FORM OF EXECUTIVE CHANGE IN CONTROL SEVERANCE AGREEMENT
Exhibit 10.3
This Executive Change in Control Severance Agreement (this “Agreement”), is made as of the
___day of __________, 200___(the “Effective Date”), by and between TTM Technologies, Inc., a
Delaware corporation (the “Company”), and __________ (the “Executive”).
Recitals
A. The Executive currently serves as [INSERT TITLE] of the Company.
B. The Board of Directors of the Company (the “Board”) acknowledges that the potential for a
change in control of the Company, whether friendly or hostile, currently exists and from time to
time in the future will exist, which potential can give rise to uncertainty among the senior
executives of the Company. The Board considers it essential to the best interests of the Company
to reduce the risk of the Executive’s departure and the inevitable distraction of the Executive’s
attention from his or her duties to the Company, which are normally attendant to such
uncertainties.
C. The Executive confirms that the terms of this Agreement reduce the risks of his or her
departure and distraction of his or her attention from his or her duties to the Company and,
accordingly, desires to enter into this Agreement.
Agreement
In consideration of the foregoing and the mutual covenants contained herein, the Company and
the Executive agree as follows:
1. Definitions. Capitalized terms used herein shall have the meanings given
to them in Appendix I attached hereto, except where the context requires otherwise.
2. Term of Agreement. This Agreement shall be effective as of the Effective
Date and shall continue in effect until the second anniversary of the Effective Date, provided,
however, that the term of this Agreement automatically shall be extended for one additional year
effective as of each anniversary of the Effective Date beginning with the second anniversary,
unless either the Company or the Executive provides written notice to the other that the term of
this Agreement shall terminate on the upcoming anniversary of the Effective Date, provided such
notice is received by the receiving party not less than ninety (90) days prior to the intended date
of termination and provided further that the Company shall not be entitled to deliver to the
Executive such notice in the event of a Change in Control or a Pending Change in Control.
Notwithstanding the foregoing, this Agreement shall terminate immediately upon the later to occur
of (a) the termination of the Executive’s employment other than in the event of a Change in Control
or a Pending Change in Control or (b) 12 months following a Change in Control.
3. At Will Employment; Reasons for Termination. The Executive’s employment
shall continue to be at-will, as defined under applicable law. If the Executive’s employment
terminates for any reason or no reason, the Executive shall not be entitled to any compensation,
benefits, damages, awards or other payments in respect of such termination, except as provided in
this Agreement or pursuant to the terms of any Applicable Benefit Plan. The Executive’s employment
shall be deemed to be terminated upon the first to occur of the following: (a) the Executive’s
voluntary resignation; (b) termination by the Company for any reason; (c) the Executive’s death or
Long-Term Disability; and (d) termination by the Executive for Good Reason following a Change in
Control.
4. Severance Benefits.
(a) Compensation and Benefits Required by Law or Applicable Benefit Plan.
Notwithstanding anything to the contrary herein, the Executive or his or her estate shall be
entitled to any and all compensation, benefits, awards and other payments required by any
Applicable Benefit Plan, the COBRA Act or other applicable law, after taking into account the
agreements set forth herein.
(b) No Payments Without Release. The Executive shall not be entitled to any of the
compensation, benefits or other payments provided herein in respect of the termination of his or
her employment, unless and until he or she has provided to the Company a full release of claims,
substantially in the form of Appendix II attached hereto, which release shall be dated not
earlier than the date of the termination of his or her employment and shall release the Company of
any claims that the Executive may have in respect of his or her employment with the Company or the
termination thereof.
(c) Involuntary Termination. In the event Executive’s employment is terminated under
circumstances constituting an Involuntary Termination, the Executive shall be entitled to receive:
(i) within 15 calendar days after the Date of Termination, the Executive’s Accrued
Compensation and Pro-Rata Bonus through the Date of Termination; and
(ii) within 15 calendar days after the Date of Termination, the amount in cash equal to 12
months of the Executive’s annual Base Salary.
5. Effect on Option and Restricted Stock Agreements.
(a) In the event options held by the Executive are assumed by the surviving entity in
connection with a Change in Control, if an Involuntary Termination of Executive’s employment
occurs, vesting of any and all assumed options held by the Executive shall be accelerated so that
all unexpired options then held by the Executive shall be fully vested and exercisable immediately
upon the Involuntary Termination.
(b) In the event Restricted Stock held by the Executive is assumed by the surviving entity in
connection with a Change in Control, if an Involuntary Termination of Executive’s employment
occurs, vesting of any and all assumed Restricted Stock held by the Executive shall be accelerated
so that all Restricted Stock then held by the Executive shall be fully vested and exercisable
immediately upon the Involuntary Termination.
