EXHIBIT 10.1
CIRRUS LOGIC, INC.
EMPLOYMENT AGREEMENT
This Agreement in entered into effective as of June 25,
1998 (the "Effective Date") by and between Cirrus Logic,
Inc., a California corporation (the "Company") and Xxxxx
Xxxxxx (the "Employee").
WHEREAS, the Company desires to employ the Employee on a
full-time basis in the capacity of President and Chief
Operating Officer of the Company, and the Employee desires to
accept such employment; and
WHEREAS, the parties desire and agree to enter into an
employment relationship by means of this Agreement;
NOW THEREFORE in consideration of the promises and
mutual covenants herein contained, and other good and
valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, it is mutually covenanted and agreed
by and among the parties as follows:
1. Position and Duties. The Employee shall be employed
and President as Chief Operating Officer of the Company,
reporting to the Company's Chief Executive Officer and
assuming and discharging such responsibilities as are
commensurate with the Employee's position. In performing his
basic duties, the Employee shall work at the Company's
principal business offices located in Fremont, California and
in Austin, Texas. The Employee acknowledges that frequent
travel will be necessary in carrying out his duties
hereunder. The Employee shall perform his duties faithfully
and to the best of his ability and shall devote his full
business time and effort to the performance of his duties
hereunder.
2. Compensation.
(a) Base Salary. For all services to be rendered
by the Employee to the Company while this Agreement is in
effect, the Employee shall receive a minimum annual base
salary equal to $325,000 (the "Base Salary"), payable bi-
weekly in accordance with the Company's normal payroll
practices. The Base Salary shall be reevaluated yearly and
may be increased by the Board, in light of the Employee's
performance of his duties.
(b) Joining Bonuses. Within fifteen (15)
business days after the Effective Date, the Company will pay
the Employee a cash lump sum bonus equal to $150,000 (the
"Hiring Bonus"). The bonus amount payable hereunder shall
be reduced by applicable payroll and tax withholding. If,
within three (3) months of the Effective Date, the Employee
resigns or is terminated by the Company for "Cause" (as
defined in Section 5 below), the Employee shall be obligated
to repay to the Company the Hiring Bonus within ninety (90)
days of the date of such resignation or termination.
(c) Executive Variable Compensation Program.
The Employee shall be eligible to participate in the
Company's Executive Variable Compensation Program ("VCP").
The Employee's target payout under the VCP shall be one
hundred percent (100%) of his Base Salary. For fiscal year
1999, the Employee's payout under the VCP shall not be less
than $150,000.
(d) Restricted Stock. On the Effective Date, the
Company shall grant 250,000 shares of the Company's common
stock ("Restricted Stock") without cost to the Employee
under the Company's 1996 Stock Plan (the "1996 Plan").
Restricted stock shall vest on the one-year anniversary of
the Effective Date, subject to employee's continued
employment with the Company, subject to earlier vesting as
provided herein. In addition, upon the Employee's request
and subject to applicable legal requirements and limitations,
the Company will make the Employee a loan of up to $750,000
(the "Loan"). The Loan shall be full recourse and secured
by Restricted Stock of equivalent value. The Loan shall bear
interest at the minimum rate of interest required to avoid
imputed income to the Employee under all applicable
provisions of the Internal Revenue Code. The Loan will have
a five (5)-year term but will become due and payable 180 days
following the Employees termination of employment with the
Company for any reason.
(e) Option. As soon as practicable following the
Effective Date, the Company shall grant an option to the
Employee covering three hundred and fifty thousand (350,000)
shares of the Company's Common Stock (the "Option")
pursuant to the Company's 1996 Stock Plan and standard form
of stock option agreement. Subject to the terms of the 1996
Plan, twenty-five (25%) of the Option shall vest and become
exercisable on the first anniversary of the date of Option
grant, and an additional one forty-eighth (1/48th) of the
Option shall vest and become exercisable at the end of each
month thereafter. The exercise price of the Option shall be
the closing price of the Company's Common Stock on the date
of grant of the Option.
