SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit 10.34
SEPARATION AGREEMENT AND GENERAL RELEASE
THIS SEPARATION AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made and entered into this
15th day of November, 2007 (the “Agreement Date”), between Xxxxxxx X. Xxxxxxxxxx (the “Employee”)
and LSI Corporation (together with its predecessors and its successors and assigns, the “Company”).
W I T N E S S E T H:
WHEREAS, the Employee is currently employed by the Company;
WHEREAS, the Company and the Employee (the “Parties”) desire to set forth the terms on which
the Employee is leaving his employment with the Company; and
WHEREAS, the Parties have negotiated and agreed to a final settlement of their respective
rights, obligations and liabilities;
NOW THEREFORE, in consideration of the promises and covenants contained in this Agreement, the
Parties agree as follows:
1. Resignation. The Employee acknowledges and agrees that, effective as of January 5,
2008 (the “Status Change Date”), the Employee hereby resigns all of his positions with the Company
(including, but not limited to, his status as Executive Vice President, Sales of the Company), and
any other positions (including directorships) with other entities that are affiliated with the
Company, other than his position as a Technical Consultant, as described in Section 2, below. The
Employee agrees to execute any documents that may be necessary or appropriate to effect or to
memorialize any resignations from the Company or its affiliates contemplated by this Agreement,
including the letter of resignation in the form attached hereto as Annex A
concurrent herewith. Until the Status Change Date, the Employee shall continue to devote his
skills and abilities to the Company on a full time regular basis. Notwithstanding any of the terms
of this Agreement, the Employee remains an “at will” employee for all purposes.
2. Change In Status. From and after the Status Change Date, all compensation and
benefits shall cease, except for those specifically listed in this Section 2. The Employee’s
position with the Company, including all compensation and eligibility for benefits (other than
post-termination benefits specifically described herein), shall terminate on the earlier of: (i)
November 15, 2008, or (ii) the Employee’s commencement of any other employment, occupation, or
consulting activity such that this activity would include being an employee of a company and
working greater than nineteen (19) hours per week at a single employer (the “Termination Date”).
2.1 Position and Continuation Salary.
(a) The Employee will remain an employee of the Company until such time as his employment
terminates on the Termination Date. The Employee’s job title, as of the Status Change Date, will
be “Technical Consultant.” In this position, the Employee will be required to provide technical
consulting to the Company on an as-needed basis. The Employee’s position as Technical Consultant,
and any other position with the Company, will terminate as of the Termination Date. During the
Employee’s tenure as a Technical Consultant from the Status Change Date until the Termination Date,
the Employee shall be paid a base salary at an annualized rate of $325,000.00, paid every two
weeks, less any and all statutory withholding and deductions as may be required by law or as
authorized by the Employee (the gross amount being the “Continuation Salary”).
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(b) If the Employee’s Termination Date is on or prior to May 15, 2008, the Continuation Salary
shall cease effective as of such Termination Date, and the Employee shall receive a one-time
payment equal to the difference between (i) $162,500, and (ii) the base salary received by the
Employee from November 15, 2007 to the Termination Date, less any and all statutory withholding and
deductions as may be required by law or as authorized by the Employee.
2.2 Incentive Payments. Within thirty (30) days of the Status Change Date,
the Employee will receive (a) a one time short-term incentive payout for 2007 in the amount
of $149,000.00; and (b) a one time supplemental bonus payment in the amount of $75,000.00.
Each of these payments will be made less any and all statutory withholding and deductions
as may be required by law or as authorized by the Employee.
2.3 Stock Rights. The Employee will not be eligible to receive any further
stock option or restricted stock unit grants after the Status Change Date. However,
existing stock option and restricted stock unit grants will continue to vest, until the
Termination Date, as described in Section 3, below; provided, however, that
in the event that the Termination Date is on or prior to March 20, 2008, then the Company
shall pay the Employee a cash payment equal to the value of 12,500 shares of the Company’s
common stock based on the closing price such stock on the Termination Date, less any and
all statutory withholding and deductions as may be required by law or as authorized by the
Employee.
2.4 Benefit Plans. The Employee and the Employee’s dependents shall continue
to be covered by the Company’s group benefit plans (e.g., medical, dental, vision care, and
life insurance), at the Company’s expense, except for the employee-paid portion of such
premiums, until the last day of the month in which the Termination Date falls, to the same
extent the Employee and the Employee’s dependents were covered by said plans as of the
Agreement Date. If the Employee desires to continue coverage, pursuant to COBRA, after the
Termination Date, the Employee may do so at the Employee’s own expense. The Employee
understands and agrees that he must complete a COBRA application in order to receive the
extension of health benefits beyond the Termination Date.
