EXHIBIT 10.1
SEPARATION AND CONSULTING AGREEMENT
This Agreement, which is dated May 31, 1998, is between DSP Group, Inc.
(the "Company") and Xxxxxx X. Xxxxxxx ("Consultant"). It is hereby mutually
agreed as follows:
1. EMPLOYMENT TERMINATION.
a) TRANSITION PERIOD. Prior to the Effective Date of this Agreement,
the existing terms and conditions of Consultant's employment with
the Company, as defined in the offer letter signed by Consultant
on March 1, 1991, continue to apply, and Consultant shall be
responsible for the services required by his position as well as
the transition of his duties to his replacements as directed by
the Company.
b) CONSULTING PERIOD. On May 31, 1998 (the "Effective Date"), this
Agreement will govern the terms and conditions of Consultant's
employment with the Company. The offer letter and all other
agreements between Consultant and the Company will have no further
effect after the Effective Date except as expressly provided in
this Agreement.
c) GENERAL RELEASE. This Agreement shall constitute the "Separation
Agreement" referenced in the General Release, which is attached to
this Agreement. The General Release shall be incorporated into
this Agreement and shall be considered a material part of this
Agreement. The Consultant shall sign the General Release on the
Effective Date. This Agreement shall terminate automatically if
the General Release does not become effective.
2. CONSULTANT'S SERVICES. In response to specific requests by the
President of the Company, the Consultant will provide to the Company
advisory services with respect to the transition of his position and any
questions the President may have. Consultant's duties will include the
following:
a) Providing advice to the Company as the Company deems desirable in
connection with these advisory services in an efficient,
trustworthy and businesslike manner;
b) Reviewing such documents as may appropriately be submitted to him by
the Company and give the Company, in writing, his professional
opinions and suggestions regarding them; and
c) Performing such other services as may reasonably requested by the
Company in connection with these advisory services.
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3. COMPENSATION.
a) CONSULTING FEE. The Company will compensate the Consultant at a
rate of $70,000 annually less applicable taxes ("Consulting Fee").
The Consulting Fee will be earned on a daily basis and will be
paid in accordance with the Company's standard payroll practices.
Consultant shall not be entitled to any other compensation.
b) STOCK OPTIONS. The stock options that were previously granted to
Consultant will continue to vest during the term of this
Agreement, pursuant to the Company's Employee Stock Option Plan
and any stock option agreements between the parties.
c) BENEFITS. The Company will provide Consultant with its standard
medical insurance benefits, and Consultant will be eligible to
participate in the Company's standard 401(k) plan. Consultant
shall not be entitled to participate in any other benefit policies
or plans provided by the Company.
d) EXPENSES. The Company will reimburse Consultant for reasonable travel
and other business expenses incurred by Consultant in the
performance of his duties in accordance with the Company's general
policies. All travel, travel expenses and other business expenses
must be approved in advance by the President of the Company.
4. CONSULTANT'S OBLIGATIONS.
a) HOURS OF WORK. This consulting position is intended to be a half-time
position. Consultant will be expected to devote the amount of
time necessary to complete the services requested pursuant to this
Agreement.
b) CONFLICTS OF INTEREST. Consultant may accept other consulting
assignments, and engage in other business activities, so long as
they do not interfere with his obligations under this Agreement.
c) LACK OF AUTHORITY. Consultant does not have the right or authority
to incur any liability or expense to or on behalf of the Company
unless specifically authorized in writing by the President.
5. PROPRIETARY INFORMATION. "Proprietary Information" is all information and
any idea pertaining in any manner to the business of the Company (or any
affiliate of the Company), its employees, clients, consultants, or
business associates, which was produced by any employee or consultant of
the Company in the course of his or her employment or consulting
relationship or otherwise produced or acquired by or on behalf of the
Company. Proprietary Information shall include, without limitation,
trade secrets, product ideas, inventions, processes, formulas, data,
know-how, software and other computer programs, copyrightable material,
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marketing plans, strategies, sales, financial reports, forecasts, sales
prospects and customer lists. All Proprietary Information not generally
known outside of the Company's organization, and all Proprietary
Information so known only through improper means, shall be deemed
"Confidential Information." Consultant shall use Proprietary
Information, and shall disclose Confidential Information, only for the
benefit of the Company and as is necessary to perform his obligations
under this Agreement. Following termination of this Agreement,
Consultant shall not use Proprietary Information and shall not disclose
Confidential Information except with express written consent of the
Company. By way of illustration and not in limitation of the foregoing,
following termination, Consultant shall not use any Confidential
Information to solicit the Company's employees or customers or to
compete against the Company. Consultant's obligations under this Section
shall survive the termination of his consulting relationship with the
Company and the expiration of this Agreement.
