SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This
Second Amended and Restated Employment Agreement (the “Agreement”) is entered
into as of November 17, 2009 (the “Effective Date”) by and between Plantronics,
Inc., a Delaware corporation (the “Company”) and S. Xxxxxxx Xxxxxxxxx (the
“Executive”) and amends and restates in its entirety the Amended and Restated
Employment Agreement entered into between the Company and the Executive on
January 26, 2009.
RECITALS
A. The
Executive is currently employed by the Company.
B. The
Company and the Executive desire to enter into an agreement that clarifies the
rights and obligations of the Company and the Executive in connection with
Executive’s employment with the Company and in the event that the Executive’s
employment with the Company terminates under certain circumstances.
C. The
Company believes it is in the best interest of the Company and its stockholders
to provide the Executive with an incentive to continue his employment and to
motivate the Executive to maximize the value of the Company upon a Change of
Control for the benefit of its stockholders.
D. The
Company believes that it is imperative to provide the Executive with certain
enhanced severance benefits upon the Executive’s termination of
employment following a Change of Control. These benefits will provide
the Executive with financial security and incentive and encouragement to remain
with the Company notwithstanding the possibility of a Change of
Control.
E. This
Agreement amends and restates the Amended and Restated Employment Agreement
dated January 26, 2009 between the Company and the Executive.
AGREEMENT
NOW,
THEREFORE, the parties agree as follows:
1. Employment and
Duties. During the Employment Period (defined in
paragraph 2 below), the Executive will serve as President and Chief
Executive Officer of the Company and such of the Company’s other affiliates and
subsidiaries as the Board of Directors of the Company (the “Board”) may from
time to time direct. The duties and responsibilities of the Executive
shall include the duties and responsibilities for the Executive’s corporate
offices and positions as set forth in the Company’s bylaws from time to time in
effect and such other duties and responsibilities as the Board may from time to
time reasonably assign to the Executive, in all cases to be consistent with the
Executive’s corporate offices and positions. The Executive shall
perform faithfully the executive duties assigned to him to the best of his
ability. The Executive also serves as a member of the Board, and
during the Employment Period agrees to serve in such capacity without additional
compensation. If the Executive is elected or appointed as an officer
or director of any of the Company’s affiliates or subsidiaries during the
Employment Period, then he shall also serve in such capacity or capacities but
without additional compensation.
2. Employment
Period. The employment period (the “Employment Period”) shall
begin upon the Effective Date and shall continue thereafter for an initial term
of one (1) year, unless sooner terminated in accordance with paragraph 10
below. After the initial one (1)-year Employment Period, or any
extension term, this Agreement shall be automatically extended for additional
one (1)-year terms, unless sooner terminated in accordance with
paragraph 10 below or unless either party provides written notice of
non-renewal to the other at least 90 days prior to the end of the then current
term. Notwithstanding the foregoing, if a Change of Control occurs at
any time during the Employment Period, the term of this Agreement shall extend
automatically through the date that is twenty-four (24) months following the
effective date of the Change of Control.
3. Place of
Employment. The Executive’s services shall be performed at the
Company’s principal executive offices in Santa Cruz, California. The
parties acknowledge, however, that the Executive may be required to travel in
connection with the performance of his duties hereunder.
4. Base
Salary. For all services to be rendered by the Executive
pursuant to this Agreement, the Company agrees to pay the Executive during the
Employment Period a base salary (the “Base Salary”) at an annual rate of not
less than $627,000. The Base Salary shall be paid in periodic
installments in accordance with the Company’s regular payroll
practices. The Company agrees to review the Base Salary at least
annually, and to make such increases therein as the Board may
approve.
5. Incentive
Bonus. Beginning with the Company’s current fiscal year and
for each fiscal year thereafter during the Employment Period, the Executive will
be eligible to receive Quarterly and Annual bonuses (together, the “Incentive
Bonus”) based upon certain financial criteria set by the Compensation Committee
of the Board, including revenue and profitability targets and other
organizational milestones. The Incentive Bonus payable hereunder
shall be payable consistent with the Company’s past practices and policies, but
shall be payable no later than the fifteenth day of the third month following
the later of the end of the Executive’s taxable year or the end of the Company’s
taxable year following the date the Incentive Bonus is no longer subject to a
substantial risk of forfeiture.
