EMPLOYMENT AND COMPENSATION AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of September__, 1995, is made
by and between Power-One LLC, a Delaware limited liability company
("Company"), and _____________ ("Executive") and supersedes all previous
agreements by and between Executive and Power-One, Inc., a California
corporation ("Power-One").
WHEREAS, Company desires to employ Executive and Executive desires
to be employed by Company.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, Company and Executive hereby agree as follows:
1. DUTIES, RESPONSIBILITIES
A. EMPLOYMENT. Company hereby engages Executive as ________ of
Company and Executive hereby accepts such engagement by Company upon the
terms and conditions specified below.
B. DUTIES. Executive shall perform the duties and obligations of
________ of Company which shall consist generally of
[responsibility for the overall management of the business and internal
operations of Company, including responsibility for the day-to-day operations
of its business.] Except to the extent otherwise hereinafter provided,
Executive's duties and responsibilities shall be generally consistent with the
services rendered by Executive as _________ of Power-One over the year prior
to the date of this Agreement. Executive shall perform such additional or other
duties, consistent with such position, as may be assigned to him from time to
time by __________ or Company's Managers.
During the term of this Agreement, Executive shall devote all of
Executive's time, skill and efforts to the performance of Executive's duties
for the Company. Company expects that Executive shall at all times use
Executive's best efforts to conduct him[HER]self in a reputable, ethical
manner that will not bring discredit to the Company. Executive shall at all
times perform such services in compliance in all material respects with, and
to the extent of Executive's authority shall use reasonable efforts to ensure
that all work done under Executive's direct supervision is in compliance
with, any and all laws, rules and regulations applicable to Company of which
Executive is aware.
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2. TERM
The initial term of employment under this Agreement (the "Initial
Term") shall commence on the date of this Agreement and terminate on December
31, 1997, unless earlier terminated as provided in Section 4. Company may
offer to extend Initial Term for two (2) additional one (1) year periods
(each an "Extension Term") by notifying Executive in writing at least ninety
(90) days prior to the expiration of the Initial Term or the first Extension
Term of its desire to so extend. Executive shall notify Company within
thirty (30) days whether Executive wishes to accept such offer. If this
Agreement is extended for either Extension Term, it shall thereafter be
terminable, other than upon expiration, only as provided in Section 4.
References herein to the "Term" shall refer to both the Initial Term and the
Extension Terms, if this Agreement is so extended. The period from the date
of this Agreement through December 31, 1996 and each twelve (12) month period
from January 1, to December 31 thereafter during the Term is sometimes
referred to generally as an "Employment Year".
3. COMPENSATION AND RELATED MATTERS
A. BASE SALARY. Except as may be otherwise established by
Company and Executive in writing, in consideration of the services to be
rendered hereunder, Company shall pay Executive a base salary (the "Base
Salary") in the amount of $_______ per year, payable according to Company's
regular payroll practices, but in no event less than monthly. Company's
Managers shall determine the Base Salary for each subsequent calendar year,
including 1996; provided, however, that Company's Managers shall not decrease
Executive's Base Salary for any subsequent calendar year.
B. BONUS. In addition to the Base Salary, a bonus (the "Bonus")
shall be paid to Executive. For the period ending December 31, 1995, the
Bonus shall be paid in accordance with Power-One's current Bonus Plan. All
future Bonus amounts shall be determined by Company's Managers, which
determination shall be generally consistent with Bonuses payable to Executive
under Power-One's Bonus Plan.
C. BENEFITS. Executive shall receive benefits (e.g. car
allowance, health, life and disability insurance, pension, home office,
profit sharing programs, vacation periods, sick leave and other fringe
benefits) on the same overall basis (i.e., without singling out any
particular item of benefits) made available by Company to its employees or
other executives.
D. DEFERRED COMPENSATION. In addition to other compensation that
Executive may be entitled to receive hereunder,
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Executive shall also be entitled to receive deferred compensation amounts
(the "Deferred Compensation") as follows:
(i) Company shall credit the amount of $_______ to a book
reserve (the "Deferred Compensation Account") established for this purpose as
of the effective date of this Agreement.
