EXHIBIT 10.34
CONFIDENTIAL SEPARATION AGREEMENT
THIS AGREEMENT is entered into as of August 4, 1997 by and between
Xxxxx Corporation, a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxx ("Xxxxx").
RECITALS
X. Xxxxx is employed as the Executive Vice President of the
Company pursuant to an Employment Agreement dated as of October 20, 1996 (the
"Employment Agreement); and
B. The parties have agreed in principle with respect to an
arrangement pursuant to which Xxxxx will resign as an officer and employee of
the Company and continue to provide consulting services to the Company,
subject to the execution of this definitive agreement with respect to such
matters.
NOW, THEREFORE, it is agreed as follows:
1. Resignation. The parties hereby confirm Xxxxx'x
resignation as Executive Vice President of the Company and as an employee of
the Company (including all positions with all subsidiaries, affiliates and
divisions of the Company), effective as of 5:00 p.m. on August 4, 1997 (the
"Effective Date") at which time the "Employment" (as defined in the
Employment Agreement) will terminate.
2. Service as a Member of the Board of Directors.
Notwithstanding Xxxxx'x resignation as an officer and employee of the
Company, he will continue to serve as a member of the Board of Directors of
the Company following the Effective Date.
3. Employment-Related Benefits. In partial
consideration for the release of claims and other consideration described in
this Agreement, the Company has provided or will provide Xxxxx with the
following benefits:
(a) Accrued Wages. Xxxxx shall be paid all
accrued but unpaid wages through the Effective Date, which shall include
Xxxxx'x base salary (as specified in Section 2.1 of the Employment Agreement)
and all accrued but unused vacation pay, less applicable withholding, in
accordance with the Company's normal payroll procedures and applicable law.
Xxxxx shall not be entitled to receive any additional payment as an Annual
Bonus (as defined in Section 2.2 of the Employment Agreement) for any period
of his employment.
(b) Expense Reimbursement. Xxxxx shall be
reimbursed for all business expenses properly incurred by Xxxxx in the
performance of his duties as an employee of
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the Company through the Effective Date, in accordance with the Company's
normal expense reimbursement policies and the provisions of Section 4 of the
Employment Agreement.
(c) Health and Other Benefits. Xxxxx
acknowledges that he has been given notice of his right to continue his
health insurance coverage under the Company's Health Plan in accordance with
the applicable provisions of the federal Consolidated Omnibus Budget
Reconciliation Act, as amended ("COBRA").
(d) Statements Concerning Separation. The
Company agrees to promptly issue a press release, substantially in the form
of Exhibit A hereto (the "Press Release"), concerning the circumstances of
Xxxxx'x resignation as an officer of the Company and his continued service as
a member of the Company's Board of Directors. The Company will designate Xxxx
Xxxxxxxx as spokesperson for the Company to whom questions regarding Xxxxx'x
employment and/or resignation should be referred. The Company agrees to use
reasonable efforts to ensure that questions concerning Xxxxx'x employment
and/or separation are referred to such designated spokesperson and that
statements made by representatives of the Company regarding Xxxxx'x
separation from the Company are reasonably consistent with the Press Release.
The Company shall ensure that the officers and directors of the Company do
not make any negative, derogatory or disparaging remarks about Xxxxx to any
third party, including any prospective employers, and shall use reasonable
efforts to ensure that other representatives of the Company make no such
remarks.
(e) Indemnity Agreement. The Company
acknowledges that it will continue to be bound by and comply with the terms
of the Indemnity Agreement dated as of December 27, 1996 between Xxxxx and
the Company (the "Indemnity Agreement").
(f) Other Benefits. Xxxxx acknowledges
that, except as specifically provided herein, he will not be entitled to
receive any severance payments or other employment-related benefits from the
Company in respect to his employment with the Company, the termination of
such employment or the consulting services to be rendered pursuant to Section
4 of this Agreement.
4. Consulting Services.
(a) Engagement. In consideration for the
payments to be made to Xxxxx under this Section 4, Xxxxx agrees to provide
consulting services to the Company during the period beginning on the
Effective Date and ending July 31, 1998 (the "Termination Date"), unless
earlier terminated as provided in subsection (d) below (the "Consulting
Term").