6. Expenses. The
Executive shall be entitled to prompt reimbursement by the Company for all
reasonable ordinary and necessary travel, entertainment and other expenses
incurred by the Executive during the Employment Period (in accordance with the
policies and procedures established by the Company for its senior executive
officers) in the performance of his duties and responsibilities under this
Agreement, provided that the Executive shall properly account for such expenses
in accordance with Company policies and procedures.
7. Other
Benefits. During the Employment Period, the Executive shall be
entitled to all of the fringe benefit programs that the Company and its
subsidiaries make available to senior officers in accordance with the terms and
conditions of such programs.
8. Vacations and
Holidays. The Executive shall be entitled to paid vacations
and holidays in accordance with the Company’s policies in effect from time to
time for its senior executive officers. The Executive shall be
entitled to accrue into the following year vacation unused in a given year,
provided that the total vacation balance at any time shall not be twice the
annual vacation allowance.
9. Other
Activities. The Executive shall devote substantially all of
his working time and efforts during the Company’s normal business hours to the
business and affairs of the Company and its subsidiaries and to the diligent and
faithful performance of the duties and responsibilities duly assigned to him
pursuant to this Agreement, except for vacations, holidays and
sickness. However, the Executive may devote a reasonable amount of
his time to civic, community or charitable activities and, with the prior
written approval of the Board, to serve as director of other corporations,
provided that such activities do not materially interfere with the Executive’s
obligations hereunder (except that the Executive shall in any event be permitted
to continue serving on the board of directors of Xxxxxxx Technology,
Inc.).
10. Severance
Benefits.
(a) Termination for any Reason
Other than for Cause. If the Executive’s employment terminates
for any reason (other than for Cause) on or after the Effective Date, and the
Executive signs and does not revoke a release of claims with the Company (in a
form reasonably acceptable to the Company) and provided that such release of
claims becomes effective no later than sixty (60) days following the termination
date or such earlier date required by the release agreement (such deadline, the
“Release Deadline”), then, in exchange for the consideration set forth in this
Agreement including but not limited to the Covenant
Not to Compete or Solicit found in paragraph 13, and
subject to this paragraph 10, Executive shall receive the following for the
period of twenty-four (24) months following the Termination Date (the “Severance
Payment Period”): (i) continued cash compensation payments equal to
seventy-five percent (75%) of the average of the cash compensation earned in the
four (4) full fiscal quarters immediately preceding the Termination Date;
provided, however, that during fiscal year 2011, the time period for calculating
seventy-five percent (75%) of the average of the cash compensation earned shall
be measured by the cash compensation earned in the eight (8) full fiscal
quarters immediately preceding the Termination Date and in fiscal year 2012 and
thereafter, the time for calculating seventy-five percent (75%) of the average
cash compensation earned shall be measured by the cash compensation earned in
the twelve (12) full fiscal quarters immediately preceding the Termination Date
and (ii) the continued provision of “Company Benefits,” including “Medical
Benefits” (as defined in paragraph 11(c)). If Executive voluntarily reduces
his compensation as a cost reduction measure, Executive’s continued cash
compensation payment shall not be calculated as outlined in subsection (i) of
this section, but instead, the continued cash compensation payment calculation
shall equal seventy-five percent (75%) of the average of the cash compensation
earned in the number of full fiscal quarters as specified in subjection (i) of
this section as if the voluntary reduction was not implemented. To remove any
ambiguity in the foregoing amount, after the foregoing payments are completed,
the Executive shall have received a total of 1.5 times the average of the cash
compensation payments earned in the number of full fiscal quarters as specified
in subjection (i) of this section (disregarding any voluntary reduction of the
Executive’s cash compensation). “Cash compensation” as used in this paragraph
shall mean Base Salary and Incentive Bonus earned in the applicable fiscal
quarters, even if the amounts are paid in subsequent periods. The
cash compensation shall be payable at the same time(s) as payable to employees
of the Company. Such payments and the provision of Company Benefits
shall be discontinued and the Company shall be entitled to a refund of all
compensation paid upon a breach by the Executive of his obligations under
paragraph 12 (Proprietary Information ) or paragraph 13 (Covenant Not to
Compete or Solicit) hereof.
(b) Termination for
Cause. If the Executive is terminated for Cause, then the
Executive shall not be entitled to receive severance or other benefits under
this Agreement, but will be entitled to receive benefits (if any) as may then be
established under the Company’s then existing severance and benefits plans and
policies at the time of such termination for similar types of
terminations.