(ii) The amount credited to the Deferred Compensation Account
from time to time, shall hereafter be credited with an amount in the nature
of interest thereon ("Interest") at a rate equal to ten percent (10%) per
annum, compounded annually, until such account has been fully distributed to
Executive or to the beneficiary or beneficiaries of Executive.
(iii) Executive shall forfeit any rights Executive may have
to the payment of Deferred Compensation under this Agreement in the event
that Executive is terminated For Cause (as defined in Section 4(C) below) at
any time during the Term, or if Executive terminates Executive's employment
with Company Without Good Reason (as defined in Section 4(F) below) during
the Initial Term.
(iv) Upon termination of Executive's employment with Company
other than as set forth in subsection (iii) above and subject to subsection
(v) below, Company shall pay to Executive all amounts credited to Executive's
Deferred Compensation Account, including Interest thereon, in twenty (20)
quarterly installments of 1/20th of the Deferred Compensation Account on the
date of such termination plus Interest accruing after such date on the
declining balance thereon, on the last day of each calendar quarter,
commencing with the quarter following the date on which Executive becomes
entitled to payment of such amounts (the "DC Date"); provided, however, that
the minimum amount of any such payment shall be the lesser of One Hundred
Twenty Five Thousand Dollars ($125,000) and the remaining balance in the
Deferred Compensation Account; provided further that Company may in its sole
discretion elect to pay all Deferred Compensation amounts in a lump sum, or
prepay the balance of any unpaid installments. Any prepayment under this
clause (iv) shall be applied to the installments in the inverse order of
their due date. The DC Date shall be determined as follows:
(a) TERMINATION BY COMPANY WITHOUT CAUSE OR BY
EXECUTIVE. If Executive is terminated by Company Without Cause (as
defined in Section 4(D) below) or, except as set forth in subsection
(iii) above, if Executive terminates Executive's employment with Company
for any reason, the DC Date is the first day of such termination.
(b) EXPIRATION OF THE TERM. If Executive ceases to be
employed by Company as a result of expiration
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of the Initial Term or the Extension Term and the parties do not agree to
extend the Term for any additional periods, the DC Date is the last day
of the then current Term of the Agreement; provided, however, that if
Executive continues to be employed by Company after expiration of the
Initial Term or the Extension Term as an "at-will" employee, the DC Date
is the last day of Executive's employment with Company.
(c) TERMINATION BY DEATH OR TOTAL AND PERMANENT
DISABILITY. If Executive dies, the DC Date is the date of death. If
Executive is terminated by reason of Total and Permanent Disability (as
defined in Section 4(B) below) of Executive, the DC Date is the
Termination Date as defined in Section 4(B).
(d) PUBLIC OFFERING; CHANGE OF CONTROL. If a "Public
Offering" (as defined below) or a "Change of Control" (as defined below)
occurs, the DC Date is the first day of the month next following the
date of the Public Offering or Change of Control. Notwithstanding the
payment terms set forth in this subsection (iv), if a Public Offering or
Change of Control occurs and the Public Offering or Change of Control
results in a distribution under Section 6.8C(ii) of Company's current
Operating Agreement (the "Operating Agreement"), Company shall pay or
cause to be paid, in a lump sum rather than in installments, an amount
equal to the same percentage of the then outstanding amount in
Executive's Deferred Compensation Account (including any remaining
balance if installment payments have already commenced), as the
percentage by which the Adjusted Capital Contributions (as defined in
the Operating Agreement) of the Members is reduced by such distribution.
