EMPLOYMENT AGREEMENT
EXHIBIT 10.1
This EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of the 5th day of August, 2011, by
and between Conexant Systems, Inc., a Delaware corporation (the “Company”), and Xxxxxxx Xxxxxxxxxxx
(the “Executive”).
WHEREAS, the Executive is currently serving the Company as its President and Chief Operating
Officer pursuant to that certain Employment Agreement between the parties previously entered into
dated April 28, 2008 (as amended, the “Prior Employment Agreement”);
WHEREAS, the Company desires to promote the Executive to, and the Executive desires to accept
the position of, the President and Chief Executive Officer of the Company;
WHEREAS, this Agreement shall only become effective at the Effective Date (as defined in
Section 2); and at the Effective Date, this Employment Agreement will replace and supersede any
other previous employment agreements or arrangements (verbal or written) (express or implied)
between the Executive and the Company or any of its Affiliates or predecessors (including, without
limitation, the Prior Employment Agreement), which shall automatically be terminated as of the
Effective Date and shall be of no force or effect from and after the Effective Date; and
WHEREAS, the parties hereto wish to enter into the arrangements set forth herein with respect
to the terms and conditions of the Executive’s employment with the Company from and after the
Effective Date (as defined in Section 2).
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment Agreement. On the terms and conditions set forth in this Agreement, the
Company agrees to employ the Executive, and the Executive agrees to be employed by the Company, for
the Employment Period set forth in Section 2 and in the positions and with the duties set forth in
Section 3. Terms used herein with initial capitalization are defined in Section 25.
2. Term. Unless earlier terminated pursuant to Section 8, the new term of the
Executive’s employment hereunder in the positions referenced under Section 3 will begin as of April
20, 2011 (the “Effective Date”) and will conclude on the first anniversary of the Effective Date
(the “Renewal Date”) (such period, the “Employment Period”); provided that the Employment
Period will automatically be extended for an additional one (1)-year period on the Renewal Date and
each anniversary of the Renewal Date unless either party gives written notice to the other party at
least sixty (60) days before the end of the Employment Period that it does not wish such automatic
one (1) year extension to occur.
3. Position and Duties. The Executive will serve as the President and Chief Executive
Offer of the Company during the Employment Period. As President and Chief Executive Officer, the
Executive will render executive, policy and other management services to
the Company of the type customarily performed by persons serving in a similar capacity and as
reasonably determined by the Board of Directors of the Company (“Board”) with regard to the
Executive’s status and position within the Company. The Executive will report directly to the
Board. The Executive will devote the Executive’s reasonable best efforts and full business time to
the performance of his duties hereunder and the advancement of the business and affairs of the
Company during the Employment Period, it being understood that the Executive may, consistent with
the other provisions of this Agreement, pursue other outside interests including but not limited to
the Executive’s devoting time to managing the Executive’s personal investments and to charitable
and community activities.
4. Place of Performance. During the Employment Period, the Executive’s primary place
of employment and work location will be Newport Beach, California, except for reasonable travel on
Company business and as otherwise consented to by the Executive.
5. Compensation.
(a) Base Salary. During the Employment Period, the Company will continue to pay to
the Executive an annual base salary (the “Base Salary”), which, as of the Effective Date, shall be
$400,000. The Base Salary will be reviewed by the Board no less frequently than annually and may
be increased (but not materially decreased) at the discretion of the Board. If the Executive’s
Base Salary is increased, the increased amount will be the Base Salary for the remainder of the
Employment Period. The Base Salary will be payable monthly or in such other installments as will
be consistent with the Company’s payroll procedures in effect from time to time.
(b) Bonus. During the Employment Period, the Executive will be eligible to earn an
annual performance bonus in an amount determined at the discretion of the Board for each fiscal
year. It is the intention of the parties hereto that the Company shall establish a target bonus
for the Executive with respect to each fiscal year of the Employment Period based upon overall
performance of the Company (calculated based upon the EBITDA of the Company for such fiscal year).
The Executive’s target bonus for the 2011 fiscal year will be as established by the Board prior to
the Effective Date, subject to increase (but not decrease) in the sole discretion of the Board.
The Executive’s target bonus for the 2012 fiscal year shall be eighty percent (80%) of the Base
Salary, subject to the performance targets established by the Board pursuant to this Section
5(b).
