EMPLOYMENT AGREEMENT
Exhibit 10.25
This EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of the 25th day of April, 2008, by and
between Conexant Systems, Inc., a Delaware corporation (the “Company”), and XXXX XX (the
“Executive”).
WHEREAS, the Executive is currently serving the Company pursuant to an employment agreement
between the parties previously entered into dated of February 2004, (the “Prior Employment
Agreement”); and
WHEREAS, in order to also fully comply with recent guidance issued under Section 409A of the
Internal Revenue Code of 1986, as amended (‘Section 409A”), the parties hereto wish to enter into
this new Employment Agreement in accordance with the terms set forth herein; and
WHEREAS, this Agreement shall only become effective at the Effective Date (as defined in
Section 2); and at the Effective Date, this Employment Agreement will replace and supersede any
other previous employment agreements or arrangements (verbal or written) (express or implied)
between the Executive and the Company or any of its Affiliates or predecessors (except for Section
5(c)of the “Prior Employment Agreement”), which shall automatically be terminated as of the
Effective Date and shall be of no force or effect from and after the Effective Date;
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 from and
after the Effective Date (as defined in Section 2);
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 are hereby
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,
for the Employment Period set forth in Section 2 and in the positions and with the duties set
forth in Section 3. Terms used herein with initial capitalization are defined in Section 23.
2. Term. Unless earlier terminated pursuant to Section 8, the new term of the
Executive’s employment hereunder in the positions referenced under Section 3 will begin as of the
signing of this Agreement by the Executive and the Company (the “Effective Date”) and will conclude
on the first anniversary of the Effective Date (the “Renewal Date”) (the “Employment Period”);
provided however, that, the Employment
Period will automatically be extended for an additional one (l)-year period on the the Renewal
Date and on each anniversary of the Renewal Date (“Effective Date”) unless either party gives
written notice to the other party at least sixty (60) days before the end of the Employment Period
that it does not wish such automatic one (1) year extensions to occur.
3. Position and Duties. The Executive will continue to serve as Senior Vice
President, Strategy and Business Development during the Employment Period. As Senior Vice
President, Strategy and Business Development, the Executive will render executive, policy, and
other management services to the Company of the type customarily performed by persons serving in
a similar capacity and as reasonably determined by the Chief Executive Officer or Board of
Directors of the Company (the “Board”) with regard to the Executive’s status and position within
the Company. The Executive will initially report directly to the Chief Executive Officer. The
Executive will devote the Executive’s reasonable best efforts and full business time to the
performance of her duties hereunder and the advancement of the business and affairs of the
Company during the Employment Period, it being understood that the Executive may, consistent with
the other provisions of this Agreement, pursue other outside interests including but not limited
to the Executive’s devoting time to managing the Executive’s personal investments and to
charitable and community activities.
4. Place of Performance. During the Employment Period, the Executive’s primary place
of employment and work location will be Newport Beach, California, except for reasonable travel
on Company business and as otherwise consented to by the Executive.
5. Compensation.
(a) Base Salary. During the Employment Period, the Company will continue to pay to
the Executive an annual base salary (the “Base Salary”), which is currently $235,000. The Base
Salary will be reviewed by the Board or the Compensation and Management Development Committee of
the Board (the “Compensation Committee”) no less frequently than annually and may be increased
(but not materially decreased) at the discretion of the Board or the Compensation Committee. If
the Executive’s Base Salary is increased, the increased amount will be the Base Salary for the
remainder of the Employment Period. The Base Salary will be payable monthly or in such other
installments as will be consistent with the Company’s payroll procedures in effect from time to
time.
(b) Bonus. During the Employment Period, the Executive will be eligible to earn an
annual performance bonus in an amount determined at the discretion of the Board or the
Compensation Committee for each fiscal year. It is the intention of the parties
hereto that the Company shall establish a target bonus for the Executive with respect to each
fiscal year of the Employment Period based upon overall performance of the Company and upon the
Executive’s individual performance. The Executive’s initial full year annual target bonus for the
2008 fiscal year will remain forty-five percent (45%) of the Base Salary. In the event that a
target bonus is not established with respect to the 2009 fiscal year or any subsequent year, the
Executive’s target bonus shall be deemed to be the target bonus established under this Agreement
for the immediately preceding fiscal year.