(c) Termination without Cause or
Resignation for Good Reason in Connection with a Change of
Control. If the Company terminates the Executive’s employment
with the Company without Cause or if the Executive resigns from such employment
for Good Reason, and such termination occurs on or within twenty-four (24)
months after a Change of Control, and the Executive signs and does not revoke a
release of claims with the Company (in a form reasonably acceptable to the
Company) and provided that such release of claims becomes effective no later
than the Release Deadline, then subject to this paragraph 10, Executive shall
receive the following:
(i) Accrued
Compensation. The Company shall pay the Executive all accrued
but unpaid vacation, expense reimbursements, wages, and other benefits due to
the Executive under any Company-provided plans, policies, and
arrangements.
(ii) Severance
Payment. The Executive shall receive a lump-sum payment (less
applicable withholding taxes) equal to the sum of (A) three hundred percent
(300%) of the Executive’s Base Salary as in effect immediately prior to the
Executive’s termination date or (if greater) at the level in effect immediately
prior to the Change of Control, (B) one hundred percent (100%) of the
Executive’s quarterly target Incentive Bonus, and (C) one hundred percent (100%)
of the Executive’s annual target Incentive Bonus. If Executive voluntarily
reduces his compensation as a cost reduction measure, Executive’s lump-sum
payment for purposes of this subsection shall be calculated based on Executive’s
Base Salary, quarterly target Incentive Bonus, and annual target Incentive Bonus
before a voluntary reduction was taken of Executive’s compensation.
(iii) Continued Employee
Benefits. If the Executive elects continuation coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) or the California Continuation Benefits Replacement Act, as
amended (“Cal-COBRA”) for periods of coverage beyond that permitted by COBRA for
the Executive and the Executive’s eligible dependents, within the time period
prescribed pursuant to COBRA, or Cal-COBRA, as applicable, the Company shall
reimburse the Executive for the COBRA (or, if applicable, Cal-COBRA) premiums
for such coverage (at the coverage levels in effect immediately prior to the
Executive’s termination) until the earlier of (A) a period of thirty-six (36)
months from the last date of employment of the Executive with the Company, or
(B) the date upon which the Executive and/or the Executive’s eligible dependents
becomes covered under similar plans. COBRA reimbursements shall be
made by the Company to the Executive consistent with the Company’s normal
expense reimbursement policy.
(d) Timing of
Payments.
(i) If the
release of claims does not become effective by the Release Deadline, the
Executive shall forfeit any rights to severance or benefits under
paragraph 10 of this Agreement. In no event shall severance
payments or benefits be paid or provided pursuant to paragraph 10 until the
release of claims actually becomes effective. In the event the
termination occurs at a time during the calendar year where the release of
claims could become effective in the calendar year following the calendar year
in which the Executive’s termination occurs (whether or not it actually becomes
effective in the following year), then any severance payments or benefits to
which the Executive becomes entitled under this Agreement that would be
considered Deferred Compensation Severance Benefits (as defined in paragraph
10(h)(i)) shall be paid on the first payroll date to occur during the calendar
year following the calendar year in which such termination occurs, or, if later,
(i) the date the release of claims actually becomes effective, (ii) such
time as required by the payment schedule applicable to each payment or benefit
as set forth in paragraph 10, or (iii) such time as required by paragraph
10(h).
(ii) Unless
otherwise required by paragraph 10(h), the Company shall pay any severance
payments (as provided for in paragraph 10(c)), in a lump-sum payment payable
within thirty (30) days following the Executive’s Termination Date; provided,
however, that no severance or other benefits shall be paid or provided until the
release of claims discussed in paragraph 10 becomes effective and irrevocable,
and any severance amounts or benefits otherwise payable between the Executive’s
Termination Date and the date such release becomes effective and irrevocable
shall be paid on the date the release becomes effective and
irrevocable. If the Executive should die before all of the severance
amounts have been paid, such unpaid amounts shall be paid in a lump-sum payment
promptly following such event to the Executive’s designated beneficiary, if
living, or otherwise to the personal representative of the Executive’s
estate.
(e) Exclusivity of
Payments. Notwithstanding anything in this Agreement to the
contrary, if the Executive receives payments or benefits pursuant to paragraph
10(a) of this Agreement, then such payments or benefits shall be in lieu of any
payments or benefits that the Executive may be entitled to pursuant to paragraph
10(c) of this Agreement. If the Executive receives payments or
benefits pursuant to paragraph 10(c) of this Agreement, then such payments or
benefits shall be in lieu of any payments or benefits that Executive may be
entitled to pursuant to paragraph 10(a) of this Agreement. If the
Executive is entitled to receive payments or benefits pursuant to both
paragraphs 10(a) and 10(c) of this Agreement, the Executive shall receive the
payments or benefits provided pursuant to either (but not both) paragraphs 10(a)
or 10(c), whichever of the foregoing shall provide him the greater economic
benefit.
