EXECUTIVE SEVERANCE AGREEMENT
August 4, 1997
Xxxx X. Xxxxx
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxx 00000 Executive
Merix Corporation
an Oregon corporation
XX Xxx 0000
Xxxxxx Xxxxx, Xxxxxx 00000 Merix
Merix considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best interests of
Merix and its shareholders. In order to induce Executive to remain employed by
Merix in the face of uncertainties about the long-term strategies of Merix and
their potential impact on the scope and nature of Executive's position with
Merix, this Agreement, which has been approved by the Board of Directors of
Merix, sets forth the severance benefits that Merix will provide to Executive in
the event Executive's employment by Merix is terminated under the circumstances
described in this Agreement.
1. Employment Relationship. Executive is currently employed by Merix as
Vice President, Site Operations. Executive and Merix acknowledge that either
party may terminate this employment relationship at any time and for any or no
reason, subject to the obligation of Merix to provide the benefits specified in
this Agreement in accordance with the terms hereof.
2. Release of Claims. In consideration for and as a condition precedent to
receiving the severance benefits outlined in this Agreement, Executive agrees to
execute a Release of Claims in the form attached as Exhibit A ("Release of
Claims"). Executive promises to execute and deliver the Release of Claims to
Merix within the later of (a) 45 days from the date Executive receives the
Release of Claims or (b) the last day of Executive's active employment.
3. Compensation Upon Termination. In the event of a Termination of
Executive's Employment (as defined in Section 6.1) at any time other than for
Cause (as defined in Section 6.2 of this Agreement), Death or Disability (as
defined in Sections 6.4 and 6.3 of this Agreement), and contingent upon
Executive's execution of a Release of Claims, Executive shall be entitled to the
following benefits:
3.1 As severance pay and in lieu of any other compensation for periods
subsequent to the date of termination, Merix shall pay Executive, in a single
payment within the later of (a) 45 days after termination of employment or (b)
eight days after execution of the Release of Claims, an amount in cash equal to
one-twelfth of Executive's annual base pay at the rate in effect immediately
prior to the date of termination multiplied by a number determined from the
following schedule:
Date of Termination Multiplication Factor
------------------- ---------------------
On or before the first anniversary
date of this Agreement. 12
After the first anniversary date
but on or before the second
anniversary date of this
Agreement. 9
Any time after the second
anniversary date of this
Agreement. 6
3.2 Executive is entitled to extend coverage under any group health
plan in which Executive and Executive's dependents are enrolled at the time of
termination of employment under the COBRA continuation laws for the 18-month
statutory period, or so long as Executive remains eligible under COBRA.
Merix will pay Executive a lump sum payment in an amount equivalent to
the reasonably estimated cost Executive may incur to extend for a period of 18
months under the COBRA continuation laws Executive's group health and dental
plan coverage in effect at the time of termination. Executive may use this
payment, as well as any payment made under Section 3.1, for such COBRA
continuation coverage or for any other purpose.
3.3 Except as provided in Section 5.2, Executive shall be entitled to
a portion of the benefits under any incentive plans in effect at the time of
termination, prorated for the portion of the plan year during which Executive
was a participant. For purposes of this Agreement, Executive's participation in
any annual performance improvement plan will be considered to have ended on
Executive's last day of active employment. Prorated awards shall not be due and
payable by Merix to Executive until the date that all awards are paid to other
eligible employees after the close of the incentive period. Unless the
applicable plan provides for a greater payment for a participant whose
employment terminates prior to the end of an incentive period (in which case the
applicable plan payment shall be made), the proration shall be calculated
pursuant to this Section 3.3. The payment, if any, that would have been made
under
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Executive's award had Executive been made a participant for the full incentive
period shall be calculated at the end of the incentive period. Such amount shall
be divided by the total number of days in the incentive period and the result
multiplied by the actual number of days Executive participated in the plan.
3.4 Merix will pay up to $12,500 to a third party outplacement firm
selected by Executive to provide career counseling assistance to Executive for a
period of one year following Executive's termination date.