To be eligible for any bonuses, the Executive must be employed by the Company at the time the
bonuses are paid. Any bonus will be paid on or before the 15th day of the
3rd month after the end of the Company’s taxable year.
(c) Benefits. During the Employment Period, the Executive will be entitled to all
employee benefits and perquisites made available to senior executives of the Company. Nothing
contained in this Agreement will prevent the Company from terminating plans, changing carriers or
effecting modifications in employee benefits coverage for the Executive as long as such
modifications affect all similarly situated employees and/or officers of the Company.
(d) Vacation; Holidays. During the Employment Period, the Executive will be entitled
to all public holidays observed by the Company. Executive will also be entitled to
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five (5) weeks
of vacation per year, which vacation days will be taken at a reasonable time or times and accrue in
accordance with the Company’s policies and practices, subject to the provisions set forth on
Schedule 5(d) attached hereto.
(e) Withholding Taxes and Other Deductions. To the extent required by law, the
Company will withhold from any payments due to the Executive under this Agreement any applicable
federal, state or local taxes and such other deductions as are prescribed by law.
6. Expenses. The Executive is expected and is authorized, subject to the business
expense policies as determined by the Company, to incur reasonable expenses in the performance of
the Executive’s duties hereunder, including the costs of entertainment, travel, and similar
business expenses. The Company will promptly reimburse the Executive for all such expenses upon
periodic presentation by the Executive of an accounting of such expenses on terms applicable to
senior executives of the Company.
7. Confidentiality; Work Product.
(a) Information. The Executive acknowledges that the information, observations and
data obtained by the Executive concerning the business and affairs of the Company and its
Affiliates and their predecessors during the course of the Executive’s performance of services for,
or employment with, any of the foregoing persons (whether or not compensated for such services) are
the property of the Company and its Affiliates, including information concerning acquisition
opportunities in or reasonably related to the business or industry of the Company or its Affiliates
and their predecessors of which the Executive becomes aware during such period. Therefore, the
Executive agrees that the Executive will not at any time (whether during or after the Employment
Period) disclose to any unauthorized person or, directly or indirectly, use for the Executive’s own
account, any of such information, observations, data or any Work Product (as defined below) or
Copyrightable Work (as defined below) without the Board’s consent, unless and to the extent that
the aforementioned matters become generally known to and available for use by the public other than
as a direct or indirect result of the Executive’s acts or omissions to act or the acts or omissions
to act of other senior or junior management employees of the Company and its Affiliates. The
Executive agrees to deliver to the Company at the termination of the Executive’s employment, or at
any other time the Company may request in writing (whether during or after the Employment Period),
all memoranda, notes, plans, records, reports and other documents, regardless of the format or
media (and copies thereof), relating to the business of the Company and its Affiliates and their
predecessors (including, without limitation, all acquisition prospects, lists and contact
information) which the Executive may then possess or have under the Executive’s control.
(b) Intellectual Property. The Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings, reports, trade
secrets, know-how, ideas, computer programs, and all similar or related information (whether or not
patentable) that relate to the actual or anticipated business, research and development or existing
or future products or services of the Company or its Affiliates and their predecessors that are
conceived, developed, made or reduced to practice by the Executive while employed by the Company or
any of its predecessors (“Work Product”) belong to the Company, and the
Executive hereby assigns, and agrees to assign, all of the Executive’s rights, title and
interest in and to the Work Product to the Company. Any copyrightable work (“Copyrightable Work”)
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prepared in whole or in part by the Executive in the course of the Executive’s work for any of the
foregoing entities will be deemed a “work made for hire” under the copyright laws, and the Company
will own all rights therein. To the extent that it is determined, by any authority having
jurisdiction, that any such Copyrightable Work is not a “work made for hire,” the Executive hereby
assigns and agrees to assign to the Company all of the Executive’s rights, title and interest,
including, without limitation, copyright in and to such Copyrightable Work. The Executive will
promptly disclose such Work Product and Copyrightable Work to the Board and perform all actions
reasonably requested by the Board (whether during or after the Employment Period) to establish and
confirm the Company’s ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).
(c) Enforcement. The Executive acknowledges that the restrictions contained in this
Section 7 are reasonable and necessary, in view of the nature of the Company’s business, in order
to protect the legitimate interests of the Company, and that any violation thereof would result in
irreparable injury to the Company. Therefore, the Executive agrees that in the event of a breach
or threatened breach by the Executive of the provisions of this Section 7, the Company may be
entitled to obtain from any court of competent jurisdiction, preliminary or permanent injunctive
relief restraining the Executive from disclosing or using any such confidential information.
