EXHIBIT 10.27
EXECUTION COPY
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EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this
17th day of January 2002, by and among GlobespanVirata, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx Xxxxxx (the "Executive").
WHEREAS, pursuant to that Merger Agreement among GlobeSpan, Inc.
("GlobeSpan"), Wine Acquisition Corp. and Virata Corporation ("Virata") (the
"Merger Agreement"), Virata has been merged into a subsidiary of the Company and
shall survive as a wholly owned subsidiary of the Company (the "Merger"), and
GlobeSpan has been renamed GlobespanVirata, Inc.; and
WHEREAS, the parties hereto wish to enter into the arrangements set
forth herein with respect to the terms and conditions of the Executive's
employment with the Company.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the parties hereto
agree as follows:
1. EMPLOYMENT AGREEMENT. On the terms and conditions set forth in this
Agreement, the Company agrees to employ the Executive and the Executive agrees
to be employed by the Company in the position and with the duties set forth in
Section 3 hereof. Terms used herein with initial capitalization and not
otherwise defined herein are defined in Section 20 below. This Agreement shall
replace and supersede any employment agreement or arrangement between the
Executive and the Company or one of its Affiliates or predecessors.
2. TERM. Unless earlier terminated pursuant to Section 7, the term of
the Executive's employment hereunder shall commence on the date first written
above (the "Effective Date") and shall conclude on December 31, 2002 (the
"Renewal Date") (the "Employment Period"); provided, however, that the
Employment Period shall be automatically extended for an additional one-year
term on the Renewal Date and on each anniversary of the Renewal Date, unless
either party gives at least sixty days' advance written notice to the other
party (a "Notice of Non-Renewal") that it no longer wishes such automatic
extensions to continue.
3. POSITION AND DUTIES. The Executive shall serve as Chief Operating
Officer of the Company during the Employment Period. As Chief Operating Officer
of the Company, subject to the terms and conditions of this Agreement, the
Executive shall render executive, policy and other management services to the
Company as reasonably determined by the President and Chief Executive Officer of
the Company or the Board. During a period to be determined by the President and
Chief Executive Officer that is expected to last until the Renewal Date (the
"Transition Period"), the President and Chief Executive Officer expects to
delegate oversight responsibility with respect to Operations and Finance to
Xxxxxx Xxxxxx, who is expected to serve as a Vice President in the Office of
President during the Transition Period and who will develop, with the President
and Chief Executive Officer, the Executive's objectives during the Transition
Period, and with whom the Executive will work closely during the Transition
Period. The Executive shall devote the Executive's reasonable best efforts and
substantially full business time to the performance of the Executive's duties
hereunder and the advancement of the business and affairs of the Company during
the Employment Period (provided that the Executive may devote time to managing
his personal investments and to charitable and community activities, and, with
the consent of the Board, take up other offices and positions during the
Employment Period). The Executive shall report directly to the President and
Chief Executive Officer; provided, however, that, after the conclusion of the
Transition Period, the President and Chief Executive Officer may change such
reporting relationship.
4. PLACE OF PERFORMANCE. During the Employment Period, the Executive's
primary place of employment and work location shall be Red Bank, New Jersey,
except for reasonable travel on Company business.
5. COMPENSATION.
(a) BASE SALARY. During the Employment Period, the Company shall pay
to the Executive an annual base salary (the "Base Salary") of $220,000.
Beginning in April 2003, the Base Salary shall be reviewed by the Board no less
frequently than annually, and may be increased at the discretion of the Board.
If the Executive's Base Salary is increased, the increased amount shall be the
Base Salary for the remainder of the Employment Period (until the date of any
subsequent increase). The Base Salary shall be payable bi-weekly or in such
other installments as shall be consistent with the Company's payroll procedures
in effect from time to time.
(b) BONUS. During the Employment Period, the Executive shall be
eligible to earn an annual performance bonus in an amount determined at the
discretion of the Board for each fiscal year. The Company shall establish a
target bonus for the Executive with respect to each year of the Employment
Period, based upon overall performance of the Company and upon the Executive's
individual performance. The annual target bonus will initially be $100,000, with
an initial maximum bonus of $200,000. In the event that a target bonus is not
established with respect to any such year, the Executive's target bonus shall be
deemed to be the target bonus established under this Agreement for the
immediately preceding year.
