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CHANGE-IN-CONTROL SEVERANCE AGREEMENT
WITH W. XXXX XXXXXXXX
This Change-in-Control Severance Agreement (the "Agreement")
is entered into this 2nd day of October, 1997 (the "Effective
Date") between W. Xxxx Xxxxxxxx ("Executive") and Sigma Circuits,
Inc., a Delaware corporation (the "Company"). This Agreement is
intended to provide Executive with the compensation and benefits
described herein upon the occurrence of specific events following
a change-in-control of the ownership of the Company.
Certain capitalized terms used in this Agreement are defined
in Article VII.
The Company and Executive hereby agree as follows:
Article I
Employment by the Company
I.1 Executive is currently employed as the Vice President
of Sales and Marketing of the Company.
I.2 This Agreement shall remain in full force and effect so
long as Executive is employed by Company; provided, however, that
the rights and obligations of the parties hereto contained in
Articles III through VIII shall survive any termination for the
longer of (i) twelve months following a Termination Event (as
hereinafter defined) (the "Term") or (ii) such longer period
provided for in this Agreement.
I.3 The Company and Executive each agree and acknowledge
that Executive is employed by the Company as an "at-will"
employee and that either Executive or the Company has the right
at any time to terminate Executive's employment with the Company,
with or without cause or advance notice, for any reason or for no
reason. The Company and Executive wish to set forth the
compensation and benefits which Executive shall be entitled to
receive in the event that Executive's employment with the Company
terminates under the circumstances described in Article II of
this Agreement.
I.4 The duties and obligations of the Company to Executive
under this Agreement shall be in consideration for Executive's
past services to the Company, Executive's continued employment
with the Company and Executive's execution of the general waiver
and release described in Section 4.3.
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Article II
Termination Events
II.1 Involuntary Termination Following Change-in-Control.
(a) In the event Executive's employment is
involuntarily terminated at any time by the Company without Cause
either at the time of or within thirteen (13) months following
the occurrence of a Change-in-Control, such termination of
employment will be a Termination Event and the Company shall pay
Executive the compensation and benefits described in Article III.
(b) In the event Executive's employment is either
involuntarily terminated by the Company with Cause at any time,
or is involuntarily terminated by the Company without Cause at
any time other than either at the time of or within thirteen (13)
months following the occurrence of a Change-in-Control, then such
termination of employment will not be a Termination Event,
Executive will not be entitled to receive any payments or
benefits under the provisions of this Agreement, except as
otherwise specifically set forth herein, and the Company will
cease paying compensation or providing benefits to Executive as
of Executive's termination date, except as otherwise provided by
a written agreement between Executive and the Company.
II.2 Voluntary Termination Following Change-in-Control.
(a) Executive may voluntarily terminate his employment
with the Company at any time. In the event Executive voluntarily
terminates his employment for Good Reason either at the time of
or within thirteen (13) months following the occurrence of a
Change-in-Control, then such termination of employment will be a
Termination Event and the Company shall pay Executive the
compensation and benefits described in Article III.
(b) In the event Executive voluntarily terminates his
employment for any reason other than Good Reason, or Executive
voluntarily terminates his employment for Good Reason at any time
other than either at the time of or within thirteen (13) months
following the occurrence of a Change-in-Control, or the
Executive's employment terminates on account of either death or
physical or mental disability, then such termination of
employment will not be a Termination Event, Executive will not be
entitled to receive any payments or benefits under the provisions
of this Agreement, except as otherwise specifically set forth
herein, and the Company will cease paying compensation or
providing benefits to Executive as of the Executive's termination
date. In the event that Executive's continued employment
relationship changes in any manner at a time when an event
constituting Good Reason has not occurred, such change in the
continued employment relationship will not be a Termination
Event, and Executive will not be entitled to receive any payments
or benefits under the provisions of this Agreement as a result of
such change.
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Article III
Compensation and Benefits Payable
III.1 Right to Benefits. If a Termination Event occurs,
Executive shall be entitled to receive the benefits described in
this Agreement subject to the restrictions and limitations set
forth in Article IV. If a Termination Event does not occur,
Executive shall not be entitled to receive any benefits described
in this Agreement, except as otherwise specifically set forth
herein.
III.2 Salary Continuation. Upon the occurrence of
a Termination Event, Executive shall receive salary continuation
benefits in a total amount equal to thirteen (13) months of
Executive's Base Salary, less any applicable withholding of
federal, state or local taxes. Such salary continuation shall
be paid in a single lump sum no later than thirty (30) days
following the date of the Termination Event.
