EXHIBIT 10.25
SEVERANCE AGREEMENT
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This Severance Agreement (the "Agreement") is made on this 20th day of
March 1998 (the "Effective Date"), by and among Integrated Circuits Systems,
Inc., a Pennsylvania corporation (the "Company"), and Xxxxxx X. Xxxxxxxxx, Ph.D.
("Employee").
Whereas, Employee has served as the President and Chief Executive Officer
of the Company:
Whereas, by mutual consent Employee is resigning as President and Chief
Executive Officer;
Whereas, the parties hereto desire to enter into this Agreement on the date
hereof to set forth their agreement with respect to said resignation and certain
other matters in connection therewith upon the terms and conditions hereinafter
set forth; and
Whereas, the parties desire that this Agreement supersede any agreement,
arrangement or understanding with respect to the terms of the employment of
Employee by the Company binding on Employee and the Company, except as referred
to in Section 13(a) hereof.
NOW THEREFORE, in consideration of the covenants and conditions set forth
in this Agreement, the parties, intending to be legally bound, agree as follows:
1. Termination of Employment.
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(a) Employee hereby voluntarily and irrevocably resigns from all
of his positions as a director, officer, employee, partner, principal, agent,
representative, consultant or otherwise, with or in (i) the Company and its
affiliates, or (ii) any other corporation, partnership or other entity in
respect of which he was serving at the request of the Company, in each case
effective as of 5:00 p.m., Philadelphia time, on the Effective Date. Employee
acknowledges that his employment relationship with the Company was permanently
and irrevocably severed as of the Effective Date and agrees that the Company and
its affiliates have no obligation, contractual or otherwise, to rehire, re-
employ, recall or rehire him in the future.
(b) Employee further acknowledges and agrees that payments made
or to be made and benefits provided or to be provided hereunder are in lieu of
any and all compensation and benefits of any nature whatsoever due to Employee
under the terms of any agreement, arrangement or understanding (whether written
or oral) binding upon the Company and Employee.
2. Severance Compensation. In full consideration of Employee's
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execution of this Agreement and his agreement to be legally bound by its terms,
the Company has paid or agrees to pay Employee the following amounts, and has
provided or agrees to provide the following benefits to Employee:
(a) The company has paid Employee, and Employee hereby
acknowledges receipt of the sum of $120,000 (minus all payroll deductions
required by law or authorized by Employee). In addition, Employee shall promptly
receive payment in respect of unused vacation days to which Employee is
entitled. The Company has paid employee, and Employee hereby acknowledges
receipt of the sum of $15,000 (minus all payroll deductions required by law or
authorized by Employee) in lieu of relocation expenses.
(b) Employee acknowledges and agrees that he has earned and been
paid in full bonus under the Company's bonus plan in respect of the period ended
December 31, 1997. The Company agrees that Employee will be eligible to receive
a bonus in respect of the quarter ending March 28, 1998 to the same extent as
would otherwise have been the case had Employee remained an employee of the
Company through such date, but no representation of any nature is made by the
Company as to whether a bonus will be earned by Employee in respect of such
period or the amount thereof. Employee and Company agree that all determinations
in that regard shall be made solely by the Compensation Committee of the board
of directors of the Company which shall be determined in its discretion in a
manner that is fair, consistent and equitable with bonuses granted to Employee
and to other employees of similar responsibility and bonus eligibility, during
the same and prior periods, and such determination shall be final and binding
upon Employee.
(c) Employee acknowledges that the period within which the
Company must make available the purchase of health insurance under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") will commence
as of the Effective Date. If and only to the extent permitted under the
Company's health insurance plans, the Company shall provide Employee until
September 30, 1998 with health insurance coverage of the nature (and subject to
the same deductibles and cost-sharing features) as may be provided by the
Company to its senior executive officers during such period. If the Company is
unable to include Employee in such health insurance plan during any portion of
such period and Employee instead purchases health insurance from the Company
under COBRA, then the Company will pay Employee during such portion of this
period an amount equal to 160% of the cost of obtaining such insurance from the
Company pursuant to COBRA. Notwithstanding the foregoing, this section shall no
longer be applicable when Employee is employed by a new employer that provides
health insurance to its employees on a comparable cost-sharing basis to that
provided by the Company. Except as expressly stated above, Employee shall not be
entitled to any benefits provided to employees of the Company after the
Effective Date.
