1
EXHIBIT 10.27
ARTISAN COMPONENTS, INC.
Severance Agreement
This Agreement is made by and between Artisan Components, Inc. (the
"Company") and Xxxxx Xxxxxxxxx ("Executive") as of the date set forth below.
WHEREAS, the Company has employed Executive as the Company's Chief
Operating Officer, Strategy and Business Development, effective as of June 4,
2001, and
WHEREAS, the Company and the Executive understand and acknowledge that
Executive's employment with the Company constitutes "at-will" employment, and
that the employment relationship may be terminated at any time, with or without
good cause or for any or no cause, at the option either of the Company or the
Executive,
NOW THEREFORE, the Company and the Executive hereby agree as follows:
1. Definition of Constructive Termination of Employment in the
Event of a Change of Control of Company. "Constructive
Termination" is defined as one of the following events occurring
following a Change in Control of the Company: (i) a material
reduction in salary or benefits, (ii) a material change in
responsibilities from those of the Chief Operating Officer,
Strategy and Business Development, (iii) a requirement to
relocate, except for office relocation that would not increase
the Executive's current one-way commute distance by more than
thirty (30) miles or (iv) subjection of Executive to
unreasonable working conditions, such as violation of
Executive's civil rights, defamation of Executive, intentional
infliction of emotional distress, coercion to condone, tolerate
or participate in illegal or immoral acts, or similar
conditions.
2. Definition of Change of Control of Company. "Change of Control
of the Company" is defined as:
(a) 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
(b) A change in the composition of the Board of Directors of
the Company 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 of Directors of the
Company with
2
the affirmative votes of a 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
(c) The date of the consummation of a merger or consolation
of the Company with any other corporation that has been
approved by the stockholders of the Company, 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.
3. Termination Incident to a Change of Control of the Company. In
the event of a Change of Control of the Company, followed within
six (6) months thereafter by the Constructive Termination or
involuntary termination of Executive's employment with the
Company or its successor entity without Cause, (i) Executive
shall be entitled to receive a cash payment of severance pay
(less applicable withholding taxes and deductions) representing
an amount equal to ninety (90) days of base salary for each full
year of service, up to a maximum of six (6) months; (ii)
Executive's employee benefits shall continue on the same terms
and conditions as during Executive's employment for the
severance period or until Executive is eligible for alternative
health care benefit. Upon becoming eligible for alternative
health care benefits, Executive shall immediately notify the
Company and the Executive's benefits shall cease. These benefits
includes health insurance, 401K deductions, health care spending
and dependant care spending account, life insurance, AD&D; and
(iii) Executive's outstanding portion of the stock option grant
of 240,000 shares of Common stock shall become 50% vested.
4. Enforcement. In the event of any action to enforce the terms of
this Agreement, the prevailing party in such action shall be
entitled to such party's reasonable costs and expenses of
enforcement including, without limitation, reasonable attorney's
fee.
5. Entire Agreement. This Agreement, the Stock Option Plan, the
Option Agreement, and the Proprietary Information Agreement of
even date herewith represent the entire agreement and
understanding between the Company and Executive concerning
Executive's employment relationship with the
3
Company, supersedes and replaces any and all prior agreements
and understandings concerning Executive's employment
relationship with the Company.
6. No Oral Modification, Cancellation or Discharge. This Agreement
may only be amended, canceled or discharged in writing signed by
Executive and the Company.
7. Governing Law. This Agreement shall be governed by the laws of
the State of California.
8. Effective Date. This Agreement is effective immediately after it
has been signed.
9. Acknowledgement. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advise from
his private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this
Agreement, and is knowingly and voluntarily entering into this
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
June 7, 2001.
ARTISAN COMPONENTS, INC.
By: /s/ Xxxx Xxxxxxxxx
Xxxx X. Xxxxxxxxx
President & Chief Executive Officer
XXXXX XXXXXXXXX
By: /s/ Xxxxx Xxxxxxxxx
