SEPARATION AGREEMENT AND RELEASE
Exhibit 10.1
This Separation Agreement and Release (“Agreement”) is made by and between Xxxxx X. Xxxxxx
(“Employee”) and Sipex Corporation (the “Company”) (collectively referred to as the “Parties” or
individually referred to as a “Party”).
WHEREAS, Employee was employed by the Company;
WHEREAS, Employee signed both the Company’s Code of Business Ethics and Conduct (the
“Confidentiality Agreement”) and Employment Agreement on April 6, 2004;
WHEREAS, the Company and Employee have entered into a Stock Option Agreement, dated December
20, 2004, September 6, 2005, January 17, 2006 and December 4, 2006 granting Employee the option to
purchase shares of the Company’s common stock subject to the terms and conditions of the Company’s
1999 Stock Plan, 2002 Non-Statutory Stock Plan, 2005 Stand Alone Stock Option Grant Agreement and
the 2006 Stand Alone Stock Option Plan, respectively and the individual Stock Option Agreement
(collectively the “Stock Agreements”);
WHEREAS, the Company and Employee entered into an Offer Letter dated April 23, 2007 amending
and updating Employee’s offer letter dated March 26, 2004 (collectively, the “Offer Letters”);
WHEREAS, the Employee’s employment with the Company will terminate immediately after the
closing of the merger (the “Merger”) of the Company with a wholly-owned subsidiary (the
“Subsidiary”) of Exar Corporation (“Exar”) pursuant to that certain Agreement and Plan of Merger
between the Company, Exar and the Subsidiary;
WHEREAS, the Parties agree that termination of Employee’s employment constitutes an
Involuntary Termination as defined under the Offer Letters; and
WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances,
charges, actions, petitions, and demands that the Employee may have against the Company and any of
the Releasees as defined below, including, but not limited to, any and all claims arising out of or
in any way related to Employee’s employment with or separation from the Company;
NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Employee
hereby agree as follows:
1. Termination of Employment. As of the close of business on the date on which
the Merger will close, which is expected to be on August 24, 2007, and following the time of such
closing, Employee’s employment with the Company shall terminate for all purposes (the “Termination
Date”). This Agreement shall become effective upon the later of the Effective Time of this
Agreement (as set forth below) or the Termination Date.
2. Consideration.
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a. Payment. The Company agrees to pay Employee a lump sum equivalent to twelve (12)
months of Employee’s base salary, for a total of Two Hundred Twenty-Five Thousand Dollars
($225,000), less applicable withholding. This payment will be made to Employee within ten (10)
business days after the Effective Date of this Agreement.
b. Medical Coverage Benefits. In settlement of all benefits owed to Employee under the
Offer Letters regarding continuation of medical benefits coverage following his Termination Date,
the Company agrees to pay Employee a lump sum amount of Thirty-Two Thousand One Hundred Fourty-Six
Dollars and Sixty-Four Cents ($32,146.64), less applicable withholding, within ten (10) business
days after the Effective Date of this Agreement.
c. Other. The Company agrees that Employee may retain for his personal use the cell
phone provided to the Employee by the Company, with the account and phone number to be transferred
from the Company to Employee. In addition, the Company agrees that Employee may retain the laptop
computer provided to the Employee by the Company, after the Company cleanses it of Company
documents. Employee agrees that he will be responsible for any applicable taxes that apply in
connection with the transfer of these assets.
3. Stock. The Parties agree that for purposes of determining the number of shares of
the Company’s common stock that Employee is entitled to purchase from the Company, pursuant to the
exercise of outstanding options, Employee will be considered to have fully vested in all of the
outstanding options granted to him by the Company. Employee acknowledges that as of the Termination
Date, Employee will have vested in and hold unexercised options (the “Options”) to purchase 114,200
shares and no more. The exercise of Employee’s vested options and shares shall continue to be
governed by the terms and conditions of the Company’s Stock Agreements. Pursuant to the Offer
Letters and the Merger Agreement, Employee’s Options will be assumed by Exar and otherwise entitled
to the treatment set forth in Section 5.10 of the Merger Agreement, and will remain exercisable by
him until the earlier of the first anniversary of the Termination Date or the applicable option
expiration date in which to exercise any vested option shares.
4. Benefits. Subject to the Company’s obligations under Section l.b. above, Employee’s
Company health insurance benefits shall cease on the last day of August 2007. Employee’s
participation in all benefits and incidents of employment, including, but not limited to, vesting
in stock options, and the accrual of bonuses, vacation, and paid time off, shall cease as of the
Termination Date.