(d) Employee shall be reimbursed for the reasonable business
expenses (including certain relocation expenses) incurred by him prior to the
Effective Date in connection with the performance of services as president and
chief executive officer of the Company upon presentation of an itemized account
and written proof of such expenses in accordance with the Company's policies.
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(e) The Company has previously granted Employee options to
acquire a total of 250,000 shares of the Company's common stock (the "Stock
Options") pursuant to the Company's 1992 Stock Option Plan, as amended (the
"1992 Plan"). Notwithstanding Section 12.3 of the 1992 Plan, but subject in all
respects to (i) all of the other provisions of the 1992 Plan and the option
agreements pursuant to which the Stock Options were granted and (ii) compliance
by Employee after the Effective Date with the provisions of this Agreement, the
Company and the Employee agree that the first 125,000 shares of the Stock
Options shall vest as scheduled (62,500 options on April 2, 1998 and the
remaining 62,500 options on April 2, 1999) and be exercisable in full through
the close of business, Philadelphia time, on October 2, 1999. The Company and
Employee agree that the remaining 125,000 options will expire immediately.
Employee acknowledges that, as a result of the foregoing, if any of the options
were intended to qualify as incentive stock options, such Stock Options will no
longer so qualify and will be treated as nonqualified stock options.
(t) Employee alone, and not the Company, will be solely
responsible for payment of all federal, state and local taxes required to be
paid by him in respect of the payments to be made and benefits to be provided to
him under this Agreement, and Employee acknowledges that such payments and
benefits may be subject to tax withholding.
3. Return of Company Property. By April 19, 1998, Employee will
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return to the Company all lists, records, documents, credit cards, building
passes, computers and other materials or property of any nature in his
possession unless mutual arrangements have been made for Employee to purchase
certain equipment, custody or control which are or were owned by the Company or
any of its subsidiaries or affiliates, and Employee will not retain or deliver
to any other persons or entities copies thereof or permit any copies thereof to
be made by any other person or entity. The Company grants to Employee the right
to purchase the Hitachi notebook computer used by Employee for a sum of
$1,000.00, which right will expire on before April 19, 1998. The Company further
agrees to forward all personal mail and package deliveries to Employee, and to
provide and maintain electronic mail and voice mail accounts and services in its
Valley Forge and San Xxxx facilities for the exclusive use of Employee from the
Effective Date until September 30, 1998.
4. General Release
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(a) In consideration of the foregoing, (including without
limitation the promises and payments as described in Section 2 above, which may
be in excess of that to which Employee would have otherwise been entitled upon
termination of employment), Employee hereby knowingly, willingly and voluntarily
remises, waives, releases and forever discharges the Company and its
subsidiaries and affiliates, the directors, officers, employees, advisors and
agents of the Company and its subsidiaries and affiliates, and the heirs,
executors, administrators, successors and assigns of such parties (collectively
referred to as the "Releasees") of and from contracts, agreements, judgements,
claims and demands whatsoever in law or equity which the Releasees or any of
them from or by reason of any cause, matter or thing whatsoever from the
beginning of his employment with the
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Company to the Effective Date, excepting only claims against the Company
relating to its obligations under this Agreement and including, without in any
way limiting the generality of the foregoing, any and all matters relating to
his employment by the Company and the termination thereof and execution of this
Agreement, any and all claims under any federal, state or local law, including
the Pennsylvania Human Relations Act, 43 P.S. & 951 et seq, and the California
Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. & 2000e et seq., the Age Discrimination in Employment Act, as
amended, 29, U.S.C. &
1001 et seq., any common law claims and all claims for counsel fees and costs.
Employee covenants and agrees never to commence, aid in any way (unless
compelled by any court or government agency), prosecute or permit to be
commenced against the Releasees any action or other proceeding based upon any
matters which are the subject of or covered by the foregoing. Nothing in this
Section 4 shall affect or modify in any manner (i) the rights of Employee and
the obligations of the Company to indemnify Employee for acts or matters
occurring prior to the Effective Date, if and to the extent required pursuant to
Article 23 of the Company's By-Laws or the Pennsylvania Business Corporation
Law, in each case as in effect on or prior to the Effective Date, and (ii) the
rights, if any, of Employee under any directors and officers insurance policy
purchased by the Company and in effect in respect of periods on or prior to the
Effective Date.
