SEPARATION AGREEMENT AND RELEASE
Exhibit 10.34
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (together with its attachments, the “Agreement”) is made
and entered into as of August 14, 2007, by and between Transmeta Corporation, a Delaware
corporation (together with its subsidiaries, successors and assigns, the “Company”), and Xxxxx X.
Xxxxx (the “Executive”).
WHEREAS, the Executive has been employed by the Company as its Chief Financial Officer
(“CFO”);
WHEREAS, the Executive and the Company desire to terminate that employment relationship as of
August 31, 2007, and the Executive intends to resign his office as CFO of the Company effective on
or before August 31, 2007;
WHEREAS, the Company believes that it is in the best interest of its shareholders to enter
into a comprehensive separation agreement and release with the Executive:
WHEREAS, the Executive and the Company (the “Parties”) desire to settle fully and finally any
and all differences between them, and so have negotiated and agreed to a final settlement of their
respective rights, obligations and liabilities;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Executive and the Company hereby agree as follows:
1. The Parties agree that the Executive’s employment relationship with the Company is
terminated effective August 31, 2007. The Executive hereby resigns as CFO and each other office
and position in the Company effective August 31, 2007, or at such earlier date as the Company
appoints a CFO as his successor.
2. Severance Payment. The Company shall make to the Executive a final lump sum severance
payment of $41,666.67 on August 31, 2007, subject to the Executive’s continued compliance with the
terms and covenants set out in this Agreement, following the Effective Date (as defined in Section
6.e below). The Executive acknowledges that such $41,666.67 sum represents a gross amount before
all applicable federal, state and local withholding taxes that are required to be deducted by the
Company.
3. Health Benefits. Pursuant to the provisions of COBRA, the Company will continue to pay
for the Executive’s present election of group health benefits for the Executive and his dependents
until he finds employment providing comparable health benefits, or through and including October
31, 2007, whichever occurs first.
4. Reimbursements. The Company shall promptly reimburse the Executive for any reasonable
business expenses properly incurred by the Executive through August 31, 2007 and duly submitted by
the Executive for reimbursement. The Company will pay to Executive all expense reimbursements,
accrued vacation, outstanding benefits, salary and
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any similar payments, if any, owed by the Company to Executive as of the separation date of August
31, 2007.
5. Stock Options. With respect to the stock options granted to the Executive by the Company,
the Parties acknowledge and agree to the following:
a. The Parties acknowledge and agree that the Company has granted to the Executive certain
options to purchase the Company’s common stock as follows: (1) a July 2006 grant to purchase up to
750,000 shares of the Company’s common stock at an exercise price of $1.37 per share (the “Stock
Options”). The Parties acknowledge and agree that the Stock Options are governed by the terms of
the original grant agreement.
b. The Executive acknowledges and agrees that the Company has not issued to him any option to
purchase common stock of the Company other than the Stock Options described above in section 5.a of
this Agreement, and that he has no other right, title or interest in or to any option or right to
acquire common stock of the Company.
6. Mutual Releases.
a. Release by the Company. In consideration of the Executive entering into this Agreement, to
the fullest extent permitted by law, the Company, on behalf of itself and its subsidiaries,
successors and assigns (collectively, the “Releasing Company Parties”), knowingly and voluntarily
releases and discharges the Executive, and each of the Executive’s heirs, family members,
executors, administrators and attorneys, and any successor or assign of any of the foregoing
(collectively, the “Released Executive Parties”), from any claim, charge, action or cause of action
that any of the Releasing Company Parties may have against any of the Released Executive Parties,
whether known or unknown, from the beginning of time through the Effective Date based upon any act,
fact, omission, matter, cause or thing whatsoever, whether or not related to or arising out of the
Executive’s employment with the Company or the termination thereof. Notwithstanding the
foregoing, this release shall not extend to or discharge (i) the Company’s right to enforce the
terms and conditions of this Agreement, or (ii) any rights or claims that might arise after the
Effective Date, or (iii) the Company’s right to enforce the terms and conditions of the Proprietary
Information Agreement, or (iv) the Company’s right to enforce the terms and conditions of the
Indemnity Agreement, its Certificate of Incorporation or its Bylaws, or (v) the Company’s right to
collect any applicable federal, state or local withholding taxes that are required to be deducted
by the Company for any reason, all of which rights and claims shall be preserved, or (vi) the
Company’s rights to enforce the terms and conditions of each agreement and plan governing the
issuance of the Stock Options referenced in Section 5.a, as well as the stock issued upon exercise
of that stock option. The Company represents and warrants that it currently knows of no basis for
any claims by it against any Released Executive Party, and that neither the Company nor anyone
acting on its behalf has filed any claim, action, suit, complaint or proceeding against any
Released Executive Party in any agency, court or other forum or tribunal.