(c) BENEFITS. During the Employment Period, the Executive will be
entitled to all employee benefits and perquisites (including health, welfare,
life insurance, pension and incentive plans and other arrangements) made
available to similarly situated executives of the Company. Nothing contained in
this Agreement shall prevent the Company from terminating plans, changing
carriers or from effecting modifications in employee benefits coverage for the
Executive as long as such modifications are Company-wide modifications that
affect all similarly situated employees of the Company.
(d) VACATION; HOLIDAYS. During the Employment Period, the Executive
shall be entitled to all public holidays observed by the Company and vacation
days in accordance with the applicable vacation policies for senior executives
of the Company, which shall be taken at a reasonable time or times.
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(e) WITHHOLDING TAXES AND OTHER DEDUCTIONS. To the extent required by
law, the Company shall withhold from any payments due to the Executive under
this Agreement any applicable federal, state or local taxes and such other
deductions as are prescribed by law.
6. EXPENSES. The Executive is expected and is authorized, subject to
the business expense policies as determined by the Board, to incur reasonable
expenses in the performance of his duties hereunder, including the costs of
entertainment, travel, and similar business expenses. The Company shall promptly
reimburse the Executive for all such expenses upon periodic presentation by the
Executive of an accounting of such expenses on terms applicable to senior
executives of the Company.
7. TERMINATION OF EMPLOYMENT. Any termination of the Executive's
employment under this Agreement by the Company or the Executive shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 10 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon, if any, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employment Period under the provision so indicated.
Termination of the Employment Period shall take effect on the Date of
Termination. The Executive's employment under this Agreement can be terminated
under the following circumstances:
(a) DEATH. The Employment Period shall terminate upon the Executive's
death;
(b) DISABILITY; CAUSE. The Company may terminate the Employment Period
(i) if the Executive shall have been unable to perform all of the Executive's
duties hereunder by reason of illness, physical or mental disability or other
similar incapacity, which inability shall continue for more than three
consecutive months, or any six months in a twelve-month period (a "Disability");
or (ii) with or without Cause; or
(c) NON-RENEWAL. The Employment Period may terminate pursuant to the
terms of Section 2.
8. COMPENSATION UPON TERMINATION.
(a) DEATH. If the Employment Period terminates as a result of the
Executive's death, the Company shall promptly pay to the Executive's estate, or
as may be directed by the legal representatives of such estate, after the Date
of Termination any accrued but unpaid Base Salary through the Date of
Termination, all accrued vacation days and all other unpaid amounts, if any,
which the Executive has accrued as of the Date of Termination in connection with
any fringe benefits or under any bonus or incentive compensation plan or program
of the Company pursuant to Sections 5(b) and (c) hereof, and the Company shall
have no further obligations to the Executive under this Agreement or otherwise
(other than pursuant to any employee benefit plan and any life insurance, death
in service or other equivalent policy for the benefit of the Executive).
(b) DISABILITY. If the Company terminates the Employment Period
because of the Executive's Disability, the Company shall promptly pay to the
Executive after the Date of
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Termination any accrued but unpaid Base Salary through the Date of Termination,
all accrued vacation days and all other unpaid amounts, if any, which the
Executive has accrued as of the Date of Termination in connection with any
fringe benefits or under any bonus or incentive compensation plan or program of
the Company pursuant to Sections 5(b) and (c) hereof, and the Company shall have
no further obligations to the Executive under this Agreement or otherwise (other
than pursuant to any employee benefit plan and any disability or other medical
or life insurance policy for the benefit of the Executive (and with respect to
life insurance, to the extent the Executive is covered by a Company provided
life insurance policy at the time of his death)).
(c) BY THE COMPANY FOR CAUSE; BY THE EXECUTIVE. If the Company
terminates the Employment Period for Cause or if the Executive voluntarily
terminates the Employment Period (including pursuant to the Executive's delivery
of a Notice of Non-Renewal), the Company shall promptly pay to the Executive
after the Date of Termination any accrued but unpaid Base Salary through the
Date of Termination and all other unpaid amounts, if any, which the Executive
has accrued and is entitled to as of the Date of Termination in connection with
any fringe benefits or under any bonus or incentive compensation plan or program
of the Company pursuant to Sections 5(b) and (c) hereof, and other than pursuant
to employee benefit plans, the Company shall have no further obligations to the
Executive under this Agreement.
