XXXX MICROPRODUCTS, INC.
MANAGEMENT RETENTION AGREEMENT
This Management Retention Agreement (the "Agreement") is made and
entered into by and between Xxxx X. Xxxxxxx (the "Employee") and Xxxx
Microproducts, Inc. (the "Company"), effective as of the latest date set forth
by the signatures of the parties hereto below (the "Effective Date").
RECITALS
A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board of Directors of the Company (the "Board") recognizes that such
consideration can be a distraction to the Employee and can cause the Employee to
consider alternative employment opportunities. The Board has determined that it
is in the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.
B. The Board believes that it is in the best interests of the Company
and its stockholders to provide the Employee with an incentive to continue his
employment and to motivate the Employee to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.
C. The Board believes that it is imperative to provide the Employee
with certain severance benefits upon Employee's termination of employment
following a Change of Control which provides the Employee with enhanced
financial security and provides incentive and encouragement to the Employee to
remain with the Company notwithstanding the possibility of a Change of Control.
D. Certain capitalized terms used in the Agreement are defined in
Section 4 below.
The parties hereto agree as follows:
1. Term Agreement. This Agreement shall terminate three years
following the Effective Date, unless a Change of Control has occurred as such
time, in which case this Agreement shall terminate upon the date that all
obligations of the parties hereto with respect to this Agreement have been
satisfied. This Agreement may be extended unilaterally by the Company by written
resolutions adopted by the Board prior to the termination of this Agreement.
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2. At-Will Employment. The Company and the Employee acknowledge that
the Employee's employment is and shall continue to at-will, as defined under
applicable law. If the Employee's employment terminates for any reason,
including (without limitation) any termination prior to a Change of Control, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company's written employee plans or pursuant to
other written agreements with the Company.
3. Severance Benefits.
a. Termination Following a Change of Control. If the
Employee's employment is terminated at any time within twelve (12)
months following a Change of Control, then, subject to Section 4, the
Employee shall be entitled to receive the following severance
benefits:
(i) Involuntary Termination. If the Employee's
employment is terminated as a result of Involuntary
Termination other than for Cause, then the Employee shall
receive the following severance benefits from the Company.
(1) Severance Payment. A cash payment in an
amount equal to one hundred percent (100%) of the
Employee's Base Salary.
(2) Continued Employment Benefits. One
hundred percent (100%) Company-paid health, dental
and life insurance coverage at the same level of
coverage as was provided to such employee immediately
prior to the Change of Control (the "Company Paid
Coverage") under the Company's plans. Such coverage
shall be provided under either (at the Company's
discretion) (i) the Company's plans, or (ii) no less
favorable plans or arrangements secured by the
Company. If such coverage included the Employee's
dependents immediately prior to the Change of
Control, such dependents shall also be covered at
Company expense. Company-Paid Coverage shall continue
until earlier or (i) one year from the date of the
Change of Control, or (ii) the date that the Employee
and his dependents become covered under another
employer's group health, dental or life insurance
plans that provide Employee and his dependents with
comparable benefits and levels of coverage. For
purposes of Title X of the Consolidated Budget
Reconciliation Act of 1985 ("COBRA"), the date of the
"qualifying event" or Employee and his dependents
shall be the date upon which the Company-Paid
Coverage terminates.
(3) Stock Option Accelerated Vesting. One
hundred percent (100%) of the unvested portion of any
stock option held by the
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Employees shall automatically be accelerated in full
so as to become completely vested; provided, however,
that if such potential vesting acceleration would
cause a contemplated Change of Control transaction
that was intended to be accounted for as a
"pooling-of-interests" transaction to become
ineligible for such accounting treatment under
generally accepted accounting principles, as
determined by the Company's independent public
accountants (the "Accountants") prior to the Change
of Control, Employee's stock options and restricted
stock shall not have their vesting so accelerated.
b. Timing of Severance Payments. Any severance payment to
which Employee is entitled under Section 3(a)(i) shall be paid by the
Company to the Employee (or to the Employee's successors in interest,
pursuant to Section 6(b)) in cash and in full, not later than (30)
calendar days following the Termination Date.
c. Voluntary Resignation; Termination for Cause. If the
Employee's employment terminates by reason of the Employee's voluntary
resignation (and is not an Involuntary Termination), or if the
Employee is terminated for Cause, then the Employee shall not be
entitled to receive severance or other benefits except for those (if
any) as may then be established under the Company's then existing
written employee plans or pursuant to other written agreements with
the Company.
d. Disability; Death. If the Company terminates the Employee's
employment as a result of the Employee's Disability, or such
Employee's employment is terminated due to the death of the Employee,
then the Employee shall not be entitled to receive severance or other
benefits except for those (if any) as may then be established under
the Company's then existing written employee plans or pursuant to
other written agreements with the Company.
e. Termination Apart from Change of Control. In the event that
the Employee's employment is terminated for any reason, either prior
to the occurrence of a Change of Control or after the twelve
(12)-month period following a Change of Control, then the Employee
shall be entitled to receive severance and any other benefits only as
may then be pursuant to other agreements with the Company.
4. Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Employee (i)
constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") and (ii) but for this
Section 4, would be subject to the excise tax imposed by Section 4999 of the
Code, then the Employee's severance benefits under Section 3(a)(i) shall be
reduced as to such lesser extent as would result in no portion of such
severance benefits being subject to excise tax under Section 4999 of the Code.
Unless the
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Company and the Employee otherwise agree in writing, any determination required
under this Section 4 shall be made in writing by the Company's independent
public accountants immediately prior to Change of Control (the "Accountants"),
whose determination shall be conclusive and binding upon the Employee and the
Company for all purposes. For purposes of making the calculations required by
this Section 4, the Accountants may make reasonable assumption and
approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code. The Company and the Employee shall furnish to the Accountants such
information and documents as the Company shall bear all costs the Accountants
may reasonably incur in connection with any calculations contemplated by this
Section 4.
5. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:
a. Base Salary. "Base Salary" means an amount equal to twelve
(12) times Employee's monthly Company salary for the last full month
preceding the Change in Control.
b. Cause. "Cause" shall mean (i) any act of personal
dishonesty taken by the Employee in connection with his
responsibilities as an employee and intended to result in substantial
personal enrichment of the Employee, (ii) the conviction of a felony,
or (iii) a willful act by the Employee which constitutes gross
misconduct and which is injurious to the Company.
c. Change in Control. "Change in Control" means the occurrence
of any of the following events:
(i) Any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 50% or more of the
total voting power represented by the Company's then
outstanding voting securities; or
(ii) A change in the composition of the Board
occurring within a two-year period, as a result of which fewer
than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (a) are
directors of the Company as of the date hereof, or (b) are
elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but
shall not include an individual whose election or nomination
is in connection with an actual or threatened proxy contest
relating to the election of directors to the Company); or
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(iii) The stockholders of the Company approve a
merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent
(50%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the
Company's assets.
d. Disability. "Disability" shall mean that the Employee has
been unable to perform his Company duties as the result of his
incapacity due to physical or mental illness, and such inability, at
least 26 weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and
acceptable to the Employee or the Employee's legal representative
(such Agreement as to acceptability not to be unreasonably withheld).
Termination resulting from Disability may only be effected after at
least 30 days' written notice by the Company of its intention to
terminate the Employee's employment. In the event that the Employee
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. Involuntary Termination. "Involuntary Termination" shall
mean (i) without the Employee's express written consent, the
significant reduction of the Employee's duties, authority or
responsibilities, relative to the Employee's duties, authority or
responsibilities as in effect immediately prior to such reduction, or
the assignment to Employee of such reduced duties, authority or
responsibilities, (ii) without the Employee's express written consent,
a substantial reduction, without good business reasons, of the
facilities and perquisites (including office space and location)
available to the Employee immediately prior to such reduction; (iii) a
reduction by the Company in the base salary of the Employee as in
effect immediately prior to such reduction unless part of a
management-wide or company-wide cost-reduction program in which a
majority of management or employees are affected; (iv) a material
reduction by the Company in the kind of level of employee benefits,
including bonuses, to which the Employee was entitled immediately
prior to such reduction with the result that the Employee's overall
benefits package is significantly reduced unless part of a
management-wide or companywide cost-reduction program in which a
majority of management or employees are affected; (v) the relocation
of the Employee to a facility or a location more than thirty-five (35)
miles from the Employee's then present location, without the
Employee's express written consent; (vi) any purported termination of
the Employee by the Company which is not effected for Disability or
for Cause; (vii) the failure of the Company to obtain the assumption
of this agreement by any successors contemplated in Section 6(a)
below; or (viii) any act or set of facts or circumstances
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which would, under California case law or statute constitute a
constructive termination of the Employee.
f. Termination Date. "Termination Date" shall mean (i) if this
Agreement is terminated by the Company for Disability, thirty (30)
days after notice of termination is given to the Employee (provided
that the Employee shall not have returned to the performance of the
Employee's duties on a full-time basis during such thirty (30)-day
period), (ii) if the Employee's employment is terminated by the
company for any other reason, the date on which a notice of
termination is given, provided that if within thirty (30) days after
the Company gives the Employee notice of termination or the benefits
due pursuant to this Agreement, then the Termination Date shall be the
date on which such dispute is finally determined, either by mutual
written agreement of the parties, or by a final judgment, order or
decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected), or
(iii) if the Agreement is terminated by the Employee, the date on
which the Employee delivers the notice of termination to the Company.
6. Successors
a. Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's
business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this
Agreement in the same manner and to the same extent as the Company
would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Company"
shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this
Section 6(a) or which becomes bound by the terms of this Agreement by
operation of law.
b. Employee's Successors. The term of this agreement and all
rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, divisees
and legatees.
7. Notice.
a. General. Notices and all other communications contemplated
by this Agreement shall be in writing and shall be deemed to have been
duly given when personally delivered or when mailed by U.S. registered
or certified mail, return receipt requested and postage prepaid. In
the case of the Employee, mailed notices shall be addressed to him at
the home address which he most recently communicated to the Company in
writing. In the case of the Company, mailed notices shall be
6
addressed to its corporate headquarters, and all notices shall be
directed to the attention of its Secretary.
b. Notice of Termination. Any termination by the Company for
Cause or by the Employee 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 Section
7(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 (which shall be not more than 30 days
after the giving of such notice). The failure by the Employee to
include in the notice any fact or circumstance which contributes to a
showing of Involuntary Termination shall not waive any right of the
Employee hereunder or preclude the Employee from asserting such fact
or circumstance in enforcing his rights hereunder.
8. Miscellaneous Provisions.
a. No Duty to Mitigate. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor
shall any such payment be reduced by any earnings that the Employee
may receive from any other source.
b. Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by an authorized
officer of the Company (other than the Employee). No waiver by either
party of any breach of, or of compliance with, any condition or
provision of this Agreement by the other party shall be considered a
waiver of any condition or provision or of the same condition or
provision at another time.
c. Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express implied)
which are not expressly set forth in this Agreement have been made or
entered into by either party with respect to the subject matter
hereof. This Agreement supersedes in their entirety any prior or
contemporaneous agreements, whether written, oral, express or implied,
relating to the subject matter hereof.
d. Choice of Law. The validity, interpretation, contruction
and performance of this Agreement shall be governed by the laws of the
State of California.