For purposes of this Agreement, a "Public Offering" shall mean a
public offering by Company and/or its Members of any securities of Company
which are entitled to vote generally in the election of directors or
Managers of Company, including any offering by a successor of Company
resulting from a merger or consolidation of Company with its affiliates or
any other similar restructuring. For purposes of this Agreement, a "Change
of Control" shall mean either (x) an acquisition of equity interests of
Company if the acquiring person would thereafter be the beneficial owner of
50% or more of Company's Sharing Ratios or equity securities or be entitled
to elect more than 50% of the Managers or directors of Company; (y) a
merger or consolidation of Company resulting in the holders of Company's
Membership Interests or other equity interests immediately prior to such
transaction holding less than 50% of the total voting stock of the
surviving company after such transaction; or (z) a sale or exchange of all
or more than 50% (by value) of the property and assets of Company.
Notwithstanding anything to the contrary contained herein, Change of
Control
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shall not include any merger or combination of Company with any or all
of its affiliates or any other similar restructuring.
(v) No payment of Deferred Compensation shall be made if a
"Default" or an "Event of Default" exists and for so long as such Default or
Event of Default continues, or the payment of the Deferred Compensation would
cause a Default or an Event of Default, under any agreement then in existence
between or among Company and one or more banks, insurance companies or other
institutional lenders. As soon as the Default or Event of Default no longer
exists or the payment would not constitute a Default or an Event of Default,
Company shall pay Executive any amounts not paid as a result of the preceding
sentence, together with interest at ten percent (10%) per annum, compounded
annually. If a payment of Deferred Compensation is not made to Executive
pursuant to this subsection (v), such payment shall cease accruing Interest
as provided in subsection (ii) above and shall only accrue interest as
provided in this subsection (v).
(vi) The obligations of Company with respect to the payment
of Deferred Compensation to Executive are not funded in any way and are
entered into by Company for the purpose of providing deferred compensation to
a select group of management personnel, including Executive. Nothing in this
Agreement nor any action taken as a result of this Agreement, including, but
not limited to the creation on the books of Company of the Deferred
Compensation Account, the crediting of any amounts thereto, or the purchase
or maintenance of any assets for the purpose of satisfying Company's
obligations under this Agreement, shall create or be construed to create a
trust of any kind or a fiduciary relationship between Company and Executive,
Executive's beneficiary, or any other person. Any funds that may be invested
by Company to fund any of the obligations under this Agreement shall continue
for all purposes to be part of the general funds of Company and no person
other than Company shall by virtue of the provisions of this Agreement have
any interest in any such funds. To the extent that any person acquires a
right to receive payments from Company under this Agreement, that right shall
be no greater than the right of any unsecured general creditor of Company.
E. MEMBERSHIP INTEREST. Subject to Section 3(E)(iii) and
(iv) below, upon termination of Executive's employment with Company and for a
period of sixty (60) days thereafter (the "Call Option Period"), Company
shall have the right to purchase Executive's Membership Interest (as defined
in the Operating Agreement) in Company for a purchase price (the "Purchase
Price") to be determined according to the provisions of this Section 3(E);
provided, however, that if Company does not exercise its right to purchase
Executive's Membership Interest for the Purchase Price during the Call Option
Period, subject to Section
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3(E)(iii) and (iv) below, Executive shall have the right for a period of
sixty (60) days after expiration of the Call Option Period (the "Put Option
Period"), to demand that Company repurchase Executive's Membership Interest
for a purchase price (the "Repurchase Price") to be determined according to
the provisions of this Section 3(E). The Purchase Price or Repurchase Price
shall be paid in twenty (20) quarterly installments of 1/20th of the Purchase
Price or Repurchase Price, as appropriate, plus interest at the rate of ten
percent (10%) per annum, compounded annually, on the unpaid portion, on the
last day of each calendar quarter, commencing with the quarter following
termination of Executive's employment; provided, however, that Company may in
its sole discretion elect to pay the entire Purchase Price or Repurchase
Price in a lump sum, or prepay the balance of any unpaid installments. Any
prepayment under this Section 3(E) shall be applied to the installments in
the inverse order of their due date. The Purchase Price and the Repurchase
Price shall be determined as follows:
(i) TERMINATION BY COMPANY FOR CAUSE OR BY EXECUTIVE
WITHOUT GOOD REASON DURING THE TERM. If Executive is terminated by Company
for Cause at any time during the Term or if Executive terminates this
Agreement Without Good Reason during the Term, the Purchase Price and the
Repurchase Price shall be the lesser of Executive's Capital Account balance
and the amount of Executive's Adjusted Capital Contributions, in each case
computed as of the date of termination.