Nothing herein will be construed as prohibiting the Company from pursuing any other remedies
available to it for such breach or threatened breach, including, without limitation, recovery of
damages from the Executive.
8. Termination of Employment. Any termination of the Employment Period by the Company
or the Executive will be communicated by a written Notice of Termination to the other party hereto
in accordance with Section 11. For purposes of this Agreement, a “Notice of Termination” will mean
a notice which will indicate the specific termination provision in this Agreement relied upon, if
any, and will set forth in reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Employment Period if the termination is being effected by the Company for
Cause. Termination of the Employment Period will take effect on the Date of Termination. The
Employment Period will be terminated under the following circumstances:
(a) Death. The Employment Period will terminate upon the Executive’s death;
(b) By the Company. The Company may terminate the Employment Period (i) if the
Executive has a Disability, or (ii) with or without Cause;
(c) By the Executive. The Executive may terminate the Employment Period at any time,
with or without Good Reason; or
(d) Non-Renewal. The Employment Period may terminate pursuant to the terms of Section
2. If the Employment Period expires due to a notice of non-renewal by the Company to the Executive
and the Executive actually resigns from employment with the Company effective upon the expiration
of the Employment Period, such cessation of the Executive’s employment with the Company will be
treated as a termination of the Employment
Period by the Company without Cause. The expiration of the Employment Period due to a
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notice
of non-renewal tendered by the Executive to the Company will be treated as a termination of the
Employment Period by the Executive.
9. Compensation upon Termination. The Executive’s services as an employee of the
Company must be terminated in order for the Executive to receive any payment or other benefit under
this Section 9. Any change in job title or responsibilities will not constitute a termination of
the Employment Period under this contract, unless Executive terminates the Employment Period for
Good Reason (as described below).
(a) Death. If the Employment Period terminates as a result of the Executive’s death,
the Company will promptly pay to the Executive’s estate, or as may be directed by the legal
representatives of such estate, after the Date of Termination any accrued but unpaid Base Salary
through the Date of Termination. All other unpaid amounts, if any, which the Executive has accrued
and is entitled to as of the Date of Termination in connection with any fringe benefits or under
any bonus or incentive compensation plan or program of the Company pursuant to Sections 5(b) and
(c) will be paid in accordance with the terms of any such plans or programs. The Company will have
no further obligations to the Executive under this Agreement or otherwise (other than pursuant to
any employee benefit plan and any life insurance, death in service or other equivalent policy for
the benefit of the Executive).
(b) Disability. If the Company terminates the Employment Period because of the
Executive’s Disability, the Company will promptly pay to the Executive after the Date of
Termination any accrued but unpaid Base Salary through the Date of Termination. All other unpaid
amounts, if any, which the Executive has accrued and is entitled to as of the Date of Termination
in connection with any fringe benefits or under any bonus or incentive compensation plan or program
of the Company pursuant to Sections 5(b) and (c) will be paid in accordance with the terms of any
such plans or programs. In addition, if the Company terminates the Employment Period because of
the Executive’s Disability, then the Executive will be entitled to the cash payment referred to in
clause (iii) of Section 9(e). The Company will have no further obligations to the Executive under
this Agreement or otherwise (other than pursuant to any employee benefit plan and any disability or
other medical insurance policy for the benefit of the Executive).
(c) By the Company for Cause; By the Executive Without Good Reason. If the Company
terminates the Employment Period for Cause or if the Executive terminates the Employment Period
without Good Reason, the Company will promptly pay to the Executive after the Date of Termination
any accrued but unpaid Base Salary through the Date of Termination. All other unpaid amounts, if
any, which the Executive has accrued and is entitled to as of the Date of Termination in connection
with any fringe benefits or under any bonus or incentive compensation plan or program of the
Company pursuant to Sections 5(b) and (c) will be paid in accordance with the terms of any such
plans or programs.
Other than as set forth in this Section 9(c), the Company will have no further obligations to
the Executive under this Agreement or otherwise (other than pursuant to any employee benefit plan).
(d) By the Company Without Cause; By the Executive for Good Reason. If the Company
terminates the Employment Period other than for Cause, Disability or death, or if
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the Executive
terminates the Employment Period for Good Reason, the Executive will be entitled to the Separation
Benefits (as defined in Section 9(e)). Other than as set forth herein, the Company will have no
further obligations to the Executive under this Agreement or otherwise (other than pursuant to any
employee benefit plan).
