March 9, 2011 Bryan Ingram Avago Technologies Limited 350 West Trimble Road San Jose, California 95131 Re: Severance Benefits Agreement Dear Bryan,
Exhibit 10.2
March 9, 2011
Xxxxx Xxxxxx
Avago Technologies Limited
000 Xxxx Xxxxxxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Avago Technologies Limited
000 Xxxx Xxxxxxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Dear Xxxxx,
This letter constitutes the Severance Benefits Agreement (the “Agreement”) between you and
Avago Technologies Limited (the “Company”). Please confirm your acceptance of these terms by
returning a signed copy of this Agreement to me.
Severance Benefits
Termination By The Company Without Cause or for Good Reason, Death or Disability. If you
experience a Separation from Service (as defined below) initiated by the Company without Cause (as
defined below), by you for Good Reason (as defined below) or because of your death or permanent
disability, as determined by the Company, and if, within sixty (60) days of such Separation from
Service, you (or your estate’s executor) sign, and fail to revoke during any applicable revocation
period, a general release of all claims against the Company and its affiliates in a form acceptable
to the Company (a “Release”), the Company or one of its subsidiaries shall provide you (or your
estate) with continuation of your base salary for a period of nine (9) months commencing on the
sixtieth (60th) day following your Separation from Service at the rate in effect
immediately prior to your Separation from Service, less applicable withholdings and payment of an
amount equal to the lesser of fifty percent (50%) of (a) your prior year’s bonus and (b) your prior
year’s target bonus, both payable in nine (9) substantially equal installments commencing on the
sixtieth (60th) day following your Separation from Service pursuant to the Company’s
normal and customary payroll procedures. The Company or one of its subsidiaries shall also pay the
group health, dental and vision plan continuation coverage premiums for you and, if relevant, your
covered dependents’ COBRA for the lesser of (i) six (6) months from the date of your Separation
from Service, or (ii) the date upon which you are covered by similar plans of a new employer. The
Company shall provide you with a Release within 10 business days of your Separation from Service.
Termination in Connection with a Change in Control. If you experience a Separation from Service
(as defined below) initiated by the Company without Cause (as defined below), by you for Good
Reason (as defined below) or because of your death or permanent disability, as determined by the
Company, in each case within the twelve (12) month period commencing on a Change in Control (as
defined below), and if, within sixty (60) days of your Separation from Service, you (or your
estate’s executor) sign, and fail to revoke during any applicable revocation period, a Release,
then in lieu of the severance benefits described in the preceding paragraph, the Company shall
provide you (or your estate) with continuation of your base salary for a period of twelve (12)
months commencing on the sixtieth (60th) day following your Separation from Service at
the rate in effect immediately prior to your Separation from Service, less applicable withholdings,
and payment of an amount equal to 100% of the lesser of (a) your prior year’s bonus and (b) your
prior year’s target
bonus, both payable in twelve (12) substantially equal installments commencing on the sixtieth
(60th) day following your Separation from Service pursuant to the Company’s normal and
customary payroll procedures. The Company or one of its subsidiaries shall also pay the group
health, dental and vision plan continuation coverage premiums for you and, if relevant, your
covered dependents’ COBRA for the lesser of (i) twelve (12) months from the date of your Separation
from Service, or (ii) the date upon which you are covered by similar plans of a new employer.
Finally, your then outstanding options shall immediately accelerate and become vested and
exercisable for that number of shares subject thereto with respect to which such options would have
become vested and exercisable over the succeeding twelve (12) month period based solely on the
passage of time and your performance of services (i.e., you will receive twelve (12) month
accelerated vesting on your time vesting options). The Company shall provide you with a Release
within 10 business days of your Separation from Service.
Termination By The Company With Cause Or Termination By You. If your employment by the Company is
terminated by the Company with Cause, or if you voluntarily terminate your employment with the
Company (other than for Good Reason), you shall not be entitled to any severance pay, severance
benefits, or any compensation or benefits from the Company whatsoever, other than as required under
applicable law.
Definitions
Cause. For purposes of this Agreement, “Cause” shall mean (A) your willful refusal to perform in
any material respect your duties or responsibilities for the Company or its affiliates or willful
disregard in any material respect of any financial or other budgetary limitations established in
good faith by the Board; or (B) your material breach of any provision of this Agreement that is not
cured upon ten (10) days notice thereof; or (C) the engaging by you in conduct that causes material
and demonstrable injury, monetarily or otherwise, to the Company or any affiliates, including, but
not limited to, misappropriation or conversion of assets of the Company or any affiliates (other
than non-material assets); or (D) your engagement in an act of moral turpitude or conviction of or
entry of a plea of nolo contendere to a felony.