(ii) TERMINATION FOR ANY OTHER REASON. If Executive's
employment with Company is terminated for any reason other than those set
forth in subsection (i) above, the Purchase Price is the aggregate amount of
the distribution Executive would receive pursuant to Section 6.8C of the
Operating Agreement if (x) all of the assets of Company were sold for a cash
purchase price equal to six times EBITDA (as defined below), (y) all "Total
Debt" (as defined in the Credit Agreement between Company, NationsBank of
Texas, N.A. and such other lenders as are listed therein, dated as of even
date hereof) and all Deferred Compensation existing under this and other
Employment and Compensation Agreements entered into as of the date hereof
("Aggregate Deferred Compensation") were then paid in full, and (z) the
remaining proceeds were distributed to the Members (including Executive)
pursuant to said Section 6.8C and the Repurchase Price is the aggregate
amount of the distribution Executive would receive pursuant to Section 6.8C
of the Operating Agreement if (x) all of the assets of Company were sold for
a cash purchase price equal to five and three-fourths times EBITDA, (y) all
bank, insurance company or other institutional debt of Company and the
Aggregate Deferred Compensation were then paid in full, and (z) the remaining
proceeds were distributed to the Members (including Executive) pursuant to
said Section 6.8C. "EBITDA" means the sum of the amounts for the prior
twelve (12) month period ending on the last day of the calendar quarter
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immediately preceding such calculation of (i) net income, (ii) interest
expense, (iii) taxes, (iv) total depreciation expense and (iv) total
amortization expense, all of the foregoing as determined in conformity with
Generally Accepted Accounting Principles ("GAAP").
(iii) PUBLIC OFFERING; CHANGE OF CONTROL. If a Public
Offering or a Change of Control occurs, Executive's Membership Interest shall
fully vest and neither Company nor Executive shall have any further purchase
or repurchase rights with respect to such Membership Interest.
Notwithstanding the payment terms set forth above, if (i) a Public Offering
or Change of Control occurs, (ii) prior thereto the Company has become
obligated to make payments with respect to the purchase of Executive's
Membership Interest under this Agreement, and (iii) the Public Offering or
Change of Control results in a distribution under Section 6.8C(ii) of the
Operating Agreement, Company shall pay or cause to be paid, in a lump sum
rather than in installments, an amount equal to the same percentage of the
then outstanding Purchase Price or the Repurchase Price, as appropriate,
(including any remaining balance if installment payments have already
commenced), as the percentage by which the Adjusted Capital Contributions of
the Members is reduced by such distribution.
(iv) EFFECT ON COMPANY DEBT; DELAWARE LAW. No payment of
the Purchase Price or the Repurchase Price, as appropriate, shall be made if
(y) such payment violates Delaware law or (z) a "Default" or an "Event of
Default" exists and for so long as such Default or Event of Default
continues, or the payment of the Purchase Price or the Repurchase Price would
cause a Default or an Event of Default, under any agreement then in existence
between or among Company and one or more banks, insurance companies or other
institutional lenders. As soon as such payment would not violate Delaware
law, the Default or Event of Default no longer exists, or the payment would
not constitute a Default or an Event of Default, Company shall pay Executive
any amounts not paid as a result of the preceding sentence, together with
interest at ten percent (10%) per annum, compounded annually. If a payment
of the Purchase Price or the Repurchase Price is not made to Executive
pursuant to this subsection (iv), such payment shall cease accruing interest
as provided above and shall only accrue interest as provided in this
subsection (iv).