III.3 Health Insurance Coverage. Following the
occurrence of a Termination Event, to the extent permitted by the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")
and by the Company's group health insurance policies, Executive
and his covered dependents will be eligible to continue their
health insurance benefits at their own expense, and later, to
convert to an individual policy if they wish. If Executive
elects COBRA continuation, the Company shall pay Executive and
his covered dependents' COBRA continuation premiums for thirteen
(13) months following the date of the Termination Event, provided
that the Company's obligation to make such payments shall cease
immediately if Executive becomes eligible for other health
insurance benefits at the expense of a new employer. Executive
agrees to notify a duly authorized officer of the Company, in
writing, immediately upon acceptance of any employment following
the Termination Event which provides health insurance benefits.
This Section 3.3 provides only for the Company's payment of
COBRA continuation premiums for the periods specified above.
This Section 3.3 is not intended to affect, nor does it affect,
the rights of Executive, or Executive's covered dependents, under
any applicable law with respect to health insurance continuation
coverage.
III.4 Stock Option Acceleration. Executive's stock
options which are outstanding as of the date of the Termination
Event (the "Stock Options") shall become fully vested and
exercisable upon the occurrence of the Termination Event. The
period of time during which the Stock Options shall remain
exercisable, and all other terms and conditions of the Stock
Options, shall be as specified in the relevant Stock Option
agreements.
3.5 Bonus. If a Termination Event occurs, Executive shall
receive a bonus for the fiscal year in which the Termination
Event occurs. The amount of the bonus shall be equal to the
amount of the bonus the Executive would have been paid had the
Executive continued his employment with the Company until the end
of such fiscal year multiplied by a fraction in which (i) the
numerator is the number of days from and including the first day
of the fiscal year until and including the date of the
Termination Event, and (ii) the denominator is three hundred
sixty-five (365). Such bonus shall be paid on the date Executive
would have received the bonus if the Termination Event had not
occurred during such fiscal year. Executive's rights to the
payment provided in this Section 3.5 shall not be terminated by
the application of Section 4.2 of this Agreement.
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3.6 Mitigation. Except as otherwise specifically provided
herein, Executive shall not be required to mitigate damages or
the amount of any payment provided under this Agreement by
seeking other employment or otherwise, nor shall the amount of
any payment provided for under this Agreement be reduced by any
compensation earned by Executive as a result of employment by
another employer or by retirement benefits after the date of the
Termination Event, or otherwise.
Article IV
Limitations And Conditions On Benefits; Amendment Of Agreement
IV.1 Reduction in Payments and Benefits; Withholding Taxes.
The benefits provided under this Agreement are in lieu of any
other benefit provided under any group severance plan of the
Company in effect at the time of a Termination Event. The
Company shall withhold appropriate federal, state or local income
and employment taxes from any payments hereunder.
IV.2 Obligations of the Executive.
(a) During the Term, Executive agrees not to
personally solicit any of the Company's employees to become
employed elsewhere or provide the names of such employees to any
other company which Executive has reason to believe will solicit
such employees.
(b) Following the occurrence of a Termination Event,
Executive agrees to continue to satisfy his obligations under the
terms of the Company's standard form of Proprietary Information
and Non-Disclosure Agreement previously executed by Executive (or
any comparable agreement subsequently executed by Executive in
substitution or supplement thereof). Executive's obligations
under this subsection 4.2(b) shall not be limited to the Term.
IV.3 Employee Agreement and Release Prior to Receipt of
Benefits. Upon the occurrence of a Termination Event, and prior
to the receipt of any benefits under this Agreement on account of
the occurrence of a Termination Event, Executive shall, as of the
date of a Termination Event, execute an employee agreement and
release in the form attached hereto as Exhibit A. Such employee
agreement and release shall specifically relate to all of
Executive's rights and claims in existence at the time of such
execution. It is understood that Executive has twenty-one (21)
days to consider whether to execute such employee agreement and
release and Executive may revoke such employee agreement and
release within seven (7) business days after execution of such
employee agreement and release. In the event Executive does not
execute such employee agreement and release within the twenty-one
(21) day period, or if Executive revokes such employee agreement
and release within the seven (7) business day period, no benefits
shall be payable under this Agreement and this Agreement shall be
null and void. Nothing in this Agreement shall limit the scope
or time of applicability of such employee agreement and release
once it is executed and not timely revoked.