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e. Severability. The invalidity of unenforceability of any
provision or provisions of this Agreement shall not affect the
validity or enforceability of any other provision hereof, which shall
remain in full force and effect.
f. Withholding. All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment
taxes.
g. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which together will constitute one and the same instrument.
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 set forth below.
Company: Xxxx Microproducts Inc.
By: /s/ W. Xxxxxx Xxxx
----------------------------
W. Xxxxxx Xxxx
President & CEO
Dated: 8/6/99
Employee: Xxxx X. Xxxxxxx
Dated: 7/29/99
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Confidential Treatment is requested for portions of this document.
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered
into by and between W. Xxxxxx Xxxx ("Xxxx") and Xxxx Microproducts, Inc., a
California corporation ("Company"), effective as of 7/1/99, and supersedes and
replaces in its entirety the Employment Agreement between the parties dated
December 10, 1996.
WITNESETH:
WHEREAS, Xxxx has been serving and continues to serve as the
Chairman, President and Chief Executive Officer of Company; and
WHEREAS, the parties wish to continue Xxxx'x employment with
Company for a period of at least three years from the date of this Agreement and
wish to set forth the terms and conditions of that employment relationship in
writing;
NOW, THEREFORE, in consideration of Xxxx'x continued
employment with Company, and other good and valuable consideration, and in
consideration of the covenants contained herein, the receipt and sufficiency of
which are hereby acknowledged, the parties do hereby agree and contract as
follows:
1. Term of Employment. Company hereby agrees to employ Xxxx as
Chairman, President and Chief Executive Officer for the period
commencing with the date set forth above and ending on December 31,
2002, unless Xxxx'x employment is terminated earlier pursuant to
Paragraph 4 of this Agreement After December 31, 2002, Xxxx'x
employment with Company may be continued by mutual written agreement
of the parties.
2. Duties. Xxxx accepts employment with Company as its
Chairman, President and Chief Executive Officer. Xxxx agrees to devote
his full time, attention and best efforts to the business and affairs
of the Company. Xxxx shall perform all duties and responsibilities
commensurate with his position as Chairman, President and Chief
Executive Officer and shall follow the reasonable direction of the
Board of Directors of the Company. Company agrees to nominate Xxxx for
election to Company's Board of Directors, and Xxxx agrees to serve,
for any period for which he is so elected, without additional
compensation therefor. Xxxx may serve on corporate, civic or
charitable boards or committees, fulfill speaking engagements and
manage personal investments, so long as Company, in its sole
discretion, reasonably determines that such activities do not
interfere, compete with or otherwise pose a conflict of interest with
respect to the performance of Xxxx'x duties and responsibilities under
this Agreement. Xxxx shall comply with Company's policies and
procedures as adopted from time to time; provided, however, that to
the extent any such policies and procedures are inconsistent with this
Agreement, the provisions of this Agreement shall control.
Confidential Treatment is requested for portions of this document.
3. Compensation and Benefits. During the term of this
Agreement, Xxxx shall receive the following compensation and
benefits:
a. Base Salary. Xxxx shall receive a minimum base
salary of $375,000 per year, less applicable withholding,
payable monthly or more frequently in accordance with
Company's customary payroll practices. The Compensation
Committee of the Company's Board of Directors shall review
Xxxx'x base salary at least annually and may, in its sole
discretion, increase the base salary under its normal
compensation policies for executive officers.
b. Annual Incentive Compensation. Xxxx shall
participate in any and all annual incentive compensation
plans, including but not limited to the Management Incentive
Program, which may be established by the Compensation
Committee of Company's Board of Directors for the Chief
Executive Officer from time to time. In no event shall any
annual incentive compensation plans established by the
Compensation Committee for the Chief Executive Officer after
the date set forth above be less favorable than the annual
incentive compensation plans currently maintained for the
Chief Executive Officer as of such date.
c. EPS Enhancement Incentive
(i) Within thirty (30) days following the
issuance of the audited financial statements for the 1999
fiscal year and each fiscal year thereafter until the
termination of this Agreement, Company shall pay Xxxx a
lump-sum cash incentive payment (the "EPS Enhancement
Incentive") equal to (i) $5,000 for each $0.01 of Company's
annual net earnings per share (as hereinafter defined) over
and above [*] per share, plus (ii) $3,000 for each $.01 if
Company's annual net earning per share (as hereinafter
defined) over and above [*] per share.
(ii) For purposes of this Paragraph 3(c), the
term "annual net earning per shares for any fiscal year" shall
mean the net profits of the Company, after the provision for
income taxes, any extraordinary items of profit or loss and
the computation of any payments due under this Paragraph 3(c),
expressed on a fully diluted earning per share basis (based on
the weighted average number of shares of Company's Common
Stock outstanding or equivalent thereto or otherwise treated
as outstanding during such annual fiscal period), computed in
accordance with generally accepted accounting principles by
Company's interdependent public accountants and as reported in
Company's audited financial statements for such fiscal year.
The [*] and [*] per share thresholds stated herein shall be
adjusted to reflect the effect of any stock dividends on, or
stock splits or reverse splits of, or recapitalizations,
reclassifications or other similar transactions affecting
Company's Common Stock which are declared or effected after
the date of this Agreement in the same manner as such
dividends, stock splits or transactions have been reflected in
the annual net earnings per share in accordance with generally
accepted
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Confidential Treatment is requested for portions of this document.
accounting principles and as reported in Company's audited
financial statements, and the $5,000 and $3,000 amounts shall
be adjusted consistent with the goals of the EPS Enhancement
Incentive and the amount that would otherwise be payable
without such adjustment pursuant to Section 3(c).