(f) Relocation: Moving Expenses. The Employee
shall be eligible for benefits under the Company's relocation
policy in the event the Employee relocates to California or
Texas. Relocation benefits will be extended for the
Employee's primary move and for the relocation of the
Employee's minor children. In addition, upon the Employee's
request, the Company will make the Employee a relocation loan
of up to $750,000 (the "Relocation Loan") to secure a new
principal residence in California or in Texas, as applicable.
To the extent possible, the Relocation Loan shall be
structured so as to qualify as a "employee-relocation loan"
within the meaning of the Internal Revenue Code section 7872
and the regulations thereunder, with interest at the minimum
rate required to avoid imputed income to the Employee under
all applicable provisions of the Internal Revenue Code;
provided that, upon termination of the Employee's employment
with the Company for any reason, the unpaid principal amount
of the Relocation Loan shall bear interest at the then
"applicable federal rate" (as defined in Section 1274(d) of
the Internal Revenue Code (or any successor provision)). The
Relocation Loan will have a fifteen (15)-year term, but will
become due and payable 180 days following the Employee's
termination of employment with the Company for any reason.
The Relocation Loan will be secured by a mortgage on the
Employee's new principal residence. The Employee may only
apply the proceeds from the Relocation Loan towards the
purchase of a new principal residence.
(g) Termination by Reason of Death or Disability.
In the event of Employee's death during the term of this
Agreement, the Company shall pay to the Employee's estate all
salary, bonuses and unpaid vacation accrued as of the date of
Employee's death and any other benefits payable under the
Company's then existing benefit plans and policies in
accordance with such plans and policies in effect on the date
of death and in accordance with applicable law. In the event
that, during the term of this Agreement, Employee is unable
to perform his job due to disability (as determined under the
Company's long-term disability insurance program) for six
months in any 12-month period, the Company may, at its
option, terminate Employee's employment with the Company and
such termination shall entitle the Employee to all salary,
bonuses and unpaid vacation accrued as of the date of such
termination and any other benefits payable under the
Company's then existing benefit plans and policies in
accordance with such plans and policies in effect on the date
of such termination and in accordance with applicable law.
3. Other Benefits. The Employee and his legal
dependants shall be entitled to participate in the employee
benefit plans and programs of the Company, if any, to the
extent that his position, tenure, salary, age, health and
other qualifications make the Employee and his legal
dependants eligible to participate in such plans or programs,
subject to the rules and regulations applicable thereto. The
Company reserves the right to cancel or change the benefit
plans and programs it offers to its employees at any time.
Employee will be eligible for vacation and sick leave in
accordance with the policies in effect during the term of
this Agreement and will receive such other benefits as the
Company generally provides to its other employees of
comparable position and experience.
4. Expenses. The Company shall reimburse the Employee
for reasonable travel, entertainment or other expenses
incurred by the Employee in the furtherance of or in
connection with the performance of the Employee's duties
hereunder, in accordance with the Company's expenses
reimbursement policy as in effect from time to time.
5. Termination. In the event (i) the Company
terminates the Employee's employment on or before the third
anniversary of the Effective Date other than for Cause, or
(ii) any successor to the Company fails or refuses to assume
this Agreement in accordance with Section 7 below, the
Employee shall be entitled to receive a single, lump-sum
severance payment within fifteen (15) days of termination
equal to the Employee's then current annual base salary. In
addition, the Company shall pay to the Employee a lump-sum
payment in an amount equivalent to the reasonably estimated
costs the Employee may incur to extend for a period of twelve
(12) months under the COBRA continuation laws the Employee's
group health and dental plans coverage in effect on the date
of such termination. In addition, in such event the Employee
will vest fully in his restricted stock and as to an
additional twelve (12) months with respect to the Option,
which will remain exercisable for a one-year period following
such termination. For purposes of this Agreement, the term
"Cause" shall mean (i) gross negligence or willful
misconduct in the performance of duties to the Company after
one written warning detailing the concerns and offering the
Employee opportunities to cure; (ii) material and willful
violation of federal or state law; (iii) commission of any
act of fraud with respect to the Company; (iv) conviction of
a felony or a crime causing material harm to the standing and
reputation of the Company; or (v) intentional and improper
disclosure of the Company's confidential proprietary
information. For purposes of this Agreement, the
determination of Cause shall be determined by the Board in
its sole and absolute discretion.