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IV.4 Certain Reductions in Payments.
(a) In the event that any payment received or to be
received by Executive pursuant to this Agreement ("Payment")
would (i) constitute a "parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code") and (ii) but for this subsection (a), be subject to
the excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), then, subject to the provisions of subsection (b) hereof,
such Payment shall be reduced, if at all, to the largest amount
which Executive, in his discretion, determines would result in
maximizing Executive's net proceeds with respect to such Payments
(after taking into account the payment of any Excise Tax imposed
on such Payment). The determination by Executive of any required
reduction pursuant to this subsection (a) shall be conclusive and
binding upon the Company. The Company shall reduce a Payment in
accordance with this subsection (a) only upon written notice by
Executive indicating the amount of such reduction, if any. If
the Internal Revenue Service (the "IRS") determines that a
Payment is subject to the Excise Tax, then subsection (b) hereof
shall apply, and the enforcement of subsection (b) shall be the
exclusive remedy to the Company for a failure by Executive to
reduce the Payment so that no portion thereof is subject to the
Excise Tax.
(b) If, notwithstanding any reduction described in
subsection (a) hereof (or in the absence of any such reduction),
the IRS determines that Executive is liable for the Excise Tax as
a result of the receipt of one or more Payments, then Executive
shall be obligated to pay back to the Company, within 30 days
after final IRS determination, an amount of such Payments equal
to the "Repayment Amount." The Repayment Amount with respect to
such Payments shall be the smallest such amount, if any, as shall
be required to be paid to the Company so that Executive's net
proceeds with respect to such Payments (after taking into account
the payment of the Excise Tax imposed on such Payments) shall be
maximized. Notwithstanding the foregoing, the Repayment Amount
with respect to such Payments shall be zero if a Repayment Amount
of more than zero would not eliminate the Excise Tax imposed on
such Payments. If the Excise Tax is not eliminated pursuant to
this subsection (b), Executive shall pay the Excise Tax.
IV.5 Amendment or Termination of This Agreement. This
Agreement may be changed or terminated only upon the mutual
written consent of the Company and Executive. The written
consent of the Company to a change or termination of this
Agreement must be signed by the Company's Chief Executive
Officer, after such change or termination has been approved by
the Compensation Committee of the Company's Board of Directors.
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Article V
Other Rights And benefits Not Affected
V.1 Nonexclusivity. Nothing in the Agreement shall prevent
or limit Executive's continuing or future participation in any
benefit, bonus, incentive or other plans, programs, policies or
practices provided by the Company and for which Executive may
otherwise qualify, nor shall anything herein limit or otherwise
affect such rights as Executive may have under any stock option
or other agreements with the Company; provided, however, that in
accordance with Section 4.1, any benefits provided hereunder
shall be in lieu of any other severance payments to which
Executive may otherwise be entitled, including without
limitation, under any employment contract or severance plan.
Except as otherwise expressly provided herein, amounts which are
vested benefits or which Executive is otherwise entitled to
receive under any plan, policy, practice or program of the
Company at or subsequent to the date of a Termination Event shall
be payable in accordance with such plan, policy, practice or
program.
V.2 Employment Status. This Agreement does not constitute
a contract of employment or impose on Executive any obligation to
remain as an employee, or impose on the Company any obligation
(i) to retain Executive as an employee, (ii) to change the status
of Executive as an at-will employee, or (iii) to change the
Company's policies regarding termination of employment.
Article VI
Non-alienation Of Benefits
No benefit hereunder shall be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt to do so shall be void.
Article VII
Definitions
For purposes of the Agreement, the following terms shall
have the meanings set forth below:
VII.1 "Agreement" means this Change-in-Control Severance
Agreement.
VII.2 "Base Salary" means Executive's salary (excluding
bonus, any other incentive or other payments and stock option
exercises) paid by the Company in consideration for Executive's
service during the thirteen (13) months ended on the date of
occurrence of a Termination Event, which is includable in the
gross income of Executive for federal income tax purposes or
which would have been includable in gross income except for an
election either under Section 125 or 402(e)(3) of the Code or
under the terms of a nonqualified deferred compensation
arrangement sponsored by the Company.