As an express condition precedent to Executive receiving any Separation Benefits under this
Section 9, Executive must execute and not revoke a unilateral general release of claims in a form
satisfactory to the Company within sixty (60) calendar days of the Date of Termination. Nothing in
this Section 9(d) will be deemed to operate or will operate as a release, settlement or discharge
of any liability of the Executive to the Company or others for any action or omission by the
Executive, including without limitation any actions which formed, or could have formed, the basis
for termination of the Executive’s employment for Cause.
(e) Separation Benefits. For purposes of this Agreement, “Separation Benefits” will
mean payment by the Company to the Executive of a cash lump sum equal to the sum of (i) $400,000;
plus (ii) an amount equal to (A) if the Date of Termination occurs prior to the end of the
Company’s 2012 fiscal year, the pro-rata portion of Executive’s target bonus for the fiscal year in
which the Date of Termination occurs (i.e., such amount shall be equal to the product of (x)
$320,000 times (y) a fraction, the numerator of which is the number of days Executive has been
employed by the Company in such fiscal year and the denominator of which is 365), or (B) if the
Date of Termination occurs after the end of the Company’s 2012 fiscal year, the pro-rata portion of
Executive’s actual bonus paid by the Company for the fiscal year immediately preceding the fiscal
year in which the Date of Termination occurs (i.e., such amount shall be equal to the product of
(x) 100% of Executive’s actual bonus paid by the Company for the fiscal year immediately preceding
the fiscal year in which the Date of Termination occurs, times (y) a fraction, the numerator of
which is the number of days Executive has been employed by the Company in such fiscal year and the
denominator of which is 365); plus (iii) $25,000; plus (iv) any accrued but unpaid Base Salary
through the Date of Termination and all other unpaid amounts, if any, which the Executive has
accrued and is entitled to as of the Date of Termination. Any cash payment pursuant to this
Section 9(e) will be made by the Company on the 60th day following the Date of Termination.
(f) Damages. The Executive agrees that, except for such other payments and benefits
to which the Executive may be entitled as expressly provided by the terms of this Agreement or any
applicable Company plan, such amounts will be in lieu of all other claims for damages that the
Executive may make with respect to the termination of the Executive’s employment, the Employment
Period or any such breach of this Agreement. In no event will the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, and such amounts will not be reduced
whether or not the Executive obtains other employment.
10. Noncompetition and Nonsolicitation.
(a) Noncompetition. THIS SECTION 10(a) WILL HAVE NO FORCE OR EFFECT, AND WILL NOT BE
DEEMED A PART OF THIS AGREEMENT, DURING ANY AND ALL PERIODS IN WHICH THE EXECUTIVE PERFORMS
SERVICES AS AN
EMPLOYEE OF THE COMPANY PRINCIPALLY IN THE STATE OF CALIFORNIA, BUT WILL BECOME IMMEDIATELY
EFFECTIVE IF AND TO THE EXTENT THE
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EXECUTIVE PERFORMS SERVICES AS AN EMPLOYEE OF THE COMPANY
PRINCIPALLY IN A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. The Executive and the Company
jointly acknowledge that Executive’s initial and principal place of employment is Newport Beach,
California, and therefore, this section 10 (a) is NOT in force and effect on the Effective Date.
However, the Executive further acknowledges that in the course of the Executive’s employment with
the Company and its Affiliates and their predecessors, the Executive has and will continue to
become familiar with the trade secrets of, and other confidential information concerning, the
Company and its Affiliates and their predecessors, that the Executive’s services will be of
special, unique and extraordinary value to the Company and its Affiliates and that the Company’s
ability to accomplish its purposes and to successfully pursue its business plan and compete in the
marketplace depends substantially on the skills and expertise of the Executive. Therefore, and in
further consideration of the compensation being paid to the Executive hereunder, the Executive
agrees that if his principal place of employment becomes a state other than California, then during
the Employment Period and for a period of twelve (12) months following the termination of the
Employment Period for any reason (the “Restricted Period”), the Executive will not directly or
indirectly own, manage, control, participate in, consult with, render services for, or in any
manner engage in any business competing with the businesses of the Company or its Affiliates, in
any country where the Company or its Affiliates conducts business; provided,
however, that passive investments amounting to no more than three percent (3%) of the
voting equity of a business and the Executive’s other current positions and activities described in
Section 3 will not be prohibited hereby.