6. Right to Advice of Counsel. The Employee
acknowledges that he has consulted with counsel and is fully
aware of his rights and obligations under this Agreement and
of the tax consequences thereof.
7. Successors.
(a) Company's Successors. Any successor to the
Company (whether direct or indirect and whether by purchase,
lease, merger, consolidation, liquidation or otherwise) to
all or substantially all of the Company's business and/or
assets shall 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", shall include any successor
to the Company's business and/or assets which executes and
delivers the assumption agreement described in this
subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.
(b) Employee's Successors. Without the written
consent of the Company, the Employee shall not assign or
transfer this Agreement or any right or obligation under this
Agreement to any other person or entity. Notwithstanding the
foregoing, the terms of this Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal
representatives, executors, administrators, successor, heirs,
distributees, devisees and legatees.
8. Notice Clause.
(a) Manner. Any notice hereby required or
permitted to be given shall be sufficiently given if in
writing and upon mailing by registered or certified mail,
postage prepaid, to either party at the address of such party
or such other address as shall have been designated by
written notice by such party to the other party.
(b) Effectiveness. Any notice or other
communication required or permitted to be given under this
Agreement will be deemed given on the day when delivered in
person, or the third business day after the day on which such
notice was mailed in accordance with Section 8(a).
9. Governing Law. This Agreement shall be governed by
and construed in accordance with the internal substantive
laws, but not the choice of law rules, of the state of
California.
10. Severability. The invalidity or unenforceability
of any provision of this Agreement, or any terms hereof,
shall not affect the validity or enforceability of any other
provision or term of this agreement.
11. Integration. Except as otherwise expressly
provided otherwise herein, this Agreement represents the
entire agreement and understanding between the parties as to
the subject matter herein and supersedes all prior or
contemporaneous agreements, whether written or oral. No
waiver, alteration, or modification of any of the provisions
of this Agreement shall be binding unless in writing and
signed by duly authorized representatives of the parties
hereto.
12. Taxes. All payments made pursuant to this
Agreement shall be subject to withholding of applicable
income and employment taxes.
13. Indemnification. In the event Employee is made,
or threatened to be made, a party to any legal action or
proceeding, whether civil or criminal, by reason of the fact
that Employee is or was a director or officer of the Company
or serves or served any other corporation fifty percent (50%)
or more owned or controlled by the Company in any capacity at
the Company's request, Employee shall be indemnified by the
Company, and the Company shall pay Employee's related
expenses when and as incurred, all to the fullest extent
permitted by law.
14. Arbitration. Except for proceedings seeking
injunctive relief, including, without limitation, allegations
of misappropriation of trade secrets, copyright or patent
infringements, or breach of any anti-competition provisions
of this Agreement, any controversy or claim arising out of or
in relation to this Agreement, or the breach thereof, shall
be settled by arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association
("AAA"), and judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction
thereof. Arbitration of this Agreement shall include all
claims, regardless of whether the dispute arises during the
term of the Agreement, at the time of termination or
thereafter. Either party may initiate the arbitration
proceedings, for which the provision is herein made, by
notifying the opposing party, in writing, of its demand to
arbitrate. In any such arbitration there shall be appointed
one arbitrator who shall be selected in accordance with the
AAA Commercial Arbitration Rules. The place of arbitration
shall be San Jose, California. The parties agree that the
award of the arbitrator shall be the sole and exclusive
remedy between them regarding any claims, counterclaims,
issues or accountings presented or plead to the arbitrator;
that the arbitrator shall be the final judge of both law and
fact in arbitration of disputes arising out of or relating to
this Agreement, including the interpretation of the terms of
this Agreement. The parties further agree it shall be the
sole and exclusive duty of the arbitrator to determine the
arbitrability of issues in dispute and that neither party
shall have recourse to the court of such determination.
IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by a duly authorized
officer, as of the day and year first above written.
CIRRUS LOGIC, INC.
By: /s/ XXXXXXX X. XXXXXXXX
SENIOR VICE PRESIDENT HUMAN
RESOURCES
/s/XXXXX XXXXXX
