SOLECTRON CORPORATION PAUL TUFANO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.2
SOLECTRON CORPORATION
XXXX XXXXXX AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the “Agreement”) is made by and between
Solectron Corporation (the “Company”), and Xxxx Xxxxxx (“Executive”) as of March 14, 2007 (the
“Effective Date”).
1. Duties and Scope of Employment.
Positions and Duties. Executive will serve as the Company’s Interim President and Chief
Executive Officer and as Executive Vice President and Chief Financial Officer. While acting as
Interim President and Chief Executive Officer, Executive will report to the Board of Directors of
the Company (the “Board”). Following the Company’s hiring of a President and Chief Executive
Officer, Executive shall remain Executive Vice President and Chief Financial Officer and shall
report to the President and Chief Executive Officer of the Company (the “CEO”). Executive will
render such business and professional services in the performance of Executive’s duties, consistent
with Executive’s position within the Company, as will reasonably be assigned to Executive by the
Board or the CEO, as the case may be. The period of Executive’s employment under this Agreement is
referred to herein as the “Employment Term.”
(b) Obligations. During the Employment Term, Executive will devote Executive’s full
business efforts and time to the Company. For the duration of the Employment Term, Executive agrees
not to actively engage in any other employment, occupation or consulting activity for any direct or
indirect remuneration without the prior approval of the Board of Directors of the Company (the
“Board”) (which approval will not be unreasonably withheld); provided, however, that Executive may,
without the approval of the Board, serve in any capacity with any civic, educational or charitable
organization, provided such services do not interfere with Executive’s obligations to Company.
2. Employee Benefits. During the Employment Term, Executive will be eligible to
participate in accordance with the terms of all Company employee benefit plans, policies and
arrangements that are applicable to other senior executives of the Company, as such plans, policies
and arrangements and terms may exist from time to time.
3. At-Will Employment. Executive and the Company agree that Executive’s employment
with the Company constitutes “at-will” employment. Executive and the Company acknowledge that this
employment relationship may be terminated at any time, upon written notice to the other party, with
or without good cause or for any or no cause, at the option either of the Company or Executive.
However, as described in this Agreement, Executive may be entitled to severance benefits depending
upon the circumstances of Executive’s termination of employment.
4. Compensation.
(a) Base Salary. During the Employment Term, the Company will pay Executive an annual
salary of $625,001 as compensation for his services (the “Base Salary”). The Base Salary will be
paid through payroll periods that are consistent with the Company’s normal payroll practices, but
in all events will not be less frequent than once per month. Executive’s salary will be subject to
review and adjustments will be made based upon the Company’s normal performance review practices.
(b) Bonuses. Executive may participate in any bonus plan or similar arrangement the
Company may have in place that are applicable to other senior executives of the Company, on such
terms and conditions as the Executive Compensation and Management Resources Committee of the Board
(the “Committee”) may determine from time to time in its discretion.
(c) Stock Options. Executive will be eligible to receive options to purchase the
Company’s common stock pursuant to any plans or arrangements it may have in effect from time to
time. The Committee will determine in its discretion whether Executive will be granted any such
option or options and the terms of any such option or options in accordance with the terms of any
applicable plan or arrangement that may be in effect from time to time. Notwithstanding the
foregoing, unless Executive’s employment has been terminated for “Cause” (as defined in Section
7(b) hereof) Executive shall be granted (i) an option to purchase 125,000 shares of the Company’s
Common Stock on the date hereof and (ii) an option to purchase 750,000 shares of the Company’s
Common Stock on September 3, 2007. The options shall have an exercise price of $0.001, shall be
deemed exercised when issued and the underlying shares issuable upon exercise shall be subject to
forfeiture until October 15, 2008 unless prior to that date Executive’s employment is terminated
pursuant to the provisions of Sections 5(a) or 5(b) hereof.
(c) Deferred compensation. Unless Executive’s employment has been terminated for
“Cause” (as defined in Section 7(b) hereof) the Company shall contribute to the account of
Executive under the Company’s deferred compensation plan $300,000 on each of the date on which a
new CEO is hired and the first anniversary of such date. This contribution shall fully vest and
shall be no longer subject to forfeiture on October 15, 2008 unless prior to that date Executive’s
employment is terminated pursuant to the provisions of Sections 5(a) or 5(b) hereof.