4. TERMINATION OF EMPLOYMENT
A. BY DEATH. The Term shall terminate, without liability
except as provided in this Section 4(A), automatically upon the death of
Executive. The "Termination Date" in the event of Executive's death during
the Term shall be the date of death. In the case of Executive's death,
Company shall pay to Executive's beneficiaries or estate, as appropriate, (i)
promptly after the Termination Date all accrued but unpaid Base Salary and
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vacation pay, on a pro rata basis with respect to any incomplete periods, up
to and including the day before the Termination Date; (ii) as soon as
practicable, but in no event later than sixty (60) days after the end of the
Employment Year, all Bonuses on a pro rata basis with respect to any
incomplete periods, up to and including the day before the Termination Date;
and (iii) subject to Section 3(D)(v), Deferred Compensation as set forth in
Section 3(D)(iv)(c). In addition to the foregoing, subject to Section
3(E)(iv), Company shall have the right during the Call Option Period to
purchase Executive's Membership Interest in Company for the Purchase Price as
provided in Section 3(E) and, if Company does not exercise such right within
the Call Option Period, Executive shall have the right during the Put Option
Period to demand repurchase of Executive's Membership Interest in Company for
the Repurchase Price as provided in Section 3(E).
B. BY TOTAL AND PERMANENT DISABILITY. The Term shall
terminate, without liability except as provided in this Section 4(B), upon
the "Total and Permanent Disability" of Executive. "Total and Permanent
Disability" shall mean, with respect to Executive, the absence of Executive
from Executive's employment by reason of any mental or physical illness,
disability or incapacity for a period of six (6) consecutive months, or for
shorter periods aggregating six (6) months in any consecutive twelve (12)
month period. Determination of Executive's mental or physical disability
shall be made by Managers based upon examination and certification by a
physician selected by Managers. If the physician selected by Managers is not
Executive's personal physician, Executive has right to have his personal
physician present at any such examination. The "Termination Date" in the
event of such illness, disability or incapacity shall be the last day of such
six (6) month period or aggregate of six (6) months as applicable. In the
case of Executive's Total and Permanent Disability, Company shall pay to
Executive (or Executive's representative) (i) promptly after the Termination
Date all accrued but unpaid Base Salary and vacation pay, on a pro rata basis
with respect to any incomplete periods, up to and including the day before
the Termination Date; (ii) as soon as practicable, but in no event later than
sixty (60) days after the end of the Employment Year, all Bonuses on a pro
rata basis with respect to any incomplete periods, up to and including the
day before the Termination Date; and (iii) subject to Section 3(D)(v),
Deferred Compensation as set forth in Section 3(D)(iv)(c). Subject to
Section 3(E)(iv), Company shall have the right to purchase and Executive
shall have the right to demand repurchase of Executive's Membership Interest
in Company in accordance with Section 4(A) above.
C. BY COMPANY FOR CAUSE. The Term may be terminated, without
liability except as provided in this Section 4(C), by Company for Cause (any
such termination of the Term, a "Termination For Cause"). "Cause" shall mean
(i) Executive willfully commits a material breach of this Agreement; or
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(ii) Executive is convicted of or pleads guilty or no contest to a felony
involving any financial impropriety or which would materially interfere with
Executive's ability to perform his services under this Agreement or which
would be materially injurious to Power-One (which conviction, through lapse
of time or otherwise, is not subject to further appeal, during which appeal
Company will be entitled to suspend, but not terminate, Executive's
employment and Company's payment obligations, provided that in the event such
conviction is overturned or vacated, Executive will be paid retroactively all
compensation withheld by Company in connection with said suspension).
Any termination under this Section 4(C) shall be effective upon
receipt of written notice of such termination (specifying the grounds for
such termination) or upon such other date as may be specified by Company in
the notice (the "Termination Date"). In the case of Executive's Termination
For Cause, all benefits provided to Executive by Company hereunder shall
thereupon cease and Company shall (i) pay to Executive within thirty (30)
days of the Termination Date all accrued but unpaid Base Salary and, to the
extent required by California law, vacation pay, on a pro rata basis with
respect to any incomplete periods, up to and including the day before the
Termination Date, and (ii) subject to Section 3(E)(iv), purchase Executive's
Membership Interest in Company as provided in Section 3(E)(i).
