Exhibit 99.2
SEPARATION AGREEMENT
This Separation Agreement is made and entered into as of May 9, 2005,
between Xxxxxxx Xxxxxxxx ("Executive") and Simtek Corporation (the "Company"),
referred to collectively as the "Parties."
WHEREAS, Executive formally resigned from his employment with the Company,
and from his position as director and officer with the Company, effective May 9,
2005 (the "Separation Date").
WHEREAS, the Parties desire fully and completely to resolve all disputes
that may exist between them, including without limitation any claims arising out
of or relating to his employment with the Company or his separation from that
employment.
In furtherance of this objective, the Executive and Company agree as
follows:
1. Termination.
Executive and Company agree that Executive voluntarily resigned from
his employment with the Company (including Executive's position as officer and
director of the Company), and his position as Chairman of the Company's
subsidiary, Q-DOT, Inc., effective May 9, 2005. The Parties agree that that
certain Employment Agreement, effective as of June 1, 1998, by and between the
Company and Executive, is hereby terminated.
2. Payments and Benefits for Executive.
Following the effective date of his resignation, in exchange for the
mutual releases and other promises herein, the Executive will receive the
following, subject to all applicable payroll taxes and deductions:
a. Salary Continuation.
For a period of 180 days following the Separation Date, the
Company shall continue to pay Executive an amount equal to his base salary
(prorated from an annualized base salary of $225,000) on the same schedule and
in the same manner as Executive's salary has heretofore been paid (the "Salary
Continuation Period");
b. Consulting Retainer.
In exchange for Executive's agreement to provide the consulting
services described in paragraph 4 below, the Company agrees to pay Executive the
amount of $1,875.00 each month for twelve months following the expiration of the
Salary Continuation Period. This additional twelve-month period shall be
referred to herein as the "Consulting Retainer Period."
c. Medical Benefits.
During the Salary Continuation Period and the Consulting Retainer
Period, the Company agrees that Executive (and any dependents of the Executive
to the extent currently covered and eligible for coverage under the Company's
plans) shall continue to receive health and medical benefits, at no cost to
Executive, under the Company's health and medical benefit plan as it may be
modified from time to time. If, under the Company's policies of insurance, such
continuation is not possible, Executive will receive a monthly payment equal to
the amount the Company currently pays for any such benefits.
d. Contingent Additional Compensation.
The Company shall pay Executive additional compensation based
upon the occurrence of future contingent events as follows:
(i) The Company shall pay Executive 50,000 shares of common stock
within thirty days after final execution of the Share Purchase Agreement with
Cypress Semiconductor Corporation ("Cypress") and the receipt by the Company of
the funds from Cypress pursuant to that agreement. This promise to pay as herein
described is also made as consideration for Executive's signing the additional
release attached hereto as Attachment A.
(ii) The Company shall pay Executive 50,000 shares of common
stock upon receipt by the Company of the purchase price from the purchaser with
respect to the sale of Q-DOT, Inc., but only if the closing of the sale occurs
within 120 days of the Separation Date and the purchaser had been made known to
the Company as a potential purchaser on or before the Separation Date.
3. Stock Options and Stock Grants.
a. With respect to that certain Stock Option Agreement, dated March 3,
2003, by and between the Company and Executive, that certain Stock Option
Agreement, dated January 2, 2001, by and between the Company and Executive, that
certain Stock Option Agreement, dated January 14, 2000, by and between the
Company and Executive, that certain Stock Option Agreement, dated April 27,
1999, by and between the Company and Executive and that certain Stock Option
Agreement, dated June 5, 1998, by and between the Company and Executive
(collectively, the "Stock Option Agreements"), Executive's continuous service
for purposes of Section 2 of each of the Stock Option Agreements shall be deemed
to continue through the Salary Continuation Period and Consulting Retainer
Period, the Option Period (as defined in each of the Stock Option Agreements)
shall be deemed to expire upon the expiration or termination of the Salary
Continuation Period and the Consulting Retainer Period, and the termination of
Executive's Option (as defined in each of the Stock Option Agreements) for
purposes of Section 7(b) of the Stock Option Agreements shall be deemed to occur
upon the expiration of the Salary Continuation Period and the Consulting
Retainer Period.
b. Promptly following the Separation Date, the Company shall grant
Executive 100,000 shares of common stock. Such 100,000 shares, together with the
shares granted under Section (d)(i) and (d)(ii) (collectively, the "Registrable
Securities"), will be unregistered initially and shall have piggy-back
registration rights in accordance with Attachment B.