(b) Description of Services. Xxxxx shall
provide consulting services to the Company, as specifically requested by the
President and Chief Executive Officer of the Company, for the purpose of
facilitating the transition of Xxxxx'x responsibilities as Executive Vice
President to his successor or successors and to assist with the orderly
transfer of Xxxxx'x duties with respect to pending matters to such person or
persons as may be designated by the President and Chief Executive Officer of
the Company.
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(c) Service Commitment.
(i) Between the Effective Date and
December 31, 1997, Xxxxx will hold himself available to provide consulting
services on a part-time basis (including travel on behalf of the Company),
for not less than thirteen (13) working days per calendar quarter (the
"Minimum Commitment"). The Company shall give Xxxxx not less than three (3)
days notice of its requirement for Xxxxx'x consulting services. The parties
shall attempt to schedule the performance of the Minimum Commitment at
approximately one (1) full working day per week and, to the extent
practicable, will establish a schedule for the performance of the Minimum
Commitment.
(ii) Between the Effective Date and
December 31, 1997, Xxxxx shall perform consulting services in excess of the
Minimum Commitment only upon written agreement between Xxxxx and the Company.
(iii) Between January 1, 1998 and
the Termination Date, Xxxxx will hold himself available to provide consulting
services of up to twenty (20) hours per month. Such services shall be
performed only upon the specific written authorization of the President and
Chief Executive Officer of the Company.
(d) Consulting Fees. The Company shall
compensate Xxxxx for his consulting services as follows:
(i) For services rendered pursuant to
the Minimum Commitment, the Company shall pay Xxxxx a consulting fee of
$7,500 per calendar month, subject to pro-rata reduction if Xxxxx fails to
perform the pro-rata portion of the Minimum Commitment during such month
(unless such failure was the result of the Company not requesting the
performance of such services).
(ii) For services rendered pursuant
to Section 4(c)(ii), the Company shall pay Xxxxx a consulting fee of $250 per
hour.
(iii) For services rendered pursuant
to Section 4(c)(iii), the Company shall pay Xxxxx a consulting fee of $300
per hour.
(iv) All such fees shall be payable
monthly, within thirty (30) days of invoice specifying the number of hours
spent and containing a detailed description of the services provided by
Xxxxx, provided Xxxxx has furnished such documentation and services as the
Company has reasonably requested hereunder.
(e) Termination. The Company shall have the
right to terminate Xxxxx'x consulting services under this Agreement (i) at
any time, upon Xxxxx'x failure to perform any duties reasonably assigned to
him hereunder, which failure is not cured within ten (10) days following
written notice thereof, or (ii) at any time, with or without cause, upon
thirty (30) days
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written notice delivered to Xxxxx. Xxxxx may terminate his consulting
services under this Agreement at any time upon thirty (30) days' written
notice delivered to the Company.
(f) Facilities, Equipment and Supplies.
Except as specifically agreed by the parties, Xxxxx will perform his
consulting services at his own facility. If the parties agree that certain
specific consulting activities shall be performed by Xxxxx at the Company's
facility, the Company will provide to Xxxxx an office, access to telephone,
facsimile and e-mail equipment, and reasonable clerical support for his use
in the performance of such consulting services. Xxxxx will not use such
facilities, equipment or services for any activities other than the
performance of such consulting services.
(g) Other Activities. The Company
acknowledges and agrees that, subject to his obligations hereunder and under
the other agreements referred to in Section 5(a) hereof, Xxxxx shall have the
right to engage in employment and consulting activities for himself and
others during the Consulting Term.
(h) Expenses. The Company will reimburse
Xxxxx for reasonable out-of-pocket expenses approved in advance by the
Company and directly related to the performance of his consulting services
hereunder.