(b) Nonsolicitation. Executive agrees that, during the Employment Period and for a
period of twelve (12) months following the termination of the Employment Period for any reason, the
Executive will not directly or indirectly (i) induce or attempt to induce any employee of the
Company or any Affiliate or any portfolio company of Golden Gate Capital to leave the employ of the
Company or such Affiliate or such portfolio company of Golden Gate Capital, hire or attempt to hire
any employee of the Company or any Affiliate or any portfolio company of Golden Gate Capital or in
any way willfully interfere with the relationship between the Company or any Affiliate or any
portfolio company of Golden Gate Capital and any employee thereof, or (ii) induce or attempt to
induce any customer, supplier, licensee or other business relation of the Company or any Affiliate
or any portfolio company of Golden Gate Capital to cease doing business with the Company or such
Affiliate or such portfolio company of Golden Gate Capital, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation and the Company or
any Affiliate or any portfolio company of Golden Gate Capital.
(c) Enforcement. If, at the time of enforcement of this Section 10, a court holds
that the restrictions stated herein are unreasonable under circumstances then existing, the parties
hereto agree that the maximum duration, scope or geographical area reasonable under such
circumstances will be substituted for the stated period, scope or area and that the court will be
allowed to revise the restrictions contained herein to cover the maximum duration, scope and area
permitted by law. If the provisions of this Section 10 will be deemed illegal by any jurisdiction,
the provisions in this Section 10 will be deemed ineffective within such jurisdiction.
Because the Executive’s services are unique and because the Executive has access to
confidential information, the parties hereto agree that money damages would be an inadequate remedy
for
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any breach of any provision of this Agreement. Therefore, in the event of a breach or
threatened breach by the Executive of any provision of this Agreement, the Company may, in addition
to other rights and remedies existing in its favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce, or prevent any
violations of, the provisions hereof (without posting a bond or other security).
11. Notices. All notices, demands, requests or other communications required or
permitted to be given or made hereunder will be in writing and will be delivered, telecopied or
mailed by first class registered or certified mail, postage prepaid, addressed as follows:
(a) If to the Company:
Conexant Systems, Inc
0000 XxxXxxxxx Xxxxxxxxx, Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxx, Executive Director of Human Resources
0000 XxxXxxxxx Xxxxxxxxx, Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxx, Executive Director of Human Resources
with a copy to:
Golden Gate Capital
Xxx Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxxx
Xxx Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxxx
(b) If to the Executive:
at the address on the books and records of the Company at the time of such notice, or to such other
address as may be designated by either party in a notice to the other. Each notice, demand,
request or other communication that will be given or made in the manner described above will be
deemed sufficiently given or made for all purposes three (3) days after it is deposited in the U.S.
mail, postage prepaid, or at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, the answer back or the affidavit of messenger being deemed
conclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon
presentation.
12. Severability. The invalidity or unenforceability of any one or more provisions of
this Agreement will not affect the validity or enforceability of the other provisions of this
Agreement, which will remain in full force and effect.
13. Survival. It is the express intention and agreement of the parties hereto that
the provisions of Sections 7, 9, 10, 11, and 22 will survive the termination of employment of the
Executive. In addition, all obligations of the Company to make payments hereunder will survive any
termination of this Agreement on the terms and conditions set forth herein.
14. Assignment. The rights and obligations of the parties to this Agreement will not
be assignable or delegable, except that (i) in the event of the Executive’s death, the personal
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representative or legatees or distributees of the Executive’s estate, as the case may be, will have
the right to receive any amount owing and unpaid to the Executive hereunder, and (ii) the rights
and obligations of the Company hereunder will be assignable and delegable in connection with any
merger, consolidation or sale of all or substantially all of the assets of the Company and any
similar event with respect to any successor corporation. Notwithstanding anything herein to the
contrary, the rights and obligations of the Company hereunder will inure to the benefit of, and
will be binding upon, any successor to the Company or its business by merger or otherwise, whether
or not there is an express assignment, delegation or assumption of such rights and obligations.
15. Binding Effect. Subject to any provisions hereof restricting assignment, this
Agreement will be binding upon the parties hereto and will inure to the benefit of the parties and
their respective heirs, devisees, executors, administrators, legal representatives, successors and
assigns.