5. Severance.
(a) Involuntary Termination other than for Cause, Death or Disability or Resignation for
Good Reason Prior to a Change of Control or After Twelve Months Following a Change of Control .
If the Executive resigns from the Company for Good Reason or the Company terminates Executive’s
employment with the Company without Executive’s consent and for a reason other than Cause,
Executive becoming Disabled or Executive’s death, any of which occur prior to a Change of Control
or after twelve (12) months following a Change of Control and Executive signs and delivers to the
Company a separation agreement and release of claims in a form satisfactory to the Company, then
promptly following such termination of employment, or, if later, the effective date of the
separation agreement and release of claims, Executive will receive the following severance from the
Company:
(i) Accrued Compensation. Executive will be entitled to receive all accrued vacation,
expense reimbursements and any other benefits due to Executive through the date of termination of
employment in accordance with the Company’s then existing employee benefit plans, policies and
arrangements.
(ii) Severance Payment. Executive will be paid continuing payments of severance pay at
a rate equal to Executive’s Base Salary rate, as then in effect, and Executive’s target bonus for
the year of termination, for a period of twelve (12) months plus one additional month for every
full year Executive has been employed with the Company as of the date of such termination, not to
exceed twenty-four (24) months (the “Severance Payment Period”), from the date of such termination,
to be paid periodically in accordance with the Company’s normal payroll policies; provided,
however, that if during the Severance Payment Period Executive engages in Competition or breaches
the covenants in Section 12 or in the separation agreement, all payments pursuant to this
subsection will immediately cease; and provided further, however, that if the event giving rise to
the payment of severance hereunder is the result of Executive’s voluntary termination of employment
for Good Reason as a result of the Company’s hiring of a new CEO, the Severance Payment Period
shall be limited to twelve (12) months.
(iii) Continued Employee Benefits. Executive will receive Company-paid coverage during
the Severance Payment Period for Executive and Executive’s eligible dependents under the Company’s
Benefit Plans; provided, however, that if during the Severance Payment Period Executive engages in
Competition or breaches the covenants in Section 12 or in the separation agreement, all
Company-paid coverage pursuant to
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this subsection will immediately cease.
(iv) Equity Awards. All option grants to Executive shall automatically vest and
become exercisable as to 100% of the shares of Common Stock subject to such options. Additionally,
shares of the Company’s Common Stock (the “Restricted Stock”) then held by Executive subject to a
Company repurchase or reacquisition right (the “Company Repurchase Right”) (whether issued on,
before or after the date of this Agreement) will immediately vest and the Company Repurchase Right
shall lapse,
(v) Deferred compensation. All amounts contributed by the Company for the account of
Executive in the Company’s deferred compensation plan shall vest and shall no longer be subject to
forfeiture.
(vi) Payments or Benefits Required by Law. Executive will receive such other
compensation or benefits from the Company as may be required by law (for example, “COBRA” coverage
under Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”)).
(b) Involuntary Termination other than for Cause, Death or Disability or Resignation for
Good Reason within Twelve Months of a Change of Control . If within twelve (12) months
following a Change of Control (i) Executive resigns from his or her employment with the Company (or
any parent or subsidiary of the Company) for Good Reason or (ii) the Company (or any parent or
subsidiary of the Company) terminates Executive’s employment for other than Cause Executive
becoming Disabled or Executive’s death, and Executive signs and delivers to the Company a
separation agreement and release of claims in a form satisfactory to the Company, then promptly
following such termination of employment, or, if later, the effective date of the separation
agreement and release of claims, Executive will receive the following severance from the Company:
(i) Severance Payment. For a period of twenty-four (24) months following Executive’s
termination of employment (the “Change of Control Severance Payment Period”), Executive will be
paid continuing payments of severance pay equal to Executive’s average Base Salary rate for the two
years prior to such termination, and Executive’s average annual target bonus for the two years
prior to such termination, to be paid in equal installments periodically in accordance with the
Company’s normal payroll practices; provided, however, that if Executive has been employed for less
than two years prior to such termination, for a period of twenty-four (24) months following such
termination, Executive will be paid continuing payments of severance pay equal to Executive’s
average Base Salary rate for the period Executive was actually employed with the Company, and
Executive’s average annual target bonus for the period Executive was actually employed with the
Company, to be paid in equal installments periodically in accordance with the Company’s normal
payroll practices; provided, further, that in the event Executive engages in Competition or
breaches the covenants in Section 12 or in the separation agreement during the Change of Control
Severance Payment Period, all payments pursuant to this subsection will immediately cease.