To be eligible for any bonuses, the Executive must be employed by the Company as Senior Vice
President, Strategy and Business Development at the time the bonuses are paid.
In addition to any annual performance bonus payable under this Section 5(b), the Company
shall pay the Executive within 30 days of the “Effective Date”, a special “one time” retention
bonus in the gross amount (subject to applicable taxes) of $400,000. While this “special”
retention bonus will be paid within 30 days, it will not be considered earned until April 30,
2009. Should the Executive voluntarily terminate her employment for any reason (other than as a
result of (i) death; or (ii) disability) or be terminated for Cause before April 30, 2009, the
Executive will repay back to the Company any amounts actually received by the Executive within 30
days of her Termination Date. If the Executive is involuntarily terminated for any other reason
than Cause before April 30, 2009, the Executive will be deemed to have earned the “special”
retention bonus.
(c) Equity Compensation. (i) Executive’s current stock option holdings will
continue to vest per their current terms and conditions. The Executive will also be granted a new
Performance Share award of 250,000 Restricted Stock Units (RSU’s) upon the Effective Date. This
Performance Share award will have a cliff vesting date (of 100% of the grant) of April 30, 2009,
subject to the Executive’s continued employment as Senior Vice President, Strategy and Business
Development through that date. All stock options, Performance Share awards, Performance RSUs and
Non-Performance RSUs shall be subject to the terms of this Agreement and the relevant stock unit or
option agreements and relevant stock plan under which they are granted.
(ii) Notwithstanding the foregoing, in the event of a Change of Control, any unvested stock
options, Non-Performance RSUs and shares of nonperformance based restricted stock in Company
common stock held by the Executive (including any unvested portion of the April 2008 Performance
Share award) will become fully vested contingent upon and immediately prior to the first Change
of Control to occur following the Effective Date.
(iii) Notwithstanding any other provision of this Agreement to the contrary, except as
otherwise provided in Executive’s respective Performance Share
award agreement, any vested Performance or Non-Performance RSUs will be paid out immediately upon
vesting and in no event after the later of (i) two and one-half (2 1/2) months after the end of the
Company’s fiscal year in which such Performance or Non-Performance RSUs vest, or (ii) March 15
following the calendar year in which such Performance or Non-Performance RSUs vest.
(d) Benefits. During the Employment Period, the Executive will be entitled to all
employee benefits and perquisites made available to senior executives of the Company. Nothing
contained in this Agreement will prevent the Company from terminating plans, changing carriers or
effecting modifications in employee benefits coverage for the Executive as long as such
modifications affect all similarly situated employees and/or officers of the Company.
(e) Vacation; Holidays. During the Employment Period, the Executive will 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 vacation days will be taken at a
reasonable time or times. The Executive will be entitled to her current vacation schedule.
(f) Withholding Taxes and Other Deductions. To the extent required by law, the
Company will 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 Company, to incur reasonable expenses in the performance of
the Executive’s duties hereunder, including the costs of entertainment, travel, and similar
business expenses. The Company will 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. Confidentiality; Work Product.
(a) 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 information concerning
acquisition opportunities in or reasonably related to the business or industry of the Company or
its Affiliates and their predecessors of which the Executive becomes aware during such period.
Therefore, the Executive agrees that the Executive 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.
(b) 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 and their predecessors
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 will be deemed a “work made for hire” under the copyright laws, and the Company will 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 of the Executive’s rights, title and interest, including,
without limitation, copyright in and to such Copyrightable Work. The Executive will 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).
(c) Enforcement. The Executive acknowledges that the restrictions contained in this
Section 7 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. Therefore, the Executive agrees that in the event of a breach
or threatened breach by the Executive of the provisions of this Section 7, the Company may be
entitled to obtain from any court of competent jurisdiction, preliminary or permanent
injunctive relief restraining the
Executive from disclosing or using any such confidential information. Nothing herein will be
construed as prohibiting the Company from pursuing any other remedies available to it for such
breach or threatened breach, including, without limitation, recovery of damages from the
Executive.