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VII.3 "Cause" means misconduct, including but not
limited to: (i) conviction of any felony or any crime involving
moral turpitude or dishonesty, (ii) participation in a fraud or
act of dishonesty against the Company, (iii) conduct by Executive
which based upon a good faith and reasonable factual
investigation and determination by the Board of Directors of the
Company demonstrates gross unfitness to serve, or
(iv) intentional, material violation by Executive of any contract
between Executive and the Company or any statutory duty of
Executive to the Company that is not corrected within thirty (30)
days after written notice to Executive thereof. Physical or
mental disability shall not constitute "Cause."
VII.4 "Change-in-Control" means (i) a merger or
consolidation in which the Company is not the surviving
corporation, (ii) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's common
stock outstanding immediately preceding the merger are converted
by virtue of the merger into other property, whether in the form
of securities, cash or otherwise, (iii) a sale of all or
substantially all of the Company's assets, (iv) any other capital
reorganization in which the beneficial ownership of more than
fifty percent (50%) of the shares of the Company entitled to vote
changes, or (v) the acquisition by any person, entity or group
(excluding any employee benefit plan, or related trust, sponsored
or maintained by the Company or any subsidiary of the Company) of
the beneficial ownership, directly or indirectly, of securities
of the Company representing more than fifty percent (50%) of the
combined voting power in the election of directors.
VII.5 "Company" means Sigma Circuits, Inc., a Delaware
corporation, and any successor thereto.
VII.6 "Good Reason" means (i) reduction of Executive's
rate of compensation as in effect immediately prior to the
Effective Date of this Agreement or in effect immediately prior
to the occurrence of a Change-in-Control event, whichever is
greater, (ii) failure to provide a package of welfare benefit
plans which, taken as a whole, provides substantially similar
benefits to those in which the Executive is entitled to
participate immediately prior to the occurrence of the
Termination Event (except that employee contributions may be
raised to the extent of any cost increases imposed by third
parties) or any action by the Company which would adversely
affect Executive's participation or reduce Executive's benefits
under any of such plans, (iii) change in Executive's
responsibilities, authority, title or office resulting in
diminution of position, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith which
is remedied by the Company promptly after notice thereof is given
by Executive, (iv) request that Executive relocate to a worksite
that is more than 35 miles from his prior worksite, unless
Executive accepts such relocation opportunity, (v) material
reduction in Executive's duties, (vi) failure or refusal of a
successor to the Company to assume the Company's obligations
under this Agreement, as provided in Section 8.7, or
(vii) material breach by the Company or any successor to the
Company of any of the material provisions of this Agreement.
VII.7 "Termination Event" means an involuntary
termination of employment described in Section 2.1(a) or a
voluntary termination of employment described in Section 2.2(a).
No other event shall be a Termination Event for purposes of this
Agreement.
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Article VIII
General Provisions
VIII.1 Notices. Any notices provided hereunder must be
in writing and such notices or any other written communication
shall be deemed effective upon the earlier of personal delivery
(including personal delivery by telex or facsimile) or the third
day after mailing by first class mail, to the Company at its
primary office location and to Executive at his address as listed
in the Company's payroll records. Any payments made by the
Company to Executive under the terms of this Agreement shall be
delivered to Executive either in person or at his address as
listed in the Company's payroll records.
VIII.2 Severability. Whenever possible, each provision
of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provisions had never
been contained herein.
VIII.3 Waiver. If either party should waive any breach
of any provisions of this Agreement, he or it shall not thereby
be deemed to have waived any preceding or succeeding breach of
the same or any other provision of this Agreement.
VIII.4 Complete Agreement. This Agreement, including
Exhibits A and B, constitutes the entire agreement between
Executive and the Company and it is the complete, final, and
exclusive embodiment of their agreement with regard to this
subject matter. It is entered into without reliance on any
promise or representation other than those expressly contained
herein.
VIII.5 Counterparts. This Agreement may be executed in
separate counterparts, any one of which need not contain
signatures of more than one party, but all of which taken
together will constitute one and the same Agreement.
VIII.6 Headings. The headings of the Articles and
Sections hereof are inserted for convenience only and shall
neither be deemed to constitute a part hereof nor to affect the
meaning thereof.
VIII.7 Successors and Assigns. This Agreement is
intended to bind and inure to the benefit of and be enforceable
by Executive and the Company, and their respective successors,
assigns, heirs, executors and administrators, except that
Executive may not delegate any of his duties hereunder and he may
not assign any of his rights hereunder without the written
consent of the Company, which consent shall not be withheld
unreasonably.
