SEVERANCE AGREEMENT AND RELEASE
EXHIBIT
10.1
This
Severance Agreement and Release (“Severance Agreement”) is executed this
17th
day of
April,
2007, by
and between Xxxxxx X. Xxxxxx (“Employee”) who resides at 000 Xxxx 00xx
Xx., Xxx
Xxxx, Xxx Xxxx and Emcore Corporation (“Emcore” or the “Company”). Employee and
Emcore shall sometimes be referred to herein as the “Parties” and shall
sometimes be referred to individually as “Party.”
1. Employee’s
employment is terminated effective April 27, 2007.
2.
(a) On
October 31, 2007, Emcore shall pay to Employee 68 weeks of his salary in a
lump-sum payment plus an amount equal to 68 weeks of Employee’s automobile,
garage and auto insurance expenses (“Severance”). The total Severance, which
will be paid to Employee, is equal to $313,939 ($292,400 +$21,539), less
applicable tax withholdings and deductions.
(b) In
accordance with the Company’s health plans, Employee will be eligible to
exercise his rights to continued health insurance coverage for Employee, and,
where applicable, Employee’s spouse and eligible dependents, at Employee’s
expense (subject to the foregoing), upon termination of the Employee’s
employment pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), as amended. To the extent Employee elects COBRA continuation
coverage, the Company shall continue to pay the employer’s portion of the COBRA
premiums for the period of time that Employee is eligible for COBRA continuation
coverage, up to a maximum of 68 weeks, equal to the amount that the Company
would have otherwise paid for health insurance coverage if Employee were an
active employee during such time. Up until the Severance payment is made, the
Company will also pay Employee’s portion of the COBRA premiums, the total of
which shall then be deducted from the Severance payment. After the Severance
payment is made, Employee shall be responsible for paying Employee’s portion of
COBRA premiums. Nothing herein shall be construed as extending or delaying
the
start date of the COBRA coverage period for Employee.
All
voluntary payroll deductions, including but not limited to 401(k), ESPP and
term
life, will cease effective the date of termination.
(c) If
Employee is rehired by Emcore, Emcore shall no longer be obligated to make
any
severance payment under Paragraph 2(a) above that would otherwise be due and
owing after the effective date of employee's rehiring. Employee acknowledges
and
agrees that the cessation of severance payments under this provision shall
not
affect the validity or enforceability of Paragraph 5 of this
Agreement.
(d) Emcore
shall pay Employee $55,341, less applicable tax withholdings and deductions,
representing the amount earned by Employee under EMCORE’s 2006 Executive Cash
Bonus Plan on the earlier to occur of (x) payment of the cash bonus under the
2006 Executive Cash Bonus Plan to the CEO and (y) October 31, 2007.
(e) Emcore
will also reimburse Employee for all business expenses incurred by Employee
through April 27, 2007 within thirty days of receipt of Employee’s expense
report.
3. Employee
agrees and acknowledges that the payments and benefits provided for in Paragraph
2 exceed any benefits to which he or she would otherwise be entitled under
any
policy, plan, and/or procedure of Emcore or any agreement with Emcore. Employee
agrees and acknowledges that the payment of Severance (or any other payments
hereunder) shall not be construed as a guarantee of any particular tax treatment
for such payment. Except for the Severance and benefits set forth in Paragraph
2, Employee acknowledges that Employee
has received all wages, bonuses, salaries, fees, vacation pay, benefits or
any
other form of compensation to which Employee was entitled.
4. Employee
shall have twenty-one (21) days from the date of his receipt of this Agreement
to consider the terms and conditions of the Agreement. Employee may accept
this
Agreement by signing and returning it to Xx. Xxxxxx Xxx Xxxxxx, Vice President,
Human Resources, Emcore Corporation, or her successor to 0000 X. Xxxxxxxx
Xxxxxx, Xxxxxxxx, XX 00000, no later than 5:00 p.m. on the twenty-first (21st)
day after Employee’s receipt of this Agreement (“Agreement and Release Return
Date”). Thereafter, Employee will have seven (7) days to revoke this Agreement
by stating his desire to do so in writing to Xx. Xxx Xxxxxx or her successor
at
the address listed above, and delivering it to Xx. Xxx Xxxxxx or her successor
no later than 5:00 p.m. on the seventh (7th) day following the date Employee
signs this Agreement. The effective date of this Agreement shall be the (8th)
day following Employee’s signing of this Agreement (the “Release Effective
Date”), provided the Employee does not revoke the Agreement during the
revocation period described above. In the event Employee does not accept this
Agreement as set forth above, or in the event Employee revokes this Agreement
during the revocation period, this Agreement, including but not limited to
the
obligation of Emcore and its subsidiaries and affiliates to provide the payments
and benefits referred to in Paragraph 2 above, shall automatically be deemed
null and void.