(c) The termination of the Executive’s employment by the Company without Cause during a
Pending Change in Control shall have no effect on the vesting of the options or Restricted Stock
then held by the Executive. If the Change in Control is effected, then the options and Restricted
Stock held by the Executive as of the Date of Termination shall be treated as if the Executive’s
employment had not been terminated and the Executive shall have rights as set forth under Sections
5(a) and 5(b) above. If the Change in Control is not effected within three months following the
Date of Termination, then the options and Restricted Stock held by the Executive as of the Date of
Termination shall be treated as if the Executive’s employment had been terminated as of such
three-month anniversary of the Date of Termination.
(d) In the event the Executive’s employment is terminated by the Company under any
circumstances other than those described in paragraphs (a) through (c) of this Section 5, the
effect of such termination of employment on the options or Restricted Stock then held by the
Executive shall be as set forth in the agreements representing such options or Restricted Stock.
6. Mitigation. In no event shall 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 except as set forth in Section 4, such
amounts shall not be reduced whether or not the Executive obtains other employment.
7. Successors.
(a) This Agreement is personal to the Executive, and, without the prior written consent of the
Company, shall not be assignable by the Executive other than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.
(c) The Company shall use reasonable efforts to require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company to assume expressly and agree to perform 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.
8. Miscellaneous.
(a) The captions of this Agreement are not part of the provisions hereof and shall have no
force or effect. This Agreement constitutes the entire agreement and understanding of the parties
in respect of the subject matter hereof and supersedes all prior understanding, agreements, or
representations by or among the parties, written or oral, to the extent they relate in any away to
the subject matter hereof; provided, however, this Agreement shall have no effect on any
confidentiality agreements or assignment of inventions agreements between the parties. This
Agreement may not be amended or modified other than by a written agreement executed by the parties
hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
if to the Executive:
if to the Company:
TTM Technologies, Inc.
0000 X. Xxxxxx Xxxxxxxxx
Xxxxx Xxx, XX 00000
Attn: Chief Executive Officer
0000 X. Xxxxxx Xxxxxxxxx
Xxxxx Xxx, XX 00000
Attn: Chief Executive Officer
With a copy to:
Xxxxxxxxx Xxxxxxx, LLP
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.
(d) The Company may withhold from any amounts payable under this Agreement such federal, state
or local or foreign taxes as shall be required to be withheld pursuant to any applicable law or
regulation.
(e) The Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive or the Company may
have hereunder shall not be deemed to be a waiver of such provision or right or any other provision
or right of this Agreement.
(f) All claims by the Executive for payments or benefits under this Agreement shall be
promptly forwarded to and addressed by the Compensation Committee and shall be in writing. Any
denial by the Compensation Committee of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the specific reasons for the denial and
the specific provisions of this Agreement relied upon. The
Compensation Committee shall afford the Executive a reasonable opportunity for a review of the
decision denying a claim and shall further allow the Executive make a written demand upon the
Company to submit the disputed matter to arbitration in accordance with the provisions of
paragraph (g) below. The Company shall pay all expenses of the Executive, including
reasonable attorneys and expert fees, in connection with any such arbitration. If for any reason
the arbitrator has not made his or her award within one hundred eighty (180) days from the date of
Executive’s demand for arbitration, such arbitration proceedings shall be immediately suspended and
the Company shall be deemed to have agreed to Executive’s position. Thereafter, the Company shall,
as soon as practicable and in any event within 10 business days after the expiration of such
180-day period, pay Executive his or her reasonable expenses and all amounts reasonably claimed by
him or her that were the subject of such dispute and arbitration proceedings.
(g) Subject to the terms of paragraph (f) above, any dispute arising from, or relating to,
this Agreement shall be resolved at the request of either party through binding arbitration in
accordance with this paragraph (g). Within 10 business days after demand for arbitration
has been made by either party, the parties, and/or their counsel, shall meet to discuss the issues
involved, to discuss a suitable arbitrator and arbitration procedure, and to agree on arbitration
rules particularly tailored to the matter in dispute, with a view to the dispute’s prompt,
efficient, and just resolution. Upon the failure of the parties to agree upon arbitration rules
and procedures within a reasonable time (not longer than 15 business days from the demand), the
Commercial Arbitration Rules of the American Arbitration Association shall be applicable.