(ii) Equity Awards. All option grants to Executive then outstanding (whether granted
on, before or after the date of this Agreement (discounted or otherwise)) will immediately vest and
become exercisable as to 100% of the shares subject to such options. Additionally, shares of
Restricted Stock will immediately vest and Company Repurchase Right will lapse. Additionally,
Executive will have a period of three (3) months following such termination of employment to
exercise any unexercised options, but in no event beyond the original maximum term of the any such
option. In all other respects any options and Restricted Stock will continue to be bound by and
subject to the terms of their respective agreements.
(iii) Continued Employee Benefits. Executive will receive Company-paid coverage for a
period of thirty-six (36) months for Executive and Executive’s eligible dependents under the
Company’s Benefit Plans; provided, however, that in the event Executive engages in Competition or
breaches the covenants in Section 12 or in the separation agreement during the thirty-six month
period following such termination, all Company-paid coverage pursuant to this subsection will
immediately cease.
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(iv) Deferred compensation. All amounts contributed by the Company for the account of
Executive in the Company’s deferred compensation plan shall vest and shall no longer be subject to
forfeiture.
(v) Payments or Benefits Required by Law. Executive will receive such other
compensation or benefits from the Company as may be required by law (for example, “COBRA” coverage
under Section 4980B of the Code).
(c) Other Terminations. If Executive voluntarily terminates Executive’s employment
with the Company (other than for Good Reason) or if the Company terminates Executive employment
with the Company for Cause, then Executive will (i) receive the Base Salary through the date of
termination of employment, (ii) receive all accrued vacation, expense reimbursements and any other
benefits due to Executive through the date of termination of employment in accordance with
established Company plans, policies and arrangements, and (iii) not be entitled to any other
compensation or benefits (including, without limitation, accelerated vesting of stock options) from
the Company except to the extent provided under the applicable stock option agreement(s) or as may
be required by law (for example, “COBRA” coverage under Section 4980B of the Code).
(d) Termination due to Death or Disability. If Executive’s employment with the Company
is terminated due to Executive’s death or Executive’s becoming Disabled, then Executive or
Executive’s estate (as the case may be) will (i) receive the Base Salary through the date of
termination of employment, (ii) receive all accrued vacation, expense reimbursements and any other
benefits due to Executive through the date of termination of employment in accordance with
Company-provided or paid plans, policies and arrangements, and (iii) not be entitled to any other
compensation or benefits from the Company except to the extent required by law (for example,
“COBRA” coverage under Section 4980B of the Code).
(e) Section 409A. Any cash severance to be paid pursuant to Sections 5(a)(ii) and
6(b)(i) will not be paid during the six-month period following Executive’s termination of
employment, unless the Company reasonably determines that paying such amounts immediately following
Executive’s termination of employment would not result the imposition of additional tax under
Section 409A of the Code (“Section 409A”), in which case such amounts shall be paid in accordance
with normal payroll practices. If no cash severance is paid to Executive as a result of the
previous sentence, on the first day following such six-month period, the Company will pay Executive
a lump-sum amount equal to the cumulative amounts that would have otherwise been paid to Executive
pursuant to Sections 5(a)(ii) and 6(b)(i). Thereafter, Executive will receive his cash severance
payments pursuant to Sections 5(a)(ii) and 6(b)(i) in accordance with the Company’s normal payroll
practices.
6. Golden Parachute Excise Tax.
(a) In the event it will be determined that any payment or distribution by the Company or
other amount with respect to the Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of Section 5(b) of this Agreement,
but determined without regard to any additional payments required under this Section 6 (a
“Payment”), is (or will be) subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”) or any interest or penalties are (or will be)
incurred by Executive with respect to the excise tax imposed by Section 4999 of the Code with
respect to the Company (the excise tax, together with any interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), Executive will be entitled to receive an additional
cash payment (a “Gross-Up Payment”) from the Company in an amount equal to the sum of the Excise
Tax and an amount sufficient to pay the cumulative Excise Tax and all cumulative income taxes
(including any interest and penalties imposed with respect to such taxes) relating to the Gross-Up
Payment so that the net amount retained by Executive is equal to all payments to which Employee is
entitled pursuant to the terms of this Agreement
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(excluding the Gross-Up Payment) or otherwise less
income taxes (but not reduced by the Excise Tax or by income taxes attributable to the Gross-Up
Payment).