(f) Death/Disability. In
the event the Executive’s employment with the Company terminates by reason of
the Executive’s death or Disability, the Company shall be obligated as
follows:
(i) Death. The Company
will during the life of Executive and while he remains employed by the Company
pay for a term life insurance policy that will pay to the beneficiary or
beneficiaries designated by the Executive to the Company in writing or, absent
such designation, to the representative of the Executive’s estate the sum of
five million dollars ($5,000,000.) If Executive leaves the Company for any
reason, Executive shall be permitted to take the policy with him provided that
as of the date of his termination from the Company, Executive shall pay from his
own account all costs to maintain the policy.
(ii) Disability. During
the time the Executive is employed by the Company, the Company shall pay for a
disability insurance policy that will pay to Executive upon his termination from
the Company by reason of his Disability a benefit of one million five hundred
thousand dollars ($1,500,000) payable in accordance with the terms of such
policy.
(g) Equity. In
the event of a Change of Control or termination of the Executive’s employment on
or following the Change of Control, the unvested equity awards held by the
Executive shall be affected as follows:
(i) Change of
Control. In the event of a Change of Control, and subject to
the Executive’s continued employment with the Company through the effective date
of such Change of Control, all outstanding equity awards shall vest in full as
to one hundred percent (100%) of the unvested portion of the award.
(ii) Involuntary Termination,
Death or Disability. If the Executive’s employment terminates
as a result of Involuntary Termination (other than for Cause), or terminates
under circumstances described in paragraph 10(f), then that portion of any
outstanding equity awards which would vest had employment continued for the next
succeeding eighteen (18) months shall automatically be accelerated and the
Executive shall become fully vested in such common stock and/or shall have the
right to exercise all or any portion of such option to acquire common stock, in
addition to any portion of the option exercisable prior to such
termination.
(iii) Voluntary Resignation after
the Effective Date. If the Executive’s employment terminates
by reason of the Executive’s voluntary resignation on or after the Effective
Date, then that portion of any outstanding equity awards which would vest had
employment continued for the next succeeding twelve (12) months shall
automatically be accelerated and the Executive shall become fully vested in such
common stock and/or shall have the right to exercise all or any portion of such
option to acquire common stock, in addition to any portion of the option
exercisable prior to such termination.
(iv) Termination for
Cause. In the event of a termination of the Executive’s
employment for Cause, all unvested equity awards shall terminate upon the
Termination Date.
(h) Section
409A.
(i) Notwithstanding
anything to the contrary in this Agreement, no severance payable to the
Executive, if any, pursuant to this Agreement, when considered together with any
other severance payments or separation benefits that are considered deferred
compensation under Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and the final regulations and any guidance promulgated thereunder
(“Section 409A”) (together, the “Deferred Compensation Separation Benefits”)
shall be payable until the Executive has a “separation from service” within the
meaning of Section 409A.
(ii) Notwithstanding
anything to the contrary in this Agreement, if the Executive is a “specified
employee” within the meaning of Section 409A at the time of the Executive’s
termination (other than due to death), then the Deferred Compensation Separation
Benefits that are payable within the first six (6) months following the
Executive’s separation from service, will become payable on the first payroll
date that occurs on or after the date six (6) months and one (1) day following
the date of the Executive’s separation from service. All subsequent
Deferred Compensation Separation Benefits, if any, will be payable in accordance
with the payment schedule applicable to each payment or
benefit. Notwithstanding anything herein to the contrary, if the
Executive dies following the Executive’s separation from service but prior to
the six (6) month anniversary of the separation, then any payments delayed in
accordance with this paragraph will be payable in a lump sum as soon as
administratively practicable after the date of the Executive’s death and all
other Deferred Compensation Separation Benefits will be payable in accordance
with the payment schedule applicable to each payment or benefit. Each
payment and benefit payable under this Agreement is intended to constitute
separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations.