8. Termination of Employment. Any termination of the Employment
Period by the Company or the Executive will be communicated by written Notice of
Termination to the other party hereto in accordance with Section 11. For purposes of this
Agreement, a “Notice of Termination” will mean a notice which will indicate the specific
termination provision in this Agreement relied upon, if any, and will set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination
of the Employment Period if the termination is being effected by the Company for Cause.
Termination of the Employment Period will take effect on the Date of Termination. The
Employment Period will be terminated under the following circumstances:
(a) Death. The Employment Period will terminate upon the Executive’s death;
(b) By the Company. The Company may terminate the Employment Period (i) if the
Executive has a Disability, or (ii) with or without Cause;
(c) By the Executive. The Executive may terminate the Employment Period at any time;
or
(d) Non-Renewal. The Employment Period may terminate pursuant to the terms of Section
2. The expiration of the Employment Period due to a notice of non-renewal by the Company to the
Executive will be treated as a termination of the Employment Period by the Company without Cause.
The expiration of the Employment Period due to a notice of non-renewal tendered by the Executive
to the Company will be treated as a termination of the Employment Period by the Executive.
9. Compensation upon Termination. The Executive’s services as an
employee of the Company must be terminated in order for the Executive to receive any
payment or other benefit under this Section 9. Any change in job title or responsibilities
will not constitute a termination of the Employment Period under this contract.
(a) Death. If the Employment Period terminates as a result of the Executive’s death,
the Company will 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 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), (c) and (d) will be paid in
accordance with the terms of any such plans or programs. In addition, if the Employment period
terminates as a result of the Executive’s death, then all unvested stock options, Non-Performance
RSUs and shares of non-performance based restricted stock in Company common stock held by the
Executive will become fully vested immediately prior to Executive’s death and, in the case of the
stock options, fully exercisable as of the Date of Termination, and the Executive’s estate will be
entitled to exercise all such options until the earlier of: (i) the third anniversary of the
Executive’s Date of Termination or (ii) the expiration date of such option set forth in the grant
notice for the option award. The Company will 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 will promptly pay to the Executive after the
Date of Termination any accrued but unpaid Base Salary through the Date of Termination.
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), (c) and
(d) will be paid in accordance with the terms of any such plans or programs. In addition, if
the Company terminates the Employment Period because of the Executive’s Disability,
then the Executive will be entitled to the equity and health insurance portions of the
Separation Benefits set forth in Section 9(e)(ii) and (iii). The Company will 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 insurance policy for the benefit
of the Executive).
(c) By the Company for Cause; By the Executive For Any Reason. If the
Company terminates the Employment Period for Cause or if the Executive terminates the
Employment Period for any reason, the Company will promptly pay to the Executive after
the Date of Termination any accrued but unpaid Base Salary through the Date of
Termination. 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), (c) and (d) will be paid in accordance with the terms of any such plans or
programs.
Other than as set forth in this Section 9(c), the Company will have no further obligations
to the Executive under this Agreement or otherwise (other than pursuant to any employee benefit
plan).
(d) By the Company Without Cause. If the Company terminates the
Employment Period other than for Cause, Disability or death, the Executive will be
entitled to the Separation Benefits (as defined in Section 9(e)). Other than as set forth
herein, the Company will have no further obligations to the Executive under this
Agreement or otherwise (other than pursuant to any employee benefit plan).
As an express condition precedent to Executive receiving any Separation Benefits under this
Section 9, Executive must execute and not revoke a unilateral separation agreement and general
release of claims in a form satisfactory to the Company within sixty (60) calendar days of the
Date of Termination. Nothing in this Section 9(d) will be deemed to operate or will operate as a
release, settlement or discharge of any liability of the Executive to the Company or others for
any action or omission by the Executive, including without limitation any actions which formed,
or could have formed, the basis for termination of the Executive’s employment for Cause.
