EXHIBIT 10.14
EXECUTIVE
SEVERANCE BENEFITS AGREEMENT
THIS EXECUTIVE SEVERANCE BENEFITS AGREEMENT (the "AGREEMENT") is entered
into this 5th day of October, 2000 (the "Effective Date"), between XXXXXXX
XXXXXXXXXX ("EXECUTIVE") and LXN CORPORATION (the "COMPANY"). This Agreement is
intended to provide Executive with the compensation and benefits described
herein upon the occurrence of specific events. Certain capitalized terms used
in this Agreement are defined in Article 4.
The Company and Executive hereby agree as follows:
ARTICLE 1
SCOPE OF AND CONSIDERATION FOR THIS AGREEMENT
1.1 Executive is currently employed by the Company.
1.2 The Company and Executive wish to set forth the compensation and
benefits which Executive shall be entitled to receive in the event Executive's
employment with the Company is terminated under the circumstances described
herein.
1.3 The duties and obligations of the Company to Executive under this
Agreement shall be in consideration for Executive's past services to the
Company, Executive's continued employment with the Company, and Executive's
execution of a release in accordance with Section 3.1.
1.4 This Agreement shall supersede any other agreement relating to cash
severance benefits, health benefits and stock option vesting in the event of
Executive's termination of employment with the Company.
ARTICLE 2
SEVERANCE BENEFITS
2.1 SEVERANCE BENEFITS. A Covered Termination (as defined in Article 4)
entitles Executive to receive the following benefits set forth in Sections 2.2,
2.3, 2.4, and 2.5.
2.2 SEVERANCE PAYMENT. Executive shall receive a severance payment equal
to twelve (12) months of his Base Salary plus the amount of the bonus Executive
received during the year prior to the Covered Termination. Such payment shall be
subject to all required tax withholding and shall be paid in a lump sum upon the
Executive's compliance with Section 3.1 herein.
1
2.3 HEALTH BENEFITS. Provided that Executive elects continued coverage
under federal COBRA law, the Company shall pay the premiums of Executive's group
health insurance coverage, including coverage for Executive's eligible
dependents, for a maximum period of twelve (12) months following a Covered
Termination; provided, however, that (i) the Company shall pay premiums for
Executive's eligible dependents only for coverage for which those eligible
dependents were enrolled immediately prior to the Covered Termination and (ii)
the Company's obligation to pay such premiums shall cease immediately upon
Executive's eligibility for comparable group health insurance provided by a new
employer of Executive. No premium payments will be made following the effective
date of Executive's coverage by a health insurance plan of a subsequent
employer. For the balance of the period that Executive is entitled to coverage
under federal COBRA law, if any, Executive shall be entitled to maintain such
coverage at Executive's own expense.
2.4 MITIGATION. Except as otherwise specifically provided herein, Executive
shall not be required to mitigate damages or the amount of any payment provided
under this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for under this Agreement be reduced by any
compensation earned by Executive as a result of employment by another employer
or by any retirement benefits received by Executive after the date of the
Covered Termination.
2.5 TERMINATION OF COMPANY'S OBLIGATIONS. Notwithstanding any provisions in
this Agreement to the contrary, the Company's obligations, and Executive's
rights pursuant to Sections 2.2 and 2.3 herein, regarding salary continuation
and the payment of COBRA premiums, shall cease and be rendered a nullity
immediately should Executive fail to comply with the provisions of the
Executive's Proprietary Information & Inventions Agreement with the Company, a
copy of which is attached hereto as Exhibit B, or if Executive directly or
indirectly competes with the Company.
2
ARTICLE 3
LIMITATIONS AND CONDITIONS ON BENEFITS
3.1 RELEASE PRIOR TO PAYMENT OF BENEFITS. Upon the occurrence of a Covered
Termination, and prior to the payment of any benefits under this Agreement on
account of such Covered Termination, Executive shall deliver to the Company an
effective release (the "Release") in the form attached hereto and incorporated
herein as Exhibit A. Such Release shall specifically relate to all of
Executive's rights and claims in existence at the time of such execution and
shall confirm Executive's obligations under the Company's standard form of
proprietary information and inventions agreement. It is understood that, as
specified in the applicable Release, Executive has a certain number of calendar
days to consider whether to execute such Release, and if Executive is 40 when he
executes the Release, Executive may revoke such Release within seven (7)
calendar days after execution. In the event Executive does not execute such
Release within the applicable period, or if Executive revokes such Release
within the subsequent seven (7) day period, no benefits shall be payable under
this Agreement, and this Agreement shall be null and void.