(i) Relationship of Parties. Xxxxx shall at
all times during the performance of his consulting services hereunder be an
independent contractor, maintaining sole and exclusive control over his
business and operations. At no time will either party hold itself out to be
the agent, employee, employer, lessee, sublessee, partner or joint venturer
of the other party. Xxxxx shall not have the express or implied right or
authority to assume or create any obligation on behalf of or in the name of
the Company, or to bind the Company in regard to any contract, agreement or
undertaking with any third party. Xxxxx acknowledges that he shall not be
entitled, by virtue of his consulting services hereunder, to any of the
benefits which the Company may make available to its employees, including but
not limited to workers' compensation insurance and coverage.
5. Covenants and Agreements of Xxxxx. Xxxxx
covenants and agrees with the Company as follows:
(a) Proprietary Information and Inventions
Agreement. Xxxxx confirms and acknowledges that he will continue to be
bound by and comply with the terms of (i) the Proprietary Information and
Inventions Agreement which he entered into with the Company effective October
20, 1996 (the "Inventions Agreement") and (ii) the Noncompetition Agreement
dated as of December 27, 1996 between Xxxxx and the Company (the
"Noncompetition Agreement").
(b) Company Property. Xxxxx confirms and
acknowledges that on or prior to the Effective Date, he will return to the
Company any Company credit cards, keys, badges, or other Company
identification which have been issued to him, and that at such time hereafter
as the parties shall agree (on or before the termination of Xxxxx'x
consulting services
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hereunder) he will return to the Company all records, documents, data,
specifications, drawings, notes, reports, proposals (or copies or extracts of
any of them), computer software, customer information, correspondence
(including electronic mail) or other documents, information, material,
equipment or other property of the Company in his possession or under his
control, with the exception of documents or other information pertinent to
his continued role as a member of the Company's Board of Directors.
(c) Statements Concerning Separation. Xxxxx
agrees that he will not make any statements regarding his separation from the
Company that are inconsistent with the text of the Press Release, or make any
negative, derogatory or disparaging remarks about the Company or any of its
employees, officers or directors to any third party, including but not
limited to employees, prospective employees, customers, prospective
customers, investors or prospective investors of Xxxxx, financial analysts,
prospective employers of Xxxxx and venture capital firms.
6. Release of Claims and Related Matters.
(a) Release by Xxxxx. In consideration for
the benefits and payments described herein, Xxxxx (on behalf of himself and
his heirs, executors, personal representatives, administrators and assigns)
hereby fully releases and discharges the Company and all of the Company's
subsidiaries and all of their respective officers, directors, shareholders,
subsidiaries, predecessors, affiliates, employees, agents, attorneys,
successors and assigns of and from any and all claims, actions and causes of
actions, whether now known or unknown, suspected or unsuspected, which Xxxxx
has, had or may have against any of them based upon or arising out of any
matter, fact, act or omission whatsoever that occurred or existed any time up
to and including the date of this Agreement, including without limitation:
any and all claims relating to or arising out of Xxxxx'x relationship as an
officer, employee or director of the Company or the termination or
modification of that relationship; any and all claims for wrongful discharge
or discrimination on the basis of age, sex, national origin or any other
basis; any and all claims for breach of contract, either express or implied;
any and all claims for breach of any fiduciary duty or any covenant of good
faith and fair dealing, express or implied; any and all claims for negligent
or intentional infliction of emotional distress; any and all claims for
negligent or intentional misrepresentation; any and all claims for
defamation; any and all claims for violation of any federal, state or
municipal statute or regulation; and any and all claims for attorneys' fees
and costs (all of which are hereinafter referred to, collectively, as the
"Xxxxx Released Claims"). The foregoing release does not extend to any claims
based upon or arising out of (i) the Indemnity Agreement or (ii) the
obligations of the Company created by this Agreement.