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b. Release by the Executive. In consideration of the Company entering into this Agreement,
to the fullest extent permitted by law, the Executive, on behalf of himself and his heirs,
executors, administrators, successors and assigns (collectively, the “Releasing Executive
Parties”), knowingly and voluntarily releases and discharges the Company and its subsidiaries and
affiliates, the respective current and former officers, employees, attorneys, agents and directors
of the Company and its subsidiaries and affiliates, and any successor or assign of any of the
foregoing (collectively, the “Released Company Parties”), from any claim, charge, action or cause
of action that any of the Releasing Executive Parties may have against any of the Released Company
Parties, whether known or unknown, from the beginning of time through the Effective Date based upon
any act, fact, omission, matter, cause or thing whatsoever, whether or not related to or arising
out of the Executive’s employment with the Company or the termination thereof. Notwithstanding the
foregoing, this release shall not extend to or discharge any claims that Executive may not release
as a matter of law, including but not limited to any rights to or claims for indemnification or
contribution, including associated expenses and attorneys fees and the advancement of either of the
foregoing, that Executive currently has or may in the future have under any of the following: the
Certificate of Incorporation or By-Laws of the Company, under any applicable insurance policy,
under that certain Indemnity Agreement effective as of July 25, 2006 between Executive and the
Company (the “Indemnity Agreement”), or under any other provision or principle of law, or
otherwise. In addition, this release shall not extend to or discharge (i) the Executive’s right to
enforce the terms and conditions of this Agreement, or (ii) any rights or claims that might arise
after the Effective Date, or (iii) the Executive’s right to enforce the terms and conditions of the
Indemnity Agreement or Executive’s right for indemnity under the Company’s Certificate of
Incorporation or Bylaws, or under any state law, all of which rights and claims shall be preserved,
or (iv) the Executive’s right to enforce the terms and conditions of each agreement and plan
governing the issuance of each stock option referenced in Section 5.a, as well as the stock issued
upon exercise of that stock option. Nothing in this Section 6.b shall prohibit Executive from
filing a charge or complaint with a government agency such as but not limited to the Equal
Employment Opportunity Commission, the National Labor Relations Board, the Department of Labor, the
California Department of Fair Employment and Housing, or other applicable agency. The Executive
represents and warrants that he currently knows of no basis for any claims by him against any
Released Company Party, and that neither he nor anyone acting on his behalf has filed any claim,
action, suit, complaint or proceeding against any Released Company Party in any agency, court or
other forum or tribunal.
c. The releases and discharges provided in subsections 6.a and 6.b above include, but are not
limited to, any rights or claims under United States federal, state or local law for wrongful or
abusive discharge, or for discrimination based upon race, color, ethnicity, sex, age, national
origin, religion, disability, sexual orientation, including rights or claims under the Age
Discrimination in Employment Act of 1967 (“ADEA”). The Executive and the Company each expressly
waives any right or benefit that otherwise would be available to them, respectively, pursuant to
section 1542 of the Civil Code of the State of California, which statute provides as follows: “A
general release does not extend to claims which the creditor does not know or suspect to exist in
his or her favor at the time
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of executing the release, which if known by him or her must have materially affected his or her
settlement with the debtor.”
d. It is understood and agreed that this Agreement represents a compromise settlement of a
disputed claim or claims, and that neither this Agreement itself nor the furnishing of the
consideration for this Agreement shall be deemed or construed as an admission of liability or
wrongdoing of any kind by the Company.
e. The Executive affirms that he has been advised by the Company to consult with an attorney
of his choice concerning the terms and conditions set forth herein; that he has availed himself of
that right; that he has been given at least twenty-one (21) days within which to consider this
release and its consequences; that he has seven (7) days after signing this Agreement to revoke and
cancel this Agreement by written notice to the Company; and that this Agreement shall not become
effective or enforceable until the eighth day following its execution (the “Effective Date”).
