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EXHIBIT 10.55
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") dated as of March 6,
2000 (the "Effective Date") by and between Xxxxxx Micro Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxx ("Executive").
WHEREAS, the Board of Directors of the Company (the "Board") desires to
employ Executive as Chief Executive Officer of the Company, and Executive
desires to accept such employment; and
WHEREAS, the Company and Executive desire to enter into an agreement
(this "Agreement") embodying the terms of such employment;
NOW THEREFORE, in consideration of the mutual covenants and agreements
of the parties set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows (certain
capitalized terms used herein being defined in Article 8):
ARTICLE 1
TERM OF AGREEMENT
SECTION 1.01. Initial Term. The term of this Agreement shall commence
on the Effective Date and shall expire December 31, 2002 (the "Initial Term"),
subject to Sections 1.02 and 1.03.
SECTION 1.02. Extensions. As of December 31, 2000 and each later date
which is two years prior to the scheduled expiration date of this Agreement as
it may be extended from time to time pursuant to Sections 1.02 and 1.03 (any
such date, a "Renewal Date"), provided Executive is actively employed by the
Company on such scheduled expiration date, the remaining term of this Agreement
shall automatically be extended by one year (each such additional one-year
period, a "Successive Period") unless, at least sixty days prior to any such
Renewal Date, the Company has provided the Executive with written notice of the
Company's intent that the term of this Agreement not be so extended.
SECTION 1.03. Automatic Extension Upon Change in Control. In the event
that any Change in Control occurs during the Initial Term or any Successive
Period, upon the effective date of such Change in Control the term of this
Agreement shall automatically be extended for a period of 24 months from the
effective date of such Change in Control (an "Extended Term"). The 24-month
extension described in this Section 1.03 shall take effect regardless of
whether,
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before or after the effective date of a Change in Control, the Company has given
written notice of intent not to extend the term of the Agreement pursuant to
Section 1.02, provided the term of the Agreement has not yet expired as of such
effective date.
ARTICLE 2
POSITION; DUTIES
SECTION 2.01. Position. Commencing as of the Effective Date, the
Company shall employ Executive as Chief Executive Officer of the Company. The
Company shall cause Executive to be elected as President and Chief Executive
Officer of the Company and a member of the Board on the Effective Date and will
include Executive as the "Management Director" (within the meaning of Article
III, Section 3 of the Company's Amended and Restated Bylaws) on the Board's
slate of nominees for election to the Board at the Company's 2000 Annual Meeting
of Shareowners and each annual meeting thereafter during the term of this
Agreement. Executive will be elected as Chairman and Chief Executive Officer of
the Company at the Annual Meeting of the Board to be held immediately following
the conclusion of the Company's 2000 Annual Meeting of Shareowners. Executive
shall have such duties and authority as shall be determined from time to time by
the Board; provided that such duties shall be consistent with the positions
assigned to Executive pursuant to this Section 2.01.
SECTION 2.02. Performance of Duties. While Executive is employed by the
Company hereunder, Executive shall devote substantially all of his business time
and best efforts to the business and affairs of the Company and the performance
of Executive's duties under this Agreement. Subject to the foregoing, Executive
shall not be precluded from (i) continuing to serve on such boards of directors
of business corporations and/or charitable organizations as Executive currently
serves on and serving on such other boards of directors of business corporations
and/or charitable organizations as to which the Board shall have given its prior
written consent, which consent shall not be withheld unreasonably; (ii) engaging
in community affairs or charitable activities (other than serving on the boards
of directors of charitable organizations, as to which clause (i) shall control),
and (iii) managing Executive's personal investments and affairs.
SECTION 2.03. Office Location. Executive's principal office will be
located in the executive office section of the facility operated by the
Company's affiliate Xxxxxx Micro Texas L.P. at 0000 Xxxxxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxx 00000. Executive will be provided sufficient administrative
support to perform his duties to the Company, including an administrative
assistant of his choosing.
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ARTICLE 3
COMPENSATION
SECTION 3.01. Base Salary. While Executive is employed by the Company
hereunder, the Company shall pay Executive a base salary (the "Base Salary") at
the annual rate of not less than $1,000,000, payable in accordance with the
usual payment practices of the Company. Executive's Base Salary shall be subject
to review for increase annually and Executive shall be entitled to such
increases in his Base Salary, if any, as may be determined from time to time in
the sole discretion of the Human Resources Committee of the Board (the
"Committee").
SECTION 3.02. Incentive Compensation Awards. (a) With respect to each
Fiscal Year beginning with the Fiscal Year ending December 30, 2000 during which
Executive is employed hereunder, Executive shall be eligible to receive in
addition to Executive's Base Salary an annual incentive compensation award (the
"Annual Award") for services rendered during such Fiscal Year, subject to the
terms and conditions of the Company's annual Executive Incentive Award Plan as
in effect from time to time. Except as provided below, the amount of the Annual
Award, if any, with respect to any Fiscal Year shall be based upon performance
targets and award levels determined by the Committee in its sole discretion, in
accordance with the Company's annual Executive Incentive Award Plan as in effect
from time to time. The Executive shall be eligible for a target bonus
opportunity of 100% of Base Salary (the "Target Bonus Opportunity"), and a
maximum bonus opportunity of 200% of Base Salary. For the Company's fiscal year
ended December 30, 2000, the Executive shall receive an Annual Award of not less
than 100% of Executive's Base Salary earned during such fiscal year, which shall
be payable in accordance with the Company's practices.
(b) In addition to the Annual Awards described above, Executive shall
be eligible to receive such additional bonuses as may be awarded by the
Committee in its sole discretion.
SECTION 3.03. Employee Benefits. While Executive is employed by the
Company hereunder, Executive (and, to the extent applicable, Executive's
eligible family members, as defined in the applicable plan or policy) shall be
entitled to participate (or to receive benefits equivalent to such
participation), on terms no less favorable than the terms offered to other
senior executives of the Company, in any group and/or executive life,
hospitalization or disability insurance plan, health program, vacation policy,
profit sharing, 401(k) and similar benefit plans (qualified, non-qualified and
supplemental) and other fringe benefits of the Company, and similar programs as
in effect from time to time.