(e) Separation Benefits. For purposes of this Agreement, “Separation
Benefits” will mean:
(i) payment by the Company to the Executive of a cash lump sum equal to:
| (A) | 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; and | ||
| (B) | an additional payment of $75,000; |
(ii) reimbursement by the Company for the cost of coverage of Executive and/or
Executive’s covered dependents pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, or similar state statute (“COBRA”) for premiums under the
Company’s health insurance plans for a period of eighteen (18) months following the Date
of Termination, provided that Executive timely elects COBRA coverage and submits proof of
premium payments to the Company, and
(iii) all unvested stock options, Non-Performance RSUs and shares of non-performance
based restricted stock in Company common stock (including the April 2008 Performance
Share award) held by the Executive will become fully vested and, in the case of the stock
options, fully exercisable immediately prior to Executive’s Date of Termination, and the
Executive will be entitled to exercise all such options until the earlier of: (A) the 15
month anniversary of the Executive’s
Date of Termination or (B) the expiration date of such option set forth in the grant
notice for the option award.
Any cash payment pursuant to this Section 9(e), payment of Non-Performance RSUs or issuance
of shares of non-performance based restricted stock in Company common stock pursuant to Section
9(e)(iii) will be made by the Company within thirty (30) days following the Date of Termination,
except for any delay period required by Section 22 of this Agreement. Reimbursements pursuant to
Section 9(e)(ii) shall be made as soon as administratively feasible following the Company’s
receipt of appropriate documentation, but in no event after the later of (i) two and one-half (2
1/2) months after the end of the Company’s fiscal year in which such costs are incurred, or (ii)
March 15 following the calendar year in which such costs are incurred. Notwithstanding the
foregoing, and to the extent applicable, the timing of such reimbursements, if any, shall be
subject to any delay period required by Section 22 of this Agreement.
(f) Damages. 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 amounts will be in lieu of all other claims for damages that the
Executive may make with respect to the termination of the Executive’s employment, the Employment
Period or any such breach of this Agreement. In no event will 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 9(e), such amounts will not be reduced whether or not the Executive obtains
other employment.
10. Noncompetition and Nonsolicitation.
(a) Noncompetition. THIS SECTION 10(a) WILL HAVE NO FORCE OR EFFECT, AND WILL
NOT BE DEEMED A PART OF THIS 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 WILL 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 and the
Company jointly acknowledge that Executive’s initial and principal place of employment is Newport
Beach, California, and therefore, this section 10 (a) is NOT in force and effect on the Effective
Date. However, the Executive further acknowledges that in the course of the Executive’s employment
with the Company and its Affiliates and their predecessors, the Executive has and will continue to
become familiar with the trade secrets of, and other confidential information concerning, the
Company and its Affiliates and their predecessors, 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 if his principal place of employment becomes a state other than California, then during
the Employment Period and for a period of twelve months following the termination of the Employment
Period for any reason (the “Restricted Period”), the Executive will 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 and the Executive’s
other current positions and activities described in Section 3 will not be prohibited hereby.
(b) Nonsolicitation. Executive agrees that, during the Employment Period and for a
period of twelve (12) months following the termination of the Employment Period for any reason,
the Executive will not directly or indirectly (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) Enforcement. If, at the time of enforcement of this Section 10, 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 will be substituted for the stated period, scope or area and that the court will 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 10 will be deemed illegal by any jurisdiction,
the provisions in this Section 10 will be deemed ineffective within such jurisdiction. 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).
11. Notices. All notices, demands, requests or other communications
required or permitted to be given or made hereunder will be in writing and will be
delivered, telecopied or mailed by first class registered or certified mail, postage prepaid,
addressed as follows:
(a) If to the Company:
Conexant Systems, Inc.
0000 XxxXxxxxx Xxxxxxxxx, Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Fax: (000)000-0000
Attention: Xxxxxxx Xxxxxx, Senior Vice President, Human Resources
0000 XxxXxxxxx Xxxxxxxxx, Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Fax: (000)000-0000
Attention: Xxxxxxx Xxxxxx, Senior Vice President, Human Resources
(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 will be given or made in the manner described above will be
deemed sufficiently given or made for all purposes three (3) 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.