2.5 Incentive Bonus Plans and Other Benefits. The Employee will no longer be
eligible to participate in any bonus program after the Status Change Date. The Employee
will not be entitled to any other compensation or benefits after the Status Change Date,
other than what is specifically set forth in this Section 2. The Employee’s car allowance
and vacation accrual will be terminated effective as of the Status Change Date.
3. Outstanding Stock Rights. The Employee acknowledges that he holds the stock
options and restricted stock units (the “Stock Rights”) set forth on Annex B
attached hereto and incorporated herein by this reference. The Employee acknowledges and agrees
that he has no other options, stock units, or other rights received from the Company to purchase
any stock or securities of the Company or any affiliate thereof (collectively, the “Issuers”). The
Employee’s outstanding Stock Rights will continue to vest through the Termination Date. Any vested
stock options must be exercised within 90 days of the Termination Date. The Employee understands
and agrees that all Stock Rights which have not vested on or before the Termination Date will
expire on the Termination Date, and vested stock options not exercised within 90 days of the
Termination Date will expire on the 91st day following the Termination Date. The Employee
acknowledges and agrees that he does not enter into this Agreement on the basis of or in reliance
in any way on any representation or assurance of any Issuer or any officer, director, employee or
agent of any Issuer regarding the current or future value of his Stock Rights or of any stock or
securities of any Issuer.
4. Release.
(a) The Employee, for himself, and his heirs, executors, administrators, assigns, successors,
agents, and representatives, hereby irrevocably and unconditionally releases and forever discharges
the Company, and each and all of its heirs, executors, administrators,
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successors, assigns, predecessors, owners, shareholders, agents, representatives, employees,
consultants, insurers, officers, directors, attorneys, affiliates, partners, and corporate parents,
subsidiaries, and divisions (referred to herein collectively as the “Related Entities”) from any
and all liabilities, claims, demands, contracts, debts, obligations and causes of action of every
nature, character and description, past, present, and future, known or unknown, vested or
contingent, ascertained or unascertained, suspected or unsuspected, existing or claimed to exist,
in law, admiralty, or equity, under any theory of the law, whether common, constitutional,
statutory, or otherwise, in any jurisdiction, foreign or domestic, which the Employee now owns or
holds, or has at any time heretofore owned or held, by reason of any matter, cause or thing
occurred, done, omitted or suffered to be done from the beginning of the world to the day of the
Agreement Date, including, without limitation, (i) the Employee’s employment relationship with the
Company (or any Related Entity), including employment through the Termination Date; and (ii) the
termination of the Employee’s employment with the Company (or any Related Entity), including the
Employee’s resignation as an executive officer of the Company.
(b) The Employee acknowledges that the release contained in this Agreement includes, but is
not limited to, a release of all claims the Employee may have under all state, federal and local
laws pertaining to discrimination, harassment, the California or other applicable state Labor Code,
family and medical leave laws, wage and hour laws, disability laws, civil rights laws, as well as
laws pertaining to claims of or for emotional distress, defamation, breach of contract, breach of
the covenant of good faith and fair dealing, as well as equal pay laws and laws pertaining to
wrongful discharge, including, without limitation, the Equal Pay Act, the Occupational Safety and
Health Act, Title VII of the Civil Rights Act of 1964, Sections 1981 through 1988 of the Civil
Rights Act of 1866, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967,
the Americans with Disabilities Act, the Fair Labor Standards Act and its state and local
counterparts, claims of discrimination under the Employee Retirement Income Security Act, the
Worker Adjustment and Retraining Notification Act, the Older Workers Benefit Protection Act, the
Family and Medical Leave Act, the Rehabilitation Act of 1973, Executive Order 11246 and any other
executive order, the Uniform Services Employment and Reemployment Rights Act, the Immigration
Reform Control Act , the California Family Rights Act, and the California Fair Employment and
Housing Act, all as amended. It is expressly understood by the Employee that among the various
rights and claims being waived in this release are those arising under the Age Discrimination in
Employment Act of 1967. The Employee understands that rights or claims under this law that may
arise after the date this Agreement is executed by him are not waived. The Employee also
understands that nothing in this Agreement is to be construed to interfere with the Employee’s
ability to file a charge with the Equal Employment Opportunity Commission concerning this Agreement
or any conduct released herein, but the Employee acknowledges that by this Agreement he waives any
ability to further collect, directly or indirectly, any monetary or non-monetary award based on any
conduct or omissions against the Company or any of the Related Entities.