3.2 TERMINATION OF BENEFITS. Benefits under this Agreement shall terminate
immediately if the Executive, at any time, violates any proprietary information
or confidentiality obligation to the Company.
3.3 NON-DUPLICATION OF BENEFITS. Executive is not eligible to receive
benefits under this Agreement more than one time.
ARTICLE 4
DEFINITIONS
For purposes of the Agreement, the following terms are defined as follows:
4.1 "BASE SALARY" means Executive's annual base salary as in effect during
the last regularly scheduled payroll period immediately preceding the Covered
Termination.
4.2 "BOARD" means the Board of Directors of the Company.
4.3 "CAUSE" means that, in the reasonable determination of the Company or,
in the case of the Chief Executive Officer, the Board, Executive:
(a) has committed an act that materially injures the business of the
Company;
(b) has refused or failed to follow lawful and reasonable directions
of the Board or the appropriate individual to whom Executive reports;
(c) the Executive's repeated failure to satisfactorily perform the
Executive's job duties after a minimum of thirty (30) days written notice of
such deficiency and an opportunity to cure; or
3
(d) has been convicted of a felony involving moral turpitude that is
likely to inflict or has inflicted material injury on the business of the
Company.
4.4 "CONSTRUCTIVE TERMINATION" means the occurrence of any of the
following events without the Executive's express written consent:
(a) a substantial dimunition in the nature, status or prestige of the
Employee's responsibilities, title or reporting level as they exist on the
Effective Date of this Agreement;
(b) the relocation of the Company's executive offices or principal
business location to a point more than thirty (30) miles from the San Diego,
California area;
(c) a reduction by the Company of the Executive's base Salary as
initially set forth herein or as the same may be increased from time to time;
(d) any action by the Company (including the elimination of benefit
plans without providing substitutes thereof or the reduction of the Executive's
benefits thereunder) that would substantially diminish the aggregate value of
the Executive's fringe benefits as they exist at such time;
(e) a failure by the Company to obtain from any successor, before the
succession takes place, an agreement to assume and perform all of the terms and
conditions of this Agreement.
4.5 "COVERED TERMINATION" means an Involuntary Termination Without Cause
or a Constructive Termination.
4.6 "INVOLUNTARY TERMINATION WITHOUT CAUSE" means Executive's dismissal or
discharge other than for Cause. The termination of Executive's employment as a
result of Executive's death or disability will not be deemed to be an
Involuntary Termination Without Cause.
ARTICLE 5
GENERAL PROVISIONS
5.1 EMPLOYMENT STATUS; EMPLOYMENT AGREEMENT SUPERSEDED. This Agreement
does not constitute a contract of employment or impose upon Executive any
obligation to remain as an employee, or impose on the Company any obligation (i)
to retain Executive as an employee, (ii) to change the status of Executive as an
at-will employee, or (iii) to change the Company's policies regarding
termination of employment. In the event of any conflict between the provisions
of this Agreement and the provisions of any other previously existing
employment, severance or other similar agreement, then the provisions of this
Agreement shall govern.
5.2 NOTICES. Any notices provided hereunder must be in writing, and such
notices or any other written communication shall be deemed effective upon the
earlier of personal delivery (including personal delivery by facsimile) or the
third day after mailing by first class mail, to the
4
Company at its primary office location and to Executive at Executive's address
as listed in the Company's payroll records. Any payments made by the Company to
Executive under the terms of this Agreement shall be delivered to Executive
either in person or at the address as listed in the Company's payroll records.
5.3 SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.
5.4 WAIVER. If either party should waive any breach of any provisions of
this Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
5.5 ARBITRATION. Unless otherwise prohibited by law or specified below,
all disputes, claims and causes of action, in law or equity, arising from or
relating to this Agreement or its enforcement, performance, breach, or
interpretation shall be resolved solely and exclusively by final and binding
arbitration held in San Diego County, California through Judicial Arbitration &
Mediation Services/Endispute ("JAMS") under the then existing JAMS arbitration
rules. However, nothing in this section is intended to prevent either party from
obtaining injunctive relief in court to prevent irreparable harm pending the
conclusion of any such arbitration. Each party in any such arbitration shall be
responsible for its own attorneys' fees, costs and necessary disbursement;
provided, however, that in the event one party refuses to arbitrate and the
other party seeks to compel arbitration by court order, if such other party
prevails, it shall be entitled to recover reasonable attorneys' fees, costs and
necessary disbursements. Pursuant to California Civil Code Section 1717, each
party warrants that it was represented by counsel in the negotiation and
execution of this Agreement, including the attorneys' fees provision herein.