7. Cooperation. For the one-year period commencing on August 31, 2007, the Executive hereby
agrees to assist the Company, upon reasonable request by the Company, and subject to reasonable
accommodation of the Executive’s personal and business schedule, in connection with any pending or
future dispute, litigation, arbitration or similar proceeding or investigation (“Dispute”) or any
regulatory request or filing involving the Company, any of its directors, or any of the directors
of any of its subsidiaries, provided that such Dispute or regulatory request or filing related to a
matter of which he had knowledge or for which he was responsible prior to August 31, 2007, and that
such request for assistance is neither unduly burdensome nor unreasonable. The Company shall
promptly reimburse the Executive for, or promptly advance to the Executive, all costs and expenses
reasonably incurred by the Executive in connection with rendering assistance to the Company in
connection with any such Dispute or regulatory request or filing, including without limitation
reasonable fees and disbursements of separate counsel for the Executive if the Executive reasonably
determines that the matter is of a nature which indicates that he should have separate
representation. Such expenses shall be reimbursed or advanced promptly after the Executive’s
submission to the Company of statements in such reasonable detail as the Company may require. Time
devoted by the Executive to assisting the Company pursuant to this Section 7 shall not be required
to exceed 20 hours in any month.
8. Publicity and Non-Disparagement.
a. Unless and until the Company publicly discloses this Agreement, the Executive shall
neither discuss any aspect of the terms of this Agreement with, nor disclose all or any portion of
this Agreement to, any person or organization. Notwithstanding anything elsewhere to the contrary,
the Executive may in any event discuss this Agreement with, and disclose all or any portion of this
Agreement to, his spouse and his legal, tax and financial advisors.
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b. The Executive agrees that he shall not intentionally make any public statement to third
parties, the public, the press or the media, or any administrative agency that is intended to
disparage the Company or to cause injury to the Company or any of its officers, directors, or
employees. The Company agrees that it shall use its reasonable best efforts to cause its officers
and directors not knowingly to make any public statement to third parties, the public, the press or
the media, or any administrative agency intending to disparage the Executive.
c. Notwithstanding the foregoing, nothing in this Section 8 shall prevent any person from
responding publicly to incorrect, disparaging or derogatory public statements to the extent
reasonably necessary to correct or refute such public statements, provided, in the case of the
Executive, that, prior to making any such responses or statements, he has informed the Company of
their substance and tenor reasonably in advance and discussed his intended course of action with
the Company. Further, nothing in this Section 8 shall prohibit the Executive from providing
truthful information in response to a proper subpoena or other legal process.
9. Confidentiality and Protection of Proprietary Information.
a. The Executive hereby reaffirms his obligations pursuant to that certain Agreement
Regarding Proprietary Information and Inventions, effective as of July 25, 2006, between the
Executive and the Company (the “Proprietary Information Agreement”), to which agreement the
Executive acknowledges that he is bound; provided, however, that the provisions of Section 10 of
this Agreement (“Non-Solicitation”) shall supersede the provisions of paragraph 10.b of the
Proprietary Information Agreement.
b. The Executive hereby agrees and covenants that he shall return or cause to be returned to
the General Counsel of the Company any and all property of the Company of any kind or description
whatsoever which on the Effective Date is in his possession or under his control (including, but
not limited to, any Proprietary Information, as defined in the Proprietary Information Agreement,
in written or other tangible form) and shall not retain any copies, duplicates, reproductions or
excerpts thereof, except as otherwise provided hereunder. The Executive represents and warrants to
the Company that he has returned to the Company all property or data of the Company of any type
whatsoever, including but not limited to any planning data, personnel data, historical or projected
financial data, compensation data, computer software and any and all documents in hardcopy or
electronic format, that has been in his possession or control. Anything to the contrary
notwithstanding, nothing in this Section 9 shall prevent the Executive from retaining papers and
other materials of a personal nature, including personal diaries and Rolodexes, information showing
his compensation or relating to reimbursement of his expenses, information that he reasonably
believes may be needed for tax purposes, and copies of plans, programs and agreements relating to
his employment with the Company.
c. For the one-year period commencing on August 31, 2007, the Executive shall not manage,
operate, control or materially participate in the management, operation or control of any other
company in any position or role that would reasonably be expected
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to put him in material breach of his obligations to the Company pursuant to the Proprietary
Information Agreement. The Executive warrants and represents that, as of the Effective Date, he is
in compliance with this Section 9.c.
d. Notwithstanding the foregoing, the provisions of this Section 9 shall not apply (i) to any
disclosure or use of Proprietary Information in connection with providing services or assistance
pursuant to Section 7, (ii) to any disclosure that may be required by law or by any court,
arbitrator, or administrative or legislative body with apparent jurisdiction to order the Executive
to disclose or provide any such Proprietary Information, (iii) to any disclosure of Proprietary
Information reasonably required to enforce the terms of this Agreement, or (iv) to any Proprietary
Information that becomes generally known to the public other than as a result of any violation of
this Agreement by the Executive.