(b) In consideration of Employee's release and of the premises
and agreements set forth in this Agreement, Company hereby knowingly, willingly,
and voluntarily remises, waives, releases and forever discharges Employee and
his heirs, executors, administrators, successors and assigns (collectively
referred to as the "Employee Releasees") of and from contracts, agreements,
judgements, claims and demands whatsoever in law or equity which the Employee
has from or by reason of any cause, matter or thing whatsoever from the
beginning of his employment with the Company to the Effective Date, and
including, without in any way limiting the generality of the foregoing, any and
all matters relating to his employment by the Company, and any and all claims
under any federal, state or local law, and any common law claims and all claims
for counsel fees and costs, excepting only claims against the Employee relating
to his obligations under this Agreement.
(c) Each party represents that it is their intention in
executing this Agreement that it shall be effective as a part of each and every
claim, demand, suit, action, cause of action, and debt which it may have against
Releasees, and Employee Releasees, respectively; and in furtherance of this
intention each party
HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS AND BENEFITS CONFERRED UPON IT BY THE
PROVISIONS OF SECITON 1542 OF THE CIVIL CODE OF CALIFORNIA WHICH PROVIDES AS
FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Notwithstanding Section 1542 of the Civil Code of California, each party
expressly consents that this Agreement shall be given full force and effect
according to each
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and all of its express terms and provisions, including as well those relating to
unknown and unspecified claims, demands, suits, actions, causes of action and
debts, if any, and those relating to any other claims, demands, suits actions,
causes of action and debts hereinabove specified.
5. Developments
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(a) Employee agrees that all inventions, original works of
authorship, developments, concepts, improvements or trade secrets, whether or
not patentable or registrable under copyright or similar laws and whether or not
related to or useful in the business of the Company (collectively, the
"Developments") which Employee, either by himself or in
(This section left blank intentionally)
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conjunction with any other person or persons, has at any time during the period
of his employment by the Company prior to the Effective Date conceived,
developed or reduced to practice, or caused to be conceived, developed or
reduced in practice, are or shall become and remain the sole and exclusive
property of the Company. Employee hereby assigns, .transfers and conveys, and
agrees to so assign, transfer and convey, all of his right, title and interest
in and to any and all such Developments, and agrees to disclose fully as soon as
practicable, in writing, all such developments to the board of directors of the
Company. At any time and from time to time, upon the request and at the expense
of the Company. Employee will execute and deliver any and all instruments,
documents and papers, give evidence and do any and all other acts which, in the
opinion of counsel for the Company, are or may be necessary or desirable to
document such transfer or enable the Company to file and prosecute applications
for and to. acquire, maintain and enforce any and all patents, trademark
registrations, copyrights, mask work rights or other Intellectual property
rights of any nature under United States or foreign law with respect to any such
Developments or obtain any extension, validation, re-issue, continuance or
renewal of any such rights, The Company will be responsible for the preparation
of any such instruments, documents and papers and for the prosecution of any
such proceedings and will reimburse Employee for all reasonable expenses
incurred by him in compliance with the provisions of this Section.
(b) Notwithstanding the foregoing, Employee and the Company
acknowledge that the provisions of (a) above do not apply to any "invention"
which qualifies fully under the provisions of California Labor Code Section
2870, a copy of which has been provided to Employee. However, Employee
represents that there are no "inventions" that meet the criteria in California
Labor Code Section 2870 included within the definition of Developments as set
forth in (a) above.
6. Confidential Information.
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(a) Employee recognizes and acknowledges that by reason of his
employment by and service with the Company he has had access to confidential
information of the Company and its subsidiaries and affiliates, Including,
without limitation, Information and knowledge pertaining to research activities,
products and services offered or being considered, mergers and other major
corporate transactions being considered, inventions, innovations, designs,
Ideas, plans, trade secrets, proprietary information, manufacturing, packaging,
advertising, distribution and sales methods and systems, sales and profit
figures, customer and client lists, and relationships between the Company and
its subsidiaries and affiliates and employees, consultants, scientific
collaborators, dealers, distributors, wholesalers, customers, clients, suppliers
and others who have bad or will have business dealings with the Company and its
subsidiaries and affiliates ("Confidential Information"). Employee acknowledges
that such Confidential Information is a valuable and unique asset and covenants
that he will not disclose any such Confidential Information to any person for
any reason whatsoever without the prior
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written authorization of the board of directors of the Company, unless compelled
by any court or government agency, or such information is in the public domain
through no fault of Employee or except as may be required by law. The Company
will use its best efforts to identify to Employee promptly upon request whether
any specific information specified in Employee's request then constitutes
Confidential Information.