4. Consulting Services.
During the Salary Continuation Period and the Consulting Period,
Executive agrees to make himself available, for reasonable periods of time
convenient for Executive and upon reasonable notice from the Company, to consult
with the Company regarding any issues that may arise. Any reasonable
out-of-pocket expenses incurred and accounted for by Executive as a result of
consulting services requested by the Company shall be reimbursed by the Company.
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5. Releases.
a. Executive's Release of the Company. In consideration of the
foregoing, Executive hereby releases and discharges the Company and its
officers, directors, shareholders, executives, agents, subsidiaries and
affiliates from any and all claims, demands or liabilities whatsoever, whether
known or unknown or suspected to exist by him, which he has or may have against
the Company relating to his employment with the Company and the termination of
that employment, including any claim Executive may have under the Age
Discrimination in Employment Act or other federal or state employment statutes.
Executive also agrees not to xxx or bring any action before any regulatory body
or agency against any of the released parties with respect to any such claims,
demands or liabilities. Executive waives his right to file any charge, complaint
or other action, nor will he accept any relief or recovery from any charge,
complaint or other action in connection with his employment with the Company or
the termination of that employment with the Company before any federal, state or
local administrative agency or court against the Company, except as such waiver
is prohibited by statutory language. Excepted from the waiver shall be any
claims by Executive for unemployment compensation, workers' compensation, COBRA,
retirement benefits, claims to enforce this Agreement, claims arising after the
date of this Agreement, and claims by Executive to indemnify him against
expenses (including attorneys' fees, judgments, fines, settlements and other
amounts) accruing by reason of the fact that Executive is or was an executive,
officer or agent of the Company to the extent that, as a result of his
employment with the Company, Executive would have been entitled to such
indemnification while he was employed by the Company. This exception shall in no
way be deemed to impair the ability of the Company to contest any such claims;
moreover, upon breach of a material term of this Agreement by Executive, he
shall have no further rights to indemnification from the Company or any policies
of insurance secured by the Company.
b. The Company's Release of Executive. In consideration of the
foregoing, the Company hereby releases and discharges Executive from any and all
claims, demands or liabilities whatsoever, whether civil or criminal, whether
known or unknown or suspected to exist which it has or may have against
Executive relating to his employment with the Company and the termination of
that employment, except claims to enforce this Agreement.
6. Proprietary Information.
a. Trade Secrets.
(i) Executive agrees that all ideas, concepts, and information
imparted to or learned by him in connection with his employment with the
Company, specifically including but not limited to customer lists, product
plans, technology matters, intellectual property, and potential partnerships,
shall be deemed trade secrets ("Trade Secrets") and shall not be used by him and
shall never be disclosed by him without the Company's written authorization
(regardless of whether such ideas, concepts or information is recognized by law
to be trade secrets). These restrictions shall only pertain to Trade Secrets
that are not known or generally known to the public and that give an advantage
to the Company over competitors who do not know of or use such Trade Secrets. In
the event that Executive has some question as to whether or not certain Trade
Secrets are covered by this paragraph, he agrees to treat such Trade Secrets as
falling under this paragraph until he is informed otherwise in writing by the
Company. Further, should Executive, at a later date, feel that any Trade Secrets
have become public knowledge through no fault of his and wish to be released
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from his obligations of confidentiality hereunder, he understands that the
Company will not unreasonably withhold its written consent provided he produces
sufficient evidence of such public knowledge.