(d) BY THE COMPANY WITHOUT CAUSE. If the Company terminates the
Employment Period (including pursuant to the Company's delivery of a Notice of
Non-Renewal) other than for Cause, Disability or death, (i) the Company shall
promptly pay to the Executive after the Date of Termination a cash lump sum in
an amount equal to the Base Salary; (ii) the Company shall continue to provide
welfare benefits pursuant to Section 5(c) to the Executive for the Continuation
Period (or, to the extent such benefits cannot be so provided, the Company shall
make a cash payment to the Executive in an amount sufficient (on an after-tax
basis) to allow the Executive to obtain comparable benefits for such period),
unless and until the Executive receives any such or similar benefits while
employed in any capacity by any other employer during the Continuation Period;
and (iii) all unvested options to purchase Company stock and shares of
restricted Company stock then held by the Executive shall continue to vest
pursuant to their terms during the Continuation Period, and the Executive shall
be entitled to exercise all such vested options only during the Continuation
Period and the ninety-day period commencing at the end of the Continuation
Period, after which time all options to purchase Company stock held by the
Executive will immediately expire. Other than as set forth herein, the Company
shall have no further obligations to the Executive under this Agreement or
otherwise (except pursuant to employee benefit plans and as otherwise set forth
in this Agreement). For purposes of this Section 8(d), "Continuation Period"
shall mean the 12-month period commencing on the Date of Termination.
(e) LIQUIDATED DAMAGES. The parties acknowledge and agree that damages
suffered by the Executive as a result of termination by the Company without
Cause shall be extremely difficult or impossible to establish or prove, and
agree that the payments and benefits provided pursuant to Section 8(d) shall
constitute liquidated damages for any breach of this Agreement by the Company
through the Date of Termination. The Executive agrees that, except for such
other payments and benefits to which the Executive may be entitled as expressly
provided by the terms of this Agreement or any applicable Company plan, such
liquidated damages shall be in lieu of all other claims that the Executive may
make with respect to
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termination of his employment, the Employment Period or any such breach of this
Agreement. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, and, except as
specifically provided in clause (ii) of Section 8(d), such amounts shall not be
reduced whether or not the Executive obtains other employment.
9. NONCOMPETITION; NONSOLICITATION; CONFIDENTIALITY.
(a) NONCOMPETITION. THIS SECTION 9(A) SHALL HAVE NO FORCE OR EFFECT,
AND SHALL NOT BE DEEMED A PART OF THE AGREEMENT DURING ANY AND ALL PERIODS IN
WHICH THE EXECUTIVE PERFORMS SERVICES AS AN EMPLOYEE OF THE COMPANY PRINCIPALLY
IN THE STATE OF CALIFORNIA, BUT SHALL BECOME IMMEDIATELY EFFECTIVE IF AND TO THE
EXTENT THE EXECUTIVE PERFORMS SERVICES AS AN EMPLOYEE OF THE COMPANY PRINCIPALLY
IN A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. The Executive acknowledges
that in the course of his employment with the Company and its Affiliates and
their predecessors, he has and will continue to become familiar with the trade
secrets of, and other confidential information concerning, the Company and its
Affiliates, that the Executive's services will be of special, unique and
extraordinary value to the Company and its Affiliates and that the Company's
ability to accomplish its purposes and to successfully pursue its business plan
and compete in the marketplace depends substantially on the skills and expertise
of the Executive. Therefore, and in further consideration of the compensation
being paid to the Executive hereunder, the Executive agrees that, during the
Employment Period and for a period of twelve months following the Executive's
termination of employment with the Company for any reason other than a
termination of employment in which Section 8(d) hereof applies (in which case
the restrictions set forth in Section 9 of this Agreement shall not apply) (the
"Restricted Period"), he shall not directly or indirectly own, manage, control,
participate in, consult with, render services for, or in any manner engage in
any business competing with the businesses of the Company or its Affiliates, in
any country where the Company or its Affiliates conducts business; provided,
however, that passive investments amounting to no more than three percent of the
voting equity of a business shall not be prohibited hereby.