12. Severability. The invalidity or unenforceability of any one or more provisions of
this Agreement will not affect the validity or enforceability of the other provisions of this
Agreement, which will remain in full force and effect.
13. Survival. It is the express intention and agreement of the parties hereto that the
provisions of Sections 7, 9, 10, 11, and 22 will survive the termination of employment of the
Executive. In addition, all obligations of the Company to make payments hereunder will survive any
termination of this Agreement on the terms and conditions set forth herein.
14. Assignment. The rights and obligations of the parties to this Agreement will 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, will
have the right to receive any amount owing and unpaid to the Executive hereunder, and (ii) the
rights and obligations of the Company hereunder will be assignable and delegable in connection
with any merger, consolidation or sale of all or substantially all of the assets of the Company
and any similar event with respect to any successor corporation. Notwithstanding anything herein
to the contrary, the rights and
obligations of the Company hereunder will inure to the benefit of, and will be binding upon, any
successor to the Company or its business by merger or otherwise, whether or not there is an express
assignment, delegation or assumption of such rights and obligations.
15. Binding Effect. Subject to any provisions hereof restricting assignment, this
Agreement will be binding upon the parties hereto and will inure to the benefit of the parties and
their respective heirs, devisees, executors, administrators, legal representatives, successors and
assigns.
16. Amendment; Waiver. This Agreement will not be amended, altered or modified except
by an instrument in writing duly executed by the parties hereto. No waiver by either of the parties
hereto of a breach of or a default under any of the provisions of this Agreement will thereafter be
construed as a waiver of any subsequent breach or default of a similar nature. 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 will not be construed as a waiver of any such
provisions, rights or privileges hereunder, or a waiver of any subsequent breach or default of a
similar nature.
17. Headings. Section and subsection headings contained in this Agreement are inserted for
convenience of reference only, will not be deemed to be a part of this Agreement for any purpose,
and will not in any way define or affect the meaning, construction or scope of any of the
provisions hereof.
18. Governing Law. This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, will be governed by and construed in accordance with
the laws of the State of California (but not including the choice of law rules thereof).
19. Entire Agreement. This Agreement, together with any stock or option agreements
executed by Executive and the Company, constitutes the entire agreement between the parties
respecting the employment of the Executive, there being no representations, warranties or
commitments between the parties except as set forth herein.
20. Counterparts. This Agreement may be executed in two or more counterparts, each of
which will be an original and all of which will be deemed to constitute one and the same
instrument.
21. Legal Expenses. The Company will pay or reimburse the Executive (up to $2,500)
for reasonable attorneys’ fees incurred by the Executive in connection with the negotiation of
this Agreement and the Executive’s commencement of employment
hereunder. Any such reimbursement will be made no later than the calendar year following the
year in which such expense was incurred.
22. Provisions Regarding Code Section 409A.
(a) Six-Month Wait for Key Employees Under Separation from Service. Notwithstanding
anything to the contrary in this Agreement, if the Executive is a “specified employee” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended and any final regulations
and guidance promulgated thereunder (“Section 409A”) at the time of the Executive’s termination,
then the severance and benefits payable to the Executive pursuant to this Agreement (other than due
to death), if any, and any other severance payments or separation benefits which may be considered
deferred compensation under Section 409A (together, the “Deferred Compensation Separation
Benefits”), which are otherwise due to the Executive on or within the six (6) month period
following the Executive’s termination will accrue during such six (6) month period and will become
payable in a lump sum payment on the date six (6) months and one (1) day following the date of the
Executive’s termination of employment or the date of death, if earlier. All subsequent Deferred
Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule
applicable to each payment or benefit.
(b) Necessary Amendments Due to Code Section 409A. The parties hereto acknowledge
that the requirements of Section 409A are still being developed and interpreted by government
agencies, that certain issues under Section 409A remain unclear at this time, and that the parties
hereto have made a good faith effort to comply with current guidance under Section 409A.