(iii) If, in any fiscal year, the total
compensation paid to Ben would result in a violation of the
compensation deduction limits contained in Section 162(m) of
the Internal Revenue Code of 1986 (the "Code"), or any
successor provision, and the regulations issued thereunder, a
portion of the EPS Enhancement Incentive shall be credited to
a deferred compensation account and shall become due and
payable upon the effective date of Xxxx'x termination of
employment for any reason. The portion credited to the
deferred compensation account shall be the amount necessary to
avoid such violation of Code 162(m). All amounts credited to
the deferred compensation account shall be adjusted for
interest, compounded quarterly, at the prime interest rate
quoted by Citicorp, NA. from time to time, beginning with the
date the deferred compensation account is established and
continuing until all amounts have been paid in full. Upon
Xxxx'x termination of employment, the balance of the deferred
compensation account shall be paid in equal annual
installments not to exceed $500,000 per year. The deferred
compensation account shall at all times be entirely unfunded.
Neither Xxxx nor his successors shall have any interest in the
assets of Company by reason of the right to receive the
amounts credited to the deferred compensation account; and
Xxxx shall have only the rights of a general unsecured
creditor with respect thereto.
d. Long-Term Disability Insurance. Company agrees to
pay all premiums required for long-term disability insurance
which shall provide Xxxx with a disability benefit equal to
(60%) of Xxxx'x total compensation if, as the result of Xxxx'x
incapacity due to physical or mental illness, Xxxx is unable
to perform his duties as President and Chief Executive
Officer. Company may, in its discretion, provide such
long-term disability insurance under its group policy.
e. Business Expenses. Company will reimburse Xxxx for
ordinary and necessary travel and other out-of-pocket expenses
incurred by Xxxx in connection with the performance of his
duties, provided that Xxxx promptly submits to Company
receipts verifying such expenses.
f. Other Employee Benefits. Xxxx shall be eligible to
participate in any and all other employee benefit plans and
programs offered by Company from time to time, including but
not limited to, any medical, dental, short-term disability and
life insurance coverage, stock option plans or retirement
plans, in accordance with the terms and conditions of those
benefit plans and programs and on a basis consistent with that
customarily provided to Company's executive officers. In
addition, Company shall continue to maintain all life
insurance policies currently in effect as one of the effective
dates set forth above.
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Confidential Treatment is requested for portions of this document.
g. Vacation and Other Absences. Xxxx shall be entitled
to paid vacations each year in accordance with Company's
then-current vacation policy for executive officers. The rules
relating to other absences from regular duties for holidays,
sick or disability leave, leave of absence without pay, or for
other reasons, shall be the same as those customarily provided
to Company's executive officers.
4. Termination. Unless extended by mutual written agreement of
the parties, and except for the provisions hereof which are intended
to survive for other periods of time as specified herein, this
Agreement shall terminate (a) upon the expiration date stated in
Paragraph 1 December 31, 2002; (b) at any time upon mutual written
agreement of the parties; (c) immediately upon Xxxx'x death; (d) by
the Company, immediately and without prior written notice, for "cause"
(as defined in Section 5(c) below); or (e) by Xxxx or by Company for
any reason not otherwise covered by clauses (a), (b), (c) or (d)
herein, with at least thirty (30) days' written notice to the other.
Except as otherwise provided in Paragraph 5, upon the termination of
Xxxx'x employment for any reason, Xxxx shall be entitled to receive
his base salary through his last date of employment, any annual
incentive employment, the amounts credited to the deferred
compensation account described in Paragraph 3(c), any unreimbursed
business expenses incurred prior to such termination of employment and
such other employee benefits to the extent permitted by the applicable
policies or plan documents or as required by law.
5. Severance Benefits.
a. Termination Without Cause or Involuntary
Termination. If Company terminates Xxxx'x employment
without cause or in the event of an "involuntary
termination" (as defined in Section 5(c) below) at any
time during the term of this Agreement, Xxxx shall be
entitled to the following additional severance
benefits:
(i) Base Salary. Company shall
continue to pay Xxxx his then-current base
salary through the expiration date stated in
Paragraph 1, or such later date as may have
been mutually agreed to in writing by the
parties.
(ii) Benefits. Company shall continue
to provide, at no cost to Xxxx, medical,
dental, short-term disability and life
insurance benefits for Ben and his dependents
through the expiration date stated in
Paragraph 1, or such later date as may have
been mutually agreed to by the parties, at
the same level of coverage as was provided to
Xxxx immediately prior to the termination of
his employment, and shall continue to pay all
premiums required for the long-term
disability insurance coverage described in
Paragraph 3(d) through the expiration date
stated in Paragraph 1, or such later date as
may have been mutually agreed to by the
parties.
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Confidential Treatment is requested for portions of this document.
Company may, in its discretion, provide the
benefits described herein under the Company's group plans or
under no less favorable insurance contracts or arrangements
secured by the Company. For purposes of Title X of the
Consolidated Budget Reconciliation Act of 1985 ("COBRA"), the
date of the "qualifying event" for Xxxx and his dependents
shall be the expiration date stated in Paragraph 1. Company's
obligations to provide the benefits described herein shall
cease if Xxxx and his dependents become covered under another
employer's group medical, dental, short-term disability,
long-term disability or life insurance plans that provide Xxxx
and his dependents with comparable benefits and levels of
coverage.