VIII.8 Attorney Fees. If either party hereto brings any
action to enforce his or its rights hereunder, the prevailing
party in any such action shall be entitled to recover his or its
reasonable attorneys' fees and costs incurred in connection with
such action.
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VIII.9 Arbitration. In order to ensure rapid and
economical resolution of any dispute which may arise under this
Agreement, Executive and the Company agree that any and all
disputes or controversies, arising from or regarding the
interpretation, performance, enforcement or termination of this
Agreement shall be resolved by final and binding arbitration
under the procedures set forth in the Arbitration Procedure
attached hereto as Exhibit B and the then existing Judicial
Arbitration and Mediation Services Rules, Inc. ("JAMS") of
Practice and Procedure or the rules of practice and procedure of
any successor entity to JAMS (except insofar as they are
inconsistent with the procedures set forth in the enclosed
Arbitration Procedure). BY ENTERING INTO THIS AGREEMENT, THE
COMPANY AND EXECUTIVE ACKNOWLEDGE THAT THEY ARE WAIVING THEIR
RIGHT TO JURY TRIAL OF ANY DISPUTE COVERED BY THIS AGREEMENT.
VIII.10 Choice of Law. All questions concerning the
construction, validity and interpretation of this Agreement will
be governed by the law of the State of California.
VIII.11 Non-Publication. The parties mutually agree not
to disclose publicly the terms of this Agreement except to the
extent that disclosure is mandated by applicable law.
VIII.12 Construction of Plan. In the event of a conflict
between the text of the Agreement and any summary, description or
other information regarding the Agreement, the text of the
Agreement shall control.
In Witness Whereof, the parties have executed this Agreement
on the day and year written above.
Sigma Circuits, Inc., W. Xxxx Xxxxxxxx
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx /s/ W. Xxxx Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President,
Finance and Administration
and Chief Financial Officer
Exhibit A: Employee Agreement and Release
Exhibit B: Arbitration Procedure
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Exhibit A
Employee Agreement and Release
I understand and agree completely to the terms set forth in
the foregoing agreement.
I acknowledge that I have read and understand Section 1542 of
the California Civil Code which 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." I hereby expressly waive and
relinquish all rights and benefits under that section and any law
of any jurisdiction of similar effect with respect to my release of
any claims I may have against the Company.
Except as otherwise set forth in this Agreement, I hereby
release, acquit and forever discharge the Company, its parents and
subsidiaries, and their officers, directors, agents, servants,
employees, shareholders, successors, assigns and affiliates, of and
from any and all claims, liabilities, demands, causes of action,
costs, expenses, attorneys fees, damages, indemnities and
obligations of every kind and nature, in law, equity, or otherwise,
known and unknown, suspected and unsuspected, disclosed and
undisclosed (other than any claim for indemnification I may have as
a result of any third party action against me based on my
employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and
including the Effective Date of this Agreement, including but not
limited to: all such claims and demands directly or indirectly
arising out of or in any way connected with my employment with the
Company or the termination of that employment, including but not
limited to, claims of intentional and negligent infliction of
emotional distress, any and all tort claims for personal injury,
claims or demands related to salary, bonuses, commissions, stock,
stock options, or any other ownership interests in the Company,
vacation pay, fringe benefits, expense reimbursements, severance
pay, or any other form of compensation; claims pursuant to any
federal, state or local law or cause of action including, but not
limited to, the federal Civil Rights Act of 1964, as amended; the
federal Age Discrimination in Employment Act of 1967, as amended
("ADEA"); the federal Americans with Disabilities Act of 1990; the
California Fair Employment and Housing Act, as amended; tort law;
contract law; wrongful discharge; discrimination; fraud;
defamation; emotional distress; and breach of the implied covenant
of good faith and fair dealing; provided, however, that nothing in
this paragraph shall be construed in any way to release the Company
from its obligation to indemnify me pursuant to the Company's
Indemnification Agreement.