D. BY COMPANY WITHOUT CAUSE. The Term may be terminated at any time
by Company, without advance notice, without Cause, and other than by reason of
Executive's death or Total and Permanent Disability (any such termination of the
Term, a "Termination Without Cause"), without liability on its part except as
provided in this Section 4(D). Any termination under this Section 4(D) shall be
effective upon receipt of written notice of such termination or upon such other
date as may be specified by Company in the notice (the "Termination Date"). In
the event that the Term is terminated Without Cause, Company shall (i) pay or
cause to be paid within fifteen (15) business days of the Termination Date in a
lump sum an amount equal to Executive's Base Salary through the end of what, but
for the termination, would otherwise have been the remainder of the Term (the
"Remainder Term"), (ii) pay or cause to be paid as soon as practicable, but in
no event later than sixty (60) days after the end of each Employment Year, all
Bonuses which Executive would have been entitled to through the end of the
Remainder Term, (iii) allow Executive to continue to participate in all employee
benefit plans in effect as of the Termination Date, including, without
limitation, all life, disability and health insurance programs and retirement,
profit-sharing and pension plans, as they may be amended from time to time, for
the Remainder Term, or at the option of Company (exercised within ninety (90)
days of the Termination Date or, if earlier, at such time continued
participation becomes infeasible, with notice to be given to Executive as soon
as practicable), the payment to Executive of
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the amount of Company's contributions to such employee insurance programs and
plans for Executive as if they had been made on behalf of Executive for the
Remainder Term based on the level of Executive's participation in such
programs at the time of termination, unless such levels are based on
Executive's compensation in which case they shall increase accordingly;
provided that with respect to any retirement, pension or profit sharing plans
for which continued participation cannot occur pursuant to such plans,
Company shall (a) pay to Executive the amount it would have paid to
Executive's account as Company contribution on an annual basis at the
year-end for each year included in the Remainder Term, and (b) Executive
shall be entitled to distribution of vested amounts in any such plan in
accordance with the terms of such plans; and (iv) subject to Section 3(D)(v),
pay or cause to be paid all amounts credited to Executive's Deferred
Compensation Account pursuant to Section 3(D)(iv)(a). Subject to Section
3(E)(iv), Company shall the right to purchase and Executive shall have the
right to demand repurchase of Executive's Membership Interest in Company in
accordance with Section 4(A) above.
E. BY EXECUTIVE FOR GOOD REASON. Executive shall have the right
to terminate Executive's employment, without further obligation or liability
to Company, except that any termination of Executive's employment under this
Section 4(E) shall require the Company to make the same payments it would
make upon Termination Without Cause by Company under Section 4(D), upon the
occurrence of any one or more of the following events, which events shall be
deemed termination by Executive for "Good Reason":
(i) If Executive's position (including responsibilities,
title, reporting requirements or authority) is reduced below the level of a
[vice president] of Company; or
(ii) If Company willfully commits a material breach of
this Agreement; or
(iii) If Company requires Executive to render Executive's
services hereunder at a location greater than fifty (50) miles from
Camarillo, California without Executive's prior written consent; provided,
however, that if Company requests that Executive relocate to any such
location and Executive does not agree to such relocation, the provisions of
subsection (i) above shall not apply but Company agrees to use its best
efforts to employ Executive in a managerial position with Company.
Upon the failure to cure any of the events/breaches set out above
within ten (10) business days after Company's receipt of written notice (the
"Initial Notice") from Executive specifying the applicable events/breaches,
Executive shall have the right to elect to terminate Executive's employment for
Good Reason by giving a second written notice (the "Second Notice") to
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Company to such effect; provided, however, that with respect to any such
events/breaches that are capable of prospective cure, if Company commences to
effect such a cure within the foregoing ten (10) day period, Company shall be
permitted additional time to cure and not be deemed in breach so long as it
diligently continues to seek to effect a cure. Any termination by Executive
pursuant to this Section 4(E) shall be effective upon receipt of the Second
Notice by Company of such termination or upon such other date as may be
specified by Executive in the Second Notice (the "Termination Date").