6. EMPLOYEE STATUS. The Consultant shall be an employee of the Company.
7. TERM. This Agreement shall be effective for one year after the Effective
Date. Before the end of this term, the Agreement may be renewed in
writing signed by both parties. If the Agreement is not renewed before
the end of the term, the Agreement shall terminate without any action by
either party, and the Company shall owe no further obligation or
liability to Consultant after the date of termination.
8. TERMINATION DURING TERM.
a) CONSULTANT'S RIGHT TO TERMINATE UPON NOTICE. At any time during the
term of this Agreement, Consultant may terminate the Agreement by
giving the Company written notice at least fourteen (14) days
prior to the effective date of such termination. Upon such
termination of this Agreement, the Company shall pay to Consultant
the Consulting Fee that was earned prior to the date of
termination and thereafter shall owe no further obligation or
liability to Consultant.
b) TERMINATION UPON BREACH. At any time during the term of this
Agreement, either party may terminate the Agreement without prior
notice if the other party breaches this Agreement. Except as
provided in the next paragraph (Section 8(c)), if the Company
terminates this Agreement pursuant to this paragraph (Section
8(b)), (1) the Company shall pay to Consultant the Consulting Fee
that was earned prior to the date of termination; (2) the Company
shall pay to Consultant a lump sum equal to the Consulting Fee
that would have been earned through the remainder of the term of
this Agreement; (3) the stock options discussed in Section 3(b)
will cease vesting on the date of termination; and (4) the Company
shall
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owe no further obligation or liability to Consultant after the date
of termination.
c) TERMINATE UPON BREACH OF GENERAL RELEASE OR PROPRIETARY INFORMATION
OBLIGATIONS. At any time during the term of this Agreement, the
Company may terminate the Agreement without prior notice and
without any obligation to pay any unearned portions of the
Consulting Fee to the Employee if the Employee breaches the
General Release or Section 5 (Proprietary Information). Upon such
termination of this Agreement, the Company shall pay to Consultant
the Consulting Fee that was earned prior to the date of
termination and thereafter shall owe no further obligation or
liability to Consultant.
9. TERMINATION OBLIGATIONS. Upon termination of this Agreement, the Company
shall owe no further obligation or liability to Consultant (except as
explicitly provided in this Agreement). Upon termination of this
Agreement, Consultant shall promptly return to the Company all property
of the Company, including, without limitation, all equipment, tangible
proprietary information, documents, books, notes, records, reports,
contracts, lists, computer disks (or other computer-generated files or
data), or copies thereof, created on any medium, prepared or obtained by
Consultant in the course of or incident to his employment and consulting
relationships with the Company. Consultant understands that Consultant
has obligations under Sections 5 and 10 of this Agreement that survive
the termination of this Agreement.
10. ARBITRATION. All claims that Consultant and the Company may have against
each other in any way related to the subject matter, interpretation,
application, validity, effect or breach of this Agreement ("Arbitrable
Claims") shall be resolved by arbitration. Arbitration shall be final
and binding upon the parties and shall be the exclusive remedy for all
Arbitrable Claims. Arbitration of Arbitrable Claims shall be in
accordance with the rules of the American Arbitration Association, as
amended, and as augmented by this Agreement. Either party may bring an
action in court to compel arbitration under this Agreement and to
enforce an arbitration award. Otherwise, neither party shall initiate
or prosecute any lawsuit or administrative action in any way related to
any Arbitrable Claim. The Federal Arbitration Act shall govern the
interpretation and enforcement of this section. If a court or
arbitrator finds the Federal Arbitration Act does not govern, then
California law shall govern the interpretation and enforcement of this
section. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY
JURY IN REGARD TO ARBITRABLE CLAIMS, INCLUDING WITHOUT LIMITATION ANY
RIGHT TO TRIAL BY JURY AS TO THE MAKING, EXISTENCE, VALIDITY, OR
ENFORCEABILITY OF THIS AGREEMENT.