(iii) Portions of EPS Enhancement Incentive
for current Fiscal Year. Within thirty (30) days after
the effective date of Xxxx'x termination of
employment, Xxxx shall receive a lump-sum cash payment
for a portion of the EPS Enhancement Incentive which
he could have earned for the fiscal year in which his
employment terminates. Such portion shall be based on
the cumulative monthly earning per share for such
fiscal year through the end of the month coinciding
with or immediately preceding the effective date of
Xxxx'x termination of employment as reported in
Company's Interim financial statements. For purposes
of determining such portion of the EPS Enhancement
Incentive, the [*] and [*] thresholds described in
Paragraph 3(c) shall be pro rated for the number of
months counted in such cumulative monthly earning per
share, rounded down to the nearest cent. Exhibit A
sets forth an example of how the payments required
under this Paragraph 5(a)(iii) shall be calculated,
but such Exhibit A shall not, in any manner, limit the
application of this Paragraph 5(a)(iii).
(iv) Average Annual and EPS Enhancement
Incentives. Within (30) days after the effective date
of Xxxx'x termination of employment, Xxxx shall
receive a lump-sum cash payment equal to three times
the sum of (A) the monthly average of the EPS
Enhancement Incentive described in Paragraph 3(c)
which Xxxx may have earned for each fiscal year or
portion thereof during the term of this Agreement,
including the fiscal year in which Xxxx'x termination
of employment occurs, multiplied by twelve, and (B)
the monthly average of all other annual incentive
compensation described in paragraph 3(b) which Xxxx
may have earned for each fiscal year or portion
thereof during the term of this Agreement, including
the fiscal year in which Xxxx'x termination of
employment occurs, multiplied by twelve. Exhibit A
sets forth an example of how the payments required
under this Paragraph 4(a)(iv) shall be calculated, but
such Exhibit A shall not, in any manner, limit the
application of this Paragraph 5(a)(iv).
(v) Acceleration of Stock Options.
Notwithstanding anything in the applicable stock
option plan and successor plan, or stock option
agreement to the contrary, upon the effective date of
Xxxx'x termination of employment, one hundred (100%)
of the unvested portion of any stock option or
restricted stock award held by Xxxx shall
automatically be accelerated in full so as to become
fully vested, subject to the restrictions relating to
"pooling-of-interests" accounting treatment
5
Confidential Treatment is requested for portions of this document.
contained in Section 3(a)(i)(3) of the Management Retention
Agreement entered into by Xxxx and the Company on July 1,
1999, if applicable.
b. Termination Upon Disability. If Xxxx'x employment
with the Company is terminated an account of disability at any
time during the term of this Agreement, Xxxx shall be entitled
to the following additional benefits:
(i) Benefits. Company shall continue to
provide, at no cost to Xxxx, medical, dental and life
insurance benefits for Xxxx and his dependents through
the expiration date stated in Paragraph 1, or such
later date as may have been mutually agreed to by the
parties, at the same level of coverage as was provided
to Xxxx immediately in writing prior to the
termination of his employment.
Company may, in its discretion, provide the
benefits described herein under the Company's group plans or
under no less favorable insurance contracts or arrangements
secured by the Company. For purposes of Title X of the
Consolidated Budget Reconciliation Act of 1985 ("COBRA"), the
date of the "qualifying event" for Xxxx and his dependents
shall be the end of the twenty-four month period following the
effective date of Xxxx'x termination of employment. Company's
obligations to provide the benefits described herein shall
cease if Xxxx and his dependents become covered under another
employer's group medical, dental or life insurance plans that
provide Xxxx and his dependents with comparable benefits and
levels of coverage.
(ii) Portion of EPS Enhancement Incentive for
Current Fiscal Year. Within thirty (30) days after the
effective date of Xxxx'x termination of employment on
account of disability, Xxxx shall receive a lump-sum
cash payment for a portion of the EPS Enhancement
Incentive which he could have earned for the fiscal
year in which his employment terminates. Such portion
shall be based on the cumulative monthly earning per
share for such fiscal year through the end of the
month coinciding with or immediately preceding the
effective date of Xxxx'x termination of employment, as
reported in Company's interim financial statements.
For purposes of determining such portion of the EPS
Enhancement Incentive, the [*] and [*] thresholds
described in Paragraph 3(c) shall be pro rated for the
number of months counted in such cumulative monthly
earnings per share, rounded down to the nearest cent.
c. Definitions.
(i) Cause. "Cause" shall mean (i) any act of
personal dishonesty taken by Xxxx in connection with
his duties and responsibilities as President and Chief
Executive Officer and intended to result in
substantial personal enrichment of Xxxx, (ii) Xxxx'x
conviction of a felony or (iii) a willful act by Xxxx
which constitutes gross misconduct and which is
injurious to the Company.
6
Confidential Treatment is requested for portions of this document.
(ii) Disability. "Disability" shall have the
same meaning as set forth in the long-term disability
insurance contract referred to in Paragraph 3(d).
(iii) Involuntary Termination. "Involuntary
termination" shall mean:
(A) without Xxxx'x express written
consent, the significant reduction of Xxxx'x
duties, authority or responsibilities,
relative to his duties, authority or
responsibilities as in effect immediately
prior to such reduction, or the assignment to
Xxxx of such reduced duties, authority or
responsibilities;
(B) without Xxxx'x express written
consent, a substantial reduction, without
good business reasons, of the facilities and
perquisites (including office space and
location) available to Xxxx immediately prior
to such reduction;
(C) a reduction by Company in Xxxx'x
base salary as in effect immediately prior to
such reduction;
(D) reduction by Company in the kind
of level of employee benefits, including
bonuses, to which Xxxx was entitled
immediately prior to such reduction with the
result that Xxxx'x overall benefits package
is significantly reduced;
(E) Xxxx'x relocation to a facility
or a location more than thirty-five (35)
miles from Xxxx'x then present location,
without Xxxx'x express written consent;
(F) any purported termination of Xxxx
by Company which is not effected for
disability or for cause, or any purported
termination for which the grounds relied upon
are not valid;
(G) the failure of Company to obtain
the assumption of this Agreement by any
successors contemplated in Paragraph 8 below;
or
(H) any act or set of facts or
circumstances which would, under California
case law or stature constitute a constructive
termination of Xxxx.