(b) Release by Company. In consideration for
the release by Xxxxx of the Xxxxx Released Claims, the Company (on behalf of
itself, its affiliates, successors and assigns) hereby fully releases and
discharges Xxxxx and all of his affiliates, employees, agents, attorneys,
successors and assigns of and from any and all claims, actions and causes of
action, whether now known or unknown, suspected or unsuspected, which the
Company has, had or may have against any of them based upon or arising out of
any matter, fact, act or omission whatsoever that occurred or existed at any
time up to and including the date of this Agreement, relating to or arising
out of Xxxxx'x relationship as an officer, employee or director of the
Company or the
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termination of that relationship (all of which are hereinafter referred to,
collectively, as the "Company Released Claims" and, together with the Xxxxx
Released Claims, as the "Released Claims"). The foregoing release does not
extend to any claims based upon or arising out of (i) dishonesty, fraud,
misrepresentation, theft or deliberate or attempted injury to the Company of
which the Board of Directors of the Company has no actual knowledge as of the
date of this Agreement; (ii) the breach of any provision of the Inventions
Agreement or the Noncompetition Agreement; (iii) the indemnification
provisions of the Agreement and Plan of Reorganization, dated October 20,
1996, as amended, between the Company, CompCore Multimedia, Inc. and See
Acquisition Corporation (the "Reorganization Agreement") and/or the Escrow
Agreement entered into in connection therewith (the "Escrow Agreement"); or
(iv) the obligations of Xxxxx created by this Agreement.
(c) Section 1542 of the California Civil Code.
Each party acknowledges that such party is familiar with the provisions of
Section 1542 of the Civil Code of the State of California which provides as
follows:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with the debtor."
Except as provided in the last sentence of Section 6(b) hereof, each party
(i) waives any rights or benefits which such party has, had or may have under
Civil Code Section 1542, or any statute or common law principle of similar
effect of any state or jurisdiction, to the fullest extent that such party
may lawfully waive such rights and benefits pertaining to the subject matter
of this Agreement and (ii) understands that such party may later discover
claims or facts in addition to or different from those that such party now
knows or believes to exist with respect to the subject matter of this
Agreement; nevertheless, such party intends to settle all of the Released
Claims fully, finally and forever in exchange for the payment and other
benefits provided by this Agreement. Except as provided in the last sentence
of Section 6(b) hereof, this Agreement will remain in effect as a full and
complete release notwithstanding the discovery or existence of any additional
claims or facts.
(d) Ownership of Released Claims. Each party
represents and warrants that such party is the sole and lawful owner of all
right, title and interest in and to all of the Released Claims of such party,
and that they have made no assignment, sale or other disposition,
voluntarily, by operation of law, or otherwise, of any Released Claim or any
part or portion thereof.
(e) Covenant Not To Xxx. Each party
covenants and agrees never to commence voluntarily, aid in any way, prosecute
or cause to be commenced or prosecuted against the other any action or other
proceeding based upon any of the Released Claims.
7. Disclaimer of Admissions. Neither this Agreement
nor any action taken in connection with this Agreement or pursuant to it will
constitute an admission by either party of
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any liability of any kind to the other party, or of any violation of any
federal, state or other law, nor will it constitute to or be construed as an
admission of any wrongdoing whatsoever.
8. Confidentiality of this Agreement. Each party
represents to the other that it has not disclosed the existence or any of the
terms of this Agreement to anyone other than its respective legal counsel,
accountants or (in the case of Xxxxx) his immediate family members or (in the
case of the Company) its officers, directors, employees and agents with a
reasonable need to know. The parties agree that, except for the information
contained in the Press Release, they will not disclose any of the terms of
this Agreement to any other person or entity, except as such disclosure may
be required for legal, accounting or tax reporting purposes or as otherwise
may be required by law.
9. Attorneys' Fees.
(a) This Agreement. Each of the parties to
this Agreement shall be responsible for the payment of its own costs and
legal expenses, and no party shall hereafter assert against the other party
any claim for reimbursement of attorneys' fees or other legal expenses
incurred in connection with the negotiation and execution of this Agreement.
(b) Subsequent Litigation. In the event of
any litigation or arbitration arising out of this Agreement, the prevailing
party shall be entitled to reimbursement of its costs and attorneys' fees and
expenses.
10. Binding Provisions. All terms, conditions and
agreements contained in this Agreement shall inure to the benefit of, and be
binding upon, the respective successors and assigns of the parties.