5. Payment of Salary and Receipt of All Benefits. Employee acknowledges and represents
that as of the Effective Date, and other than the consideration set forth in this Agreement, the
Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, housing
allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses,
commissions, stock, stock options, vesting, and any and all other benefits and compensation due to
Employee.
6. Release of Claims. Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Employee by the Company and its current
and former officers, directors, employees, agents, investors, attorneys, shareholders,
administrators, affiliates, divisions, and subsidiaries, and predecessor and successor corporations
and assigns
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(collectively, the “Releasees”). Employee, on his own behalf and on behalf of his respective heirs,
family members, executors, agents, and assigns, hereby fully and forever releases the Releasees
from, and agrees not to xxx concerning, or in any manner to institute, prosecute, or pursue, any
claim, complaint, charge, duty, obligation, or cause of action relating to any matters of any kind,
whether presently known or unknown, suspected or unsuspected, that Employee may possess against any
of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until
and including the Effective Date of this Agreement, including, without limitation:
a. any and all claims relating to or arising from Employee’s employment relationship with
the Company and the termination of that relationship;
b. any and all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;
c. any and all claims for wrongful discharge of employment; termination in violation of public
policy; discrimination; harassment; retaliation; breach of contract, both express and implied;
breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel;
negligent or intentional infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;
d. any and all claims for violation of any federal, state, or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the
Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the
Fair Labor Standards Act, except as prohibited by law; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee
Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the
Family and Medical Leave Act, except as prohibited by law; the Xxxxxxxx- Xxxxx Act of 2002; the
Uniformed Services Employment and Reemployment Rights Act; the California Family Rights Act; the
California Labor Code, except as prohibited by law; the California Workers’ Compensation Act,
except as prohibited by law; and the California Fair Employment and Housing Act;
e. any and all claims for violation of the federal or any state constitution;
f. any and all claims arising out of any other laws and regulations relating to employment or
employment discrimination;
g. any claim for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by Employee as a result of
this Agreement; and
h. any and all claims for attorneys’ fees and costs.
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Employee agrees that the release set forth in this section shall be and remain in effect in
all respects as a complete general release as to the matters released.
Notwithstanding the above, this release does not extend to any obligations incurred under this
Agreement. In addition, this release does not release claims that cannot be released as a matter of
law, including, but not limited to: (1) Employee’s right to file a charge with or participate in a
charge by the Equal Employment Opportunity Commission or comparable state agency against the
Company (with the understanding that any such filing or participation does not give Employee the
right to recover any monetary damages against the Company; Employee’s release of claims herein bars
Employee from recovering such monetary relief from the Company); (2) claims under Division 3,
Article 2 of the California Labor Code (which includes California Labor Code section 2802 regarding
indemnity for necessary expenditures or losses by employee); (3) claims prohibited from release as
set forth in California Labor Code section 206.5 (specifically “any claim or right on account of
wages due, or to become due, or made as an advance on wages to be earned, unless payment of such
wages has been made”); (4) any claim for coverage of, or payment of benefits to, Employee and his
dependents with respect to claims arising during such period as he or they have been covered by
Company healthcare benefits plans; (5) Employee’s vested rights, if any, in the Company’s 401 (k)
plan; or (6) any claim or right he has to seek indemnification with respect to any potential
liability alleged against him in connection with his role as an officer of the Company in
accordance with the Company’s bylaws, applicable law, any directors and officers liability
insurance policy maintained by the Company (including any policy obtained at the time of or in
connection with the Merger) and/or any indemnification agreement between him and the Company in
effect immediately prior to the date of this Agreement.
7. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is
waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967
(“ADEA”), and that this waiver and release is knowing and voluntary. Employee agrees that this
waiver and release does not apply to any rights or claims that may arise under the ADEA after the
Effective Date of this Agreement. Employee acknowledges that the consideration given for this
waiver and release is in addition to anything of value to which Employee was already entitled.
Employee further acknowledges that he has been advised by this writing that: (a) he should consult
with an attorney prior to executing this Agreement; (b) he has twenty-one (21) days within
which to consider this Agreement; (c) he has seven (7) days following his execution of this
Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the
revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee
from challenging or seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law. In the event Employee signs this Agreement and returns it
to the Company in less than the 21-day period identified above, Employee hereby acknowledges that
he has freely and voluntarily chosen to waive the time period allotted for considering this
Agreement.