(c) The Employee understands and agrees that if, hereafter, the Employee discovers facts
different from or in addition to those which the Employee now knows or believes to be true, that
the waivers and releases of this Agreement shall be and remain effective in all respects
notwithstanding such different or additional facts or the discovery of such fact. The Employee
further agrees that the Employee fully and forever waives any and all rights and benefits conferred
upon the Employee by the provisions of Section 1542 of the Civil Code of the State of California,
or any other similar federal, state, or local law, which states as follows (parentheticals added):
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR (i.e., THE
EMPLOYEE) 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 (i.e., THE COMPANY).”
(e) The provisions of this Section 4 shall survive the termination or expiration of this
Agreement for any reason.
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5. Restrictive Covenants; Confidentiality and Return of Company Property.
(a) Until November 15, 2008, the Employee shall not, without the prior written consent of the
Company’s Chief Executive Officer, (i) directly or indirectly solicit (or encourage any company or
business organization in which the Employee is an officer, employee, partner, director, consultant
or member of a technical advisory board to solicit or employ) or (ii) refer to any employee search
firms, any person who was employed by the Company as of the date hereof.
(b) Until November 15, 2008, the Employee shall not, without the prior written consent of the
Company’s Chief Executive Officer, at any time or for any reason, anywhere in the world, directly
or indirectly (i) engage in any business or activity, whether as an employee, consultant, partner,
principal, agent, representative, stockholder (except as a holder of less than 5% of the combined
voting power of the outstanding stock of a publicly held company) or in any other individual,
corporate or representative capacity, or render any services or provide any advice to any business,
activity, person or entity, if the Employee knows or reasonably should know that such business,
activity, service, person or entity, directly or indirectly, competes in any material manner with
the Company’s business as constituted on the date hereof, or (ii) meaningfully assist, help or
otherwise support any person, business, corporation, partnership or other entity or activity,
whether as an employee, consultant, partner, principal, agent, representative, stockholder (other
than in the capacity as a stockholder of less than 5% of the combined voting power of the
outstanding shares of stock of a publicly held company) or in any other individual, corporate or
representative capacity, to create, commence or otherwise initiate, or to develop, enhance or
otherwise further, any business or activity if you know or reasonably should know that such
business, activity, service, person or entity, directly or indirectly, competes in any material
manner with the Company’s business as constituted on the date hereof. For the purposes of this
Agreement, the Company’s competitors shall be those companies listed in the “Competition” section
of the Company’s Form 10-K for the fiscal year ended December 31, 2006.
(c) If at any time the Employee violates the provisions above, any amounts remaining unpaid as
set forth in this Agreement as well as any benefits provided for in this Agreement (other than
those from qualified retirement or welfare plans) and any continuing vesting of stock options or
restricted stock units, if any, shall immediately be forfeited and terminated, and any amounts
already paid to the Employee in accordance with this Agreement, except for the sum of One Thousand
Dollars ($1,000) shall, at the Company’s sole discretion, be required to be repaid by the Employee
to the Company within ten (10) business days of the Company’s request in writing therefore. This
provision shall not affect the Company’s right to otherwise specifically enforce any provision
relating to non-solicitation or non-competition that is in this Agreement or in any other
agreement, document or plan applicable to the Employee.
(d) The Employee acknowledges, agrees, and warrants that he will continue to maintain the
confidentiality of all confidential and proprietary information of the Company and third parties,
and shall abide by the terms and conditions of the Employee Invention and Confidential Information
Agreement entered into between the Employee and the Company.
(e) The Employee represents and warrants that to the best of his knowledge and belief he has
returned to the Company all tangible and intangible property of the Company in his possession,
custody, or control. In addition, notwithstanding the foregoing representation and warranty, if
the Employee discovers he has retained any property of the Company, he shall promptly notify the
Company thereof and take reasonable steps in accordance with the Company’s instructions to return
such property to the Company. The provisions of this Section 6 shall survive the expiration or
termination, for any reason, of this Agreement.
6. Governing Law. This Agreement is entered into in the State of North Carolina and
shall be construed and interpreted in accordance with the laws of the State of North Carolina,
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excluding any conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the substantive law of any other jurisdiction.
7. Filing of this Agreement. The Employee and the Company both acknowledge that the
disclosure rules promulgated by the Untied States Securities & Exchange Commission require that
this Agreement be publicly disclosed. The Company undertakes the obligation to file this Agreement
within the time required by law.
