CONFIDENTIAL SEVERANCE AGREEMENT
This agreement between SOLA INTERNATIONAL, INC., a Delaware corporation (the
"Company") and Xxxxxx X. Xxxx (the "Executive") is dated and entered into as of
October 13, 1997. The Company and the Executive hereby agree as follows:
WHEREAS, the Executive is a valued employee of the Company; and
WHEREAS, the Company desires to provide the Executive with certain
benefits should his employment be terminated:
THEREFORE, in consideration of the foregoing, the Company and the
Executive have agreed to the following terms while he is employed and in the
event of such a Severance:
1. Employment Term. The Executive acknowledges that he is employed
at-will by the Company subject only to the terms of this Agreement. The
Executive agrees to devote substantially all of his productive time, ability and
attention to the business of the company while he is employed by the Company,
and shall not, directly or indirectly, render services of a business, commercial
or professional nature to any other person or organization, whether for
compensation or otherwise, without the prior consent of the President of the
Company or his designee.
2. Severance. In the event that any of the following occurs, the
Executive shall be entitled to the benefits set forth in paragraph 3 below. For
purposes of this Agreement a Severance shall have taken place only if:
A. The Executive's employment with the Company is terminated
for any reason other than cause. For purposes of this Agreement, "cause" is
defined as the Executive's engaging in: (i) willful misconduct, neglect of
duties, or any act or omission any or all of which materially adversely affect
the Company's business, or (ii) conviction of a felony.
(i) For purposes of subparagraph 2.A(i), no such
event or omission shall constitute cause unless the Executive fails to cure the
underlying matter within forty-five (45) days after receipt from the Company of
a detailed statement of the cause for termination.
B. The Executive is regularly assigned duties and
responsibilities that materially diminish his position as an Executive of the
Company. For the purpose of this subparagraph, the assignment of duties, other
than those Executive performs as of the date of this Agreement, whether or not
in lieu of those previously assigned duties, does not by itself constitute a
material diminishment of the Executive's position with the Company.
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C. The Executive's compensation (including but not limited to
salary and benefits) is reduced and that reduction is not part of, or is
disproportionate to a company general reduction of executive compensation.
The Executive shall not be entitled to any Severance Benefits as set
forth in paragraph 3 of this Agreement if he freely and voluntarily resigns his
employment with the Company.
3. Severance Benefits. If a Severance takes place, then immediately
after the occurrence of that event or events, the Executive shall be entitled to
the following:
A. To continue to receive his compensation for either the
period of twelve (12) months or one (1) month per completed year of service with
the Company, up to a maximum of (18) months , whichever is longer, commencing
the first of the month following the month in which the Severance takes place.
For purposes of this paragraph, the Executive's "compensation" shall be that
annual salary in effect immediately prior to the Severance, plus the average of
Management Incentive Plan compensation (or successor thereto) paid to him over
the three years immediately prior to the Severance, or if the Executive has been
employed for less than three years, the annual average of Management Incentive
Plan compensation paid to him during his period of employment with the Company.
B. To continue for either a period of twelve (12) months or
one (1) month per completed year of service with the Company up to a maximum of
eighteen (18) months whichever is longer to be covered by and participate in, at
the Company's expense, any and all benefit plans the Company regularly provides
its other executives or employees including, but not limited to, health, dental,
vision, pension or other retirement plans. In addition, the Executive shall be
entitled to the other benefits specified on the attached Schedule.
C. To receive outplacement assistance in the form of
professional consultation and administrative assistance, subject to the approval
of the Company, which shall not be unreasonably withheld. The Company shall pay
up to a maximum of twenty-five thousand dollars ($25,000.00) for the
aforementioned outplacement services during the period the Executive receives
Severance Benefits as described in A and B above.
4. Non-Mitigation. The Executive shall not be required to mitigate the
amount of any payments or other benefits provided under this Agreement at any
time by seeking other employment or consultancy; however the Executive shall
notify the Company of any employment or consulting engaged in during the period
covered by Severance Benefits provided in Section 3 and the amounts payable and
benefits provided shall be reduced or offset by the amount of any salary, bonus
of any sort, fees, stock, stock options, stock dividends, other securities or
any non-cash consideration so paid or payable and benefits to be received with
respect to such
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period and that offset or reduction shall be determined by the Company in the
complete and absolute exercise of its sole discretion.
5. Non-Disparagement. In the event of a Severance both the Executive
and the Company agree that neither of them will disparage the other in any
manner.