5. (a) In
consideration of the payments and benefits referred to in Paragraph 2, Employee
for himself and on behalf of his heirs, executors, and assigns (hereinafter
collectively referred to as the “Releasors”), forever releases and discharges
Emcore and any and all of its parent corporations, subsidiaries, divisions,
affiliated entities, predecessors, successors and assigns, and any and all
of
its or their employee benefit and/or pension plans or funds, and any of its
or
their past or present officers, directors, stockholders, agents, trustees,
administrators, employees or assigns (whether acting as agents for such entities
or in their individual capacities) (hereinafter collectively referred to as
“Releasees”), from any and all claims, demands, causes of action, fees and
liabilities of any kind whatsoever (based upon any legal or equitable theory,
whether contractual, common-law, statutory, decisional, federal, state, local
or
otherwise), whether known or unknown, which Releasors ever had, now have or
may
have against Releasees by reason of any actual or alleged act, omission,
transaction, practice, conduct, occurrence, or other matter from the beginning
of the world up to and including the Release Effective Date relating to or
arising from Employee’s employment with the Company or the termination thereof;
provided, however, that Releasors do not release Emcore from any defense,
indemnification or reimbursement obligation that Emcore has or may have to
Employee by law, under Emcore’s By-Laws or under any insurance policy in effect
including, but not limited to, by reason of Employee’s (i) performance of his
duties as General Counsel, Chief Legal Officer, Secretary or executive officer
of Emcore, (ii) conduct in connection with the granting and accounting for
stock
options or investigation and analysis of past stock option grant practices,
or
(iii) any post-employment consulting arrangements that Employee may provide
to
Emcore; and provided further that Releasors do not release Releasees from any
breaches of this Agreement.
(b)
Without
limiting the generality of the foregoing subparagraph (a), this Agreement is
intended to and shall release the Releasees from any and all claims arising
out
of Employee’s employment with the Company and/or the termination of Employee’s
employment, including but not limited to any claim(s) under or arising out
of
(i) the Age Discrimination in Employment Act, as amended, or the Older Workers
Benefit Protection Act; (ii) Title VII of the Civil Rights Act of 1964, as
amended; (iii) the Americans with Disabilities Act, as amended; (iv) the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (excluding
claims for accrued, vested benefits under any employee benefit plan of Emcore
in
accordance with the terms of such plan and applicable law); (v) the New
Mexico Human Rights Act; (vi) the California Fair Employment and Housing Act;
(vii) the California Equal Pay Law; (viii) the California Sexual Orientation
Bias Law; (ix) the California Labor and Government Codes; (x) the California
Xxxxx Act; (xi) the New Jersey Law Against Discrimination, the New Jersey Equal
Pay Act, the New Jersey Family Leave Act; (xii) the Illinois Human Rights Act;
(xiii) the Virginia Human Rights Act; (xiv) the Pennsylvania Human Relations
Act; (xv) alleged discrimination or retaliation in employment (whether based
on
federal, state or local law, statutory or decisional); (xvi) the terms and
conditions of Employee’s employment with Emcore, the termination of such
employment, and/or any of the events relating directly or indirectly to or
surrounding that termination; and (xvii) any law (statutory or decisional)
providing for attorneys’ fees, costs, disbursements and/or the
like.
(c) As
a
further consideration and inducement for this Agreement, to the extent permitted
by law, Employee hereby waives and releases any and all rights under Section
1542 of the California Civil Code or any analogous state, local, or federal
law,
statute, rule, order or regulation that Employee has or may have with respect
to
the Releasees. California Civil Code Section 1542 reads 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.