Notwithstanding anything in this Agreement to the contrary, in the event that amendments to this
Agreement are necessary in order to comply with future guidance or interpretations under Section
409A, including amendments necessary to ensure that compensation will not be subject to Section
409A, the Executive agrees that the Company will be permitted to make such amendments, on a
prospective and/or retroactive basis, in its sole discretion, provided that it has first
negotiated with the Executive on a good faith basis to construct an amendment that would be
mutually satisfactory to the parties hereto.
23. Definitions.
“Affiliate” means any entity from time to time designated by the Board and any 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 meanings correlative to the
foregoing.
“Board” means the board of directors of the Company.
“Cause” means: (i) the Executive’s indictment or conviction of or entering into a plea
of guilty or no contest to a felony or a crime involving moral turpitude, or the intentional
commission of any other act or omission involving dishonesty or fraud that is materially injurious
to the Company or any of its Affiliates; (ii) the Executive’s substantial and repeated failure to
perform duties of the office(s) held by the Executive, as reasonably directed by the Chief
Executive Officer or Board, if such failure is not cured within thirty (30) days after the
Executive receives written notice thereof; (iii) gross negligence or willful misconduct in the
performance of the Executive’s duties which materially injures the Company or its reputation, or;
(iv) the Executive’s willful breach of the material covenants of this Agreement.
“Change of Control” means:
(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) (a Person) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30%
or more of either (A) the then outstanding shares of Common Stock of the Company (the Outstanding
Company Common Stock) or (B) the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the Outstanding Company Voting
Securities); provided, however, that for purposes of this subparagraph (i), the following
acquisitions will not constitute a Change of Control: (w) any acquisition directly from the
Company, (x) any acquisition by the Company, (y) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation controlled by the Company
or (z) any acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (iii) of this definition; or
(ii) Individuals who, as of the date hereof, constitute the Board of Directors (the Incumbent
Board) cease for any reason to constitute at least a majority of the Board of Directors; provided,
however, that any individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’s shareowners, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board of Directors; or
(iii) Consummation of a reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company or the acquisition of assets of another
entity (a Corporate Transaction), in each case, unless, following such Corporate Transaction, (A)
all or substantially all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than
50% of, respectively, the then outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such Corporate
Transaction of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the
Corporation or such corporation resulting from such Corporate Transaction) beneficially owns,
directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock
of the corporation resulting from such Corporate Transaction or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that such ownership
existed prior to the Corporate Transaction, and (C) at least a majority of the members of the board
of directors of the corporation resulting from such Corporate Transaction were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the action of the
Board of Directors, providing for such Corporate Transaction; or
(iv) Approval by the Company’s shareowners of a complete liquidation or dissolution of the
Company.
Notwithstanding the foregoing, a Company transaction that does not constitute a change in
control event under Treasury Regulation 1.409A-3(i)(5)(v)-(vii) shall be not be considered a Change
of Control.
“Code” means the Internal Revenue Code of 1986, as amended.
“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 (30) days after Notice of Termination,
provided that the Executive will not have returned to the performance of the Executive’s duties on
a full-time basis during such thirty (30)-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 during the Employment Period for any other reason, the date
specified in the
Notice of Termination; or (v) if the Executive’s employment is terminated due to the non-renewal of
the Employment Period in accordance with Section 2 hereof, the date on which the Employment Period
expires by its terms.
“Disability” means: as provided under Section 409A(a)(2)(C) and Treasury regulation
1.409A-3(i)(4) and other official guidance issued thereunder, that Executive (i) is unable to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically
determinable physical or mental impairment, which can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for a period of not
less than three (3) months under an accident and health plan covering Company employees.
Notwithstanding, Executive shall be deemed Disabled if he is determined to be totally disabled by
the United States Social Security Administration or by the then-current disability insurance
program of the Company; provided that, the definition of disability applied under such disability
insurance program complies with the requirements of Section 409A and the applicable Treasury
regulations and other official guidance issued thereunder.
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.
| Very truly yours, CONEXANT SYSTEMS, INC. |
||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | SVP, Human Resources | |||
| XXXX XX |
||||
| /s/ Xxxx Xx | ||||
| Date 4/25/08 | ||||