6. Covenant Not to Compete. In consideration of Xxxx'x employment
hereunder and other good and valuable consideration, and in
consideration of the covenants contained herein, the receipt and
sufficiency of which are hereby acknowledged, all of which are express
payments for the obligations set forth in this Paragraph 6, Xxxx agrees
that, during his employment and for a period of two (2) years after the
termination of the Agreement, he will not, directly or indirectly,
engage in (whether as an employee, consultant, proprietor, partner,
director or otherwise), have any ownership interest in, or participate
in the financing, operation,
7
Confidential Treatment is requested for portions of this document.
management or control of any firm, corporation or business that engages in or
intends to engage in business that is in direct competition with the Company's
principal business (as defined and discussed in Company's documents filed with
the Securities Exchange Commission); provided, however, that nothing contained
herein shall prevent Xxxx from owning or purchasing securities of any business
entity whose securities are regularly traded in any national securities exchange
or in the over-the-counter market if such ownership does not result in his or
his affiliates' owning directly or beneficially at any time five percent (5%) of
the voting securities of any corporation engaged in any business competitive to
the business then carried on by Company.
7. Remedies. The restriction contained in paragraph 6 is necessary for
Company's protection, and any breach thereof will cause Company irreparable
damage for which there is not adequate remedy at law. Xxxx agrees that, in the
event of such breach, Company shall, in addition to any other remedy which
Company may have at law or in equity, be entitled to seek such equitable and
injunctive relief as may be available without the necessity of proving damages.
Company agrees that, in the event of a breach of this Agreement by Company, Xxxx
shall have all such remedies as may be available at law or in equity.
8. Successors.
a. Company's Successors. Any successor to Company (whether
direct or indirect and whether by purchase, merger, consolidation,
liquidation or otherwise) to all or substantially all of Company's
business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this
Agreement in the same manner and to the same extent as Company would be
required to perform such obligations in the absence of a succession.
For all purposes under this Agreement, the term "Company" shall include
any successor to the Company's business and/or assets which executes
and delivers the assumption agreement contemplated by this Paragraph
8(a) or which becomes bound by the terms of this Agreement by operation
of law.
b. Employee's Successors. The terms of this agreement and all
of Xxxx'x hereunder shall inure to the benefit of, and be enforceable
by, Xxxx'x personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
9. Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of Xxxx, mailed notices shall
be addressed to him at the home address which he most recently communicated to
Company in writing. In the case of Company, mailed notices shall be addressed to
its corporate headquarters, and all notices shall be directed to the attention
of its Secretary.
8
Confidential Treatment is requested for portions of this document.
10. Coordination of Agreements. In the event of any conflict between
this Agreement and the Management Retention Agreement entered into by Xxxx and
Company on July 1, 1999, the terms of this Agreement shall control.
11. Miscellaneous Provisions.
a. No Duty to Mitigate. Xxxx shall not be required to mitigate
the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earning that Xxxx may receive from any
other source.
b. Amendment Waiver. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or
discharge is agreed to in writing and signed by Xxxx and by an
authorized officer of Company (other than Xxxx). No waiver by either
party of any breach of, or of compliance with, any condition or
provision of this Agreement by the other party shall be considered a
waiver of any other condition or provision or of the same condition or
provision at any other time.
c. Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied)
which are not expressly set forth in this Agreement have been made or
entered into by either party with respect to the subject matter hereof.
This Agreement supersedes in their entirety any prior or
contemporaneous agreements, whether written, oral, express, or implied,
relation to the subject matter hereof.
d. Governing Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the
State of California.
e. Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity
or enforceability of any other provision hereof, which shall remain in
full force and effect.
f. Withholding. All payments made pursuant to this Agreement
will be subject to the withholding of all applicable federal, state or
local income and employment taxes.
g. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which together will constitute one and the same instrument.
9
Confidential Treatment is requested for portions of this document.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year set forth above.
COMPANY: XXXX MICROPRODUCTS INC.
Its: Director X X Xxxxxxx
Dated: 7/12/99
XXXX: /s/ W. Xxxxxx Xxxx
-------------------------
W. Xxxxxx Xxxx
Dated: 6/30/99
10
Confidential Treatment is requested for portions of this document.
EXHIBIT A
This Exhibit A sets forth an example of how the payments required
under Paragraphs 5(a)(iii) and 5(a)(iv) should be calculated, but shall not, in
any manner, limit the application of such provisions.
Example: Assume that Xxxx is terminated on June 30, 1999. Company's
earnings per share ("EPS") for FY 1999 are as follows:
First Quarter [*]
Second Quarter [*]
Third Quarter [*]
Fourth Quarter [*]
During FY 1999, Xxxx earned the following incentive bonuses:
First Quarter [*]
Second Quarter [*]
1. Paragraph 5(a)(iii) - EPS Enhancement incentive for 1999.
Cumulative Monthly EPS:
Pro Rata Threshold: [*]
EPS Enhancement
Incentive for 1999 [*]
2. Paragraph 5(a)(Civ) -- Average Annual and EPS Enhancement
Incentives.
(A) EPS Enhancement Incentive
Monthly Average EPS: [*] [*]
Average Annual EPS: [*] [*]
Three Year Payout: [*] [*]
A-l
Confidential Treatment is requested for portions of this document.
(B) Other Incentive Bonuses:
Monthly Average
Incentive Bonus: [*]
Average Annual Bonus [*]
Three-Year Payout: [*]
Total Payout equals the sum of (A) and (B): [*]
A-2
XXXX MICROPRODUCTS, INC.