F. BY EXECUTIVE WITHOUT GOOD REASON. The Term may be terminated
at any time by Executive, without advance notice, for any reason (any such
termination of the Term, a "Termination Without Good Reason"), without any
further liability on Executive's part. Any termination by Executive pursuant
to this Section 4(F) shall be effective upon (i) receipt by Company of
written notice of such termination if such notice does not specify another
date or (ii) the date specified in the written notice of termination, if a
date is specified (the "Termination Date"). In the event that the Term is
terminated Without Good Reason, all benefits provided to Executive by Company
hereunder shall thereupon cease and Company shall pay to Executive, (i)
within thirty (30) days of the Termination Date all accrued but unpaid Base
Salary and, to the extent required by California law, vacation pay, on a pro
rata basis with respect to any incomplete periods, up to and including the
day before the Termination Date, (ii) as soon as practicable, but in no event
later than sixty (60) days after the end of the Employment Year, all Bonuses
declared but not yet payable, (iii) subject to Section 3(D)(v), if
termination by Executive Without Good Reason occurs after the Initial Term,
all amounts credited to Executive's Deferred Compensation Account as provided
for in Section 3(D)(iv)(a); and (iv) subject to Section 3(E)(iv), Company
shall purchase Executive's Membership Interest in Company as provided for in
Section 3(E)(i).
G. EXECUTIVE'S TERMINATION OBLIGATIONS.
(i) Executive hereby acknowledges and agrees that all
personal property and equipment furnished to or prepared by Executive in the
course of or incident to Executive's employment belong to Company and shall
be promptly returned to Company upon termination of the Term. "Personal
property" includes, without limitation, all books, manuals, records, reports,
notes, contracts, lists, blueprints, and other documents, or materials, or
copies thereof, and all other proprietary information relating to the
business of Company. Following termination, Executive will not retain any
written or other tangible material containing any proprietary information of
Company.
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5. CONFIDENTIALITY
A. NONDISCLOSURE OF CONFIDENTIAL MATERIAL. In the performance of
Executive's duties, Executive will have access to confidential records,
including, but not limited to, trade secrets, development, marketing,
organizational, financial, managerial, administrative, manufacturing,
production, distribution and sales information (including customer lists),
data, specifications and processes presently owned or at any time hereafter
developed, by Company, its subsidiaries or affiliates that is not otherwise
part of the public domain (collectively, the "Confidential Material"). All
such Confidential Material is disclosed to Executive in confidence. Except
in the performance of Executive's duties to Company, Executive shall not,
directly or indirectly, disclose or use any such Confidential Material,
unless such Confidential Material ceases to be confidential because it has
become part of the public domain (not due to a breach by Executive of
Executive's obligations hereunder). All records, files, drawings, documents,
equipment and other tangible items, wherever located, relating in any way to
the Confidential Material or otherwise to Company's business (including, the
businesses of its subsidiaries and affiliates), which Executive shall
prepare, use or encounter, shall be and remain Company's sole and exclusive
property and shall be included in the Confidential Material. Upon
termination of this Agreement Executive shall promptly deliver to Company any
and all of the Confidential Material, not previously delivered to Company,
that may be, or at any previous time has been, in the possession or under the
control of Executive.