(b) Subject to the provisions of Section 6(c), all determinations required to be made under
this Section 6, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at the determination, will be made
by a nationally recognized certified public accounting firm selected by the Company with the
consent of Executive, which should not unreasonably be withheld (the “Accounting Firm”) which will
provide detailed supporting calculations both to the Company and Executive within 30 days after the
receipt of notice from Executive that there has been a Payment, or such earlier time as is
requested by the Company. All fees and expenses of the Accounting Firm will be borne solely by the
Company. The Company, as determined in accordance with this Section 6, will pay any Gross-Up
Payment to Executive within five days after the receipt of the Accounting Firm’s determination. If
the Accounting Firm determines that no Excise Tax is payable by Executive, it will so indicate to
Executive in writing. Any determination by the Accounting Firm will be binding upon the Company and
Executive. As a result of uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm, it is possible that Gross-Up Payments that the
Company should have made will not have been made (an “Underpayment”), consistent with the
calculations required to be made hereunder. In the event the Company exhausts its remedies in
accordance with Section 6(c) and Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm will determine the amount of Underpayment that has occurred and the
Underpayment will be promptly paid by the Company to or for the benefit of Executive.
(c) Executive will notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require a Gross-Up Payment (that has not already been paid by the
Company). The notification will be given as soon as practicable but no later than ten business days
after Executive is informed in writing of the claim and will apprise the Company of the nature of
the claim and the date on which the claim is requested to be paid. Executive will not pay the claim
prior to the expiration of the 30-day period following the date on which Executive gives notice to
the Company or any shorter period ending on the date that any payment of taxes with respect to the
claim is due. If the Company notifies Executive in writing prior to the expiration of the 30-day
period that it desires to contest the claim, Executive will:
(i) give the Company any information reasonably requested by the Company relating to the
claim;
(ii) take any action in connection with contesting the claim as the Company will reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to the claim by an attorney reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively to contest the claim; and
(iv) permit the Company to participate in any proceedings relating to the claim.
(d) The Company will bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with the contest and will indemnify and hold
Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of the representation and payment of costs and
expenses. Without limitation of the forgoing provisions of this Section 6, the Company will control
all proceedings taken in connection with the contest and, at its sole option, may pursue or forego
any and all administrative appeals, proceedings, hearings, and conferences with the taxing
authority in respect of the claim and may, at its sole option, either direct Executive to pay the
tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive
agrees to prosecute the contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company will determine. If the
Company directs Executive to pay the claim and xxx for a refund, the Company will advance the
amount of the payment to Executive, on an interest-free basis, and will indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
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(including interest or
penalties with respect thereto) imposed with respect to the advance or with respect to any imputed
income with respect to the advance; and any extension of the statute of limitations relating to
payment of taxes for the taxable year of Executive with respect to which the contested amount is
claimed to be due will be limited solely to the contested amount. The Company’s control of the
contest will be limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
If, after the receipt by Executive of an amount advanced by the Company pursuant to Section
6(d), Executive becomes entitled to receive any refund with respect to the claim, Executive will,
subject to the Company’s compliance with the requirements of Section 6(d), promptly pay to the
Company the amount of the refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Executive of an amount advanced by the Company
pursuant to this Section 6(d), a determination is made that Executive will not be entitled to any
refund with respect to the claim and the Company does not notify Executive in writing of its intent
to contest the denial of refund prior to the expiration of 30 days after the determination, then
the advance will be forgiven and will not be required to be repaid and the amount of the advance
will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
7. Definition of Terms. The following terms referred to in this Agreement will have
the following meanings:
(a) Benefit Plans. “Benefit Plans” means plans, policies or arrangements that the
Company sponsors (or participates in) and that immediately prior to Executive’s termination of
employment provide Executive and/or Executive’s eligible dependents with medical, dental, vision
and/or financial counseling benefits. Benefit Plans do not include any other type of benefit
(including, but not by way of limitation, disability, life insurance or retirement benefits). A
requirement that the Company provide Executive and Executive’s eligible dependents with coverage
under the Benefit Plans will not be satisfied unless the coverage is no less favorable than that
provided to Executive and Executive’s eligible dependents immediately prior to Executive’s
termination of employment. Notwithstanding any contrary provision of this Section 7, but subject to
the immediately preceding sentence, the Company may, at its option, satisfy any requirement that
the Company provide coverage under any Benefit Plan by instead providing coverage under a separate
plan or plans providing coverage that is no less favorable or by paying Executive a lump sum
payment sufficient to provide Executive and Executive’s eligible dependents with equivalent
coverage under a third party plan that is reasonably available to Executive and Executive’s
eligible dependents.