SECTION 3.04. Business Expenses. The Company shall reimburse promptly
such of Executive's travel, entertainment and other business expenses as
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are reasonably and necessarily incurred by Executive in the performance of his
duties while employed hereunder, in accordance with the Company's policies as in
effect from time to time.
SECTION 3.05. Stock Incentive Awards. The Executive shall be granted
options to purchase 1,500,000 shares of the Company's Class A common stock, $.01
par value, with an exercise price equal to the closing price of such stock, as
reported on the New York Stock Exchange, on the trading day prior to Executive's
first day of work for a term of 10 years, which will vest in three equal annual
installments commencing on the first anniversary of the Effective Date.
Executive shall be eligible to receive such additional equity-based incentive
awards, including additional options and restricted stock awards, as may be
granted by the Committee in its sole discretion. Upon Executive's Retirement or
if his employment should terminate by reason of his death, the unexercised
vested portion of all such options and awards shall remain exercisable until the
earlier of the expiration date of such option or award or the third anniversary
of the date of Executive's Retirement or death. If Executive's employment should
terminate by reason of Disability, all such options and awards shall continue to
vest and be or become exercisable, in each case in accordance with the terms of
the governing plan, but in no event shall any such option or award expire prior
to the earlier of the expiration date of such option or award or the third
anniversary of the date of such termination.
ARTICLE 4
CERTAIN TERMINATION BENEFITS
SECTION 4.01. Certain Events. (a) A "Qualifying Event" means any of
the following events:
(i) The involuntary termination of Executive's employment by
the Company during the 24-month period following any Change in Control,
other than (x) for Cause, or (y) by reason of Executive's death or
Disability; or
(ii) Executive's voluntary termination of employment for Good
Reason during the 24-month period following any Change in Control,
provided that Executive's termination occurs within (x) six months
following a Qualifying Nonrenewal or (y) 90 days after the occurrence
of any other event constituting Good Reason.
(b) A "Nonqualifying Event" means the involuntary termination of
Executive's employment by the Company other than during the 24-month period
following any Change in Control, other than (x) for Cause, or (y) by reason of
Executive's death or Disability.
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(c) A "Constructive Event" means, other than during the 24-month
period following any Change in Control, Executive's voluntary termination of
employment for Good Reason within 90 days after the occurrence of an event
constituting Good Reason.
SECTION 4.02. Right to Certain Benefits. (a) In the event that a
Qualifying Event, a Nonqualifying Event, a Constructive Event or other
termination of employment occurs during the term of this Agreement, Executive
shall be entitled to receive from the Company the Severance Benefits as
described in Section 4.03 or the relevant Separation Benefits as described in
Section 4.04, as the case may be.
(b) (i) In the event that a Change in Control occurs during the term
of this Agreement all stock options, stock appreciation rights, restricted
stock, or other awards (collectively, "Awards") then held by Executive pursuant
to the provisions of any of the Company's stock or option plans or any successor
plans (each, a "Stock Plan") shall become immediately vested, nonforfeitable and
exercisable as of the date of the Change in Control and remain exercisable until
the earlier of (x) the expiration date of such Award, any termination of
employment notwithstanding, and (y) if applicable, the first anniversary of the
last day of the Continuation Period (such earlier date, the "Termination Date").
Subject to the provisions above upon a subsequent Change in Control, all Awards
granted after a Change in Control to Executive shall vest pursuant to the terms
of each such Award and its related Stock Plan; provided, however, that each such
Award shall continue to vest through any Continuation Period, and shall
terminate on the Termination Date.
(ii) In the event that a Constructive Event or a Nonqualifying
Event occurs during the term of this Agreement all Awards held by Executive
shall continue to vest through the Payment Period, and shall terminate on the
earlier of (x) the expiration date of such Award, any termination of employment
notwithstanding, and (y) the first anniversary of the last day of the Payment
Period.
SECTION 4.03. Benefits upon a Qualifying Event. Subject to Executive's
execution of an agreement in substantially the form set forth as Exhibit A
hereto, with such changes in the Competitor Companies named therein as the Board
shall reasonably determine (the "Release") and except to the extent provided in
Section 7.07 and Section 7.09, Executive shall be entitled to the following
benefits (the "Severance Benefits") upon a Qualifying Event:
(a) The Company shall pay Executive a lump sum, in cash, equal to
Executive's earned but unpaid Base Salary and other earned but unpaid cash
entitlements for the period through and including the date of termination of
Executive's employment, including unused earned and accrued vacation pay and
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unreimbursed documented business expenses (collectively, "Accrued
Compensation"). In addition, Executive shall be entitled to any other benefits
earned or accrued by Executive for the period through and including the date of
termination of Executive's employment under any other employee benefit plans and
arrangements maintained by the Company, in accordance with the terms of such
plans and arrangements, except as modified herein (collectively, "Accrued
Benefits").
(b) The Company, through the third anniversary of the Qualifying Event
(the "Continuation Period"), shall pay Executive cash compensation in equal
installments over 36 months at the times and in accordance with the applicable
Company payroll system, in an amount equal to three times the sum of the amounts
set forth in Clauses (i) and (ii) below:
(i) Executive's Base Salary at its highest annual rate in
effect during the period beginning on the date of the Change in Control
to which such Qualifying Event relates, and ending on the date of such
Qualifying Event; and
(ii) Executive's Target Bonus Opportunity for the year in
which Executive's employment terminates (the "Bonus Amount").
(c) The Company shall also pay Executive, at the times and in the
manner provided above, an amount in cash equal to Executive's Target Bonus
Opportunity for the year in which Executive's employment terminates times a
fraction, the numerator of which is the number of days in such year ending on
the date of such Qualifying Event and the denominator of which is 365 (the
"Basic Bonus Amount").