Likewise, upon the failure of the parties to agree upon an arbitrator within a reasonable time (not
longer than 15 business days from demand), there shall be a panel comprised of three arbitrators,
one to be appointed by each party and the third one to be selected by the two arbitrators jointly,
or by the American Arbitration Association, if the two arbitrators cannot decide on a third
arbitrator. At least 30 days before the arbitration hearing (which shall be set for a date no
later than 60 days from the demand), the parties shall allow each other reasonable written
discovery including the inspection and copying of documents and other tangible items relevant to
the issues that are to be presented at the arbitration hearing. The arbitrator(s) shall be
empowered to decide any disputes regarding the scope of discovery. The award rendered by the
arbitrator(s) shall be final and binding upon both parties. The arbitration shall be conducted in
Orange County in the State of California. The California District Court located in Orange County
shall have exclusive jurisdiction over disputes between the parties in connection with such
arbitration and the enforcement thereof, and the parties consent to the jurisdiction and venue of
such court for such purpose.
(h) This Agreement shall be governed by the laws of the State of California, without giving
effect to any choice of law provision or rule (whether of the State of California or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other than the State
of California.
(i) If the Company determines that any payment obligation pursuant to this Agreement will
trigger tax obligations under Section 409A of the Code, then the parties shall use their
commercially reasonable efforts to structure an alternative payment mechanism consistent with the
parties’ objectives, to the extent reasonably practicable, that will not trigger such tax
obligations under Section 409A of the Code.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth in the
Preamble hereto.
| TTM TECHNOLOGIES, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
APPENDIX I
DEFINITIONS
(a) “Accrued Compensation” means an amount including all amounts earned or accrued
through the Date of Termination but not paid as of the Date of Termination including (i) Base
Salary, (ii) reimbursement for reasonable and necessary expenses incurred by the Executive on
behalf of the Company during the period ending on the Date of Termination, (iii) vacation and sick
leave pay (to the extent provided by Company policy or applicable law), and (iv) incentive
compensation (if any) earned in respect of any period ended prior to the Date of Termination. It
is expressly understood that incentive compensation shall have been “earned” as of the time that
the conditions to such incentive compensation have been met, even if not calculated or payable at
such time.
(b) “Affiliate” shall have the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended.
(c) “Agreement” means this Executive Change in Control Severance Agreement, as set
forth in the Preamble hereto.
(d) “Applicable Benefit Plan” means any written employee benefit plan in effect and
in which the Executive participates as of the time of the termination of his or her employment.
(e) “Base Salary” means the Executive’s annual base salary at the rate in effect
during the last regularly scheduled payroll period immediately preceding the occurrence of the
Change in Control or termination of employment and does not include, for example, bonuses, overtime
compensation, incentive pay, fringe benefits, sales commissions or expense allowances.
(f) “Benefits” means the benefits for the Executive and/or the Executive’s family
that are being provided to the Executive and/or the Executive’s family immediately prior to the
Date of Termination, including the welfare benefit plans, practices, policies and programs provided
by the Company (including, without limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance plans and programs) and, if
applicable, car allowance, as set forth in Section 4 hereof.
(g) “Board” means the Board of Directors of the Company, as set forth in the
Recitals hereto.
(h) “Cause” means any of the following:
(i) the charging or indictment of the Executive or the Executive’s conviction of, or entry of
a plea of no contest with respect to, any felony or any crime involving moral turpitude;
(ii) the commission by the Executive of any other material act of fraud or intentional
dishonesty with respect to the Company or any of its Subsidiaries or Affiliates;
(iii) a material breach by the Executive of his or her fiduciary duties to the Company or any
of its Subsidiaries. including the commission by the Executive of an act of fraud or embezzlement
against the Company or any of its Subsidiaries or Affiliates;
(iv) failure by the Executive to perform in a material manner his or her properly assigned
duties after at least one written warning specifically advising him or her of such failure and
providing him or her with l0 days to resume performance in accordance with his or her assigned
duties;
(v) any breach by the Executive of any of the material terms of (A) this Agreement, or (B) any
other agreement between the Company and the Executive;
(vi) the association, directly or indirectly, of the Executive, for his or her profit or
financial benefit, with any person, firm, partnership, association, entity or corporation that
competes, in any material way, with the Company;
(vii) the disclosing or using of any material Company Information at any time by the
Executive; or
(viii) any material breach of a Company policy.
(i) “Change in Control” shall be deemed to occur upon the consummation of any of the
following transactions:
(i) a merger or consolidation in which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the state of the Company’s incorporation or
a transaction in which 50% or more of the surviving entity’s outstanding voting stock following the
transaction is held by holders who held 50% or more of the Company’s outstanding voting stock prior
to such transaction; or
(ii) the sale, transfer or other disposition of all or substantially all of the assets of the
Company; or
(iii) any reverse merger in which the Company is the surviving entity, but in which 50% or
more of the Company’s outstanding voting stock is transferred to holders different from those who
held the stock immediately prior to such merger; or
(iv) the acquisition by any person (or entity), directly or indirectly, of 50% or more of the
combined voting power of the outstanding shares of Common Stock.
(j) “Code” means the Internal Revenue Code of 1986, as amended.