Change in Control. For purposes of this Agreement, “Change in Control” shall mean (i) the sale of
all or substantially all of the assets of the Company and its subsidiaries, taken as a whole to a
person who is not an affiliate of the Company or the Sponsors; (ii) a sale by the Sponsors or any
of their respective affiliates resulting in more than fifty percent (50%) of the voting shares of
the Company being held by a person or related group of persons that does not include the Sponsors
or any of their respective affiliates or (iii) a merger or consolidation of the Company into
another person which is not an affiliate of the Company or the Sponsors, if and only if as a result
of such merger or consolidation the Sponsors lose the ability to elect a majority of the Board (or
the resulting entity).
Good Reason. For purposes of this Agreement, the term “Good Reason” shall mean any of the
following: (A) a material reduction in your base salary (other than as part of a broad salary
reduction program instituted because the Company or its affiliates is in financial distress); (B) a
substantial reduction in your duties and responsibilities; (C) the elimination or reduction of your
eligibility to participate in the Company’s benefit programs that is inconsistent with the
eligibility of executive employees of the Company to participate therein; (D) the Company informs
you of its intention to transfer your primary workplace to a location that is more than 50 miles
from the location of your primary workplace as of such date; (E) the Company’s material breach of
this
Agreement that is not cured within sixty (60) days written notice thereof; and (F) any serious
chronic mental or physical illness of a member of your family that requires you to terminate your
employment because of substantial interference with your duties at the Company; provided, that at
the Company’s request you shall provide the Company with a written physician’s statement confirming
the existence of such mental or physical illness.
Separation from Service. For the purposes of this Agreement, the term “Separation from Service”
shall mean “separation from service” within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), and the Department of Treasury regulations and other
guidance promulgated thereunder.
Sponsors. For the purposes of this Agreement, the term “Sponsors” shall mean Kohlberg Kravis &
Xxxxxxx Co., L.P. and Silver Lake Partners, LLC.
Section 409A
Six Month Delay. Notwithstanding any provision to the contrary in this Agreement, if you are
deemed by the Company at the time of your Separation from Service to be a “specified employee” for
purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion
of the benefits to which you are entitled under this Agreement is required in order to avoid a
prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of your benefits
shall not be provided to you prior to the earlier of (a) the expiration of the six-month period
measured from the date of your Separation from Service or (b) the date of your death. Upon the
expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant
to this paragraph shall be paid in a lump sum to you, and any remaining payments due under the
Agreement shall be paid as otherwise provided herein.
Installments. For purposes of Section 409A of the Code (including, without limitation, for
purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), your right to receive the installment
payments under this Agreement shall be treated as a right to receive a series of separate payments
and, accordingly, each installment payment hereunder shall at all times be considered a separate
and distinct payment.
Entire Agreement
This Agreement and the documents referenced herein (including, without limitation, the
equity-related documents) constitute the complete, final and exclusive embodiment of the entire
agreement between you and the Company and its subsidiaries with respect to severance benefits
payable to you upon your termination of employment with the Company and its subsidiaries. This
Agreement supersedes any other such promises, warranties, representations, plans or agreements.
This Agreement may not be amended or modified except by a written instrument signed by you and an
authorized representative of the Board or the Company’s chief executive officer.
Governing Law
This Agreement will be governed by and construed in accordance with the laws of the State of
California without regard to the conflicts of law provisions thereof.
Dispute Resolution
To ensure the timely and economical resolution of disputes that arise in connection with your
employment with the Company and its subsidiaries, you and the Company agree that any and all
disputes, claims, or causes of action arising from or relating to the enforcement, breach,
performance or interpretation of this Agreement, your employment, or the termination of your
employment, shall be resolved to the fullest extent permitted by law by final, binding and
confidential arbitration, by a single arbitrator, in Santa Xxxxx County, California, conducted by
Judicial Arbitration and Mediation Services, Inc. (“JAMS”) under the applicable JAMS employment
rules. By agreeing to this arbitration procedure, both you and the Company waive the right to
resolve any such dispute through a trial by jury or judge or administrative proceeding. The
arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the
dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written
arbitration decision, to include the arbitrator’s essential findings and conclusions and a
statement of the award. The arbitrator shall be authorized to award any or all remedies that you
or the Company would be entitled to seek in a court of law. The Company shall pay all JAMS’
arbitration fees in excess of the amount of court fees that would be required if the dispute were
decided in a court of law. Nothing in this Agreement is intended to prevent either you or the
Company from obtaining injunctive relief in court to prevent irreparable harm pending the
conclusion of any such arbitration. Notwithstanding the foregoing, you and the Company each have
the right to resolve any issue or dispute over intellectual property rights by Court action instead
of arbitration.
[Signature Page Follows]
If you choose to accept this Agreement under the terms described above, please return a signed copy
of this letter to my attention.
| Sincerely, |
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| /s/ Xxxx X. Xxx | ||||
| Xxxx X. Xxx | ||||
| President and Chief Executive Officer Avago Technologies Limited | ||||
| Agreed and Accepted this 9th day of March, 2011 |
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| /s/ Xxxxx Xxxxxx | ||||
| Xxxxx Xxxxxx | ||||