(d) In addition, Executive shall be entitled to the benefits set forth
below (collectively, the "Additional Benefits") through and in respect of the
Continuation Period:
(i) Continue to receive Executive's automobile allowance, if
any, as in effect immediately prior to the Qualifying Event;
(ii) Continue to participate in the Company's Medical Plans,
provided that the Company shall reimburse Executive for Executive's
total actual premium costs incurred for such period including, without
limitation, 102% of such total premium costs as are incurred by
Executive for "Continuation Coverage" (within the meaning of Section
4980B(f)(2) of the Code) for the last 18 months of such Period;
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(iii) Reimbursement for the documented costs, including
laboratory and test fees, of an annual physical examination in an
amount not to exceed $1,500;
(iv) Reimbursement for the documented costs of annual gift and
income tax preparation services and advice in an amount not to exceed
$2,000 (the "Tax Preparation Benefits"); and
(v) Participation in the Company's Supplemental Executive
Deferred Compensation Plan up to the full amount of employee
contributions permitted; provided, however, that the Company will not
be required to make any matching contributions with respect to
Executive's contributions during the Continuation Period.
SECTION 4.04. Separation Payments. Subject to Executive's execution of
a Release and except to the extent provided under Section 7.07 and Section 7.09,
Executive shall be entitled to the benefits set forth below (the "Separation
Benefits") upon termination of employment under the following circumstances:
(a) Upon a Nonqualifying Event, Executive shall be entitled to:
(i) The Accrued Compensation;
(ii) The Accrued Benefits;
(iii) An amount equal to two times Executive's Base Salary at
its highest annual rate during the one year period prior to such
Nonqualifying Event (the "Basic Termination Benefit") payable in cash
in equal installments at the times and in accordance with the
applicable Company payroll system over a period of 24 months (the
"Payment Period");
(iv) An amount, in cash, payable in equal installments over
the Payment Period and at the times and in accordance with the
applicable Company payroll system, equal to the Basic Bonus Amount; and
(v) The Additional Benefits, paid over, or in respect of, the
Payment Period, as appropriate.
(b) Upon a Constructive Event, Executive shall be entitled to:
(i) The Accrued Compensation;
(ii) The Accrued Benefits;
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(iii) An amount, in cash, equal to the sum of (x) the Basic
Termination Benefit, (y) the Bonus Amount, and (z) the Basic Bonus
Amount, payable in equal installments at the times and in the manner
provided in Section 4.04(a)(iv); and
(iv) The Additional Benefits, paid over, or in respect of, the
Payment Period, as appropriate.
(c) Upon Executive's voluntary termination of employment other than
for Good Reason or Retirement, Executive shall be entitled to:
(i) The Accrued Compensation; and
(ii) The Accrued Benefits.
(d) Upon termination of Executive's employment by reason of
Retirement, Executive shall be entitled to:
(i) The Accrued Compensation;
(ii) The Accrued Benefits; and
(iii) The Tax Preparation Benefit through and in respect of
the year in which Retirement occurs.
(e) Upon termination of Executive's employment by reason of death or
Disability, Executive shall be entitled to:
(i) The Accrued Compensation;
(ii) The Accrued Benefits;
(iii) The Basic Bonus Amount; and
(iv) The Tax Preparation Benefit through and in respect of the
year in which death or Disability occur.
(f) Upon termination of the Executive's employment for Cause,
Executive shall be entitled to:
(i) The Accrued Compensation; and
(ii) The Accrued Benefits.
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ARTICLE 5
CERTAIN TAX REIMBURSEMENT PAYMENTS
SECTION 5.01. Gross-Up Payment. If any portion of the Severance
Benefits or any other payment under this Agreement, or under any other agreement
with, or plan of the Company, including but not limited to stock options and
other long-term incentives (in the aggregate "Total Payments") would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Executive shall be entitled under this paragraph to an
additional amount (the "Gross-Up Payment") such that after payment by Executive
of all of Executive's applicable Federal, state and local taxes, including any
Excise Tax, imposed upon such additional amount, Executive will retain an amount
equal to the Excise Tax imposed on the Total Payments.
For purposes of this Section 5.01, Executive's applicable Federal,
state and local taxes shall be computed at the maximum marginal rates, taking
into account the effect of any loss of personal exemptions resulting from
receipt of the Gross-Up Payment.
SECTION 5.02. Determinations. All determinations required to be made
under this Article 4, including whether a Gross-Up Payment is required under
Section 5.01, and the assumptions to be used in determining the Gross-Up
Payment, shall be made by PricewaterhouseCoopers LLP, or such other firm as the
Company may designate in writing prior to a Change in Control (the "Accounting
Firm"), which shall provide detailed supporting calculations both to the Company
and Executive within twenty business days of the receipt of notice from
Executive that there has been a Qualifying Event, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the Person effecting the Change in Control or is
otherwise unavailable, Executive may appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company.
SECTION 5.03. Subsequent Redeterminations. Executive agrees (unless
requested otherwise by the Company) to use reasonable efforts to contest in good
faith any subsequent determination by the Internal Revenue Service that
Executive owes an amount of Excise Tax greater than the amount determined
pursuant to Section 5.02; provided, that Executive shall be entitled to
reimbursement by the Company of all fees and expenses reasonably incurred by
Executive in contesting such determination. In the event the Internal Revenue
Service or any court of competent jurisdiction determines that Executive owes an
amount of Excise Tax that is either greater or less than the amount previously
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taken into account and paid under this Article 5, the Company shall promptly pay
to Executive, or Executive shall promptly repay to the Company, as the case may
be, the amount of such excess or shortfall. In the case of any payment that the
Company is required to make to Executive pursuant to the preceding sentence (a
"Later Payment"), the Company shall also pay to Executive an additional amount
such that after payment by Executive of all of Executive's applicable Federal,
state and local taxes, including any interest and penalties assessed by any
taxing authority, on such additional amount, Executive will retain an amount
equal to the total of Executive's applicable Federal, state and local taxes,
including any interest and penalties assessed by any taxing authority, arising
due to the Later Payment. In the case of any repayment of Excise Tax that
Executive is required to make to the Company pursuant to the second sentence of
this Section 5.03, Executive shall also repay to the Company the amount of any
additional payment received by Executive from the Company in respect of
applicable Federal, state and local taxes on such repaid Excise Tax, to the
extent Executive is entitled to a refund of (or has not yet paid) such Federal,
state or local taxes.
ARTICLE 6
SUCCESSORS AND ASSIGNMENTS
SECTION 6.01. Successors. The Company will require any successor
(whether by reason of a Change in Control, direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform the
obligations under this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place.