(ii) Executive understands and agrees that Executive will
identify to the Company and turn over to the Company all files, memoranda,
records (and copies thereof), credit cards and other physical or personal
property which are the property of the Company. Executive agrees that he shall
not knowingly, after making every effort to so determine, retain any documents
or items embodying any Trade Secrets or business information involving or in any
way relating to the operations, business, prospective business, customers,
potential customers, or research of the Company.
b. Copyrights and Research Material. Executive agrees that all creative
work including all expressions in any media, whether published or unpublished,
conceived pursuant to his employment duties while employed by the Company or
prepared by Executive within the scope of his employment, whether for the
Company, its clients, or prospective clients, shall be deemed to be made as work
for hire and shall be the property of the Company as employer, free from any and
all claims by Executive of any nature whatsoever relating to such work products,
including the right to copyright the same in the name of the Company as author.
All research material and data of any kind generated by Executive during the
term of his employment within the scope of his employment shall be the sole
property of the Company and Executive covenants to turn over all of said
research material and data to the Company, not to keep any copies whatsoever,
and not to make any use of the contents thereof, to the extent the contents
constitute a trade secret under Colorado law.
7. Covenant Not to Compete. Executive agrees that during the Salary
Continuation Period and the Consulting Retainer Period, he will not either
directly or indirectly, or for his own account or the account of others engage
in competition with the Company. This promise by Executive applies to any
entity, doing business in the United States and in any other country where the
Company does business or proposes to do business. Executive further covenants
that, during the Salary Continuation Period and the Consulting Retainer Period,
he will not hire or cause to be hired any individuals who are employees of the
Company without the prior written permission of the Company.
8. Non-Disparagement and Trade Secrets. Executive agrees not to disparage
the Company or its agents and to hold in confidence and neither reveal or use
the Company's Trade Secrets.
9. Remedies. The Parties agree that the damages resulting to the Company
from a breach of paragraphs 6, 7 and 8 above are difficult or impossible to
calculate, and that irreparable injury for which there is no adequate remedy at
law would result to the Company from any such breach. The Parties agree that the
rights and obligations of the Parties under this Agreement may be enforced by a
decree of specific performance. Specifically, the Company shall be entitled to
injunctive relief in the event of any breach or threatened breach of this
Agreement without proving actual damages, in additional to any other remedy in
law or equity arising therefrom. Any breach of the provisions of paragraphs 6, 7
and 8 above shall also entitle the Company to terminate the Salary Continuation
Period and Consulting Retainer Period; in such event, Executive shall not be
entitled to receive any further compensation or benefits (including any
indemnification rights) under this Agreement or otherwise.
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10. Governing Law and Arbitration. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of Colorado, without giving
effect to conflict of laws, any controversy or claim under or relating to this
contract, or its breach, shall be settled by arbitration administered by the
American Arbitration Association under its Commercial Arbitration Rules, and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction. However, because a beach of the covenants imposed on
Executive under paragraphs 7 and 8 regarding competition are not capable of
being easily measured by monetary damages, such promises may be enforced by
injunctive relief in any Court having jurisdiction without the need to seek such
injunctive relief through arbitration. In any action, whether in court or in
arbitration, the prevailing party shall be awarded its attorney fees, and other
costs and expenses of prosecuting such action.
11. Entire Agreement and Modification. This Agreement contains all of the
terms and conditions agreed to by the parties and no other agreements, oral or
otherwise, regarding the subject matter of this contract, except as referenced
in paragraph 3 herein, shall be deemed to exist or bind either of the parties
hereto. This Agreement may be modified only by a written instrument executed by
the Parties.
12. Waiver. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as a waiver of any other breach of that provision or
of any other provision of the Agreement. Any waiver must be in writing executed
by a properly authorized party.
13. Separability. If any provision of this Agreement is invalid, illegal,
or unenforceable, the balance of this Agreement shall remain in effect.
14. Notice. Any notice under this Agreement shall be sufficient if
delivered by hand or if sent by certified or registered mail, postage prepaid,
return receipt requested, to the address of each respective party as is set
forth under the signature lines or as such other address a party may designate
from time to time in writing to the other party.