(iii) The
foregoing provisions are intended to comply with the requirements of Section
409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and
any ambiguities herein will be interpreted to so comply. The Company
and the Executive agree to work together in good faith to consider amendments to
this Agreement and to take such reasonable actions which are necessary,
appropriate or desirable to avoid imposition of any additional tax or income
recognition prior to actual payment to the Executive under Section
409A.
11. Definition of
Terms. The following terms referred to in this Agreement shall
have the following meanings:
(a) Cause. “Cause”
shall mean the Executive’s (i) conviction of a felony, act of fraud
against, or the misappropriation of property belonging to the Company,
(ii) willful misconduct that is demonstrably and materially injurious to
the Company, or (iii) continued material violations of his obligation under
the Employee Agreement (defined in paragraph 12) or under
paragraphs 1, 9 or 13 of this Agreement after there has been delivered to
the Executive a written demand for performance from the Company that describes
such violations.
(b) Change of
Control. “Change of Control” shall mean the occurrence of any
of the following events:
(i) Change in Ownership of the
Company. A change in the ownership of the Company which occurs
on the date that any one person, or more than one person acting as a group
(“Person”), acquires ownership of the stock of the Company that, together with
the stock held by such Person, constitutes more than fifty percent (50%) of the
total voting power of the stock of the Company, except that any change in the
ownership of the stock of the Company as a result of a private financing of the
Company that is approved by the Board will not be considered a Change of
Control; or
(ii) Change in Effective Control
of the Company. A change in the effective control of the
Company which occurs on the date that a majority of members of the Board is
replaced during any twelve (12) month period by directors whose appointment or
election is not endorsed by a majority of the members of the Board prior to the
date of the appointment or election. For purposes of this clause
(ii), if any Person is considered to be in effective control of the Company, the
acquisition of additional control of the Company by the same Person shall not be
considered a Change of Control; or
(iii) Change in Ownership of a
Substantial Portion of the Company’s Assets. A change in the
ownership of a substantial portion of the Company’s assets which occurs on the
date that any Person acquires (or has acquired during the twelve (12) month
period ending on the date of the most recent acquisition by such person or
persons) assets from the Company that have a total gross fair market value equal
to or more than fifty percent (50%) of the total gross fair market value of all
of the assets of the Company immediately prior to such acquisition or
acquisitions. For purposes of this subsection (iii), gross fair
market value means the value of the assets of the Company, or the value of the
assets being disposed of, determined without regard to any liabilities
associated with such assets.
For these
purposes, persons will be considered to be acting as a group if they are owners
of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the
Company.
Notwithstanding
the foregoing provisions of this definition, a transaction shall not be deemed a
Change of Control unless the transaction qualifies as a change in control event
within the meaning of Section 409A.
(c) Company
Benefits. “Company Benefits” shall mean the Company’s Medical
Benefits (defined below), its Automobile Expense Reimbursement Program, and its
disability, life or other group insurance benefits to the extent the Executive
is receiving such benefits immediately prior to the Termination Date, or such
comparable alternative benefits or payments as the Company may, in its
discretion, determine to be sufficient to satisfy its obligations to the
Executive under this Agreement. “Medical Benefits” shall mean the
Group Medical/Dental Plan and the Exec-U-Care Medical Reimbursement Insurance
Program, as currently in effect (as adjusted for all then current executives),
or such comparable alternative benefits or payments as the Company may, in its
discretion, determine to be sufficient to satisfy its obligations to the
Executive under this Agreement.
(d) Disability. “Disability”
shall mean that the Executive is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months. Termination
resulting from Disability may only be effected after at least thirty (30) days’
written notice by the Company of its intention to terminate the Executive’s
employment. In the event that the Executive resumes the performance
of substantially all of his duties hereunder before the termination of his
employment becomes effective, the notice of intent to terminate shall
automatically be deemed to have been revoked.
(e) Good
Reason. “Good Reason” shall mean the Executive’s termination
of employment within ninety (90) days following the expiration of any cure
period (discussed below) following the occurrence of one or more of the
following, without the Executive’s consent:
(i) A
material reduction in the Executive’s base compensation as in effect immediately
prior to such reduction not including a substantially similar reduction that
applies to all similarly situated executives;
(ii) The
assignment to the Executive of any duties, or the reduction of
the Executive’s duties, either of which results
in a material diminution of the Executive’s authority, duties, or
responsibilities with the Company in effect immediately prior to such
assignment, or the removal of the Executive from such position and
responsibilities; provided, however, that a reduction in duties, position or
responsibilities solely by virtue of the Company being acquired and made part of
a larger entity, whether as a subsidiary, business unit or otherwise (as, for
example, when the Chief Executive Officer of the Company remains the Chief
Executive Officer of the Company following a Change of Control where the Company
becomes a wholly owned subsidiary of the acquiror, but is not made the Chief
Executive Officer of the acquiring corporation) shall not constitute “Good
Reason;”
(iii) A
material change in the geographic location at which the Executive must perform
services (in other words, the relocation of the Executive to a facility that is
more than twenty-five (25) miles from the Executive’s current location);
or
(iv) the
failure of the Company to obtain the assumption of the Agreement by a successor
and/or acquirer.