SECTION 6.02. Assignment by Executive. This Agreement shall inure to
the benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If Executive should die or become disabled while any
amount is owed but unpaid to Executive hereunder, all such amounts, unless
otherwise provided herein, shall be paid to Executive's devisee, legatee, legal
guardian or other designee, or if there is no such designee, to Executive's
estate. Executive's rights hereunder shall not otherwise be assignable.
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Notices. Any notice required to be delivered hereunder
shall be in writing and shall be addressed
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if to the Company, to:
Xxxxxx Micro Inc.
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attn: General Counsel;
if to Executive, to Executive's last known address as reflected on
the books and records of the Company
or such other address as such party may hereafter specify for the purpose by
written notice to the other party hereto. Any such notice shall be deemed
received on the date of receipt by the recipient thereof if received prior to 5
p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
SECTION 7.02. Legal Fees and Expenses. The Company shall pay all legal
fees, costs of litigation, prejudgment interest, and other expenses which are
reasonably incurred by Executive as a result of (i) the Company's refusal to
provide Severance Benefits, Separation Benefits or other amounts payable in
accordance herewith, (ii) the Company's (or any third party's) contesting the
validity, enforceability, or interpretation of the Agreement, (iii) any conflict
between the parties pertaining to this Agreement, (iv) Executive's contesting
any determination by the Internal Revenue Service pursuant to Section 5.03, or
(v) Executive's pursuing any claim under Section 7.15 hereof.
SECTION 7.03. Arbitration. Executive shall have the right and option to
elect (in lieu of litigation) to have any dispute or controversy arising under
or in connection with this Agreement settled by arbitration, conducted before a
panel of three arbitrators sitting in a location selected by Executive within 50
miles from the location of Executive's principal place of employment with the
Company in Carrollton, Texas, in accordance with the rules of the American
Arbitration Association then in effect. Executive's election to arbitrate, as
herein provided, and the decision of the arbitrators in that proceeding, shall
be binding on the Company and Executive. Judgment may be entered on the award of
the arbitrator in any court having jurisdiction. All expenses of such
arbitration, including the fees and expenses reasonably incurred by Executive,
shall be borne by the Company.
SECTION 7.04. Unfunded Agreement. The obligations of the Company under
this Agreement represent an unsecured, unfunded promise to pay benefits to
Executive and/or Executive's beneficiaries, and shall not entitle Executive or
such beneficiaries to a preferential claim to any asset of the Company.
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SECTION 7.05. Non-Exclusivity of Benefits. Unless specifically provided
herein, neither the provisions of this Agreement nor the benefits provided
hereunder shall reduce any amounts otherwise payable, or in any way diminish
Executive's rights as an employee of the Company, whether existing now or
hereafter, under any compensation and/or benefit plans (qualified or
nonqualified), programs, policies, or practices provided by the Company, for
which Executive may qualify. Vested benefits or other amounts which Executive is
otherwise entitled to receive under any plan, policy, practice, or program of
the Company (i.e., including, but not limited to, vested benefits under any
qualified or nonqualified retirement plan), at or subsequent to the date of
termination of Executive's employment shall be payable in accordance with such
plan, policy, practice, or program except as expressly modified by this
Agreement.
SECTION 7.06. Employment Status. Nothing herein contained shall
interfere with the Company's right to terminate Executive's employment with the
Company at any time, with or without Cause, subject to the Company's obligation
to provide such Severance Benefits or Separation Benefits, as the case may be,
and other amounts as may be required hereunder.
SECTION 7.07. Mitigation. (a) In no event shall Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to Executive under any of the provisions of this Agreement, nor
except as provided below, shall the amount of any payment hereunder be reduced
by any compensation earned by Executive as a result of employment by another
employer.
(b) Notwithstanding any other provision of this Agreement to the
contrary, including, without limitation, Section 7.07(a), in the event that
Executive becomes entitled to receive the Severance Benefits described in
Section 4.03 of this Agreement or the Separation Benefits described in Section
4.04 of this Agreement, and if Executive is subsequently employed by any party
or becomes self-employed following such termination of employment, where, in
either case, Executive becomes eligible to receive Base Salary and an annual
bonus opportunity comparable in the aggregate to such compensation Executive
received from the Company immediately prior to such termination, then all cash
payments pursuant to Section 4.03(b), Section 4.04(a)(iii) or Section
4.04(b)(iii)(x) and (y), as the case may be, shall automatically cease on the
first of the month immediately following the month in which Executive becomes
entitled to such compensation; provided, however, that no other Separation
Benefits (including the right to receive any remaining unpaid portion of the
Basic Bonus Amount) shall be affected or reduced nor shall the period of time
during which any of Executive's Awards may vest or be exercised as provided in
Section 4.02(b) be affected or reduced.
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SECTION 7.08. No Set-Off. The Company's obligations to make all
payments and honor all commitments under this Agreement shall be absolute and
unconditional and, except as provided in Section 7.09, shall not be affected by
any circumstances including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company may have against Executive.
SECTION 7.09. Entire Agreement. This Agreement represents the entire
agreement between Executive and the Company and its affiliates with respect to
Executive's employment and/or severance rights, and supersedes all prior
discussions, negotiations, and agreements concerning such rights; provided,
however, that any amounts payable to Executive hereunder shall be reduced by any
amounts paid to Executive as required by any applicable local law in connection
with any termination of Executive's employment.
SECTION 7.10. Tax Withholding. Notwithstanding anything in this
Agreement to the contrary, the Company shall withhold from any amounts payable
under this Agreement all federal, state, city, or other taxes as are legally
required to be withheld.
SECTION 7.11. Waiver of Rights. The waiver by either party of a breach
of any provision of this Agreement shall not operate or be construed as a
continuing waiver or as a consent to or waiver of any subsequent breach hereof.
SECTION 7.12. Severability. In the event any provision of the Agreement
shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Agreement, and the Agreement shall
be construed and enforced as if the illegal or invalid provision had not been
included.
SECTION 7.13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without
reference to principles of conflict of laws.
SECTION 7.14. Counterparts. This Agreement may be signed in several
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were on the same instrument.