Employee
hereby expressly agrees that this Agreement shall extend and apply to all
unknown, unsuspected and unanticipated injuries and damages, as well as any
that
are now disclosed, arising prior to Employee’s execution of this Agreement.
This
release does not extend to those rights, which as a matter of law cannot be
waived, including but not limited to unwaivable rights Employee may have under
the California Labor Code. Nothing in this Agreement shall limit Employee’s
right to file a charge or complain with any state or federal agency or to
participate or cooperate in such a manner. In the event that any claim or suit
is brought on behalf of Employee, Employee waives any and all rights to receive
monetary damages or injunctive relief in his favor.
6. (a) Employee
agrees that he has not and will not engage in any conduct that is injurious
to
Emcore’s or Releasee’s reputation or interest, including but not limited to, (i)
divulging, communicating, or in any way making use of any confidential or
proprietary information acquired in the performance of his duties at Emcore,
except as required by law, or (ii) publicly disparaging (or inducing or
encouraging others to publicly disparage) Emcore or Releasees.
(b) Employee
agrees to return to Emcore any and all originals of documents, materials,
records or other items in his possession or control belonging to Emcore or
containing proprietary information relating to Emcore, but may retain copies
thereof for archival and legal defense purposes. Employee agrees to remove
all
Emcore proprietary information from his laptop. Employee shall be permitted
to
retain his laptop computer and cell phone. Emcore shall continue to pay
Employee’s cell phone charges until April 27, 2007.
(c) Employee
acknowledges that the terms of the Confidentiality and Invention Assignment
Agreement (“Confidentiality Agreement”) between Employee and Emcore signed by
the Employee during his employment, remains in full force and effect, and
Employee agrees and acknowledges that he is bound by its terms. Without limiting
the generality of the foregoing, Emcore acknowledges that pursuant to N.J.
Advisory Committee on Professional Ethics Opinion 708 (July 10, 2006) Employee
is not bound by the non-compete and non-solicitation covenants contained in
his
Confidentiality Agreement. Employee understands and acknowledges that as counsel
to Emcore and, where appropriate, affiliated entities (collectively, the
“Company”), Employee has owed ethical and fiduciary obligations to the Company.
Employee further understands and acknowledges that some of these obligations
will continue after Employee ceases to be employed by the Company and that
these
continuing obligations include, at a minimum, the duty to protect information
relating to the representation of a client (sometimes referred to as the duty
to
protect former client confidences and secrets) and the duty to avoid former
client conflicts of interest. Employee hereby represents that to the best of
Employee’s ability, and in accordance with the Confidentiality Agreement,
Employee will fully comply with all such obligations.
7. (a) Employee
will reasonably cooperate with Emcore and/or its subsidiaries and affiliates
and
its/their counsel in connection with any investigation, administrative
proceeding or litigation relating to any matter in which Employee was involved
or of which Employee has knowledge, including without limitation the filing
of
all Emcore’s periodic reports required by the Securities Exchange Act of 1934
and completion of all matters related to the options investigation undertaken
by
the Special Committee of Emcore’s Board of Directors. Emcore will continue to
indemnify, defend and reimburse Employee in accordance with the terms of
Emcore’s By-Laws and insurance policies and will also compensate Employee for
his reasonable travel and lodging expenses for any time that Employee is
required to devote to such investigation, administrative proceeding or
litigation. Emcore shall compensate Employee at the rate of $350/hour for any
time that Employee is required to devote to such investigation, administrative
proceeding or litigation. Employee will be released from this obligation as
of
September 30, 2007. All payments required by this Paragraph 7(a) shall be paid
within 30 days of the date that Employee performs the relevant
service.
(b) Employee
agrees that, in the event he is subpoenaed by any person or entity (including,
but not limited to, any government agency) to give testimony (in a deposition,
court proceeding or otherwise) which in any way relates to Employee’s employment
with Releasees, he will give prompt notice of such request to Xxxxxx Xxx Xxxxxx,
Vice President, Human Resources, Emcore Corporation, or her successor, and
will
make no disclosure until Emcore has had a reasonable opportunity to contest
the
right of the requesting person or entity to such disclosure, unless Employee
is
legally compelled to make such disclosure and, in the opinion of Employee’s
counsel, Employee would be prejudiced by not making such disclosure prior to
Emcore exercising its rights to contest.