(b) Employee recognizes that the Company has received from third
parties their confidential or proprietary information subject to a duty on the
Company's part to maintain the confidentiality of such information and to use it
only for certain limited purposes. Employee shall hold all such confidential or
proprietary information in the strictest confidence and shall not disclose it to
any person or entity or use it except as consistent with the Company's
agreements with such third parties.
7. Non-Competition
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(a) Until September 30, 1998, Employee will not, unless acting
with the prior written consent of the Board of Directors of the Company,
directly or indirectly, own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control or financing of, or
be connected as an officer, director, advisor, employee, partner, principal,
agent, representative, consultant or otherwise with or use or permit his name to
be used in connection with, any business or enterprise engaged in (i) the
design, marketing, or sale of (A) integrated circuits for frequency timing
generation control functions for personal computers/workstations, or (B)
integrated circuits for local area network applications, or (ii) any other
business in which the Company or any of its subsidiaries or affiliates is
engaged as of the Effective Date, or which the Company by written notice to the
Employee given within 30 days after the Effective Date advises him that it
intends to pursue within the 6-month period following the Effective Date
(together, the "Business"). It is recognized by Employee that the Business as
engaged in by the Company is and will continue to be international in scope, and
that geographical limitations on this non-competition covenant (and the non-
solicitation covenant set forth in Section 8 below) are therefore not
appropriate.
(b) The foregoing restriction shall not be construed to prohibit
the ownership by Employee of not more than 5% of any class of securities of any
corporation which is engaged in the Business having a class of securities
registered pursuant to the Securities Exchange Act of 1934, as amended, provided
that such ownership represents a passive investment and that neither Employee
nor any group of persons including Employee in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees any
of its financial obligations, otherwise takes any part in its business other
than exercising his rights as a shareholder, or seeks to do any of the
foregoing. In addition, the foregoing restriction shall not be construed to
prohibit the employment of Employee by an entity engaged in the Business as long
as Employee does not, directly or indirectly, participate in the business.
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8. No Solicitation.
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Employee will not, either directly or indirectly, (i) until September 30, 1998,
call on or solicit any person, firm, corporation or other entity who or which,
at the Effective Date or at any time during the one-year period prior to the
Effective Date, was a customer of the Company or any of its subsidiaries or
affiliates with respect to the activities prohibited by Section 7 hereof or (ii)
until September 30, 1998, solicit the employment of any person who was employed
by the Company or any of its subsidiaries or affiliates on a full or part-time
basis at the Effective Date, unless prior to any such solicitation of employment
such person (A) was involuntarily discharged by the Company or such subsidiary
or affiliate or (b) voluntarily terminated his or her relationship with the
Company or such subsidiary or affiliate.
9. Equitable Relief.
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(a) Employee acknowledges that the restrictions contained in
Sections 5, 6, 7 and 8 hereof are reasonable and necessary to protect the
legitimate interests of the Company and its subsidiaries and affiliates, that
the Company would not have entered into this Agreement in the absence of such
restrictions, and that any violation of any provision of those Sections will
result in irreparable injury to the Company, its subsidiaries and affiliates.
Employee represents that his experience and capabilities are such that the
restrictions contained in Sections 7 and 8 hereof will not prevent Employee from
obtaining employment or otherwise earning a living at the same general level of
economic benefit as he has previously enjoyed immediately prior to the Effective
Date.
(b) Employee agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as to an equitable accounting of all earnings, profits
and other benefits arising from any violation of Sections 5, 6,7 or 8 hereof
should ever be adjudicated to exceed the time, geographic, product or service,
or other limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, product or service, or other limitations permitted by applicable
law.
(c) Employee irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of this Agreement, including
without limitation, any action commenced by the Company for preliminary and
permanent injunctive relief and other equitable relief, may be brought in any
court of competent jurisdiction in the Commonwealth of Pennsylvania or any other
court of competent jurisdiction, provided that any suit, action or other legal
proceeding brought against the Company shall be brought and adjudicated in the
United States District Court for the Eastern District of Pennsylvania, or, if
such court will not accept jurisdiction, in any court of competent civil
jurisdiction sitting in Xxxxxxxxxx County, Pennsylvania, (ii) consents to the
non-exclusive jurisdiction of any such court in any such suit,
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action or proceeding and (iii) waives any objection which Employee may have to
the laying of venue of any such suit. action or proceeding in any such court.