5.6 COMPLETE AGREEMENT. This Agreement, including Exhibit A, constitutes
the entire agreement between Executive and the Company and is the complete,
final, and exclusive embodiment of their agreement with regard to this subject
matter, wholly superseding all written and oral agreements with respect to cash
severance benefits and health benefits to Executive in the event of employment
termination. It is entered into without reliance on any promise or
representation other than those expressly contained herein. This Agreement does
not supercede the Proprietary Information & Inventions Agreement, a copy of
which is attached hereto as Exhibit B.
5.7 AMENDMENT OR TERMINATION OF AGREEMENT. This Agreement may be changed
or terminated only upon the mutual written consent of the Company and Executive.
The written consent of the Company to a change or termination of this Agreement
must be signed by an executive officer of the Company after such change or
termination has been approved by the Board.
5
5.8 COUNTERPARTS. This Agreement may be executed in separate counterparts,
any one of which need not contain signatures of more than one party, but all of
which taken together will constitute one and the same Agreement.
5.9 HEADINGS. The headings of the Articles and Sections hereof are
inserted for convenience only and shall not be deemed to constitute a part
hereof nor to affect the meaning thereof.
5.10 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive, and the Company, and any
surviving entity resulting from a Change in Control and upon any other person
who is a successor by merger, acquisition, consolidation or otherwise to the
business formerly carried on by the Company, and their respective successors,
assigns, heirs, executors and administrators, without regard to whether or not
such person actively assumes any rights or duties hereunder; provided, however,
that Executive may not assign any duties hereunder and may not assign any rights
hereunder without the written consent of the Company, which consent shall not be
withheld unreasonably.
5.11 CHOICE OF LAW. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the law of the State of
California, without regard to such state's conflict of laws rules.
5.12 NON-PUBLICATION. The parties mutually agree not to disclose publicly
the terms of this Agreement except to the extent that disclosure is mandated by
applicable law or to respective advisors (e.g., attorneys, accountants).
5.13 CONSTRUCTION OF AGREEMENT. In the event of a conflict between the text
of the Agreement and any summary, description or other information regarding the
Agreement, the text of the Agreement shall control.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
Effective Date written above.
LXN CORPORATION XXXXXXX XXXXXXXXXX
By: /s/ Signature /s/ Xxxxxxx Xxxxxxxxxx
---------------------------- ----------------------------
Name:
--------------------------
Title:
-------------------------
Exhibit A: Release (Individual Termination)
6
EXHIBIT A
RELEASE
Certain capitalized terms used in this Release are defined in the Executive
Severance Benefits Agreement (the "Agreement") which I have executed and of
which this Release is a part.
I hereby confirm my obligations under the Company's proprietary information
and inventions agreement.
I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads 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." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of any claims I may
have against the Company.
Except as otherwise set forth in this Release, I hereby release, acquit and
forever discharge the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys fees, damages, indemnities and obligations of
every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed (other than any claim for
indemnification I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to the date I execute
this Release, including, but not limited to: all such claims and demands
directly or indirectly arising out of or in any way connected with my employment
with the Company or the termination of that employment, including but not
limited to, claims of intentional and negligent infliction of emotional
distress, any and all tort claims for personal injury, claims or demands related
to salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of disputed compensation; claims pursuant to
any federal, state or local law or cause of action including, but not limited
to, the federal Civil Rights Act of 1964, as amended; the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"); the federal
Employee Retirement Income Security Act of 1974, as amended; the federal
Americans with Disabilities Act of 1990; the California Fair Employment and
Housing Act, as amended; tort law; contract law; statutory law; common law;
wrongful discharge; discrimination; fraud; defamation; emotional distress; and
breach of the implied covenant of good faith and fair dealing; provided,
however, that nothing in this paragraph shall be construed in any way to release
the Company from its obligation to indemnify me pursuant to the Company's
indemnification obligation pursuant to agreement or applicable law.
1
I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under ADEA. I also acknowledge that the consideration given
under the Agreement for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (A) my waiver and release do not apply to any rights or claims that may
arise on or after the date I execute this Release; (B) I have the right to
consult with an attorney prior to executing this Release; (C) I have twenty-one
(21) days to consider this Release (although I may choose to voluntarily execute
this Release earlier); and (D) if I am 40 or older at the time I execute this
Release, I have seven (7) days following the execution of this Release by the
parties to revoke the Release; and (E) if I am 40 or older at the time I execute
this Release, this Release shall not be effective until the date upon which the
revocation period has expired, which shall be the eighth day after this Release
is executed by me.
XXXXXXX XXXXXXXXXX
-----------------------------------
Date:
------------------------------
2
EXHIBIT B
PROPRIETARY INFORMATION & INVENTIONS AGREEMENT
3