16. Amendment; Waiver. This Agreement will not be amended, altered or modified except
by an instrument in writing duly executed by the parties hereto. No waiver by either of the
parties hereto of a breach of or a default under any of the provisions of this Agreement will
thereafter be construed as a waiver of any subsequent breach or default of a similar nature. The
failure of either of the parties, on one or more occasions, to enforce any of the provisions of
this Agreement or to exercise any right or privilege hereunder will not be construed as a waiver of
any such provisions, rights or privileges hereunder, or a waiver of any subsequent breach or
default of a similar nature.
17. Headings. Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, will not be deemed to be a part of this Agreement for
any purpose, and will not in any way define or affect the meaning, construction or scope of any of
the provisions hereof.
18. Governing Law. This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, will be governed by and construed in accordance with
the laws of the State of California (but not including the choice of law rules thereof).
19. Entire Agreement. This Agreement constitutes the entire agreement between the
parties respecting the employment of the Executive. There being no representations, warranties or
commitments between the parties except as set forth herein, this Agreement replaces and supersedes
any other employment or equity agreements or arrangements, oral or written (including, without
limitation, the Prior Employment Agreement), between the Executive and the Company or any of its
Affiliates or predecessors.
20. Effective Date. This Agreement will become biding once both parties hereto have
executed this Agreement. Once executed, this Agreement will be effective as of the date hereof.
21. Counterparts. This Agreement may be executed in two or more counterparts, each of
which will be an original and all of which will be deemed to constitute one and the same
instrument.
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22. Legal Expenses. The Company will pay or reimburse the Executive (up to $2,500)
for reasonable attorneys’ fees incurred by the Executive in connection with the negotiation of this
Agreement and the Executive’s commencement of employment hereunder. Any such reimbursement will be
made no later than the calendar year following the year in which such expense was incurred.
23. Attorneys’ Fees. If either party sues the other to enforce any of the terms of
this Agreement, the prevailing party (as determined by a court of competent jurisdiction in a
final, non-appealable order) shall, in addition to all other damages, be entitled to recover its
reasonable, out-of-pocket costs and attorneys’ fees.
24. Executive’s Cooperation. During the Employment Period and thereafter, the
Executive shall cooperate with the Company and its subsidiaries in any internal investigation, any
administrative, regulatory or judicial investigation or proceeding or any dispute with a third
party as reasonably requested by the Company (including, without limitation, the Executive being
available to the Company upon reasonable notice for interviews and factual investigations,
appearing at the Company’s request to give testimony without requiring service of a subpoena or
other legal process, volunteering to the Company all pertinent information and turning over to the
Company all relevant documents which are or may come into the Executive’s possession, all at times
and on schedules that are reasonably consistent with the Executive’s other permitted activities and
commitments). In the event the Company requires the Executive’s cooperation in accordance with this
Section, the Company shall reimburse the Executive solely for reasonable travel expenses (including
lodging and meals) upon submission of receipts.
25. Provisions Regarding Code Section 409A.
(a) Six-Month Wait for Key Employees Under Separation from Service. Notwithstanding
anything to the contrary in this Agreement, if the Executive is a “specified employee” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended and any final regulations
and guidance promulgated thereunder (“Section 409A”) at the time of the Executive’s termination,
then the severance and benefits payable to the Executive pursuant to this Agreement (other than due
to death), if any, and any other severance payments or separation benefits which may be considered
deferred compensation under Section 409A (together, the “Deferred Compensation Separation
Benefits”), which are otherwise due to the Executive on or within the six (6) month period
following the Executive’s termination will accrue during such six (6) month period and will become
payable in a lump sum payment on the date six (6) months and one (1) day following the date of the
Executive’s termination of employment or the date of death, if earlier. All subsequent Deferred
Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule
applicable to each payment or benefit.
(b) Necessary Amendments Due to Code Section 409A. The intent of the parties is that
payments and benefits under this Agreement comply with Section 409A and the regulations and
guidance promulgated thereunder and, accordingly, to the maximum extent permitted, this Agreement
shall be interpreted to be in compliance therewith. In no event whatsoever shall the Company be
liable for any additional tax, interest or penalty that may be imposed on the Executive by Code
Section 409A or damages for failing to comply with Section 409A. Notwithstanding anything in this
Agreement to the contrary, in the event that
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amendments to this Agreement are necessary in order to comply with future guidance or
interpretations under Section 409A, including amendments necessary to ensure that compensation will
not be subject to Section 409A, the Executive agrees that the Company will be permitted to make
such amendments, on a prospective and/or retroactive basis, in its sole discretion, provided that
it has first negotiated with the Executive on a good faith basis to construct an amendment that
would be mutually satisfactory to the parties hereto.