(b) Cause. “Cause” means (i) a willful failure by Executive to substantially perform
Executive’s duties as an employee, other than a failure resulting from the Executive’s complete or
partial incapacity due to physical or mental illness or impairment, (ii) a willful act by Executive
that constitutes gross misconduct and that is injurious to the Company, (iii) circumstances where
Executive willfully imparts material confidential information relating to the Company or its
business to competitors or to other third parties other than in the course of carrying out
Executive’s duties, (iv) a material and willful violation by Executive of a federal or state law or
regulation applicable to the business of the Company or (v) Executive’s conviction or plea of
guilty or no contest to a felony. No act or failure to act by Executive will be considered
“willful” unless committed without good faith and without a reasonable belief that the act or
omission was in the Company’s best interest.
(c) Change of Control. “Change of Control” means the occurrence of any of the
following:
(i) the sale, lease, conveyance or other disposition of all or substantially all of the
Company’s assets to any “person” (as such term is used in Section 13(d) of the Securities Exchange
Act of 1934, as amended), entity or group of persons acting in concert;
(ii) any person or group of persons becoming the “beneficial owner” (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company representing 30% or more of
the total voting
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power represented by the Company’s then outstanding voting securities;
(iii) a merger or consolidation of the Company with any other corporation, other than a merger
or consolidation that would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or its controlling entity) at least 50% of the total
voting power represented by the voting securities of the Company or such surviving entity (or its
controlling entity) outstanding immediately after such merger or consolidation; or
(iv) a contest for the election or removal of members of the Board that results in the removal
from the Board of at least 33% of the incumbent members of the Board.
(d) Competition. “Competition” will mean Executive’s direct or indirect engagement in
(whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate
officer, director or otherwise), or ownership interest in or participation in the financing,
operation, management or control of, any person, firm, corporation or business that competes with
Company as identified on the attached schedule.
(e) Disability. “Disability” will mean that Executive has been unable to perform the
principal functions of Executive’s duties due to a physical or mental impairment, but only if such
inability has lasted or is reasonably expected to last for at least six months. Whether Executive
has a Disability will be determined by the Board based on evidence provided by one or more
physicians selected by the Board.
(f) Good Reason. “Good Reason” means (without Executive’s consent) (i) a material
reduction in Executive’s title, authority, status, or responsibilities, including specifically,
Executive’s no longer being Interim President and Chief Executive Officer of the Company as a
result of the Company’s hiring of a new CEO, provided that within twelve (12) months following
Executive’s removal as Interim President and CEO Executive provides the Company with not less than
six (6) months notice of his intention to resign his employment with the Company and continues his
employment with the Company for the six (6) month notice period or until October 15, 2008,
whichever shall be last to occur (ii) the Executive reports to anyone other than the Chief
Executive Officer or the Board, (iii) a reduction in the Executive’s then current base salary and
target bonus, (iv a material breach by the Company of its obligations as an employee, or (v) a
relocation of Executive’s principal place of employment by more than twenty five (25) miles. With
respect to a termination of employment that occurs during the six (6) month period immediately
following a Change of Control, clause (i) of the preceding sentence will be applied by replacing
the word “reduction” with the word “change.”