11. MISCELLANEOUS PROVISIONS.
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a) NOTICES. Any notice under this Agreement must be in writing and
shall be effective upon delivery by hand or three (3) business days
after deposit in the United States mail, postage prepaid, certified or
registered, and addressed to the Company or to Consultant at the
corresponding address below. Consultant shall be obligated to notify
the Company in writing of any change in his address. Notice of change
of address shall be effective only when done in accordance with this
Section.
The Company's Notice Address:
DSP Group, Inc.
0000 Xxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Consultant's Notice Address:
Xxxxxx X. Xxxxxxx
[INSERT ADDRESS]
b) INTEGRATION. The parties understand and agree that the preceding
Sections (including the General Release) recite the sole
consideration for this Agreement; that no representation or
promise has been made by Consultant or the Company concerning the
subject matter of this Agreement, except as expressly set forth in
this Agreement; and that all agreements and understandings between
the parties concerning the subject matter of this Agreement are
embodied and expressed in this Agreement. This Agreement shall
supersede all prior or contemporaneous agreements and
understandings among Consultant and the Company, whether written
or oral, express or implied, with respect to any subject covered
by this Agreement, except to the extent that the provisions of any
such agreement or plan have been expressly referred to in this
Agreement as having continued effect.
c) AMENDMENTS; WAIVERS. This Agreement may not be amended except by
an instrument in writing, signed by each of the parties. No
failure to exercise and no delay in exercising any right, remedy,
or power under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, or
power under this Agreement preclude any other or further exercise
thereof, or the exercise of any other right, remedy, or power
provided herein or by law or in equity.
d) ASSIGNMENT; SUCCESSORS AND ASSIGNS. Consultant agrees that he will
not assign, sell, transfer, delegate, or otherwise dispose of,
whether voluntarily or involuntarily, or by operation of law, any
rights or obligations under this Agreement. Any such purported
assignment, transfer, or delegation shall be null and void.
Subject to the foregoing, this Agreement shall be binding
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upon and shall inure to the benefit of the parties and their
respective heirs, successors, attorneys, and permitted assigns.
This Agreement shall not benefit any other person or entity except
as specifically enumerated in this Agreement.
e) SEVERABILITY. If any provision of this Agreement, or its application
to any person, place, or circumstance, is held by an arbitrator or
a court of competent jurisdiction to be invalid, unenforceable, or
void, such provision shall be enforced to the greatest extent
permitted by law, and the remainder of this Agreement and such
provision as applied to other persons, places, and circumstances
shall remain in full force and effect.
f) ATTORNEYS' FEES. In any legal action, arbitration or other proceeding
brought to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to recover reasonable
attorney's fees and costs.
g) GOVERNING LAW. Except as expressly provided otherwise, this Agreement
shall be governed by and construed in accordance with the law of
the State of California, excluding its laws relating to the choice
of laws.
h) INTERPRETATION. This Agreement shall be construed as a whole,
according to its fair meaning, and not in favor of or against any
party. By way of example and not in limitation, this Agreement
shall not be construed in favor of the party receiving a benefit
nor against the party responsible for any particular language in
this Agreement. Captions are used for reference purposes only and
should be ignored in the interpretation of the Agreement.
The parties have duly executed this Agreement as of the date first written
above.
/S/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
DSP Group, Inc.