I acknowledge that I am knowingly and voluntarily waiving and
releasing any rights I may have under ADEA. I also acknowledge
that the consideration given for the waiver and release in the
preceding paragraph hereof is in addition to anything of value to
which I was already entitled. I further acknowledge that I have
been advised by this writing, as required by the ADEA, that: (A)
my waiver and release do not apply to any rights or claims that may
arise after the Effective Date of this Agreement; (B) I have the
right to consult with an attorney prior to executing this
Agreement; (C) I have twenty-one (21) days to consider this
Agreement (although I may choose to voluntarily execute this
Agreement earlier); (D) I have seven (7) days following the
execution of this Agreement by the parties to revoke the Agreement;
and (E) this Agreement shall not be effective until the date upon
which the revocation period has expired, which shall be the eighth
day after this Agreement is executed by me, provided that the
Company has also executed this Agreement by that date ("Effective
Date").
By: /s/ W. Xxxx Xxxxxxxx
W. Xxxx Xxxxxxxx
Date:
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Exhibit B
Arbitration Procedure
1. The parties agree that any dispute that arises in
connection with this Agreement or the termination of this Agreement
shall be resolved by binding arbitration in the manner described
below.
2. A party intending to seek resolution of any dispute under
the Agreement by arbitration shall provide a written demand for
arbitration to the other party, which demand shall contain a brief
statement of the issues to be resolved.
3. The arbitration shall be conducted in Santa Xxxxx County,
California, by a mutually acceptable retired judge from the panel
of Judicial Arbitration and Mediation Services, Inc. or any entity
performing the same type of services that succeeds to its business
("JAMS"). At the request of either party, arbitration proceedings
will be conducted in the utmost secrecy and, in such case, all
documents, testimony and records shall be received, heard and
maintained by the arbitrator in secrecy under seal, available for
inspection only by the parties to the arbitration, their respective
attorneys, and their respective expert consultants or witnesses who
shall agree, in advance and in writing, to receive all such
information confidentially and to maintain such information in
secrecy, and make no use of such information except for the
purposes of the arbitration, unless compelled by legal process.
4. The arbitrator is required to disclose any circumstances
that might preclude the arbitrator from rendering an objective and
impartial determination. In the event the parties cannot mutually
agree upon the selection of a JAMS arbitrator, the President of
JAMS shall designate the arbitrator.
5. The party demanding arbitration shall promptly request
that JAMS conduct a scheduling conference within fifteen (15) days
of the date of that party's written demand for arbitration or on
the first available date thereafter on the arbitrator's calendar.
The arbitration hearing shall be held within thirty (30) days after
the scheduling conference or on the first available date thereafter
on the arbitrator's calendar. Nothing in this paragraph shall
prevent a party from at any time seeking temporary equitable
relief, from JAMS or any court of competent jurisdiction, to
prevent irreparable harm pending the resolution of the arbitration.
6. Discovery shall be conducted as follows: (a) prior to the
arbitration any party may make a written demand for lists of the
witnesses to be called and the documents to be introduced at the
hearing; (b) the lists must be served within fifteen days of the
date of receipt of the demand, or one day prior to the arbitration,
whichever is earlier; and (c) each party may take no more than two
depositions (pursuant to the procedures set forth in the California
Code of Civil Procedure) with a maximum of five hours of
examination time per deposition, and no other form of pre-
arbitration discovery shall be permitted.
7. It is the intent of the parties that the Federal
Arbitration Act ("FAA") shall apply to the enforcement of this
provision unless it is held inapplicable by a court with
jurisdiction over the dispute, in which event the California
Arbitration Act ("CAA") shall apply.
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8. The arbitrator shall apply California law, including the
California Evidence Code, and shall be able to decree any and all
relief of an equitable nature, including but not limited to such
relief as a temporary restraining order, a preliminary injunction,
a permanent injunction, or replevin of Company property. The
arbitrator shall also be able to award actual, general or
consequential damages, but shall not award any other form of damage
(e.g., punitive damages).
9. Each party shall pay its pro rata share of the
arbitrator's fees and expenses, in addition to other expenses of
the arbitration approved by the arbitrator, pending the resolution
of the arbitration. The arbitrator shall have authority to award
the payment of such fees and expenses to the prevailing party, as
appropriate in the discretion of the arbitrator. Except as
provided in the Change-in-Control Severance Agreement, each party
shall pay its own attorneys' fees, witness fees and other expenses
incurred for its own benefit.
10. The arbitrator shall render a written award setting forth
the reasons for his or her decision. The decree or judgment of an
award rendered by the arbitrator may be entered and enforced in any
court having jurisdiction over the parties. The award of the
arbitrator shall be final and binding upon the parties without
appeal or review except as permitted by the FAA, or if the FAA is
not applicable, as permitted by the CAA.