(c) Separation from Service. A termination of employment shall not be deemed to have
occurred for purposes of any provision of this Agreement providing for the payment of any amounts
or benefits upon or following a termination of employment unless such termination is also a
“separation from service” within the meaning of Section 409A and, for purposes of any such
provision of this Agreement, references to a “termination,” “termination of employment” or like
terms shall mean “separation from service.”
(d) Offset Limitation. Notwithstanding any other provision to the contrary, in no
event shall any payment under this Agreement that constitutes “deferred compensation” for purposes
of Section 409A be subject to offset by any other amount unless otherwise permitted by Section
409A.
26. Definitions.
“Affiliate” means any entity from time to time designated by the Board and any other
entity directly or indirectly controlling or controlled by or under common control with the
Company. For purposes of this definition: “control” means the power to direct the management and
policies of such entity, whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Board” means the board of directors of the Company.
“Cause” means: (i) the Executive’s indictment or conviction of or entering into a plea
of guilty or no contest in a court of competent jurisdiction to a felony or a crime involving moral
turpitude, or the intentional commission of any other material act or material omission involving
dishonesty or fraud that is materially injurious to the Company or any of its Affiliates; (ii) the
Executive’s willful, substantial and repeated failure to perform duties of the office(s) held by
the Executive, as reasonably directed by the Board, if such failure is not cured within thirty (30)
days after the Executive receives written notice thereof; (iii) gross negligence or willful
misconduct in the performance of the Executive’s duties which materially injures the Company or its
reputation; or (iv) the Executive’s willful and material breach of the material covenants of this
Agreement.
“Code” means the Internal Revenue Code of 1986, as amended.
“Date of Termination” means: (i) if the Executive’s employment is terminated by the
Executive’s death, the date of the Executive’s death; (ii) if the Executive’s employment is
terminated because of the Executive’s Disability, thirty (30) days after Notice of Termination,
provided that the Executive will not have returned to the performance of the Executive’s duties on
a full-time basis during such thirty (30)-day period; (iii) if the Executive’s employment is
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terminated by the Company for Cause, the date specified in the Notice of Termination; (iv) if
the Executive’s employment is terminated during the Employment Period for any other reason, the
date specified in the Notice of Termination; or (v) if the Executive’s employment is terminated due
to the non-renewal of the Employment Period in accordance with Section 2 hereof, the date on which
the Employment Period expires by its terms.
“Disability” means: as provided under Section 409A(a)(2)(C) and Treasury regulation
1.409A-3(i)(4) and other official guidance issued thereunder, that Executive (i) is unable to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically
determinable physical or mental impairment, which can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for a period of not less
than three (3) months under an accident and health plan covering Company employees.
Notwithstanding, Executive shall be deemed Disabled if he is determined to be totally disabled by
the United States Social Security Administration or by the then-current disability insurance
program of the Company; provided that, the definition of disability applied under such disability
insurance program complies with the requirements of Section 409A and the applicable Treasury
regulations and other official guidance issued thereunder.
“Good Reason” means: (i) a material reduction of Executive’s authorities, duties or
responsibilities as President and Chief Executive Officer; (ii) a requirement that Executive
relocate his full-time residence outside of Orange County without Executive’s consent; (iii) any
reduction by the Company in Executive’s base salary or bonus targets as in effect on the date
hereof, or (iv) any other material breach of this Agreement by the Company; provided, in
each case, that (1) Executive has given written notice of such Good Reason condition within 90 days
of the initial existence of the condition; (2) the Company has not remedied such condition within
30 days of such notice; and (3) Executive’s termination occurs within 120 days of the initial
existence of the condition
{Signature page follows.}
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or have caused this
Agreement to be duly executed on their behalf, as of the day and year first hereinabove written.
| Very truly yours, CONEXANT SYSTEMS, INC. |
||||
| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Authorized Signatory | |||
| XXXXXXX XXXXXXXXXXX |
||||
| /s/ Xxxxxxx Xxxxxxxxxxx | ||||