11. Governing Law. This Agreement will be governed by
the laws of the State of California as applied to agreements entered into and
to be performed entirely within California between California residents. The
language of this Agreement shall be construed as a whole accordingly to its
fair meaning, and not strictly for or against either of the parties.
12. Entire Agreement. This Agreement constitutes the
entire agreement and final understanding of the parties with respect to the
subject matter hereof and supersedes any and all prior or contemporaneous
negotiations, agreements or understandings by or between the parties, whether
written or oral, express or implied with respect to such subject matter.
Notwithstanding the foregoing, nothing contained herein shall be construed to
limit the effectiveness of the Inventions Agreement, the Noncompetition
Agreement, the Indemnity Agreement, the Reorganization Agreement, the Escrow
Agreement or the Employment Agreement (to the extent that, by its terms, it
survives the termination of Xxxxx'x employment). This Agreement is intended
to be a complete and wholly integrated expression of the parties'
understanding and agreement, and may not be modified, altered, amended or
otherwise changed in any way except by a written document which specifically
identifies the intended alteration and clearly expresses the intention to
change this Agreement, signed by Xxxxx and by an officer of the Company.
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13. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of
which shall be deemed one instrument.
XXXXX HAS CONSULTED WITH AND BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL
WITH RESPECT TO THIS AGREEMENT, AND HE ENTERS THIS AGREEMENT AFTER
CONSULTATION WITH SUCH LEGAL COUNSEL. XXXXX ENTERS INTO THIS AGREEMENT
KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE PAYMENTS AND
BENEFITS DESCRIBED HEREIN, AND HE AND HIS LEGAL COUNSEL HAVE HAD AN ADEQUATE
OPPORTUNITY TO MAKE WHATEVER INVESTIGATION OR INQUIRY THEY DEEM NECESSARY OR
DESIRABLE IN CONNECTION WITH THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
XXXXX CORPORATION
By:
--------------------------------
Title:
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------------------------------------
XXXXXX X. XXXXX
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EXHIBIT A
SANTA CLARA, CALIF. -- August 4, 1997 --Xxxxx Corporation (NASDAQ: ZRAN),
announced today that Xxxxxx X. Xxxxx, Executive Vice President of Xxxxx,
will resign, effective August 4, 1997 to pursue other opportunities.
Xx. Xxxxx will remain a member of Zoran's Board of Directors and
will serve as a consultant to the company.
Xx. Xxxxx was a co-founder of CompCore Multimedia, Inc., a provider of MPEG
hardware and software products for processing digital video and audio
signals. CompCore became a wholly-owned subsidiary of Xxxxx as a result of an
acquisition completed in December 1996.
Dr. Xxxx Xxxxxxxx, Zoran's President and CEO, stated, "We acknowledge
George's valuable contribution to the development of CompCore's compression
technologies which have become an important part of Zoran's integrated
hardware and software product line. We wish Xxxxxx success in his future
endeavors and look forward to his continuing contributions as a member of the
Board of Directors and consultant. Xxxxx remains firmly committed to the
CompCore component of its product line as an important element of the
company's strategy to position itself as a broad-based provider of hardware
and software products for a wide range of video and audio applications
enabled by compression.
About Xxxxx
Xxxxx Corporation develops and markets integrated circuits and software for
digital video and audio applications enabled by compression for the PC and
consumer multimedia markets. Zoran's product lines include JPEG codecs, MPEG
and DVD decoders, Dolby Digital and MPEG audio decoders, real-time Video CD
and DVD software for the PC, and VLSI cores. The company's software is
bundled by PC and graphic system manufacturers for software-only or
hardware-assisted Video CD, DVD and JPEG compressed video playback on the PC.
Current applications for Xxxxx IC products include professional and consumer
video editing systems, filmless digital cameras, PC-based or stand-alone
Video CD systems and DVD players, and digital audio systems.
The company has further strengthened its technology leadership with the
recent acquisition of CompCore Multimedia, Inc., a leading provider of
software and hardware IC cores for multimedia products. Xxxxx is
headquartered in Santa Clara, California with operations in Haifa Israel,
Tokyo, Japan and Toronto, Canada.
For more information about Xxxxx call (000) 000-0000.
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