
| Xxxxx X. Xxxxx | ||||
| Chief Executive Officer | ||||
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