SEVERANCE AND CONSULTING AGREEMENT
This Severance and Consulting Agreement is entered into effective as of
this 25th day of October, 1996 (the "Execution Date") by and between Xxxx
Xxxxxxxxxx ("Xxxxxxxxxx") and DSP Group, Inc., a Delaware corporation
("DSPG").
RECITALS
X. Xxxxxxxxxx has served as DSPG's Chief Financial Officer and Vice
President of Finance.
X. Xxxxxxxxxx has resigned as DSPG's Chief Financial Officer and Vice
President of Finance effective October 21, 1996 (the "Termination Date"), on
the terms set forth below.
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Eight (8) days after DSPG receives satisfactory evidence of the fully
executed original of this Agreement (assuming that Xxxxxxxxxx has executed this
Agreement and has not revoked acceptance within the seven (7) day period as set
forth in Section 2 (below), DSPG will cause to be delivered to Xxxxxxxxxx $250,
plus an amount equal to the unpaid salary, if any, Xxxxxxxxxx would have earned
through October 31, 1996 if his employment had not been previously terminated,
less applicable deductions required by law, if any.
2. Provided that Xxxxxxxxxx does not revoke this Agreement prior to the
eighth day after the date that this Agreement was executed by Xxxxxxxxxx, and
so long as Xxxxxxxxxx is not in breach of this Agreement or any
Confidentiality Agreement with DSPG, DSPG shall agree (a) to pay to
Xxxxxxxxxx an amount equal to $14,583.33 per month for a three (3) month
period commencing on November 1, 1996 (the "Consulting Fee"), subject to
applicable withholding taxes, deductions, etc., in exchange for Xxxxxxxxxx'x
agreement to consult on a full-time basis with the Chief Executive Officer
and the Chairman of the Board of DSPG and to not compete, in any way directly
or indirectly, with DSPG during such three (3) months period, (b) thereafter
to pay to Xxxxxxxxxx an additional amount equal to $14,583.33 per month for
an additional three (3) months, subject to applicable withholding taxes,
deductions, etc. which shall constitute the equivalent of a severance payment
plus the pro-rated amount of such annual bonus that Xxxxxxxxxx would have
earned had he remained employed by DSPG to qualify for such bonus
(collectively, the "Final Severance Amount") and (c) provide a mutually
acceptable letter of reference. The Consulting Fee and Final Severance
Amount shall accrue over a six (6) month period from November 1, 1996 through
April 30, 1997 (the "Severance Period") and be paid in twelve (12) equal
bi-monthly payments, in arrears, with the first such payment commencing on
the later of November 15, 1996 and eight (8) days after DSPG receives
satisfactory evidence of the fully executed original of this Agreement by
Xxxxxxxxxx during which period Xxxxxxxxxx has not revoked this Agreement.
Despite Xxxxxxxxxx'x termination, Xxxxxxxxxx'x stock options in DSPG shall
continue to vest up to and through the end of the Severance Period.
Thereafter, Xxxxxxxxxx shall have a period of forty-five (45) days after the
end of the Severance Period to exercise his stock options vested as of the
termination of the Severance Period in accordance with the terms of such
stock options and thereafter all unexercised stock options shall be null and
void. During the Severance Period, DSPG shall also continue to provide to
Xxxxxxxxxx at its cost the employment benefits which Xxxxxxxxxx is currently
receiving to the extent it may lawfully and contractually provide such
benefits to him.
3. Upon execution of this Agreement, Xxxxxxxxxx shall submit to DSPG a
written report describing in detail all on-going contacts and activities made
or performed by Xxxxxxxxxx on DSPG's behalf in order to provide a smooth
transition and Xxxxxxxxxx shall return to DSPG all DSPG property in
Xxxxxxxxxx'x possession and control, including, but not limited to, all keys
to DSPG offices and facilities, equipment, and all DSPG credit cards owned by
DSPG, except for the portable computer used by Xxxxxxxxxx which he may keep.
4. Upon execution of this Agreement, Xxxxxxxxxx acknowledges his
resignation as the Chief Financial Officer, Vice President of Finance and as
an employee of DSPG effective as of October 21, 1996, and confirms that he
has resigned as the Chief Financial Officer and Vice President of Finance of
DSPG, notwithstanding any right to revoke other terms of this Agreement
concerning the termination of his employment as set forth herein.
5. Subject to the terms and conditions of this Agreement, Xxxxxxxxxx
hereby agrees that he is entitled to no further severance or bonus from DSPG
and agrees that the Final Severance Amount is greater than the severance and
bonus, if any, to which Xxxxxxxxxx was entitled.
6. Xxxxxxxxxx represents that Xxxxxxxxxx has had the opportunity to
thoroughly discuss all aspects of this letter, including the general release
provisions, with his advisors; has carefully read and understood all of the
provisions of this Agreement; and, that Xxxxxxxxxx has voluntarily entered
into this Agreement.