SECTION 7.15. Claim Review Procedure. If Executive is denied benefits
under this Agreement, Executive may request, in writing, a review of the denial
by the Company or its designee within 60 days of receiving written notice of the
denial. The Company shall respond in writing to a written request for review
within 90 days of receipt of such request. Neither the claim procedure set forth
in this Section 7.15 nor Executive's failure to adhere to such procedure shall
derogate from Executive's right to enforce this Agreement through legal action,
including arbitration as provided in Section 7.03.
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SECTION 7.16. Indemnification. The Company shall indemnify Executive
(and Executive's legal representatives or other successors) to the fullest
extent permitted by the Certificate of Incorporation and By-Laws of the Company,
as in effect at such time or on the Effective Date, or by the terms of any
indemnification agreement between the Company and Executive, whichever affords
or afforded greater protection to Executive, and Executive shall be entitled to
the protection of any insurance policies the Company may elect to maintain
generally for the benefit of its directors and officers (and to the extent the
Company maintains such an insurance policy or policies, Executive shall be
covered by such policy or policies, in accordance with its or their terms, to
the maximum extent of the coverage available for any Company officer or
director), against all costs, charges and expenses whatsoever incurred or
sustained by Executive or Executive's legal representatives at the time such
costs, charges and expenses are incurred or sustained, in connection with any
action, suit or proceeding to which Executive (or Executive's legal
representatives or other successors) may be made a party by reason of
Executive's being or having been a director, officer or employee of the Company,
or any Subsidiary or Executive's serving or having served any other enterprise
as a director, officer, employee or fiduciary at the request of the Company.
ARTICLE 8
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth below.
"Accounting Firm" has the meaning accorded such term in Section 5.02.
"Accrued Benefits" has the meaning accorded such term in Section 4.03.
"Accrued Compensation" has the meaning accorded such term in Section
4.03.
"Additional Benefits" has the meaning accorded such term in Section
4.03.
"Affiliate" and "Associate" have the respective meanings accorded to
such terms in Rule 12b-2 under the Exchange Act as in effect on the Effective
Date.
"Annual Award" has the meaning accorded such term in Section 3.02.
"Awards" has the meaning accorded such term in Section 2.02.
"Base Salary" means, at any time, the then-regular annual rate of pay
which Executive is receiving as annual salary.
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"Basic Bonus Amount" has the meaning accorded such term in Section
4.03.
"Basic Termination Benefit" has the meaning accorded such term in
Section 4.04.
"Beneficial Ownership." A Person shall be deemed the "Beneficial
Owner"of, and shall be deemed to "beneficially own," securities pursuant to Rule
13d-3 under the Exchange Act as in effect on the Effective Date.
"Board" has the meaning accorded such term in the second "Whereas"
clause of this Agreement.
"Bonus Amount" has the meaning accorded such term in Section 4.03.
"Cause" means the occurrence of any one or more of the following:
(a) A demonstrably willful and deliberate material act or failure to
act by Executive (other than as a result of incapacity due to physical or mental
illness) which is committed in bad faith, without reasonable belief that such
action or inaction is in the best interests of the Company, and which act or
inaction is not remedied within fifteen business days of written notice from the
Company;
(b) Executive's gross negligence in the performance of Executive's
duties hereunder; or
(c) Executive's conviction for committing an act of fraud,
embezzlement, theft, or any other act constituting a felony involving moral
turpitude.
Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for the reasons set forth in clause (a) or (b) of this
definition unless and until there shall have been delivered to Executive a copy
of a resolution duly adopted by the affirmative vote (which cannot be delegated)
of not less than three-quarters of the entire membership of the Board, other
than Executive, at a meeting of the Board called and held for such purpose (and
after reasonable notice to Executive an opportunity for Executive, together with
Executive's counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, Executive is guilty of conduct set forth above in
such clauses (a) or (b) of this definition and specifying the particulars
thereof in detail.
"Change in Control" means, and shall be deemed to have occurred upon
any occurrence of any of the following events:
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(a) Any Person (other than an Excluded Person) acquires, together with
all Affiliates and Associates of such Person, Beneficial Ownership of securities
representing 25% or more of the combined voting power of the Voting Stock then
outstanding, unless such Person acquires Beneficial Ownership of 25% or more of
the combined voting power of the Voting Stock then outstanding solely as a
result of an acquisition of Voting Stock by the Company which, by reducing the
Voting Stock outstanding, increases the proportionate Voting Stock beneficially
owned by such Person (together with all Affiliates and Associates of such
Person) to 25% or more of the combined voting power of the Voting Stock then
outstanding; provided, that if a Person shall become the Beneficial Owner of 25%
or more of the combined voting power of the Voting Stock then outstanding by
reason of such Voting Stock acquisition by the Company and shall thereafter
become the Beneficial Owner of any additional Voting Stock which causes the
proportionate voting power of Voting Stock beneficially owned by such Person to
increase to 25% or more of the combined voting power of the Voting Stock then
outstanding, such Person shall, upon becoming the Beneficial Owner of such
additional Voting Stock, be deemed to have become the Beneficial Owner of 25% or
more of the combined voting power of the Voting Stock then outstanding other
than solely as a result of such Voting Stock acquisition by the Company;
(b) During any period of 24 consecutive months (not including any
period prior to the Effective Date), individuals who at the beginning of such
period constitute the Board (and any new Director, whose election by the Board
or nomination for election by the Company's stockholders was approved by a vote
of at least two-thirds of the Directors then still in office who either were
Directors at the beginning of the period or whose election or nomination for
election was so approved), cease for any reason to constitute a majority of
Directors then constituting the Board;
(c) A reorganization, merger or consolidation of the Company is
consummated, in each case, unless, immediately following such reorganization,
merger or consolidation, (i) more than 50% of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners of the Voting Stock outstanding immediately prior to such
reorganization, merger or consolidation, (ii) no Person (but excluding for this
purpose any Excluded Person and any Person beneficially owning, immediately
prior to such reorganization, merger or consolidation, directly or indirectly,
25% or more of the voting power of the outstanding Voting Stock) beneficially
owns, directly or indirectly, 25% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such reorganization,
merger or consolidation or the combined voting power of the then outstanding
voting securities of such
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corporation entitled to vote generally in the election of directors and (iii) at
least a majority of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were members of the
Board at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation;
(d) The shareholders of the Company approve (i) a complete liquidation
or dissolution of the Company or (ii) the sale or other disposition of all or
substantially all of the assets of the Company, other than to any corporation
with respect to which, immediately following such sale or other disposition, (A)
more than 50% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial owners
of the Voting Stock outstanding immediately prior to such sale or other
disposition of assets, (B) no Person (but excluding for this purpose any
Excluded Person and any Person beneficially owning, immediately prior to such
sale or other disposition, directly or indirectly, 25% or more of the voting
power of the outstanding Voting Stock) beneficially owns, directly or
indirectly, 25% or more of, respectively, the then outstanding shares of common
stock of such corporation or the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors and (C) at least a majority of the members of the board of
directors of such corporation were members of the Board at the time of the
execution of the initial agreement or action of the Board providing for such
sale or other disposition of assets of the Company; or
(e) The occurrence of any transaction or event that the Board, in its
sole discretion, designates a "Change in Control".