8. California Civil Code Section 1542. Employee acknowledges that he has been advised
to consult with legal counsel and is familiar with the provisions of California Civil Code Section
1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:
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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
Employee, being aware of said code section, agrees to expressly waive any rights he may have
thereunder, as well as under any other statute or common law principles of similar effect.
9. No Pending or Future Lawsuits. Employee represents that he has no lawsuits, claims,
or actions pending in his name, or on behalf of any other person or entity, against the Company or
any of the other Releasees. Employee also represents that he does not intend to bring any claims on
his own behalf or on behalf of any other person or entity against the Company or any of the other
Releasees.
10. Confidentiality. Except to the extent that this Agreement is required to be
publicly filed, or it or its terms become(s) public through no fault of Employee, Employee agrees
to maintain in complete confidence the existence of this Agreement, the contents and terms of this
Agreement, and the consideration for this Agreement (hereinafter collectively referred to as
“Separation Information”). Except as required by law, Employee may disclose Separation Information
only to his immediate family members, the Court in any proceedings to enforce the terms of this
Agreement, Employee’s undersigned counsel, and Employee’s accountant and any professional tax
advisor to the extent that they need to know the Separation Information in order to provide advice
on tax treatment or to prepare tax returns, and must prevent disclosure of any Separation
Information to all other third parties. Employee agrees that he will not publicize, directly or
indirectly, any Separation Information.
11. Trade Secrets and Confidential Information/Company Property. Employee reaffirms
and agrees to observe and abide by the terms of the Confidentiality Agreement, specifically
including the provisions therein regarding nondisclosure of the Company’s trade secrets and
confidential and proprietary information, and non-solicitation of Company employees. Employee’s
signature below constitutes his certification under penalty of perjury that he has returned all
documents and other items provided to Employee by the Company, developed or obtained by Employee in
connection with his employment with the Company, or otherwise belonging to the Company.
12. No Cooperation. Employee agrees not to act in any manner that might damage the
business of the Company. Employee further agrees that he will not knowingly encourage, counsel, or
assist any attorneys or their clients in the presentation or prosecution of any disputes,
differences, grievances, claims, charges, or complaints by any third party against Company or any
of its related Releasees, unless under a subpoena or other court order to do so or as related
directly to the ADEA waiver in this Agreement. Employee agrees both to immediately notify the
Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business
days of its receipt, a copy of such subpoena or other court order. If approached by anyone for
counsel or assistance in the presentation or prosecution of any disputes, differences, grievances,
claims, charges, or complaints against any of the Company or its respective Releasees, Employee
shall state no more than that he cannot provide counsel or assistance.
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13. Breach. Employee acknowledges and agrees that any material breach of this
Agreement, unless such breach constitutes a legal action by Employee challenging or seeking a
determination in good faith of the validity of the waiver herein under the ADEA, or of any
provision of the Confidentiality Agreement shall entitle the Company immediately to recover and/or
cease providing the consideration provided to Employee under this Agreement, except as provided by
law.
14. No Admission of Liability. Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all actual or potential disputed
claims by Employee. No action taken by the Company hereto, either previously or in connection with
this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any
actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or
liability whatsoever to Employee or to any third party.
15. Costs. The Parties shall each bear their own costs, attorneys’ fees, and other
fees incurred in connection with the preparation of this Agreement.
16. Arbitration. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS
OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT
TO ARBITRATION IN SANTA XXXXX COUNTY, BEFORE JAMS, PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES &
PROCEDURES (“JAMS RULES”). THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES.
THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW,
INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND
PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW
PROVISIONS OF ANY JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH CALIFORNIA LAW,
CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE,
AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY
ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO
ENFORCE THE ARBITRATION AWARD. THE COMPANY WILL PAY FOR ANY ADMINISTRATIVE OR HEARING FEES CHARGED
BY THE ARBITRATOR OR JAMS EXCEPT THAT EMPLOYEE WILL PAY THE FIRST $125.00 OF ANY FILING FEES
ASSOCIATED WITH ANY ARBITRATION EMPLOYEE INITIATES. EACH PARTY SHALL SEPARATELY PAY FOR ITS
RESPECTIVE COUNSEL FEES AND EXPENSES; PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’
FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES HEREBY AGREE TO
WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY.
NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE
RELIEF (OR ANY OTHER PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND
THE SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED
HEREIN BY REFERENCE. SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS
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PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE PARTIES
AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.