8. The
making of this Agreement is not intended, and shall not be construed, as an
admission that Releasees or Releasors have violated any federal, state or local
law (statutory or decisional), ordinance or regulation, breached any contract,
or committed any wrong whatsoever.
9. The
parties agree that this Agreement may not be used as evidence in a subsequent
proceeding except in a proceeding to enforce the terms of this
Agreement.
10. Employee
acknowledges that: (a) he has carefully read this Agreement in its entirety;
(b)
he has had an opportunity to consider fully the terms of this Agreement;
(c) he has been advised by Emcore in writing to consult with an attorney of
his choosing in connection with this Agreement; (d) he fully understands the
significance of all of the terms and conditions of this Agreement and he has
discussed it with his independent legal counsel, or has had a reasonable
opportunity to do so; (e) he has had answered to his satisfaction any questions
he has asked with regard to the meaning and significance of any of the
provisions of this Agreement; and (f) he is signing this Agreement voluntarily
and of his own free will and assents to all the terms and condition contained
herein.
11. This
Agreement is binding upon, and shall inure to the benefit of, the parties and
their respective heirs, executors, administrators, successors and
assigns.
12. If
any
provision of this Agreement shall be held by a court of competent jurisdiction
to be illegal, void, or unenforceable, such provision shall be of no force
and
effect. However, the illegality or unenforceability of such provision shall
have
no effect upon, and shall not impair the enforceability of, any other provision
of this Agreement; provided, however, that, upon any finding by a court of
competent jurisdiction that the release and covenants provided for by Paragraph
5 of this Agreement is illegal, void, or unenforceable, Employee agrees to
execute a release, waiver and/or covenant that is legal and enforceable. Emcore
may seek appropriate relief in a court of competent jurisdiction, including,
but
not limited to, permanent or temporary injunctive relief against Employee,
without the requirement of posting a bond or other security, for any material
breach by Employee of Paragraph 6 and/or 7 of this Agreement.
13. This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of New Jersey, without regard to the conflict of laws
provisions thereof.
14. This
Agreement (including the Exhibits attached hereto) constitute the complete
understanding between the parties and supersede any and all agreements,
understandings, and discussions, whether written or oral, between the parties.
No other promises or agreements shall be binding unless in writing and signed
after the Release Effective Date by the parties to be bound
thereby.
15. The
Parties acknowledge that Section 409A of the Internal Revenue Code of 1986,
as
amended (“Section 409A”) imposes an additional tax (the “409A Tax”) on deferred
compensation (as defined under Section 409A) that does not meet certain
requirements, and that as of the date this Agreement is executed, final
regulations implementing Section 409A have not been implemented. The Parties
agree that it is not intended that the 409A Tax apply to any payment or the
provision of any benefit hereunder, and accordingly, the provisions of this
Paragraph 15 shall apply to any payment or benefit to which the 409A Tax would
apply, regardless of whether such payment or benefit is explicitly made subject
to this Paragraph 15. If any of the Parties reasonably determine that any
payment or benefit permitted or required under this Agreement would result
in
409A Tax, and if such 409A Tax could be avoided by delaying the payment or
postponing the provision of the benefit, the Parties agree to work in good
faith
to delay or postpone such payment or provision of the benefit until such time
as
it may be made or provided without the 409A Tax being imposed. If delay or
postponement of a payment or the provision of a benefit would not avoid the
imposition of the 409A Tax, then the Parties shall promptly agree in good faith
on appropriate provisions to avoid such risk without materially changing the
economic value of this Agreement to any Party.
/s
Xxxxxx
Xxxxxx
Date:
April 17, 0000
Xxxxxx
X.
Xxxxxx
By: /s
Xxxxxx
X. Xxxxxxxx, Xx. Date:
April 17, 2007
Xxxxxx
X.
Xxxxxxxx, Xx.
Chief
Executive Officer