Notwithstanding the foregoing, in no event shall a "Change in Control"
be deemed to have occurred (i) as a result of the formation of a Holding
Company, or (ii) with respect to Executive, if Executive is part of a "group,"
within the meaning of Section 13(d)(3) of the Exchange Act as in effect on the
Effective Date, which consummates the Change in Control transaction. In
addition, for purposes of the definition of "Change in Control" a Person engaged
in business as an underwriter of securities shall not be deemed to be the
"Beneficial Owner" of, or to "beneficially own," any securities acquired through
such Person's participation in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such acquisition.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" has the meaning accorded such term in Section 3.01.
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"Company" has the meaning accorded such term in the introductory
paragraph of this Agreement.
"Constructive Event" has the meaning accorded such term in Section
4.01.
"Continuation Period" has the meaning accorded to such term in Section
4.03.
"Disability" means Long-Term Disability, as such term is defined in the
Disability Plan.
"Disability Plan" means the long-term disability plan (or any successor
disability and/or survivorship plan adopted by the Company) in which Executive
participates, as in effect immediately prior to the relevant event (subject to
changes in coverage levels applicable to all employees generally covered by such
Plan).
"Effective Date" has the meaning accorded such term in the introductory
paragraph of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excise Tax" has the meaning accorded such term in Section 5.01.
"Excluded Person" means (i) the Company; (ii) any of the Company's
Subsidiaries; (iii) any Holding Company; (iv) any employee benefit plan of the
Company, any of its Subsidiaries or a Holding Company; (v) any Person organized,
appointed or established by the Company, any of its Subsidiaries or a Holding
Company for or pursuant to the terms of any plan described in clause (iv) or
(vi) any Family Stockholder as such term is defined in the Company's amended and
restated by-laws.
"Executive" has the meaning accorded such term in the introductory
paragraph of this Agreement.
"Extended Term" has the meaning accorded such term in Section 1.03.
"Good Reason" means, without Executive's express written consent, the
occurrence of any one or more of the following:
(a) The assignment to Executive of duties inconsistent with Executive's
authorities, duties, responsibilities and status as an officer of the Company,
or a reduction or alteration in the nature or status of Executive's authorities,
duties, or responsibilities from those in effect immediately prior to the
Reference Date,
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other than an insubstantial and inadvertent act that is remedied by the Company
promptly after receipt of notice thereof given by Executive;
(b) The Company's requiring Executive to be based at a location in
excess of 35 miles from Executive's principal job location or office immediately
prior to the Reference Date (such location on the Effective Date being
Carrollton, Texas); except for required travel on the Company's business to an
extent consistent with Executive's business travel obligations immediately prior
to the Reference Date;
(c) A reduction by the Company of Executive's Base Salary or total
annual target compensation from the highest level at any time in the year prior
to such reduction by more than 10%;
(d) The failure by the Company to keep in effect compensation,
retirement, health and welfare benefits, or perquisite programs under which
Executive receives benefits substantially similar, in the aggregate, to the
benefits under such programs as exist immediately prior to the Reference Date
(other than pursuant to an equivalent reduction in such benefits of all
full-time domestic employees of the Company who are not subject to a collective
bargaining agreement); or the failure of the Company to meet the funding
requirements, if any, of any of such programs; or
(e) Any material breach by the Company of its obligations under this
Agreement or any failure of a successor of the Company to assume and agree to
perform the Company's entire obligations under this Agreement, as required by
Section 6.01 herein, provided that such successor has received at least ten days
written notice from the Company or Executive of the requirements of Section
6.01.
(f) The Executive's receipt from the Company at any time during an
Extended Term of written notice pursuant to Section 1.02 to the effect that the
term of this Agreement will not be extended (a "Qualifying Nonrenewal").
"Gross-Up Payment" has the meaning accorded such term in Section 5.01.
"Holding Company" means an entity that becomes a holding company for
the Company or its businesses as a part of any reorganization, merger,
consolidation or other transaction, provided that the outstanding shares of
common stock of such entity and the combined voting power of the then
outstanding voting securities of such entity entitled to vote generally in the
election of directors is, immediately after such reorganization, merger,
consolidation or other transaction, beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Voting Stock outstanding immediately
prior to such reorganization, merger, consolidation or other transaction in
substantially the
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same proportions as their ownership, immediately prior to such reorganization,
merger, consolidation or other transaction, of such outstanding Voting Stock.
"Initial Term" has the meaning accorded such term in Section 1.01.
"Later Payment" has the meaning accorded such term in Section 5.03.
"Medical Plans" means the medical care plans (or any successor medical
plans adopted by the Company) in which Executive participates, as in effect
immediately prior to the relevant event (subject to changes in coverage levels
applicable to all employees generally covered by such Plans).
"Nonqualifying Event" has the meaning accorded such term in Section
4.01.
"Payment Period" has the meaning accorded such term in Section 4.04.
"Person" means an individual, corporation, partnership, association,
trust or any other entity or organization.
"Qualifying Event" has the meaning accorded such term in Section 4.01.
"Qualifying Nonrenewal" has the meaning accorded such term in clause
(f) of the definition of Good Reason in this Article 8.
"Reference Date" means the later of (x) the Effective Date or (y) the
date 90 days prior to the date of the relevant event, if any, set forth in the
definition of Good Reason.
"Release" has the meaning accorded such term in Section 4.03.