8. Term of Agreement. This Agreement will have an initial term of two (2) years
commencing on the Effective Date. On the second anniversary of the Effective Date and on each
annual anniversary of the Effective Date thereafter, this Agreement automatically will renew for an
additional term of one year unless at least three (3) months prior to such anniversary, Executive
or the Company gives the other party written notice that the Agreement will not be renewed.
Notwithstanding the foregoing provisions of this paragraph, in the event of a Change of Control,
the term of this Agreement will extend through the one-year anniversary of such Change of Control.
Additionally, on the anniversary of such Change of Control and each annual anniversary of the
Change of Control thereafter, this Agreement automatically will renew for an additional term of one
year unless at least three (3) months prior to such anniversary, Executive or the Company gives the
other party written notice that the Agreement will not be renewed.
If Executive incurs a termination of employment that entitles Executive to receive the
payments and benefits described in Section 5, this Agreement will not terminate until all of
Executive’s and the Company’s obligations under the Agreement have been satisfied. For avoidance of
doubt, the expiration of this Agreement upon the provision of notice as provided in this Section 8
by either party will not by itself entitle Executive to any payments or benefits described in
Section 5(a) or (b).
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9. Successors.
(a) The Company’s Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially
all of the Company’s business and/or assets will assume the obligations under this Agreement and
agree expressly to perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the absence of a succession.
For all purposes under this Agreement, the term “Company” will include any successor to the
Company’s business and/or assets which executes and delivers the assumption agreement described in
this Section 9(a) or which becomes bound by the terms of this Agreement by operation of law.
(b) Executive’s Successors. The terms of this Agreement and all rights of Executive
hereunder will inure to the benefit of, and be enforceable by, Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
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10. Notices. All notices, requests, demands and other communications called for
hereunder will be in writing and will be deemed given (i) on the date of delivery if delivered
personally, (ii) one (1) day after being sent by a well established commercial overnight service,
or (iii) four (4) days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:
If to the Company:
Attn: Chairman, Executive Compensation and Management Resources Committee of the Board
of Directors
If to Executive:
Xxxx Xxxxxx
at the last residential address known by the Company.
at the last residential address known by the Company.
11. Severability. In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue
in full force and effect without said provision.
12. Non-Solicitation. For a period beginning on the Effective Date and ending one year
after the Executive ceases to be employed by the Company or, if longer, upon the completion of the
Severance Payment Period if Executive is entitled to severance under Section 5(a) or the Change of
Control Severance Payment Period if Executive is entitled to receive severance under Section 5(b),
Executive, directly or indirectly, whether as employee, owner, sole proprietor, partner, director,
member, consultant, agent, founder, co-venturer or otherwise, will: (i) not solicit, induce or
influence any person to leave employment with the Company; or (ii) not directly or indirectly
solicit business from any of the Company’s customers and users on behalf of any business that
directly competes with the principal business of the Company.
13. Entire Agreement. This Agreement constitutes the entire agreement of the parties
hereto and supersedes in their entirety all prior representations, understandings, undertakings or
agreements (whether oral or written and whether expressed or implied) of the parties with respect
to the subject matter hereof. No future agreements between the Company and Executive may supersede
this Agreement, unless they are in writing and specifically mention this Section 13.
14. Arbitration.
(a) General. In consideration of Executive’s service to the Company, its promise to
arbitrate all employment related disputes and Executive’s receipt of the compensation, pay raises
and other benefits paid to Executive by the Company, at present and in the future, Executive agrees
that any and all controversies, claims, or disputes with anyone (including the Company and any
employee, officer, director, shareholder or benefit plan of the Company in their capacity as such
or otherwise) arising out of, relating to, or resulting from Executive’s service to the Company
under this Agreement or otherwise or the termination of Executive’s service with the Company,
including any breach of this Agreement, will be subject to binding arbitration under the
Arbitration Rules set forth in California Code of Civil Procedure Section 1280 through 1294.2,
including Section 1283.05 (the “Rules”) and pursuant to California law. Disputes which Executive
agrees to arbitrate, and
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thereby agrees to waive any right to a trial by jury, include any
statutory claims under state or federal law, including, but not limited to, claims under Title VII
of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the California
Fair Employment and Housing Act, the California Labor Code, claims of harassment, discrimination or
wrongful termination and any statutory claims. Executive further understands that this Agreement to
arbitrate also applies to any disputes that the Company may have with Executive.