/S/ XXX XXXXXX
------------------------------------
By: Xxx Xxxxxx
Its: President and CEO
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GENERAL RELEASE
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THIS RELEASE MUST BE SIGNED BETWEEN MAY 31, 1998 AND JUNE 9, 1998
(WHICH IS 21 DAYS AFTER YOU RECEIVED THE RELEASE AND SEPARATION
AGREEMENT) AND MUST BE FILED WITH AVI BASHER AT 0000 XXXXX XXXX. XXXXX
XXXXX XXXXXXXXXX BY JUNE 10, 1998. THIS RELEASE MAY BE REVOKED WITHIN
7 DAYS AFTER IT WAS SIGNED BY FILING A WRITTEN REVOCATION NOTICE WITH
AVI BASHER 0000 XXXXX XXXX. XXXXX XXXXX XXXXXXXXXX.
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DSP Group Inc. (Company) and I agree as follows:
(a) BENEFITS PAYABLE
The Company promises that I will receive the benefits provided in the
Separation Agreement between me and the Company (which contains benefits to
which I otherwise would not be entitled) in exchange for this Release. I may
revoke this Release within 7 days after I sign it, in which case I will not
be entitled to receive those benefits.
(b) EMPLOYMENT TERMINATION
I agree that my employment with the Company will end effective May 31,
1999.
(c) CLAIMS RELEASED
In exchange for benefits described above, I irrevocably and
unconditionally release the Company, its current or former affiliates, and
their employees or agents (collectively, the Released Parties), from all
known or unknown claims that I presently may have arising out of my
employment with, or separation from, the Company (Claims).
The Claims I am releasing include, without limitation, any claim based
on a contract, any employment or wrongful discharge claim, any tort claim
(e.g., emotional distress, fraud, negligence or defamation), and any claim
based on a federal, state or local law including the Age Discrimination in
Employment Act, which prohibits age discrimination in employment; Title VII
of the Civil Rights Act of 1964, which prohibits discrimination based on
race, color, national origin, religion, or sex; the Equal Pay Act, which
prohibits paying men and women unequal pay for equal work; the Americans With
Disabilities Act, which prohibits discrimination based on disability, the
California Fair Employment and Housing Act, which prohibits discrimination
based on race, religion, creed, color, national origin, ancestry, disability,
medical condition, marital status, sex or age; or any other federal, state,
or local common law, statute, regulation, or law of any other type.
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The only Claims that I am not releasing are claims that arise after I
sign this Release, my rights to the benefits provided by the Separation
Agreement and this Release, my rights, if any, to government-provided
unemployment benefits, my rights, if any, to vested retirement benefits or
COBRA benefits and any previously filed workers' compensation claims. I
acknowledge that I have not sustained any physical or emotional injury within
the scope of my employment for the Company except for claims that I have
already filed with the Company's workers' compensation carrier.
(d) ACKNOWLEDGEMENT OF UNDERSTANDING
I acknowledge that I am releasing Claims I know I have and Claims I may
not know I have. I understand the significance of releasing all Claims that
I may have. I voluntarily waive all rights that I have under the terms of
Section 1542 of the California Civil Code, which provides as follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with
the debtor.
(e) PURSUIT OF RELEASED CLAIMS
I agree to withdraw with prejudice all complaints or charges, if any, I
have filed against any Released Party with any agency or court. I agree that
I will never file any lawsuit or complaint against them based on the Claims
released in this Release. I promise never to seek any damages, remedies, or
other relief for myself personally (any right to which I hereby waive) by
filing or prosecuting a charge with any administrative agency with respect to
any Claim released by this Release. I have not assigned or transferred any
Claim that I am releasing.
(f) NONDISCLOSURE
I understand that I will continue to be bound by the Proprietary
Information obligations in my Separation Agreement after the termination of
my employment and reaffirm my obligations under that agreement.
(g) ARBITRATION OF DISPUTES AND ENFORCEMENT OF RELEASE
The Company and I agree to resolve any Claims we may have with each
other or that I have with any other Released Party through final and binding
arbitration. This arbitration agreement applies, for example, to disputes
about the validity, interpretation, or effect of this Release or alleged
violations of it and whether a particular claim is covered by this Release.
Arbitration shall be the exclusive remedy for any such claim or
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dispute. Arbitration shall be in accordance with the rules of American
Arbitration Association, as augmented by this Agreement. However, either
party may bring an action in court to compel arbitration under this Agreement
or to enforce an arbitration award. The Federal Arbitration Act shall govern
the interpretation and enforcement of this section. If a court or arbitrator
finds the Federal Arbitration Act does not govern, then California law shall
govern the interpretation and enforcement of this section.
