Exhibit 10.2
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement") is entered into by and
between Cherokee International Corporation (the "Company"), a Delaware
corporation, and Xxxxxxx X. Xxx (the "Executive").
R E C I T A L S
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WHEREAS, the Executive will be employed by the Company as its
Executive Vice President, Chief Financial Officer and Secretary; and
WHEREAS, the Executive and the Company desire to memorialize their
understanding with respect to severance benefits payable to the Executive in
the event his employment is terminated by the Company other than for Cause (as
defined in Section 3 below).
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements and covenants herein contained, the Company and the Executive
agree as follows:
1. At Will Employment. The Executive's employment with the Company is
currently on an at-will basis, meaning that either the Executive or the
Company may terminate the employment relationship at any time for any
reason or for no reason, and without further obligation or liability,
except as set forth in this Agreement.
2. Term of Agreement. This Agreement shall remain in effect for so long as
the Executive is employed as the Executive Vice President, Chief
Financial Officer and Secretary of the Company.
3. Severance Payment. Subject to the Executive's having executed and, if
applicable, not revoked, a release of claims reasonably satisfactory to
the Company (the "Release of Claims"), in the event the Executive's
employment is terminated by the Company other than for Cause (as such
term is defined below), the Executive shall be entitled to a cash payment
(the "Severance Payment"), in lieu of any other severance payment
pursuant to any other plan or agreement of the Company or any subsidiary
thereof to which the Executive is otherwise entitled, of an amount equal
to his then annual base salary as in effect immediately prior to the date
of termination. Subject to Section 409A of the Internal Revenue Code of
1986, as amended, the Severance Payment shall be payable in a lumpsum
commencing within 10 business days following the effective date of the
Release of Claims. If required by Section 409A, the Severance Payment may
be delayed for a period of six months.
For purposes of this Agreement, "Cause" for termination by the Company of
the Executive's employment shall mean (i) the willful and continued
failure by the Executive to perform his or her duties with the Company,
(ii) the Executive's conviction of, or entry of a plea of guilty or nolo
contendere to, a felony or other crime involving moral turpitude, (iii)
the commission by the Executive of any act of theft, embezzlement or
fraud in connection with his employment with the Company, or (iv) the
Executive's appropriation (or attempted appropriation) of a material
business opportunity of the Company, including attempting to secure or
securing from anyone other than the Company any personal profit without
the Company's consent in connection with any transaction entered into on
behalf of the Company.
The Executive shall not be entitled to the Severance Payment if (i) the
Executive's employment is terminated by the Company for Cause or as a
result of the Executive's death or Disability or (ii) the Executive
terminates his employment with the Company for any reason.
4. No Mitigation. The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment
or otherwise.
5. Successors. Any successor to the Company (whether direct or indirect, by
purchase, merger, consolidation or otherwise) or to all or substantially
all of the business and/or assets of the Company shall assume all
obligations of the Company under this Agreement and all rights of the
Company under this Agreement shall inure to such successor, in the same
manner and to the same extent that the Company would be required to
perform and be entitled to the benefits of this Agreement if no such
succession had taken place.
6. Notices. All notices and other communications under this Agreement shall
be in writing and delivered to the addresses set forth below and shall be
effective when delivered, if hand delivered; three (3) days after mailing
by first class mail, certified or registered with return receipt
requested; and 24 hours after transmission of a fax :
If to the Company: Cherokee International Corporation
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chairman of the Board
If to the Executive: Xxxxxxx X. Xxx
17864 Via Xxxxxx
Xxx Xxxxx, XX 00000
Either party may change such party's address for notices by notice duly
given pursuant hereto.
7. Arbitration. The Company and Executive agree that any dispute arising as
to the parties' rights and obligations hereunder shall, at the election
and upon written demand of either party, be submitted to arbitration
before a single neutral arbitrator in Orange County, California and will
be conducted in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association, which Rules
shall be modified by the arbitrator to the extent necessary to comply
with applicable law. The arbitrator shall not have authority to add to,
modify, change or disregard any lawful terms of this Agreement or to
issue an award that is contrary to applicable law. The decision of the
arbitrator shall be final and binding and enforceable in any court of
competent jurisdiction. The parties further agree, notwithstanding the
foregoing, that (i) the provisions of the California Arbitration Act,
including Sections 1281.8 and 1283.05 of the California Code of Civil
Procedure, will apply to any arbitration hereunder; (ii) the Company
shall pay any costs and expenses that the Executive would not otherwise
have incurred if the dispute had been adjudicated in a court of law,
rather than through arbitration, provided, however, that if either party
prevails on a statutory claim that affords the prevailing party an award
of attorney's fees, the arbitrator may award reasonable attorney's fees
to the prevailing party, consistent with applicable law; and (iii) any
hearing must be transcribed by a court reporter and any decision of the
arbitrator must be set forth in writing, consistent with the applicable
state or federal law and supported by essential findings of fact and
conclusion of law. The provisions of this Section 7 shall survive the
termination or revocation of this Agreement.
8. Miscellaneous.
(a) Modification and Waiver. Except as otherwise specifically provided
in this Agreement, no provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by both the Company and the
Executive. No waiver at any time by either party to this Agreement
of any breach by the other party hereto of, or failure to comply
with, any provision hereof shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
similar time.
(b) Entire Agreement. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set
forth in this Agreement. This Agreement supercedes any and all
prior agreements between the parties and/or any of their affiliates
with respect to the subject matter hereof.
(c) Governing Law. This Agreement and the legal relations thus created
between the parties hereto shall be governed by and construed under
and in accordance with the internal laws of the State of
California.
(d) Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in
full force and effect.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and the Executive has executed this
Agreement, as of the date set forth below.
EXECUTIVE CHEROKEE INTERNATIONAL CORPORATION
/s/ Xxxxxxx X. Xxx /s/ Xxxxxxx X. Xxxxx
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By: Xxxxxxx X. Xxxxx
Its: Chief Executive Officer
Date: October 14, 2005 Date: October 14, 2005