(b) NONSOLICITATION. During the Restricted Period, the Executive shall
not directly or indirectly through another entity (i) induce or attempt to
induce any employee of the Company or any Affiliate to leave the employ of the
Company or such Affiliate, or in any way willfully interfere with the
relationship between the Company or any Affiliate and any employee thereof; or
(ii) induce or attempt to induce any customer, supplier, licensee or other
business relation of the Company or any Affiliate to cease doing business with
the Company or such Affiliate, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any Affiliate.
(c) INFORMATION. The Executive acknowledges that the information,
observations and data obtained by the Executive concerning the business and
affairs of the Company and its Affiliates and their predecessors during the
course of the Executive's performance of services for, or employment with, any
of the foregoing persons (whether or not compensated for such services) are the
property of the Company and its Affiliates, including
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information concerning acquisition opportunities in or reasonably related to the
business or industry of the Company or its Affiliates of which the Executive
becomes aware during such period. Therefore, the Executive agrees that he will
not at any time (whether during or after the Employment Period) disclose to any
unauthorized person or, directly or indirectly, use for the Executive's own
account, any of such information, observations, data or any Work Product (as
defined below) or Copyrightable Work (as defined below) without the Board's
consent, unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a direct or
indirect result of the Executive's acts or omissions to act or the acts or
omissions to act of other senior or junior management employees of the Company
and its Affiliates. The Executive agrees to deliver to the Company at the
termination of the Executive's employment, or at any other time the Company may
request in writing (whether during or after the Employment Period), all
memoranda, notes, plans, records, reports and other documents, regardless of the
format or media (and copies thereof), relating to the business of the Company
and its Affiliates and their predecessors (including, without limitation, all
acquisition prospects, lists and contact information) which the Executive may
then possess or have under the Executive's control.
(d) INTELLECTUAL PROPERTY. The Executive acknowledges that all
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports, trade secrets, know-how, ideas, computer programs, and all
similar or related information (whether or not patentable) that relate to the
actual or anticipated business, research and development or existing or future
products or services of the Company or its Affiliates that are conceived,
developed, made or reduced to practice by the Executive while employed by the
Company or any of its predecessors ("Work Product") belong to the Company, and
the Executive hereby assigns, and agrees to assign, all of the Executive's
rights, title and interest in and to the Work Product to the Company. Any
copyrightable work ("Copyrightable Work") prepared in whole or in part by the
Executive in the course of the Executive's work for any of the foregoing
entities shall be deemed a "work made for hire" under the copyright laws, and
the Company shall own all rights therein. To the extent that it is determined,
by any authority having jurisdiction, that any such Copyrightable Work is not a
"work made for hire," the Executive hereby assigns and agrees to assign to the
Company all the Executive's rights, title and interest, including, without
limitation, copyright in and to such Copyrightable Work. The Executive shall
promptly disclose such Work Product and Copyrightable Work to the Board and
perform all actions reasonably requested by the Board (whether during or after
the Employment Period) to establish and confirm the Company's ownership
(including, without limitation, assignments, consents, powers of attorney and
other instruments).
(e) ENFORCEMENT. The Executive acknowledges that the restrictions
contained in this Section 9 are reasonable and necessary, in view of the nature
of the Company's business, in order to protect the legitimate interests of the
Company, and that any violation thereof would result in irreparable injury to
the Company. If, at the time of enforcement of this Section 9, a court holds
that the restrictions stated herein are unreasonable under circumstances then
existing, the parties hereto agree that the maximum duration, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area and that the court shall be allowed to revise
the restrictions contained herein to cover the maximum duration, scope and area
permitted by law. If the provisions of this Section 9 shall be deemed illegal by
any jurisdiction, the provisions in this Section 9 shall be deemed ineffective
within such jurisdiction.
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Because the Executive's services are unique and because the Executive has access
to confidential information, the parties hereto agree that money damages would
be an inadequate remedy for any breach of any provision of this Agreement.
Therefore, in the event of a breach or threatened breach by the Executive of any
provision of this Agreement, the Company may, in addition to other rights and
remedies existing in its favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce, or
prevent any violations of, the provisions hereof (without posting a bond or
other security).
10. NOTICES. All notices, demands, requests or other communications
required or permitted to be given or made hereunder shall be in writing and
shall be delivered, telecopied or mailed by first class registered or certified
mail, postage prepaid, addressed as follows:
(a) If to the Company:
GlobespanVirata, Inc.