The
Executive shall not resign for Good Reason without first providing the Company
with written notice within ninety (90) days of the event that the Executive
believes constitutes “Good Reason” specifically identifying the acts or
omissions constituting the grounds for Good Reason and a reasonable cure period
of not less than thirty (30) days following the date of such
notice.
(f) Involuntary
Termination. “Involuntary Termination” shall mean
(i) without the Executive’s express written consent, the assignment to the
Executive of any duties or the reduction of the Executive’s duties, either of
which results in a significant diminution in the Executive’s position or
responsibilities with the Company in effect immediately prior to such
assignment, or the removal of the Executive from such position and
responsibilities; (ii) without the Executive’s express written consent, a
substantial reduction, without good business reasons, of the facilities and
perquisites (including office space and location) available to the Executive
immediately prior to such reduction; (iii) a reduction by the Company in
the Base Salary of the Executive as in effect immediately prior to such
reduction; (iv) a material reduction by the Company in the kind or level of
employee benefits to which the Executive is entitled immediately prior to such
reduction with the result that the Executive’s overall benefits package is
significantly reduced; (v) the relocation of the Executive to a facility or
a location more than 25 miles from the Executive’s then present location,
without the Executive’s express written consent; (vi) any termination of
the Executive’s employment by the Company that is not effected for death,
Disability or for Cause; (vii) the failure of the Company to obtain the
assumption of this Agreement by any successor; (viii) any material breach
by the Company of any material provision of this Agreement; (ix) any
purported termination of the Executive’s employment by the Company that is not
effected pursuant to a notice of termination satisfying the requirements of
paragraph 19 below, and for purposes of this Agreement, no such purported
termination shall be effective; or (x) provision of notice of non-renewal
or extension of the Employment Period as provided for in paragraph 2
above.
(g) Termination
Date. “Termination Date” shall mean (i) if this Agreement
is terminated by the Company for Disability, thirty (30) days after notice of
termination (pursuant to paragraph 19) is given to the Executive (provided
that the Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty (30)-day period), (ii) if the
Executive’s employment is terminated by reason of the Executive’s death, the
date of death, (iii) if the Agreement is terminated by the Executive, such
date as the Executive specifies in his notice of termination (pursuant to
paragraph 19) to the Company, (iv) if the Agreement is terminated by
either the Executive or the Company in connection with a notice of non-renewal
or extension of the Employment Period as provided for in paragraph 2 above,
the expiration of such Period, or (v) if the Company terminates the
Executive’s employment, the date specified by the Company in the notice of
termination to the Executive (pursuant to paragraph 19).
12. Proprietary
Information. During the Employment Period and thereafter, the
Executive agrees to comply with the Employee Patent, Secrecy and Invention
Agreement, which the Executive executed as of February 1, 1995 (the
“Employee Agreement”), which is incorporated herein by reference.
13. Covenant Not to Compete or
Solicit.
(a) Non-Competition. The
Executive agrees that for a period of thirty-six (36) months following the
Executive’s termination of employment with the Company for any reason (other
than death), the Executive will not directly or indirectly engage in (whether as
an employee, consultant, proprietor, partner, director or otherwise), or have
any ownership interest in, or participate in the financing, operation,
management or control of, any person, firm, corporation or business that engages
in or (to the Executive’s knowledge, after due inquiry) intends to engage in, a
“restricted business” (as defined below).
Ownership
of (i) no more than one percent (1%) of the outstanding voting stock of a
publicly traded corporation, or (ii) any stock owned by the Executive on
the Effective Date, shall not constitute a violation of this
provision.
(b) Non-Solicitation. The
Executive agrees that for a period of thirty-six (36) months following the
Executive’s termination of employment for any reason (other than death), the
Executive shall not (i) solicit, encourage or take any other action that is
intended to induce any other employee of the Company to terminate his or her
employment with the Company, or (ii) interfere in any manner with the
contractual or employment relationship between the Company and any such employee
of the Company.