6. Covenants-Not to Compete and Not to Solicit.
A. Covenant Not to Compete.
The Executive recognizes that the services to be performed
while employed by the Company are special, unique, and extraordinary and that by
reason of the Executive's prior and continued employment with the Company the
Executive has acquired and will acquire confidential information and trade
secrets concerning the Company's operations ("Company Confidential Information")
and the operations of its parent and affiliates ("Affiliate Confidential
Information"). Accordingly, it is agreed that during the period of Employment by
the Company, and for any period following a Severance covered by payments
provided for in Section 3 hereof, the Executive will not, directly or
indirectly, as an officer, director, stockholder, partner, associate, owner,
employee, consultant or otherwise, become or be interested in or associated with
any other corporation, firm or business engaged in the same or a similar or
competitive business with the Company or any of its affiliates in any
geographical area in which the Company or any of its affiliates are then engaged
in business, provided that the Executive's ownership, directly or indirectly, of
not more than one percent of the issued and outstanding stock of a corporation
the shares of which are regularly traded on a national securities exchange or in
the over-the-counter market shall not, in any event, be deemed to be a violation
of this subsection.
B. Covenant Not to Solicit.
The Executive agrees not to solicit any person employed by the
Company or its affiliates who perform a scientific, technical, sales or
marketing function. As used herein, "solicit" or "soliciting" means any direct
or indirect approach or appeals to such an employee to leave the Company.
Indirect solicitation inciudes but is not limited to, acting through a third
party or parties or characterizing job advertisements or opportunities in such a
fashion so as to entice any employee. The executive agrees that, if approached
by a Company employee, the Executive will:
(i) Inform the employee of the Executive's
obligations set forth in this subparagraph;
(ii) Refer the employee to the relevant Company
Human Resources personnel; and
(iii) Request that the employee confirm in writing
to the Company that he has approached the
Executive and
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confirm that request in a memorandum to such
Human Resources organization.
7. Confidentiality. The Executive recognizes that the services to be
performed while employed by the Company are special, unique, and extraordinary
and that by reason of the Executive's prior and continued employment with the
Company the Executive has acquired and will acquire confidential information and
trade secrets concerning the Company's operations ("Company Confidential
Information") and the operations of its parent and affiliates ("Affiliate
Confidential Information"). Accordingly, it is agreed that:
A. The Executive shall not divulge to any entity or person,
other than the Company or its affiliates, or, in the event of an assignment of
this Agreement pursuant to Section 10 hereof, the assignee and its affiliates,
if any, whether while employed or after a Severance, any Company Confidential
Information concerning the Company's customer lists, research or development
programs or plans, processes, methods or any other of its trade secrets, except
information that is then available to the public in published literature and
became publicly available through no fault of the Executive.
B. The Executive shall not divulge to any person or entity,
including an assignee of this Agreement and its affiliates, but excepting the
Company and its affiliates, whether while employed or after a Severance, any
Affiliate Confidential Information acquired by the Executive concerning the
customer lists, research or development programs or plans, processes, methods or
any other trade secrets of the parent or any affiliate, except information which
is then available to the public in published literature and became publicly
available through no fault of the Executive.
C. The Executive acknowledges that all information the
disclosure of which is prohibited hereby is of a confidential and proprietary
character and of great value to the Company and its affiliates. Upon a
Severance, the Executive shall forthwith deliver up to the Company all records,
memoranda, data and documents of any description which refer or relate in any
way to Company Confidential Information or Affiliate Confidential Information
and return to the Company any of its equipment and property which may then be in
the Executive's possession or under the executive's personal control. Upon the
assignment of this Agreement, pursuant to Section 10, the Executive shall
forthwith deliver up to the Company all records, memoranda, data and documents
of any description which refer or relate in any way to Affiliate Confidential
Information and return to the Company any of its equipment and property which
may then be in the Executive's possession or under the Executive's personal
control.
D. The Executive agrees that while employed and for a two year
period after the occurrence of a Severance not to disclose the terms of this
Agreement to any person other than the Executive's immediate family, the
executive's
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attorneys, accountants and other professional advisors or a prospective employer
permitted hereby, except as otherwise required by law.