(k) “Common Stock” means common stock, par value $0.001, of the Company.
(l) “Company” means TTM Technologies, Inc., a Delaware corporation, as set forth in
the Preamble hereto.
(m) “Date of Termination” means (i) if the Executive’s employment is terminated for
Cause, the date of receipt by the Executive of written notice from the Board or the Chief Executive
Officer that the Executive has been terminated, or any later date specified therein, as the case
may be, (ii) if the Executive’s employment is terminated by the Company other than for Cause, death
or Long-Term Disability, the date specified in the Company’s written notice to the Executive of
such termination, (iii) if the Executive’s employment is terminated by reason of the Executive’s
death or Long-Term Disability, the date of such death or the effective date of such Long-Term
Disability, (iv) if the Executive’s employment is terminated by Executive’s resignation that
constitutes Involuntary Termination under this Agreement, the date of the Company’s receipt of the
Executive’s notice of termination or any later date specified therein.
(n) “Effective Date” means the date set forth in the Preamble hereto.
(o) “Executive” means the individual identified in the Preamble hereto.
(p) “Good Reason” means any of the following:
(i) a material reduction in the Executive’s duties, level of responsibility or authority,
other than (A) reductions solely attributable to the Company ceasing to be a publicly held company
or becoming a subsidiary or division of another company, or (B) isolated incidents that are
promptly remedied by the Company; or
(ii) a reduction in the Executive’s Base Salary (other than in connection with a salary
reduction plan that applies proportionately to all officers of the Company, including the Chief
Executive Officer), without (A) the Executive’s express written consent or (B) an increase in the
Executive’s benefits, perquisites and/or guaranteed bonus, which increase(s) have a value
reasonably equivalent to the reduction in Base Salary; or
(iii) a material reduction in the Benefits, taken as a whole, without the Executive’s express
written consent, that does not apply proportionately to all officers of the Company, including the
Chief Executive Officer; or
(iv) the relocation of the Executive’s principal place of business to a location more than
thirty-five (35) miles from the Executive’s principal place of business immediately prior to the
Change in Control, without the Executive’s express written consent; or
(v) the Company’s (or its successor’s) material breach of this Agreement.
(q) “Involuntary Termination” means the termination of Executive’s employment with
the Company:
(i) by the Company without Cause during a Pending Change in Control or within 12 months
following a Change in Control, or
(ii) by the Executive for Good Reason within in 12 months following a Change in Control.
(r) “Long-Term Disability” is defined according to the Company’s insurance policy
regarding long-term disability for its employees.
(s) “Pending Change in Control” means that one or more of the following events has
occurred and a Change in Control pursuant thereto is reasonably expected to be effected within 90
days of the date as of the determination as to whether there is a Pending Change in Control: (i)
the Company executes a letter of intent, term sheet or similar instrument with respect to a
transaction or series of transactions, the consummation of which transaction(s) would result in a
Change in Control; (ii) the Board approves a transaction or series of transactions, the
consummation of which transaction(s) would result in a Change in Control; or (iii) a person makes a
public announcement of tender offer for the Common Stock, the completion of which would result in a
Change in Control. A Pending Change in Control shall cease to exist upon a Change in Control.
(t) “Pro Rata Bonus” means an amount equal to 100% of the Bonus that the Executive
would have been eligible to receive for the Company’s fiscal year in which the Executive’s
employment terminates following a Change in Control, multiplied by a fraction, the numerator of
which is the number of days in such fiscal year through the Termination Date and the denominator of
which is 365.
(u) “Restricted Stock” means Common Stock issued by the Company with vesting
restrictions and subject to an award agreement pursuant to a stock plan of the Company.
(v) “Subsidiary” when used with respect to any Person means any other Person,
whether incorporated or unincorporated, of which (i) more than 50% of the securities or other
ownership interests or (ii) securities or other interests having by their terms ordinary voting
power to elect more than 50% of the board of directors or others performing similar functions with
respect to such corporation or other organization, is directly owned or controlled by such Person
or by any one or more of its Subsidiaries.
SCHEDULE TO
FORM OF EXECUTIVE CHANGE IN CONTROL SEVERANCE AGREEMENT
FORM OF EXECUTIVE CHANGE IN CONTROL SEVERANCE AGREEMENT
The form of Executive Change in Control Severance Agreement was executed by the following persons
on the dates indicated:
| Name | Title | Date of Execution | ||
Xxxxxx X. Xxxxxxxx
|
Vice President and Chief Financial Officer |
December 1, 2005 | ||
Xxxxx Xxxxxxxxx
|
Senior Vice President and Chief Operating Officer |
December 1, 2005 | ||
O. Xxxx Xxxxx
|
Senior Vice President — Marketing | December 1, 2005 |