"Retirement" shall be determined under guidelines established from time
to time by the Committee, which in no event shall require more than 3 years of
service.
"Separation Benefits" has the meaning accorded such term in Section
4.04.
"Severance Benefits" has the meaning accorded such term in Section
4.03.
"Stock Plan" has the meaning accorded such term in Section 4.02.
"Subsidiary" of any Person means any other Person of which securities
or other ownership interests having voting power to elect a majority of the
board of
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directors or other Persons performing similar functions are at the time directly
or indirectly owned by such Person.
"Successive Period" has the meaning accorded such term in Section 1.02.
"Tax Preparation Benefits" has the meaning accorded such term in
Section 4.03.
"Termination Date" has the meaning accorded such term in Section 4.02.
"Total Payments" has the meaning accorded such term in Section 5.01.
"Voting Stock" means securities of the Company entitled to vote
generally in the election of members of the Board.
"Years of Service" has the meaning accorded such term in Section 4.04.
IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement, to be effective as of the day and year first written above.
EXECUTIVE Xxxxxx Micro Inc.
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
----------------------------------- -----------------------------------
Xxxx X. Xxxxxx Title: Chairman of the Board
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EXHIBIT A
RELEASE AND COVENANT
This letter sets forth the agreement of Xxxxxx Micro Inc. (the
"Company") and Xxxx X. Xxxxxx ("Executive") relating to the termination of
Executive's employment with Company. Subject to the execution of this Agreement,
the parties hereto agree as follows:
Termination of Employment.
(A). Executive agrees and acknowledges that the termination of his
employment with Company shall be effective as of __________________, ______ (the
"TERMINATION DATE").
(B). Executive acknowledges Executive's obligation to promptly return
to the Company all property of the Company in Executive's possession including,
without limitation, keys, SECUREID card, credit cards, cell phones, pagers,
computers, office equipment, documents and files and instruction manuals on or
before the Termination Date, or earlier if so requested by the Company. After
the Termination Date, the Company shall forward all mail addressed to Executive
to the most recent address provided by Executive to the Company pursuant to
Section 5.01 of the Employment Agreement between the Executive and the Company
dated as of March 6, 2000 to which this Agreement is Exhibit A (the "Employment
Agreement").
Mutual Releases.
1. In consideration of the foregoing and the benefits paid and payable
to Executive under the Employment Agreement, Executive hereby waives all claims
against Company, its affiliates and their respective officers, directors and
executives (hereinafter the "RELEASEES"), and releases and discharges the
Releasees from liability for any and all claims and damages that Executive may
have against them as of the date of this Agreement, whether known or unknown,
including, but not limited to, any claims arising out of his employment
relationship with Company or its affiliates or the termination of such
employment, or any violation of any federal, state or local fair employment
practice law, including Title VII of the Civil Rights Act, the Civil Rights Act
of 1991, the Age Discrimination in Employment Act as amended by the Older
Workers' Benefit Protection Act, or any other employee relations statute, rule,
executive order, law or ordinance, tort, express or implied contract, public
policy or other obligations; provided, however, that nothing herein shall be
deemed a waiver or release of Executive's right to enforce the obligations of
Company under this Agreement or
23
the Employment Agreement or Executive's rights to indemnification to the fullest
extent provided by law or in any applicable certificate of incorporation,
charter or similar document, by-laws or contract.
Executive acknowledges that Executive has had up to 21 days to consider
the terms of this Agreement and is hereby advised by Company to discuss the
terms of this Agreement with an attorney unrelated to Company prior to signing
this Agreement. Executive further acknowledges that Executive is entering into
this Agreement freely, knowingly, and voluntarily, with a full understanding of
its terms. Executive also acknowledges that Executive will have 7 days from the
date he signs this Agreement to revoke the Agreement by notifying the General
Counsel of the Company in writing.
2. In consideration of the performance by Executive of the covenants
and undertakings made herein by Executive, Company on behalf of itself and its
affiliates hereby waives all claims against Executive and releases and
discharges Executive from liability for any and all claims and damages that any
of them may have against Executive as of the date of this Agreement, whether
known or unknown, including Executive's employment relationship with Company or
its affiliates or the termination of such employment; provided, however, that
nothing herein shall be deemed a waiver or release of the right of Company or
its affiliates to enforce the obligations of Executive under this Agreement or
for any claims arising from a breach of Executive's fiduciary duty of loyalty to
the Company or its affiliates.
Waiver. Each of the Company and Executive hereby expressly waives and
relinquishes all rights and benefits under Section 1542 of the California Civil
Code which provides:
"Section 1542. General Release - Claim extinguished. 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."
Each of the Company and Executive understands and acknowledges that the
significance and consequences of this waiver of Section 1542 of the Civil Code
is that even if the Company and Executive, as the case may be, should eventually
suffer damages arising out of Executive's employment relationship with the
Company and its affiliates, or termination of such employment, such party will
not be permitted to make any claim for those damages except as expressly
permitted by this Agreement. Furthermore, each of the Company and Executive
acknowledges that such party intends these consequences even as to claims for
injuries and/or damages that may exist as of the date of this Agreement but
which
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Executive or the Company, as the case may be, does not know exist, and which, if
known, would materially affect such party's decision to execute this Agreement.
Cooperation. Executive agrees to cooperate fully with Company and to
provide such information as Company may reasonably request with respect to any
Company-related transaction, investment or other matter in which Executive was
involved in any way while employed by Company.
Confidentiality. Executive acknowledges Executive's obligation not to
disclose, during or after employment, any trade secrets or proprietary and/or
confidential data or records of the Company or its affiliates or to utilize any
such information for private profit. Each of the parties hereto agrees that such
party will not release, publish, announce or otherwise make available to the
public in any manner whatsoever any information or announcement regarding this
Agreement or the transactions contemplated hereby without the prior written
consent of the other party hereto, except as required by law or legal process,
including, in the case of the Company, filings with the Securities and Exchange
Commission. Executive agrees not to communicate with, including responding to
questions or inquiries presented by, the media, employees or investors of the
Company, its affiliates or any third party relating to the terms of this
Agreement, without first obtaining the prior written consent of the Company.
Notwithstanding the foregoing, Executive may make disclosure to his spouse,
attorneys and financial advisors of the existence and terms of this Agreement
provided that they agree to be bound by the provisions of this paragraph.