8. Invention Assignment. The Executive agrees that any invention made
by the Executive while employed shall belong to the Company if (i) it was made
in the normal course of the duties of the Executive or in the course of duties
falling outside the Executive's normal duties but specifically assigned to the
Executive, and the circumstances in either case were such that an invention
might reasonably be expected to result from the carrying out of such duties, or
(ii) the invention was made in the course of the duties of the Executive and, at
the time of making the invention, because of the nature of the Executive's
duties and the particular responsibilities arising from the nature of the
Executive's duties, the Executive had a special obligation to further the
interests of the Company. In addition, if (x) the Executive while employed shall
make any improvement or develop any know-how, copyrightable work or design, (y)
such improvement, know-how, copyrightable work or design is relevant to the
business of the Company or any of its subsidiaries, and (z) such improvement,
know-how, copyrightable work or design arouse directly out of any work carried
out while employed, or out of Confidential Company Information or Confidential
Affiliate Information to which the Executive had access while in the employ of
the Company, then such improvement, know-how, copyrightable work or design shall
belong to the Company whether or not it was disclosed to the Company while
employed by the Company.
A. In the event that the Executive makes any invention or
develops any improvement, know-how, copyrightable design or work which belongs
to the Company, the Executive shall fully, freely and immediately communicate
the same to the Company and the Executive shall, if and as desired by the
Company execute all documents and do all acts and things at the Company's cost
which may be necessary or desirable to obtain letters patent or other adequate
protection in any part of the world for such invention, improvement, know-how,
copyrightable work or design and to vest the same in the Company for the
Company's benefit. The Executive hereby irrevocably appoints the Company as the
Executive's attorney in the Executive's name and on the Executive's behalf to
execute all such deeds and documents and to do all such acts and things as may
be necessary to give effect to this Subsection in the event that the Executive
fails to comply within seven days with the written directions given by the
Company pursuant to this Subsection.
B. The Executive has been notified and understands that the
provisions of Subsections 6(g) and 6(h) hereof do not apply to any invention
that qualifies fully under the provisions of Section 2870 of the California
Labor Code, which states as follows:
(i) Any provision in an employment agreement which
provides that an employee shall assign, or offer to assign, any of his or her
rights in an invention to his or her employer shall not apply to an invention
that the employee
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developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or
reduction to practice of the invention to the employer's business, or actual or
demonstrably anticipated research or development of the employer; or
(2) Result from any work performed by the
employee for the employer.
(ii) To the extent a provision in an employment
agreement purports to require an employee to assign an invention otherwise
excluded from being required to be assigned under subdivision (a), the provision
is against the public policy of this state and is unenforceable.
9. Remedies. The Company shall be entitled, in addition to any other
right or remedy that it may have at law or in equity with respect to a breach of
this Agreement by the Executive (including the right to terminate payments
pursuant to Section 3 hereof), to an injunction, without the posting of a bond
or other security, enjoining or restraining the Executive from any violation or
threatened violation of this section, and the Executive hereby consents to the
issuance of such an injunction.
10. Moral Rights Waiver. "Moral Rights" means any right to claim
authorship of a work, any right to object to any distortion, or other
modification of a work, and any similar right, existing under the law of any
country in the world, or under any treaty. Executive hereby irrevocably
transfers and assigns to the Company any and all Moral Rights that Executive may
have in any services or materials. Executive also hereby forever waives and
agrees never to assert against client, its successors or assigns and any and all
Moral Rights Executive may have in any services or materials, even after
termination of this Agreement.
11. Release. In consideration of the payments and covenants made in
this Agreement, the Executive hereby releases the Company, its Employees,
officers, directors, subsidiaries, affiliates, successors and assigns and the
Company, its subsidiaries, affiliates, successors and assigns hereby release the
Executive from any and all claims for relief or causes of action relating to any
matters of any kind arising out of his employment (or its termination) with the
Company excepting those claims for relief for causes of action relating to the
Severance Benefit obligations of the Company under Section 3 of this Agreement.
The Executive expressly waives all rights and remedies under Section
1542 of the Civil Code of the State 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,
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which if known by him must have materially affected his settlement with
the debtor.
The Executive understands that if the facts with respect to which this
Agreement is executed are found hereafter to be different from the facts which
you now believe to be true, the Ekecutive expressly accepts and assumes the risk
of such possible differences in facts and agrees that this Agreement shall be
and remain effective notwithstanding such differences in facts.
12. Notices. All notices, consents, waivers or demands of any kind
which either party to this Agreement may be required or may desire to serve on
the other party in connection with this Agreement shall be in writing and may be
delivered by personal service or sent by telegraph or cable or sent by
registered or certified mail, return receipt requested with postage thereon
fully prepaid. All such communications shall be addressed as follows:
THE COMPANY: Sola International, Inc.