B. NOT HIRE AWAY. During the Term and for a period of two (2)
years thereafter, Executive shall not solicit any employee of Company (or any
of its subsidiaries or affiliates) or encourage any such employee to leave
the employment of Company (or any of its subsidiaries or affiliates); except
that (a) if the Term expires in the ordinary course, the two (2) year period
provided above will be twelve (12) months; (b) the proscriptions and
restrictions set out above will be inapplicable and accordingly of no force
or effect in the event Executive is terminated Without Cause pursuant to
Section 4(D), or terminates Executive's employment for Good Reason pursuant
to Section 4(E); and (c) none of the proscriptions and restrictions described
above will apply with respect to any personal assistant or secretary who
reports solely to Executive, whose services and employment Executive will be
free to solicit at any time without restriction provided that such personal
assistant or secretary agrees to be bound by the provisions of Section 5(A).
6. ASSIGNMENT; SUCCESSORS AND ASSIGNS.
Executive and Company each agrees that they will not assign, sell,
transfer, delegate or otherwise dispose of, whether voluntarily or
involuntarily, any rights or obligations under
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this Agreement, except by Executive pursuant to community property laws or
laws of descent and distribution and except by Company as provided below. In
addition, the benefits provided pursuant to this Agreement shall not be
subject to garnishment, attachment, or any other legal process by creditors
of Executive or any person or persons designated as beneficiaries under this
Agreement or any other payee of the benefits provided hereunder.
Furthermore, Executive's rights shall not be subject to encumbrance or the
claims of creditors. Any purported assignment, transfer, or delegation in
violation of this Section 6 shall be null and void.
7. NOTICES
Any notice, request, claim, demand, document and other
communication hereunder to any party shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or sent
by telex, telecopy, or certified or registered mail, postage prepaid, or
other similar means of communication, as follows:
(a) If to Company:
Power-One LLC
c/o Stephens Group, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Fax No.: (000) 000-0000
With a copy to:
Xxxxxxxx Group, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax No.: (000) 000-0000
(b) If to Executive, to Executive at the address set forth below
under Executive's signature;
With a copy to:
O'Melveny & Xxxxx
1999 Avenue of the Stars
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
or at any such other address as either party shall have specified by notice
in writing to the other.
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8. ENTIRE AGREEMENT
The terms of this Agreement are intended by the parties to be the
final expression of their agreement with respect to the employment of
Executive by Company and may not be contradicted by evidence of any prior or
contemporaneous agreement. The parties further intend that this Agreement
shall constitute the complete and exclusive statement of its terms and that
no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this Agreement.
9. AMENDMENTS; WAIVERS
This Agreement may not be modified, amended, or terminated except
by an instrument in writing, signed by Executive and Company. By an
instrument in writing similarly executed, either party (Executive or Company)
may waive compliance by the other party with any provision of this Agreement
that such other party was or is obligated to comply with or perform,
provided, however, that such waiver shall not operate as a waiver of, or
estoppel with respect to, any other or subsequent failure. No failure to
exercise and no delay in exercising any right, remedy, or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
of any right, remedy, or power hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, or power
provided herein or by law or in equity.
10. SEVERABILITY; ENFORCEMENT
If any provision of this Agreement, or the application thereof to
any person, place, or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable, or void, the remainder of this
Agreement and such provisions as applied to other persons, places, and
circumstances shall remain in full force and effect.
11. GOVERNING LAW
This Agreement will be governed by and interpreted in accordance
with the laws of the State of California, without regard to the conflict of
laws principles thereof, including all matters of construction, validity,
performance and enforcement.
12. COUNTERPARTS
This Agreement may be executed in one or more counterparts and each
counterpart shall be deemed to be an original but all counterparts together
shall constitute one instrument.
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13. DISPUTE RESOLUTION
Company and Executive agree that any dispute relating to this
Agreement in any respect shall be submitted to binding mediation by an agreed
independent organization specializing in mediation dispute resolution, or if
no Agreement can be reached, by Judicial Arbitration and Mediation Services
(JAMS). Company and Executive further agree that such mediation shall take
place in Los Angeles.
14. CAPTIONS
The captions and headings contained herein are solely for
convenience and reference and do not constitute a part of this Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first written above.
POWER-ONE LLC EXECUTIVE
("Company")
By:
--------------------------- ---------------------------
Its:
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