No Disparagement. Executive and Company agree that no party hereto
shall make disparaging statements or representations, or otherwise communicate
disparagingly, directly or indirectly, in writing, orally, or otherwise, about
either of the parties hereto or the other Releasees or the employees, customers,
suppliers, competitors, vendors, stockholders or lenders of the Company or its
affiliates or any third party, nor take any action which may, directly or
indirectly, disparage or be damaging to either of the parties hereto or the
other Releasees, their businesses, or their reputations.
No Solicitation. Executive will not (i) directly or indirectly make
known to any person, firm, corporation, partnership or other entity, any list,
listing or other compilation or document, whether prepared or maintained by
Executive, the Company or any of the Company's affiliates, which contains
information that is confidential to the Company or any of its affiliates about
their customers ("the Company's Customers"), including but not limited to names
and addresses, or (ii) at any time through the end of the "Continuation Period"
(as defined in the Employment Agreement), call on or solicit, or attempt to call
on or solicit, in either case with the intent to divert business or potential
business from the Company or any of its affiliates, any of the Company's
Customers with whom Executive has become acquainted during his employment with
the Company or
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any of its affiliates, either for Executive's own benefit or for the benefit of
any other person, firm, corporation, partnership or other entity.
No Raid. Through the end of the Continuation Period, Executive will
not, and will use Executive's best efforts not to permit any person, firm,
corporation, partnership or other entity of which Executive is an officer or
control person to, (i) knowingly solicit, entice, or persuade any individual who
is an associate of the Company or any of its affiliates at any time during the
Continuation Period (each such individual, a "Company Associate") to leave the
services of the Company or any of its affiliates for any reason, or (ii) solicit
for employment, hire, or engage any present or future Company Associate as an
employee, independent contractor or consultant.
Noncompetition. Executive acknowledges that Executive has unique
knowledge of the Company and its affiliates and unique knowledge of the computer
and software sales and distribution industry. Based on his unique status,
Executive agrees that through the end of the Continuation Period, Executive will
not be employed or hired as an employee or consultant by, or otherwise directly
or indirectly provide services for, any of Tech Data, Merisel, Inacom, Pinacor,
Globelle, Gates Arrow, CHS Electronics, Hallmark, Xxxxxxxx Avnet, Daisytek,
Azerti, Azlan, Northamber, Tech Pacific, Synnex, Xxxx Micro, DSS and/or GE
Capital Information Technology Solutions-North America, Inc., and any subsidiary
or affiliate of these entities in a business or line of business conducted by
any such entity which competes with any line of business conducted by the
Company or any of its affiliates. Notwithstanding the foregoing, should
Executive be employed by an entity that is not a subsidiary or affiliate of one
of these entities at the time Executive commences such employment, but
subsequently becomes a subsidiary or affiliate of, or becomes merged into, one
of these entities on or before the end of the Continuation Period, he shall not
be deemed to be in breach of the provisions of this paragraph due to such
employment, provided that at the time Executive commenced his employment there
had been no public announcement of an agreement pursuant to which Executive's
employer would become a subsidiary or affiliate of, or merged into, one of these
entities or discussions that could lead to such an agreement and Executive had
no knowledge of the existence of any such agreement or discussions. Executive
further agrees that Executive will not own any interest in, provide financing
to, be connected with, or be a principal, partner or agent of any such
competitive distributor or aggregator; provided, Executive may own less than
1% of the outstanding shares of any such entity whose shares are traded in the
public market.
Availability. Provided that the Company is not in breach of its
obligations under this Agreement, and subject to Executive's other commitments,
upon request of the Company or any of its affiliates during the Continuation
Period, Executive will make himself available for up to 15 hours in any calendar
month to
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provide reasonable assistance to the Company or any such affiliate and will use
reasonable efforts to arrange his commitments so as to make Executive available
for such assistance on a basis which is consistent with the requests of the
Company or any affiliates. Such assistance may include telephone conversations,
correspondence, attendance and participation in meetings, transfer of knowledge
or information regarding operational or other issues, litigation preparation and
trials. During such period, the Company shall reimburse Executive for any
out-of-pocket expense Executive may incur in connection with such assistance in
accordance with the Company's reimbursement policies. After the end of the
Continuation Period, Executive shall use reasonable efforts, subject to his
other commitments, to continue to provide such assistance as may be requested by
the Company and, in such event, shall be compensated at a rate per day (minimum
charge, one-half day) commensurate with the daily rate he was earning based on
his base salary immediately prior to the Termination Date.
The running of the periods prescribed in this Agreement shall be tolled
and suspended by the length of time Executive works in circumstances that a
court of competent jurisdiction subsequently finds to violate the terms of this
Agreement.
No Reliance. The parties hereto represent and acknowledge that, in
executing this Agreement, they do not rely and have not relied upon any
representation or statement, written or oral, made by either of the parties or
by either of the parties' agents, attorneys, or representatives with regard to
the subject matter, basis, or effect of this Agreement or otherwise, other than
those specifically stated in this written Agreement.
Assignment. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, administrators,
representatives, executors, successors, and assigns. This Agreement shall also
inure to the benefit of all the Releasees and their respective heirs,
administrators, representatives, executors, successors, and assigns. This
Agreement shall not be assignable by Executive.
No Waiver. Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any
subsequent breach hereof, or as a waiver of a breach of any other provision.
Interpretation: Choice of Law. This Agreement shall be interpreted in
accordance with the plain meaning of its terms and not strictly for or against
any of the parties hereto. This Agreement and all provisions hereof shall be
governed by and construed under the laws of the State of California without
regard to the choice of law rules thereof.
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Acknowledgment. Executive acknowledges that Executive has carefully
read this Agreement, fully understands and accepts all of its provisions, and
signs it voluntarily of Executive's own free will. Executive further
acknowledges that Executive has been provided a full opportunity to review and
reflect on the terms of this Agreement and to seek the advice of legal counsel
of Executive's choice.
XXXXXX MICRO INC.
by
-------------------------------------
Agreed and Accepted Name: Xxxxx X. Xxxxx
Title: Chairman of the Board
-------------------------------------
Xxxx X. Xxxxxx
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