The
foregoing shall not prohibit any entity with which the Executive may be
affiliated from hiring a former employee of the Company.
(c) World-wide. The
parties acknowledge that the market for the Company’s products is world-wide,
and that, in this market, products from any nation compete with products from
all other countries. Accordingly, the parties agree that the
provisions of this paragraph 13 shall apply to each of the states and
counties of the United States, including each county in California, and to each
country world-wide.
(d) Severability. The
parties intend that the covenants contained in the preceding subparagraphs shall
be construed as a series of separate covenants, one for each county of
California, each state of the Union, and each country. Except for
geographic coverage, each such separate covenant shall be deemed identical in
terms of the covenant contained in the preceding subparagraphs. If,
in any judicial proceeding, a court shall refuse to enforce any of the separate
covenants (or any part thereof) deemed included in said subparagraphs, then such
unenforceable covenant (or such part) shall be deemed eliminated from this
Agreement for the purpose of those proceedings to the extent necessary to permit
the remaining separate covenants (or portions thereof) to be
enforced. In the event the provisions of this paragraph 13
should ever be deemed to exceed the time of geographic limitations, or the scope
of this covenant, permitted by applicable law, then such provisions shall be
reformed to the maximum time or geographic limitations, as the case may be,
permitted by applicable laws.
(e) Restricted
Business. For purposes of this Agreement, “restricted
business” shall mean any business that is engaged in or (to the Executive’s
knowledge, after due inquiry) preparing to engage in the design, manufacture,
marketing, sale or distribution of communications headsets, communications
handsets, or related products, assemblies, subassemblies, components, and the
repair or refurbishment of same.
14. Indemnification. In
accordance with the Company’s current indemnification policies, the Company
shall indemnify the Executive if the Executive is or becomes a party or is
threatened to be made a party to any threatened or pending action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Company) by reason of the fact that the
Executive is or was a director, officer, employee or agent of the Company, or
any subsidiary of the Company, by reason of any action or inaction on the part
of the Executive while an officer or director, against expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement (if such
settlement is approved in advance by the Company, which approval shall not be
unreasonably withheld) actually and reasonably incurred by the Executive in
connection with such action, suit or proceeding if the Executive acted in good
faith and in a manner the Executive reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the Executive’s conduct was
unlawful.
15. Successors. The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure
of the Company to obtain such assumption agreement prior to the effectiveness of
any such succession shall entitle the Executive to the benefits described in
paragraph 10(a) of this Agreement, subject to the terms and conditions
therein.
16. Arbitration.
(a) Agreement. The
Company and the Executive agree that any dispute or controversy arising out of,
relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof shall be
settled by binding arbitration, unless otherwise required by law, to be held in
Santa Xxxxx County, California, and administered by Judicial Arbitration &
Mediation Services, Inc. (“JAMS”), pursuant to its Employment Arbitration Rules
& Procedures (the “JAMS Rules”). The Arbitrator shall have the
power to award any remedies available under applicable law, and the Arbitrator
shall award attorneys’ fees and costs to the prevailing party, except as
prohibited by law. The arbitrator may grant injunctions or other
relief in such dispute or controversy. The decision of the arbitrator
shall be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator’s decision in
any court having jurisdiction.
(b) Governing
Law. The arbitrators shall apply California law to the merits
of dispute or claim, without reference to rules of conflicts of
law. The Executive hereby expressly consents to the personal
jurisdiction of the state and federal courts located in California for any
action or proceeding arising from or relating to this Agreement or relating to
any arbitration in which the parties are participants.
(c) Costs and Fees of
Arbitration. The Executive shall pay the initial arbitration
filing (but only so much of the filing fees as the Executive would have instead
paid had he filed a complaint in a court of law), and the Company shall pay the
remaining costs and expenses of such arbitration (unless the Executive requests
that each party pay one-half of the costs and expenses of such arbitration or
unless otherwise required by law). The Company and the Executive
shall each pay separately its counsel fees and expenses unless otherwise
required by law.
(d) Equitable
Relief. The parties may apply to any court of competent
jurisdiction for a temporary restraining order, preliminary injunction, or other
interim or conservatory relief, as necessary, without breach of this arbitration
agreement and without abridgment of the powers of the arbitrator.