10. Non-Solicitation. For the one-year period commencing on August 31, 2007, the Executive
shall not, directly or indirectly, without the prior written consent of the Company, knowingly
solicit, induce, or attempt to induce, either for himself or on behalf of any company or business
organization in which he serves as an officer, employee, partner, director, or consultant, any
employee or consultant of the Company to terminate his, her or its employment or consulting
relationship with the Company, whether for employment or to consult with a third party or
otherwise. Anything to the contrary notwithstanding, the Company agrees that this Section 10 does
not prohibit the Executive from (i) responding in any manner to an unsolicited request from any
present or former employee of the Company for advice or information on employment matters, or (ii)
responding to an unsolicited request for any employment reference for any present or former
employee of the Company, by providing a reference setting out his personal views about such present
or former employee.
11. Indemnification. Notwithstanding anything in this Agreement to the contrary, the Company
and Executive agree that the Indemnity Agreement, and the parties’ respective obligations
thereunder, shall remain in full force and effect.
12. Notice. Any notice, request, or other communication given in connection with this
Agreement shall be in writing and shall be deemed to have been given (i) when delivered personally
to the recipient or (ii) provided that a written acknowledgement of receipt is obtained, three days
after being sent by prepaid certified or registered mail, or two days after being sent by a
nationally recognized overnight courier, to the address specified below for the recipient (or to
such other address as the recipient shall have specified by ten days’ advance written notice given
in accordance with this Section 12). Such communication should be addressed to the Executive at
his principal residence and to the Company at its corporate headquarters to the attention of the
General Counsel.
13. Entire Agreement. Except as expressly set forth herein, this Agreement contains the
entire agreement between the parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations, and undertakings, whether written or oral,
between the parties with respect thereto. This
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Agreement may be modified only by a written document signed by the Executive and a duly authorized
officer of the Company. Any waiver by any person of any provision of this Agreement shall be
effective only if in writing and signed by the person against whom enforcement of the waiver is
sought. For any waiver or modification to be effective, it must specifically refer to this
Agreement and to the terms or provisions being modified or waived. No waiver of any provision of
this Agreement shall be effective as to any other provision of this Agreement except to the extent
specifically provided in an effective written waiver.
14. Severability. In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining provisions or portions of
this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law. Specifically, should a court, arbitrator or agency conclude that a
particular claim may not be released as a matter of law, it is the intention of the Parties that
the general release and the waiver of unknown claims herein shall otherwise remain effective to
release any and all other claims.
15. Governing Law. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of California.
16. Headings. The headings of the Sections contained in this Agreement are for convenience
only and shall not be deemed to control or affect the meaning or construction of any provision of
this Agreement.
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17. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one and the same
instrument. Signatures delivered by facsimile shall be effective for all purposes.
IN WITNESS WHEREOF, the Parties have executed this Agreement.
PLEASE READ CAREFULLY. THIS SEPARATION AGREEMENT AND RELEASE INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
| THE EXECUTIVE: Xxxxx X. Xxxxx | ||||||||
| Executed this 14th day of August, 2007. | ||||||||
| /S/ XXXXX X. XXXXX | ||||||||
| Xxxxx X. Xxxxx | ||||||||
| THE COMPANY: Transmeta Corporation | ||||||||
| Executed this 14th day of August, 2007. | ||||||||
| Transmeta Corporation | ||||||||
| By: | /S/ XXXX X’XXXX XXXXXXX | |||||||
| Xxxx X’Xxxx Xxxxxxx | ||||||||
| Executive Vice President, | ||||||||
| General Counsel & Secretary | ||||||||
| Address: | 0000 Xxxxxxx Xxxxxxx Xxxx. | |||||||
| Xxxxx Xxxxx, XX 00000 | ||||||||
| Telephone: 000-000-0000 | ||||||||
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