(b) Procedure. Executive agrees that any arbitration will be administered by the
American Arbitration Association (“AAA”) and that a neutral arbitrator will be selected in a manner
consistent with its National Rules for the Resolution of Employment Disputes. The arbitration
proceedings will allow for discovery according to the rules set forth in the National Rules for
the Resolution of Employment Disputes or California Code of Civil Procedure . Executive agrees that
the arbitrator will have the power to decide any motions brought by any party to the arbitration,
including motions for summary judgment and/or adjudication and motions to dismiss and demurrers,
prior to any arbitration hearing. Executive agrees that the arbitrator will issue a written
decision on the merits. Executive also agrees that the arbitrator will have the power to award any
remedies, including attorneys’ fees and costs, available under applicable law. Executive
understands the Company will pay for any administrative or hearing fees charged by the arbitrator
or AAA except that Executive will pay the first $125.00 of any filing fees associated with any
arbitration Executive initiates. Executive agrees that the arbitrator will administer and conduct
any arbitration in a manner consistent with the Rules and that to the extent that the AAA’s
National Rules for the Resolution of Employment Disputes conflict with the Rules, the Rules will
take precedence.
(c) Remedy. Except as provided by the Rules, arbitration will be the sole, exclusive
and final remedy for any dispute between Executive and the Company. Accordingly, except as provided
for by the Rules, neither Executive nor the Company will be permitted to pursue court action
regarding claims that are subject to arbitration. Notwithstanding, the arbitrator will not have the
authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator will not
order or require the Company to adopt a policy not otherwise required by law, which the Company has
not adopted.
(d) Availability of Injunctive Relief. In addition to the right under the Rules to
petition the court for provisional relief, Executive agrees that any party may also petition the
court for injunctive relief where either party alleges or claims a violation of this Agreement or
the Confidentiality Agreement or any other agreement regarding trade secrets, confidential
information, nonsolicitation or Labor Code §2870. In the event either party seeks injunctive
relief, the prevailing party will be entitled to recover reasonable costs and attorneys’ fees.
(e) Administrative Relief. Executive understands that this Agreement does not prohibit
Executive from pursuing an administrative claim with a local, state or federal administrative body
such as the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission
or the workers’ compensation board. This Agreement does, however, preclude Executive from pursuing
court action regarding any such claim.
(f) Voluntary Nature of Agreement. Executive acknowledges and agrees that Executive is
executing this Agreement voluntarily and without any duress or undue influence by the Company or
anyone else. Executive further acknowledges and agrees that Executive has carefully read this
Agreement and that Executive has asked any questions needed for Executive to understand the terms,
consequences and binding effect of this Agreement and fully understand it, including that Executive
is waiving Executive’s right to a jury trial. Finally, Executive agrees that Executive has been
provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this
Agreement.
15. No Oral Modification, Cancellation or Discharge. This Agreement may be changed or
terminated only in writing (signed by Executive and the Company).
16. Waiver of Breach. The waiver of a breach of any term or provision of this
Agreement, which must be in
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writing, will not operate as or be construed to be a waiver of any
other previous or subsequent breach of this Agreement.
17. Headings. All captions and section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.
18. Withholding. The Company is authorized to withhold, or cause to be withheld, from
any payment or benefit under this Agreement the full amount of any applicable withholding taxes.
19. Governing Law. This Agreement will be governed by the laws of the State of
California (with the exception of its conflict of laws provisions).
20. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss
this matter with and obtain advice from Executive’s private attorney, has had sufficient time to,
and has carefully read and fully understands all the provisions of this Agreement, and is knowingly
and voluntarily entering into this Agreement.
21. Counterparts. This Agreement may be executed in counterparts, and each counterpart
will have the same force and effect as an original and will constitute an effective, binding
agreement on the part of each of the undersigned.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the respective dates set
forth below:
EXECUTIVE |
||
/s/ Xxxx Xxxxxx
|
Date: March 14, 2007 | |
Xxxx Xxxxxx |
||
SOLECTRON CORPORATION |
||
/s/ Xxxxx X’Xxxxxx
|
Date: March 14, 2007 | |
Xxxxx X’Xxxxxx |
||
Executive Vice President Human Resources |
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