7. Xxxxxxxxxx acknowledges that this Agreement was delivered to
Xxxxxxxxxx on October 25, 1996, and DSPG agreed that Xxxxxxxxxx had until
the close of business on November 15, 1996 (21 days later), to consider the
Agreement. Xxxxxxxxxx elected to execute this Agreement on the Execution
Date as a matter of Xxxxxxxxxx'x choice and acknowledges that he has been
afforded sufficient time to consider the Agreement and has obtained legal
advice. DSPG acknowledges that Xxxxxxxxxx may revoke this Agreement for a
period of seven (7) days following the date the Agreement is executed by
Xxxxxxxxxx, but such revocation shall not effect the termination of
Xxxxxxxxxx'x employment status as Chief Financial Officer and Vice President
of Finance.
8. As a material inducement to execute this Agreement, and except for
the provisions herein and any Confidentiality Agreements entered into by
Xxxxxxxxxx with DSPG, Xxxxxxxxxx hereby irrevocably and unconditionally
releases, acquits, and forever discharges DSPG (for purposes of this Section
and Sections 9 and 10 (below), DSPG shall include DSPG's predecessors,
successors, assigns, agents, subsidiaries, former subsidiaries, directors,
former directors, officers, former officers, employees, representatives,
attorneys, affiliates (and agents, directors, officers, employees,
representatives, and attorneys of such affiliates and former officers,
directors, and agents thereof)), and all persons acting by, through, under,
or in concert with any of them (collectively "Releasees"), or any of them,
from any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of actions,
suits, rights, demands, costs, losses, debts, and expenses (including
attorneys' fees and costs actually incurred), of any nature whatsoever, known
or unknown ("Claim" or "Claims") which Xxxxxxxxxx now has, owns, or holds, or
claims to have, owns, or holds, or which Xxxxxxxxxx at any time heretofore
had, owned, or held, or claimed to have, owns, or holds, against DSPG or any
of DSPG's Releasees.
9. Xxxxxxxxxx expressly waives and relinquishes all rights and benefits
afforded by Section 1542 of the Civil Code of the State of California and
does so understanding and acknowledging the significance and consequence of
such specific waiver of Section 1542. Section 1542 of the Civil Code of the
State of California states as follows:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with the debtor."
Thus, notwithstanding the provisions of Section 1542, and for the purpose
of implementing a full and complete release and discharge of the Releasees,
Xxxxxxxxxx expressly acknowledges that this Agreement is intended to include
in its effect, without limitation, all Claims which Xxxxxxxxxx may have
against DSPG, up to and through the last date of execution of this document,
including but not limited to those under the Age Discrimination and
Employment Act, even though Xxxxxxxxxx is not currently aware of or suspects
such claim to exist in his favor at the time of execution hereof, and that
this Agreement contemplates the extinguishment of any such Claim or Claims.
10. Without limiting the generality of the foregoing, DSPG and
Xxxxxxxxxx, each hereby agree that in the event that any party hereto should
bring any action, suit, or other proceedings against any other party hereto,
concerning a breach of this Agreement, the claims released by this Agreement,
or contesting the validity of this Agreement, or attempting to rescind,
negate, modify or reform this Agreement or any of its terms or provisions, or
to remedy, prevent or obtain relief from a breach of this Agreement, the
prevailing party to such an action, suit or proceeding, shall be entitled to
the attorneys' fees reasonably incurred in each and every such action, suit,
or other proceeding, including any and all appeals or petitions therefrom.
11. Xxxxxxxxxx represents and acknowledges that in executing this
Agreement he has not relied upon any representation or statement made by any
of the Releasees or by any of the Releasees' agents, representatives, or
attorneys with regard to the subject matter, basis, or effect of this
Agreement, or otherwise.
12. This Agreement shall be binding upon the parties hereto and their
heirs, administrators, representatives, executors, successors and assigns
(collectively, the "Interested Parties") , and shall inure to the benefit of
DSPG and Xxxxxxxxxx, their respective Interested Parties and each of them,
and to their heirs, administrators, representatives, executors, successors,
and assigns.
13. This Agreement is made and entered into in the State of California,
and shall in all respects be interpreted, enforced, and governed under the
laws of said State.
14. This Agreement constitutes the entire agreement and understanding
between the parties with respect to the subject matters herein, and
supersedes and replaces any prior agreements and understandings, whether oral
or written between them with respect to such matters. The provisions of this
Agreement may be waived, altered, amended or repealed in whole or in part
only upon the written consent of both parties to this Agreement.
DSP GROUP, INC.
By /s/ XXX XXXXXX /s/ XXXX X. XXXXXXXXXX III
--------------------------------- ---------------------------------
Xxx Xxxxxx, Chief Executive Xxxx X. Xxxxxxxxxx III
Officer