17. Tax Consequences. The Company makes no representations or warranties with respect
to the tax consequences of the payments and any other consideration provided to Employee or made on
his behalf under the terms of this Agreement. Employee agrees and understands that he is
responsible for payment, if any, of local, state, and/or federal taxes on the payments and any
other consideration provided hereunder by the Company and any penalties or assessments thereon.
Employee further agrees to indemnify and hold the Company harmless from any claims, demands,
deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any
government agency against the Company for any amounts claimed due on account of (a) Employee’s
failure to pay or the Company’s failure to withhold, or Employee’s delayed payment of, federal or
state taxes, or (b) damages sustained by the Company by reason of any such claims, including
attorneys’ fees and costs.
18. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement. Employee represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through him to bind them to
the terms and conditions of this Agreement. Each Party warrants and represents that there are no
liens or claims of lien or assignments in law or equity or otherwise of or against any of the
claims or causes of action released herein.
19. No Representations. Employee represents that he has had an opportunity to consult
with an attorney, and has carefully read and understands the scope and effect of the provisions of
this Agreement. Employee has not relied upon any representations or statements made by the Company
that are not specifically set forth in this Agreement.
20. Severability. In the event that any provision or any portion of any provision
hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent
jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in
full force and effect without said provision or portion of provision.
21. Attorneys’ Fees. Except with regard to a legal action challenging or seeking a
determination in good faith of the validity of the waiver herein under the ADEA, in the event that
either Party brings an action to enforce or effect its rights under this Agreement, the prevailing
Party shall be entitled to recover its costs and expenses, including the costs of mediation,
arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with
such an action.
22. Entire Agreement. This Agreement represents the entire agreement and understanding
between the Company and Employee concerning the subject matter of this Agreement and Employee’s
employment with and separation from the Company and the events leading thereto and associated
therewith, and supersedes and replaces any and all prior agreements and understandings concerning
the subject matter of this Agreement and Employee’s relationship with the Company, with the
exception of the Confidentiality Agreement and the Stock Agreements.
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23. No Oral Modification. This Agreement may only be amended in a writing signed by
Employee and the Company’s Chief Executive Officer.
24. Governing Law. This Agreement shall be governed by the laws of the State of
California, without regard for choice-of-law provisions. Employee consents to personal and
exclusive jurisdiction and venue in the State of California.
25. Effective Date. Each Party has seven (7) days after that Party signs this
Agreement to revoke it. This Agreement will become effective on the eighth (8th) day after Employee
signed this Agreement, so long as it has been signed by the Parties and has not been revoked by
either Party before that date (the “Effective Date”).
26. Counterparts. This Agreement may be executed in counterparts and by facsimile, and
each counterpart and facsimile shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the undersigned.
27. Voluntary Execution of Agreement. Employee understands and agrees that he executed
this Agreement voluntarily, without any duress or undue influence on the part or behalf of the
Company or any third party, with the full intent of releasing all of his claims against the Company
and any of the other Releasees. Employee acknowledges that:
| (a) | he has read this Agreement; | ||
| (b) | he has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of his own choice or has elected not to retain legal counsel; | ||
| (c) | he understands the terms and consequences of this Agreement and of the releases it contains; and | ||
| (d) | he is fully aware of the legal and binding effect of this Agreement. |
29. Assignment. This Agreement will be binding upon and inure to the benefit of
(a) the heirs, executors and legal representatives of Employee upon Employee’s death and (b) any
successor of the Company, including without limitation Exar. Any such successor of the Company will
be deemed substituted for the Company under the terms of this Agreement for all purposes. For this
purpose, “successor” means any person, firm, corporation or other business entity which at any
time, whether by purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights of Employee to
receive any form of compensation payable pursuant to this Agreement may be assigned or transferred
except by will or the laws of descent and distribution. Any other attempted assignment, transfer,
conveyance or other disposition of Employee’s right to compensation or other benefits will be null
and void.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set
forth below.
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| XXXXX X. XXXXXX, an individual | ||||
Dated:
8/17/07
|
/s/ Xxxxx X. Xxxxxx | |||
| Xxxxx X. Xxxxxx | ||||
| SIPEX CORPORATION |
Dated: 8/17/07
|
By | /s/ Xxxxx Xxxxxxx | ||
| Xxxxx Xxxxxxx | ||||
| Chief Executive Officer |
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