Xxxxx 000
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
THE EXECUTIVE: Xxxxxx X. Xxxx
00000 Xxxxxxxxx Xxxxx
Xxx Xxxxx Xxxxx, XX 00000
If sent by telegraph or cable, a confirmed copy of such telegraphic or
cable notice shall be promptly sent by mail (in the manner provided above) to
the addressees. Service of any such communication made only by mail shall be
deemed complete on the date of actual delivery as shown by the addressee's
registry or certification receipt or at the expiration of the third (3rd)
business day after the date of mailing which ever is later in time. Either party
hereto may from time to time, by notice in writing served upon the other as
aforesaid, designate a different mailing address or a different person to which
such notices or demands are thereafter to be addressed or delivered. Nothing
contained in this Agreement shall excuse either party from giving oral notice to
the other when prompt notification is appropriate, but any oral notice given
shall not satisfy the requirement of written notice as provided in this
paragraph.
13. Choice of Law. This Agreement shall be governed and construed and
enforced in accordance with the laws of the State of California (regardless of
that jurisdiction or any other jurisdictions choice of law principles).
14. Assignment. This Agreement may be assigned by the Company to any
affiliate of the Company or to any non-affiliate of the Company that shall
succeed to the business and assets of the Company. In the event of such
assignment, the Company shall cause such affiliate or non-affiliate as the case
may be, to assume the
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obligations of the Company hereunder by written agreement addressed to the
Executive concurrently with any assignment with the same effect as if such
assignee were the Company hereunder. This Agreement is personal to the Executive
and the Executive may not assign any rights or delegate any responsibilities
hereunder without the prior approval of the Company.
15. Entire Agreement. This Agreement is the entire Agreement between
the Company and the Executive with respect to the subject matter hereof and
cancels and supersedes any and all other agreements regarding the subject matter
hereof between the parties. This Agreement may not be altered, modified,
changed, or discharged except in writing signed by both of the parties.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instruments.
17. Construction. If any one or more of the provisions (or any part
thereof) of this Agreement shall be held to be invalid, illegal or unenforceable
in any respect of validity, legality and enforceability of the remaining
provisions (or any part thereof) shall not in any way be affected or impaired
thereby.
18. Arbitration. With respect to any controversy arising out of or
relating to this Agreement, or the subject matter thereof, such controversy
shall be settled by final and binding arbitration in Palo Alto, California in
accordance with the then existing rules ("the Rules") of the American
Arbitration Association ("AAA") and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof; provided
however, that the law applicable to any controversy shall be the law of
California, regardless of its or any jurisdictions choice of law principles.
Arbitration shall be the sole and exclusive remedy for the resolution of the
disputes described above. In any such arbitration, the award or decision shall
be rendered by a majority of the members of a board of arbitration, consisting
of three (3) members, one of whom shall be appointed by each party and the third
of whom shall be the chairman of the panel and be appointed by mutual agreement
of said two party appointed arbitrators. In the event of the failure of said two
arbitrators to agree, within five (5) working days after the commencement of the
arbitration, upon appointment of the third arbitrator, the third arbitrator
shall be appointed by the AAA in accordance with the Rules. In the event that
either party shall fail to appoint an arbitrator within five (5) days after the
commencement of the arbitration proceeding, such arbitrator and the third
arbitrator shall be appointed by the AAA in accordance with the Rules. The
arbitrator is empowered but, not limited, in making an award in favor of the
Executive to require any act or acts which they believe necessary to effectuate
the intent of this Agreement. The Company agrees that any costs of any
arbitration brought whether by the Executive or the Company including the
Executive's reasonable attorney's fees and expenses and the costs, fees and
expenses of the Executive's party appointed arbitrator, shall be borne in their
entirety by the Company.
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19. THE EXECUTIVE ACKNOWLEDGES THAT HE HAS HAD THE OPPORTUNITY TO
CONSULT WITH THE ADVISOR OF HIS CHOICE AND THAT HE HAS FREELY AND VOLUNTARILY
ENTERED INTO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year written below.
Sola International, Inc.
Dated: ______________, 1997 By __________________________
Dated: ______________, 1997 __________________________
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Schedule of Continuing Benefits Entitlement Pursuant to Paragraph 3B of the
Attached Agreement between SOLA International Inc. and Xxxxx X. Xxxx.
1. Reimbursement of the cost of a Company Car under the terms of the SOLA
International Company Automobile Policy for U.S. Executives.
2. Relocation housing benefits including provision of an interest free loan as
defined in the Executive's appointment letter and Secured promissory Note.
3. Continuation of the Company's equity stake in the Executive's residence
under the Agreement between the Company and the executive as
Tenants-in-Common.
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