8. Further Actions. The Employee, for himself, and his heirs, executors,
administrators, assigns and successors, covenants not to xxx or otherwise institute or cause to be
instituted or in any way actively participate in or voluntarily assist in (except at the Company’s
request or as provided by law) the prosecution of any legal or administrative proceedings against
the Company and/or any of the Related Entities with respect to any matter arising out of or
relating to any liabilities, claims, demands, contracts, debts, obligations and causes of action
released hereunder.
9. No Admission of Liability. The Employee and the Company both acknowledge and agree
that this is a compromise settlement of the hereinabove mentioned dealings and disputes, which is
not in any respect to be deemed, construed, or treated as an admission or a concession of any
liability or wrongdoing whatsoever by either party for any purpose whatsoever.
10. Non-Disparagement. The Employee and the Company agree that, in the future,
neither will make any disparaging or defamatory remarks about the other or any of the Related
Entities.
11. Severability. If any term, clause or provision of this Agreement is construed to
be or adjudged invalid, void or unenforceable, such term, clause or provision will be construed as
severed from this Agreement, and the remaining terms, clauses and provisions will remain in full
force and effect.
12. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered will be deemed to be an original and all of which taken
together will constitute one and the same instrument.
13. Entire Agreement. This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof and supersedes any and all prior, contemporaneous
or subsequent statements, representations, agreements or understandings, whether oral or written,
between the parties with respect hereto. This Agreement shall inure to the benefit of the
executors, administrators, heirs, successors and assigns of the parties hereto. The terms of this
Agreement may only be modified by a written instrument signed by the Employee and an authorized
officer of the Company.
14. Execution. For this Agreement to be effective, the Employee must sign and date it
on the last page hereof, and return the executed original to the undersigned representative of the
Company, no later than the close of business on the date twenty-one (21) days after the Agreement
Date, or this Agreement will be deemed rescinded by the Company, and thereafter void for all
purposes.
15. Rescission Period. The Employee understands that he has a full seven (7) days
following his execution and delivery of this Agreement to the Company to revoke his consent to this
Agreement by notifying the undersigned representative of the Company, of such revocation, in
writing, within that seven-day period. This Agreement shall not be effective or enforceable until
the seven-day revocation period has expired (the “Effective Date”). In the event that the Employee
revokes this Agreement prior to the Effective Date, the Agreement shall be deemed void and neither
party shall have any obligation hereunder, including the Company’s obligation to pay the amounts
described herein.
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16. Notices. All notices, requests, demands, and other communications called for
hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered
personally, (b) one day after being sent overnight by a well established commercial overnight
service, or (c) four days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:
| To the Company: | LSI Corporation | ||
| 0000 Xxxxxxxx Xxxxxxx XX | |||
| Xxxxxxxxx, XX 00000 | |||
| Attn: General Counsel | |||
| To the Employee: | Xxxxxxx X. Xxxxxxxxxx | ||
| 000 Xxxxxxxxxxxx Xxxxx | |||
| Xxxxxxxxxxx, XX 00000 |
17. Opportunity to Consult Counsel. The Employee hereby acknowledges that he has read
and understands the foregoing Agreement and is being given the opportunity to consider this
Agreement for up to a full twenty-one (21) days from his receipt of this Agreement. The Employee
is advised to consult with an attorney of his own choosing before signing this Agreement. The
Employee may execute this Agreement at any time prior to the expiration of the 21-day period and
that if he does so, he does so voluntarily, without any threat or coercion from anyone, knowing
that he is waiving his statutory right to consider this Agreement for a full twenty-one (21) days.
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BY SIGNING AND DELIVERING THIS AGREEMENT, THE EMPLOYEE STATES:
a. HE HAS READ IT AND UNDERSTANDS IT AND HAS AT LEAST 21 DAYS TO CONSIDER IT AND A PERIOD OF
SEVEN DAYS AFTER EXECUTING IT TO REVOKE IT;
b. HE AGREES WITH IT AND IS AWARE THAT HE IS GIVING UP IMPORTANT RIGHTS, INCLUDING RIGHTS
PROVIDED BY THE OLDER WORKERS BENEFIT PROTECTION ACT, FOR CONSIDERATION TO WHICH HE WAS NOT ALREADY
OTHERWISE ENTITLED;
c. HE WAS ADVISED TO, AND IS AWARE OF HIS RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING IT;
AND
d. HE HAS SIGNED IT KNOWINGLY AND VOLUNTARILY.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first written above.
| LSI CORPORATION, | ||||||||
| a Delaware corporation | ||||||||
/s/ Xxxxxxx X. Xxxxxxxxxx
|
By: | /s/ Xxx X. Xxxxxx
|
||||||
| Vice President, Human Resources | ||||||||
Date: November 15, 2007 |
||||||||
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