(e) Executive’s
Representation. THE EXECUTIVE HAS READ AND UNDERSTANDS THIS
PARAGRAPH, WHICH DISCUSSES ARBITRATION. THE EXECUTIVE UNDERSTANDS
THAT BY SIGNING THIS AGREEMENT, HE AGREES TO SUBMIT ANY FUTURE CLAIMS ARISING
OUT OF, RELATING TO, OR IN CONNECTION WITH THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT, TO BINDING ARBITRATION,
UNLESS OTHERWISE REQUIRED BY LAW, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A
WAIVER OF HIS RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
DISPUTES RELATING TO THIS AGREEMENT.
17. Absence of
Conflict. The Executive represents and warrants that his
employment by the Company as described herein shall not conflict with and will
not be constrained by any prior employment or consulting agreement or
relationship.
18. Assignment. This
Agreement and all rights under this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
personal or legal representatives, executors, administrators, heirs,
distributors, devisees, legatees, successors and assigns. This
Agreement is personal in nature, and neither of the parties to this Agreement
shall, without the written consent of the other, assign or transfer this
Agreement or any right or obligation under this Agreement to any other person or
entity, except that the Company may assign this Agreement to any of its
affiliates or wholly-owned subsidiaries or to any successor by merger, provided
that such assignment will not relieve the Company of its obligations
hereunder. If the Executive should die while any amounts are still
payable to him hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the Executive’s
devisee, legatee, or other designee or, if there be no such designee, to the
Executive’s estate.
19. Notices.
(a) General. For
purposes of this Agreement, notices and other communications provided for in
this Agreement shall be in writing and shall be delivered personally or sent by
United States certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the
Executive:
S. Xxxxxxx Xxxxxxxxx
c/o Plantronics, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
If to the
Company: Plantronics,
Inc.
000 Xxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Attn: General Counsel
or to
such other address or the attention of such other person as the recipient party
has previously furnished to the other party in writing in accordance with this
paragraph. Such notices or other communications shall be effective
upon delivery or, if earlier, three days after they have been mailed as provided
above.
(b) Notice of
Termination. Any termination by the Company for Disability or
Cause, or by the Executive as a result of a voluntary resignation or an
Involuntary Termination, shall be communicated by a notice of termination to the
other party hereto given in accordance with paragraph 19(a) of this
Agreement. Such notice shall indicate the specific termination
provision in this Agreement relied upon, shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination under the
provision so indicated, and shall specify the termination date in accordance
with paragraph 11(g). The failure by the Executive to include in
the notice any fact or circumstance that contributes to a showing of Involuntary
Termination shall not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing his rights
hereunder.
20. Integration. This
Agreement, the Employee Agreement dated February 1, 1995, the Executive’s
Indemnification Agreement also dated March 27, 1997, and the respective
agreements governing the Executive’s Company stock options and other equity
awards represent the entire agreement and understanding between the parties as
to the subject matter hereof and supersede all prior or contemporaneous
agreements whether written or oral. As of the Effective Date, the
Amended and Restated Employment Agreement between the Company and the Executive
dated as of January 26, 2009 is superseded. No waiver, alteration or
modification of any of the provisions of this Agreement shall be binding unless
in writing and signed by duly authorized representatives of the parties
hereto.
21. Waiver. Failure
or delay on the part of either party hereto to enforce any right, power or
privilege hereunder shall not be deemed to constitute a waiver
thereof. Additionally, a waiver by either party or a breach of any
promise hereof by the other party shall not operate as or be construed to
constitute a waiver of any subsequent waiver by such other party.
22. Severability. Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein.
23. Headings. The
headings of the paragraphs contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
any provision of this Agreement.
24. Applicable
Law. This Agreement shall be governed by and construed in
accordance with the internal substantive law, and not the choice of law rules,
of the State of California.
25. Counterparts. This
Agreement may be executed in one or more counterparts, none of which need
contain the signature of more than one party hereto, and each of which shall be
deemed to be an original, and all of which together shall constitute a single
agreement.
IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of
the Company by its duly authorized officer, as of the day and year first above
written.
PLANTRONICS,
INC.
By: s/Xxxxxxx X.
Xxxxxxx
Xxxxxxx
X. Xxxxxxx
Title:
Vice President – Legal, General Counsel & Secretary
EXECUTIVE:
By: s/S. Xxxxxxx
Xxxxxxxxx
S.
Xxxxxxx Xxxxxxxxx