Employee also Irrevocably and unconditionally consents to the service of any
process, pleading, notices or other papers in any manner permitted by the notice
provisions of Section 12 hereof.
(d) Employee agrees that he will provide, and that the Company
may similarly provide, a copy of Sections 5,6,7 and 8 of this Agreement to any
business or enterprise (I) which he may directly or indirectly own, manage,
advise, operate, finance, join, control or participate in the ownership,
management operation, financing or control of or(ii) with which he maybe
connected with as an officer, director, advisor, employee, partner, principal,
agent. representative, consultant or otherwise, or in connection with which he
may use or permit his name to be used until September 30, 1998
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
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INTERPRETED UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
11. In the event of a law suit by either party to enforce the
provisions of this Agreement, the prevailing party shall be entitled to recover
reasonable costs, expenses and attorney's fees from the other party.
12. Notices All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall deemed to have been given when hand delivered or mailed by
registered or certified mail, return receipt requested as follows (provided that
notice of change of address shall be deemed given only when received):/
If to the Company, to: return receipt requested
Integrated Circuit Systems, Inc.
2435 Boulevard of the Generals
X.X. Xxx 000
Xxxxxx Xxxxx, Xxxxxxxxxxxx 00000
Attention: Chairman
With a required copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
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Attention: Xxxxx X. Xxxx, Esquire If to Employee, to:
Xxxxxx X. Xxxxxxxxx, Ph.D.
000 Xxxx Xxxxx
Xxxxxxx, XX 00000
with a required copy to:
Xxxxxx Xxxxxx Xxxxxxx and Xxxxx
0000 Xxxxxxxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
or to such other names or addresses as the Company or Employee, as the case may
be shall designate by notice to each other person entitled to receive notices in
the manner specified in this Section.
13. Contents of Agreement: Amendment and Assignment
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(a) This Agreement supersedes all prior agreements and sets
forth the entire understanding among the parties hereto with respect to the
subject matter hereof, except that this Agreement shall not supersede and shall
be in addition to any agreements between Employee and the Company with respect
to confidentiality or other intellectual property rights. This Agreement may not
be changed, modified, extended or terminated except upon written amendment
executed by Employee and approved by the board of directors of the Company and
executed on behalf of the Company by a duly authorized officer. Without
limitation of the foregoing, Employee and the Company acknowledge that the
effect of this provision is that no oral modifications of any nature whatsoever
to this Agreement shall be permitted.
(b) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and assigns
of the parties hereto.
14. Severability. If any provision of this Agreement or the
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application thereof to any person or circumstance is held invalid or
unenforceable in any jurisdiction, the remainder of this Agreement, and the
application of such provision to such person or circumstance in any other
jurisdiction or to other persons or circumstances in any jurisdiction, shall not
be affected thereby.
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15. Remedies Cumulative: No Waiver. No remedy conferred upon the
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Company by this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to any
other remedy given hereunder or now or hereafter existing at law or in equity.
No delay or omission by the Company in exercising any right, remedy or power
hereunder or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by the Company
from time to time and as often as may be deemed expedient or necessary by the
Company in its sole discretion.
16. Miscellaneous. All section headings are for convenience only.
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This Agreement may be executed in counterparts, each of which is an original. It
shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.
17. Consultation with Legal Counsel, Etc. EMPLOYEE REPRESENTS AND
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ACKNOWLEDGES THAT (i) HE HAS BEEN ADVISED BY THE COMPANY TO CONSULT HIS OWN
LEGAL COUNSEL WITH RESPECT TO THE AGREEMENT, (ii) HE HAS HAD FULL OPPORTUNITY,
PRIOR TO EXECUTION OF THIS AGREEMENT, TO REVIEW THOROUGHLY THIS AGREEMENT WITH
HIS COUNSEL, AND THAT HE HAS DONE SO, (iii) HE HAS READ AND FULLY UNDERSTANDS
THE TERMS AND PROVISIONS OF THIS AGREEMENT AND (iv) HE IS KNOWINGLY AND
VOLUNTARILY EXECUTING THIS AGREEMENT. Employee acknowledges that no promise or
inducement for this Agreement has been made except as set forth herein and that
this Agreement is executed without Employee's reliance upon any statement or
representation by or on behalf of the Company.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
INTEGRATED CIRCUIT SYSTEMS, INC.
BY:
Name: Xxxxx X. Xxxxxx
Title: Chairman
EMPLOYEE
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