000 Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
GlobespanVirata, Inc.
000 Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: General Counsel
(b) If to the Executive:
at the address on the books and records of the Company at the time
of such notice, or to such other address as may be designated by either party in
a notice to the other. Each notice, demand, request or other communication that
shall be given or made in the manner described above shall be deemed
sufficiently given or made for all purposes three days after it is deposited in
the U.S. mail, postage prepaid, or at such time as it is delivered to the
addressee (with the return receipt, the delivery receipt, the answer back or the
affidavit of messenger being deemed conclusive evidence of such delivery) or at
such time as delivery is refused by the addressee upon presentation.
11. SEVERABILITY. The invalidity or unenforceability of any one or
more provisions of this Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement, which shall remain in
full force and effect.
12. SURVIVAL. It is the express intention and agreement of the parties
hereto that the provisions of Sections 8, 9 and 10 hereof shall survive the
termination of employment of
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the Executive. In addition, all obligations of the Company to make payments
hereunder shall survive any termination of this Agreement on the terms and
conditions set forth herein.
13. ASSIGNMENT. The rights and obligations of the parties to this
Agreement shall not be assignable or delegable, except that (i) in the event of
the Executive's death, the personal representative or legatees or distributees
of the Executive's estate, as the case may be, shall have the right to receive
any amount owing and unpaid to the Executive hereunder; and (ii) the rights and
obligations of the Company hereunder shall be assignable and delegable in
connection with any subsequent merger, consolidation, sale of all or
substantially all of the assets of the Company and any similar event with
respect to any successor corporation.
14. BINDING EFFECT. Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon the parties hereto and shall
inure to the benefit of the parties and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.
15. AMENDMENT; WAIVER. This Agreement shall not be amended, altered or
modified except by an instrument in writing duly executed by the parties hereto.
Neither the waiver by either of the parties hereto of a breach of or a default
under any of the provisions of this Agreement, nor the failure of either of the
parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder, shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any such provisions, rights or privileges hereunder.
16. HEADINGS. Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
17. GOVERNING LAW. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of New Jersey.
18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties respecting the employment of the Executive and supersedes
any other employment agreement or arrangement between the Executive and the
Company or Virata or any of their respective subsidiaries or predecessors, in
effect prior to the date hereof (the "Former Arrangement") upon commencement of
the Employment Period, there being no representations, warranties or commitments
between the parties except as set forth herein. The Executive agrees and
acknowledges that following the Effective Time the Executive shall have no
rights under the Former Arrangement and shall have no claim against the Company
or Virata with respect to the Former Arrangement.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
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20. DEFINITIONS.
"Affiliates" means any entity, as may from time to time be designated
by the Board, and other entity directly or indirectly controlling or controlled
by or under common control with the Company. For purposes of this definition,
"control" means the power to direct the management and policies of such entity,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meaning correlative to the
foregoing.
"Board" means the board of directors of the Company.
"Cause" means (i) the Executive's indictment or conviction of a felony
or a crime involving moral turpitude or the intentional commission of any other
act or omission involving dishonesty or fraud; (ii) habitual neglect of the
Executive's duties as described in Section 3, which neglect continues
uncorrected for ten days following written notice to the Executive by the
Company; (iii) as determined by the Board, excessive absenteeism,
insubordination, misconduct or malfeasance; or (iv) violation of work rules or a
policy set by the Board.
"Date of Termination" means (i) if the Executive's employment is
terminated by the Executive's death, the date of the Executive's death; (ii) if
the Executive's employment is terminated because of the Executive's Disability,
thirty days after Notice of Termination, provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during such thirty-day period; (iii) if the Executive's employment is terminated
by the Company for Cause, the date specified in the Notice of Termination; (iv)
if the Executive's employment is terminated pursuant to delivery of a Notice of
Non-Renewal, the end of the then effective term of employment hereunder; or (v)
if the Employment Period is terminated for any other reason, the date on which
Notice of Termination is given.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Agreement to be duly executed on their behalf, as of the day
and year first hereinabove written.
GLOBESPANVIRATA, INC.
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: CEO
XXXXXXX XXXXXX
/s/ Xxxxxxx Xxxxxx
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