In any arbitration, legal proceeding or other proceeding brought to
enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to recover reasonable attorneys' fees and costs. In addition,
should I or the Company attempt to resolve any claim waived by this Release
or pursue any arbitrable dispute related by any method other than
arbitration, the responding party will be entitled to recover from the
initiating party all damages, costs, expenses, and attorneys' fees incurred
as a result of that breach.
Should I attempt to challenge the enforceability of this Release, I
agree first to deliver a certified check to the Company for all amounts I
have received because I signed this Release, and to invite the Company to
cancel this Release. If the Company accepts my offer, this Release will be
canceled. If it rejects my offer, the Company will notify me and deposit the
amount I repaid in an interest-bearing account pending a determination of the
enforceability of this Release. If the Release is determined to be
enforceable, the Company will pay me the amount in the account, less any
amounts I owe the Company. If this Release is not enforceable, the Company
or its designee is to retain the account.
(h) NONADMISSION OF LIABILITY
I agree that this Release is not an admission of guilt or wrongdoing by
the Released Parties and I acknowledge that the Released Parties do not
believe or admit that they have done anything wrong. I acknowledge that I
have not suffered any discrimination or wrongful treatment by any Released
Party.
(i) CONSEQUENCES OF VIOLATING MY PROMISES
I agree to pay the reasonable attorneys' fees, costs, and any damages
Released Parties may incur as a result of my breaching a promise I made in
this Release (such as by suing Released Parties over a released Claim) or if
any representation I made in this Release is false.
(j) CONSIDERATION OF RELEASE
I acknowledge that, before signing this Release, I was given at least 21
calendar days. I waive any right I might have to additional time beyond this
consideration period
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within which to consider this Release. I acknowledge that: (a) I took
advantage of that time to consider this Release before signing it; (b) I
carefully read this Release; (c) I fully understand what this Release means;
and (d) I am entering into it voluntarily. I further acknowledge that the
Company encouraged me to discuss this Release with my attorney (at my own
expense) before signing this Release and that I did so to the extent I deemed
appropriate.
(k) MISCELLANEOUS
This Release sets forth the entire agreement between me and the Company
pertaining to the subject matter of this Release. This Release may not be
modified or canceled in any manner except by a writing signed by both me and
an authorized Company official. I acknowledge that the Company has made no
representations or promises to me other than those in this Release and the
Separation Agreement. If any provision in this Release is found to be
unenforceable, that provision will be enforced to the greatest extent
permitted by law and all other provisions will remain fully enforceable. It
is not necessary that the Company sign this Release for it to become binding
on both me and the Company. This Release binds my heirs, administrators,
representatives, executors, successors, and assigns, and will inure to the
benefit of the Released Parties and their heirs, administrators,
representatives, executors, successors, and assigns. This Release shall be
construed as a whole according to its fair meaning. It shall not be
construed strictly for or against me or the Released Parties. Unless the
context indicates otherwise, the term "or" shall be deemed to include the
term "and" and the singular or plural number shall be deemed to include the
other. This Release shall be governed by the law the State of California,
excluding its laws relating to the choice of laws.
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TAKE THIS RELEASE HOME, READ IT, AND CAREFULLY CONSIDER ALL OF ITS
PROVISIONS BEFORE SIGNING IT. THIS RELEASE INCLUDES A RELEASE OF
KNOWN AND UNKNOWN CLAIMS. THIS RELEASE ALSO INCLUDES AN ARBITRATION
AGREEMENT IN WHICH BOTH PARTIES WAIVE ANY RIGHTS THEY MAY HAVE TO
TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS, INCLUDING WITHOUT
LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING, EXISTENCE,
VALIDITY, OR ENFORCEABILITY OF THIS AGREEMENT. IF YOU WISH, YOU
SHOULD TAKE ADVANTAGE OF THE CONSIDERATION PERIOD AFFORDED BY SECTION
(j) AND CONSULT YOUR ATTORNEY.
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Date 5/31/98 /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
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