MANAGEMENT RETENTION AGREEMENT
This Management Retention Agreement (the "Agreement") is made and
entered into by and between W. Xxxxxx Xxxx (the "Employee") and Xxxx
Microproducts, Inc. (the "Company"), effective as of the latest date set forth
by the signatures of the parties hereto below (the "Effective Date").
RECITALS
A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board of Directors of the Company (the "Board") recognizes that such
consideration can be a distraction to the Employee and can cause the Employee to
consider alternative employment opportunities. The Board has determined that it
is in the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.
B. The Board believes that it is in the best interests of the Company
and its stockholders to provide the Employee with an incentive to continue his
employment and to motivate the Employee to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.
C. The Board believes that it is imperative to provide the Employee
with certain severance benefits upon Employee's termination of employment
following a Change of Control which provides the Employee with enhanced
financial security and provides incentive and encouragement to the Employee to
remain with the Company notwithstanding the possibility of a Change of Control.
D. Certain capitalized terms used in the Agreement are defined in
Section 4 below.
The parties hereto agree as follows:
1. Term of Agreement. This Agreement shall terminate three years
following the Effective Date, unless a Change of Control has occurred as of such
time, in which case this Agreement shall terminate upon the date that all
obligations of the parties hereto with respect to this Agreement have been
satisfied. This Agreement may be extended unilaterally by the Company by Written
resolutions adopted by the Board prior to the termination of this Agreement.
2. At-Will Employment The Company and the Employee acknowledge that
the Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason,
including (without limitation) any termination prior to a Change of Control, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company's written employee plans or pursuant to
other written agreements with the Company.
3. Severance Benefits.
a. Termination Following a Change of Control. If the
Employee's employment terminates at any time within twelve (12) months
following a Change of Control, then, subject to Section 4, the
Employee shall be entitled to receive the following severance
benefits:
(i) Involuntary Termination. If the Employee's
employment is terminated as a result of Involuntary
Termination other than for Cause, then the Employee shall
receive the following severance benefits from the Company.
(1) Severance Payment. A cash payment in an
amount equal to one hundred percent (100%) of the
Employee's Base Salary.
(2) Continued Employment Benefits. One
hundred percent (100%) Company-paid health, dental and
life insurance coverage at the same level of coverage
as was provided to such employee immediately prior to
the Change of Control (the "Company-Paid Coverage")
under the Company's plans. Such coverage shall be
provided under either (at the Company's discretion)
(i) the Company's plans, or (ii) no less favorable
plans or arrangements secured by the Company. If such
coverage included the Employee's dependents
immediately prior to the Change of Control, such
dependents shall also be covered at Company expense.
Company-Paid Coverage shall continue until the earlier
of (i) one year from the date of the Change of
Control, or (ii) the date that the Employee and his
dependents become covered under another employer's
group health, dental or life insurance plans that
provide Employee and his dependents with comparable
benefits and levels of coverage. For purposes of Title
X of the Consolidated Budget Reconciliation Act of
1985 ("COBRA"), the date of the "qualifying event" or
Employee and his dependents shall be the date upon
which the Company-Paid Coverage terminates.
(3) Stock Option Accelerated Vesting. One
hundred percent (100%) of the unvested portion of any
stock option held by the
-2-
Employee shall automatically be accelerated in full
so as to become completely vested; provided,
however, that if such potential vesting acceleration
would cause a contemplated Change of Control
transaction that was intended to be accounted for as
a "pooling of interests" transaction to become
ineligible for such accounting treatment under
generally accepted accounting principles, as
determined by the Company's independent public
accountants (the "Accountants") prior to the Change
of Control, Employee's stock options and restricted
stock shall not have their vesting so accelerated.
b. Timing of Severance Payments. Any severance payment to
which Employee is entitled under Section 3(a)(i) shall be paid by the
Company to the Employee (or to the Employee's successors in interest,
pursuant to Section 6(b)) in cash and in full, not later than thirty
(30) calendar days following the Termination Date.
C. Voluntary Resignation: Termination for Cause. If the
Employee's employment terminates by reason of the Employee's voluntary
resignation (and is not an Involuntary Termination), or if the
Employee is terminated for Cause, then the Employee shall not be
entitled to receive severance or other benefits except for those (if
any) as may then be established under the Company's then existing
written employee plans or pursuant to other written agreements with
the Company.
d. Disability: Death. If the Company terminates the
Employee's employment as a result of the Employee's Disability, or
such Employee's employment is terminated due to the death of the
Employee, then the Employee shall not be entitled to receive severance
or other benefits except for those (if any) as may then be established
under the Company's then existing written employee plans or pursuant
to other written agreements with the Company.
e. Termination Apart from Change of Control. In the event the
Employee's employment is terminated for any reason, either prior to
the occurrence of a Change of Control or after the twelve (12)-month
period following a Change of Control, then the Employee shall be
entitled to receive severance and any other benefits only as may then
be established under the Company's existing severance and benefits
plans and practices or pursuant to other agreements with the Company.
4. Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Employee (i)
constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") and (ii) but for this
Section 4, would be subject to the excise tax imposed by Section 4999 of the
Code, then the Employee's severance benefits under Section 3(a)(i) shall be
reduced as to such lesser extent as would result in no portion of such severance
benefits being subject to excise tax under Section 4999 of the Code. Unless the
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Company and the Employee otherwise agree in writing, any determination required
under this Section 4 shall be made in writing by the Company's independent
public accountants immediately prior to Change of Control (the "Accountants"),
whose determination shall be conclusive and binding upon the Employee and the
Company for all purposes. For purposes of making the calculations required by
this Section 4, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code, The Company and the Employee shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 4.
5. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:
a. Base Salary. "Base Salary" means an amount equal to twelve
(12) times Employee's monthly Company salary for the last full month
preceding the Change of Control.
b. Cause. "Cause" shall mean (i) any act of personal
dishonesty taken by the Employee in connection with his
responsibilities as an employee and intended to result in substantial
personal enrichment of the Employee, (ii) the conviction of a felony,
or (iii) a willful act by the Employee which constitutes gross
misconduct and which is injurious to the Company.
c. Change of Control. "Change of Control" means the
occurrence of any of the following events:
(i) Any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding
voting securities; or
(ii) A change in the composition of the Board
occurring within a two-year period, as a result of which fewer
than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (a) are
directors of the Company as of the date hereof, or (b) are
elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or
-4-
(iii) The stockholders of the Company approve a merger
or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total
voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company of
all or substantially all the Company's assets.
d. Disability. "Disability" shall mean that the Employee has
been unable to perform his Company duties as the result of his
incapacity due to physical or mental illness, and such inability, at
least 26 weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and
acceptable to the Employee or the Employee's legal representative
(such Agreement as to acceptability not to be unreasonably withheld).
Termination resulting from Disability may only be effected after at
least 30 days' written notice by the Company of its intention to
terminate the Employee's employment. In the event that the Employee
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. Involuntary Termination. "Involuntary Termination" shall
mean (i) without the Employee's express written consent, the
significant reduction of the Employee's duties, authority or
responsibilities, relative to the Employee's duties, authority or
responsibilities as in effect immediately prior to such reduction, or
the assignment to Employee of such reduced duties, authority or
responsibilities, (ii) without the Employee's express written consent,
a substantial reduction, without good business reasons, of the
facilities and perquisites (including office space and location)
available to the Employee immediately prior to such reduction; (iii) a
reduction by the Company in the base salary of the Employee as in
effect immediately prior to such reduction unless part of a
management-wide or company-wide cost-reduction program in which a
majority of management or employees are affected; (iv) a material
reduction by the Company in the kind or level of employee benefits,
including bonuses, to which the Employee was entitled immediately
prior to such reduction with the result that the Employee's overall
benefits package is significantly reduced unless part of a
management-wide or company-wide cost-reduction program in which a
majority of management or employees are affected; (v) the relocation
of the Employee to a facility or a location more than thirty-five (35)
miles from the Employee's then present location, without the
Employee's express written consent; (vi) any purported termination of
the Employee by the Company which is not effected for Disability or
for Cause; (vii) the failure of the Company to obtain the assumption
of this agreement by any successors contemplated in Section 6(a)
below; or (viii) any act or set of facts or circumstances
-5-
which would, under California case law or statute constitute a
constructive termination of the Employee.
f. Termination Date. "Termination Date" shall mean (i) if this
Agreement is terminated by the Company for Disability, thirty (30)
days after notice of termination is given to the Employee (provided
that the Employee shall not have returned to the performance of the
Employee's duties on a full-time basis during such thirty (30)-day
period), (ii) if the Employee's employment is terminated by the
Company for any other reason, the date on which a notice of
termination is given, provided that if within thirty (30) days after
the Company gives the Employee notice of termination, the Employee
notifies the Company that a dispute exists concerning the termination
or the benefits due pursuant to this Agreement, then the Termination
Date shall be the date on which such dispute is finally determined,
either by mutual written agreement of the parties, or by a final
judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been
perfected), or (iii) if the Agreement is terminated by the Employee,
the date on which the Employee delivers the notice of termination to
the Company.
6. Successors.
a. Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's
business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this
Agreement in the same manner and to the same extent as the Company
would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Company"
shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this
Section 6(a) or which becomes bound by the terms of this Agreement by
operation of law.
b. Employee's Successors. The terms of this agreement and all
rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, divisees
and legatees.
7. Notice.
a. General. Notices and all other communications contemplated
by this Agreement shall be in writing and shall be deemed to have been
duly given when personally delivered or when mailed by U.S. registered
or certified mail, return receipt requested and postage prepaid. In
the case of the Employee, mailed notices shall be addressed to him at
the home address which he most recently communicated to the Company in
writing. In the case of the Company, mailed notices shall be
-6-
addressed to its corporate headquarters, and all notices shall be
directed to the attention of its Secretary.
b. Notice of Termination. Any termination by the Company for
Cause or by the Employee 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 Section
7(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 (which shall be not more than 30 days
after the giving of such notice). The failure by the Employee to
include in the notice any fact or circumstance which contributes to a
showing of Involuntary Termination shall not waive any right of the
Employee hereunder or preclude the Employee from asserting such fact
or circumstance in enforcing his rights hereunder.
8. Miscellaneous Provisions.
a. No Duty to Mitigate. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor
shall any such payment be reduced by any earnings that the Employee
may receive from any other source.
b. Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by an authorized
officer of the Company (other than the Employee). No waiver by either
party of any breach of, or of compliance with, any condition or
provision of this Agreement by the other party shall be considered a
waiver of any other condition or provision or of the same condition or
provision at another time.
C. Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or
implied) which are not expressly set forth in this Agreement have been
made or entered into by either party with respect to the subject
matter hereof. This Agreement supersedes in their entirety any prior
or contemporaneous agreements, whether written, oral, express or
implied, relating to the subject matter hereof.
d. Choice of Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the
State of California.
e. Severabillity. The invalidity of unenforceability of any
provision or provisions of this Agreement shall not affect the
validity or enforceability of any other provision hereof, which shall
remain in full force and effect.
f. Withholding. All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment
taxes.
g. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which together will constitute one and the same instrument.
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 set forth below.
Company: Xxxx MicroProducts
By: EJ Gellbach
Its: Director
Dated: 7/12/99
Employee: /s/ W. Xxxxxx Xxxx
----------------------------
W. Xxxxxx Xxxx
Dated: 6/30/99
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