15. Confidentiality. Each party agrees to keep the terms of this Agreement
in confidence and to disclose such only as necessary to such parties' agents or
as may be required by law. Upon request by Executive, the Company shall verify
to third parties the dates of Executive's employment, the position he held, that
Executive voluntarily resigned, and that Executive served the Company well,
honestly, and faithfully.
16. Section 409A. To the extent Executive would be subject to the
additional 20% tax imposed on certain deferred compensation arrangements
pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code"), as a result of any provision of this Agreement, such provision shall be
deemed amended to the minimum extent necessary to avoid application of such tax
and the Parties shall execute any amendment reasonably necessary to implement
this Section 16. Whether or not any amendment is executed by the Parties,
Executive agrees that any modification required by this Section 16 shall not be
considered to be a breach of this Agreement.
By signing below, each party acknowledges that he has read and understands
the terms of this Agreement, and that he signs this Agreement voluntarily with
full knowledge of its significance and consequences.
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/s/Xxxxxxx Xxxxxxxx SIMTEK CORPORATION
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Xxxxxxx Xxxxxxxx
By: /s/Xxxxxx Xxxxxxxxx
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Its: Chairman
Date: May 9, 2005 Date: May 9, 2005
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Address for Notice: Address for Notice:
000 Xxxxx Xxxxx 0000 Xxxxxxxxxx Xx. Xxxxx 000
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Xxxxxxxx Xxxx, XX 00000 Xxxxxxxx Xxxxxxx, XX 00000
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ATTACHMENT A
RELEASE
Xxxxxxx Xxxxxxxx ("Executive"), in consideration of the mutual promises and
obligations contained in the Agreement dated May 9, 2005 (the "Separation
Agreement") between Executive and Simtek Corporation (the "Company"), and
specifically the consideration described in Section 2(d)(i) of the Separation
Agreement, hereby agrees as follows:
1. Executive hereby releases and discharges the Company and its officers,
directors, shareholders, executives, agents, subsidiaries and affiliates from
any claims, demands or liabilities, whether known or unknown or suspected to
exist by Executive, which he has or may have against the Company under the Age
Discrimination in Employment Act, as amended by the Older Worker's Benefit
Protection Act.
2. To comply with the Older Worker's Benefit Protection Act of 1990, this
Release has advised Executive of the legal requirements of this Act and fully
incorporates the legal requirements by reference into this Release as follows:
a. This Release is written in xxxxxx'x terms, and Executive understands
and comprehends its terms;
b. Executive has been advised of his right to consult an attorney to
review the Release;
c. Executive does not waive any rights or claims that may arise after
the date the Release is executed;
d. Executive is receiving consideration beyond anything of value to
which he already is entitled;
e. Executive has been given twenty-one (21) days to consider this
Release; and
f. Executive has seven (7) days following his execution of this Release
to revoke his signature, and this Release will not become effective or
enforceable until after the revocation period has expired.
EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS READ THIS RELEASE, THAT EXECUTIVE
HAS BEEN ADVISED THAT EXECUTIVE SHOULD CONSULT WITH AN ATTORNEY BEFORE EXECUTIVE
EXECUTES THIS RELEASE, AND THAT EXECUTIVE UNDERSTANDS ALL OF THE RELEASE'S TERMS
AND EXECUTES IT VOLUNTARILY WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND THE
CONSEQUENCES THEREOF.
/s/ Xxxxxxx Xxxxxxxx Date: May 9, 2005
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Xxxxxxx Xxxxxxxx
ATTACHMENT B
REGISTRATION AGREEMENT
If, prior to such time as the Registrable Securities could be sold without
restriction under Rule 144 promulgated by the Securities and Exchange Commission
(the "Commission"), the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of 1933, as amended (the
"Securities Act") of any of its equity securities (other than on Form S-4 or
Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, or as contemplated
by that certain Registration Rights Agreement, dated October 12, 2004, by and
among the Company and the investors who are signatories thereto), then the
Company shall give to Executive written notice of such determination and, if
Executive shall so request in writing within fifteen days after receipt of such
notice, the Company shall include in such registration statement all or any part
of such Registrable Securities that Executive requests to be registered, subject
to customary underwriter cutbacks applicable to all holders of registration
rights.