3.5 All outstanding stock options, restricted stock, stock bonuses or
other stock awards shall become vested to the extent provided in Section 5.2.
4. Subsequent Employment. The amount of any payment provided for in this
Agreement shall not be reduced, offset or subject to recovery by Merix by reason
of any compensation earned by Executive as the result of employment by another
employer after termination.
5. Other Agreements.
5.1 In the event that severance benefits are payable to Executive
under any other agreement with Merix in effect at the time of termination
(including but not limited to any change of control, "golden parachute" or
employment agreement, but excluding for this purpose any stock option agreement
or stock bonus agreement or stock appreciation right agreement that may provide
for accelerated vesting or related benefits upon the occurrence of a change in
control), the benefits provided in this Agreement shall not be payable to
Executive. Executive may, however, elect to receive all of the benefits provided
for in this Agreement in lieu of all of the benefits provided in all such other
agreements. Any such election shall be made with respect to the agreements as a
whole, and Executive cannot select some benefits from one agreement and other
benefits from this Agreement.
5.2 The vesting or accrual of stock options, restricted stock, stock
bonuses, or any other stock awards shall not continue following termination. The
vesting or accrual provisions of any agreements between Executive and Merix that
relate to stock awards (including but not limited to stock options, long term
incentive program, stock bonuses and restricted stock) shall be superseded by
the provisions of this Section 5.2 to the extent this Section 5.2 results in
earlier vesting or accrual. In the event of a Termination of Executive's
Employment (as defined in Section 6.1) at any time other than for Cause (as
defined in Section 6.2), Death or Disability (as defined in Sections 6.4 and
6.3), and contingent upon Executive's execution of a Release of Claims, all
outstanding stock options, restricted stock, stock bonuses or any other stock
awards then held by Executive shall vest or accrue in accordance with the
following schedule:
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Date of Termination Amount Vested or Accrued
------------------- ------------------------
On or before the All shares that would
first anniversary have otherwise vested
date of this or accrued on or
Agreement. before the date of
termination.
After the first All shares that would
anniversary date but have otherwise vested
on or before the or accrued on or
second anniversary before the end of the
date of this 12 calendar months
Agreement. after the month in
which termination
occurred.
Any time after the All shares that would
second anniversary have otherwise vested
date of this or accrued on or
Agreement. before the end of the
24 calendar months
after the month in
which termination
occurred.
5.3 Executive shall be entitled to exercise any stock options or stock
appreciation rights that are or became exercisable as a result of any other
agreement between Executive and Merix or this Agreement at any time prior to the
expiration date of the option or the expiration of 90 days after the date
Executive's employment is terminated, whichever is the shorter period. All
unexercised stock options and stock appreciation rights shall immediately
terminate upon the expiration of such 90-day period.
6. Definitions.
6.1 Termination of Executive's Employment. Termination of Executive's
Employment means that Merix has terminated Executive's employment with Merix
(including any subsidiary of Merix). If Executive is assigned additional or
different titles, tasks or responsibilities from those currently held or
assigned, consistent with Executive's areas of professional expertise, whether
at Merix or any subsidiary of Merix, such circumstances shall not constitute a
Termination of Executive's Employment.
6.2 Cause. Termination of Executive's Employment for "Cause" shall
mean Termination upon (a) the willful failure by Executive to perform
substantially Executive's reasonably assigned duties with Merix after written
notice outlining the deficiencies and after a demand for substantial performance
is delivered to Executive by
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the Board, Chief Executive Officer or President of Merix or (b) the willful
engaging by Executive in illegal conduct which is materially and demonstrably
injurious to Merix.
6.3 Disability. Termination of Executive's Employment based on
"Disability" shall mean termination without further compensation under this
Agreement, due to Executive's absence from Executive's full-time duties with
Merix for 180 consecutive days as a result of Executive's incapacity due to
physical or mental illness, unless within 30 days after notice of termination by
Merix following such absence Executive shall have returned to the full-time
performance of Executive's duties.
6.4 Death. Executive's employment terminates upon Executive's death
without further compensation under this Agreement.
7. Successors; Binding Agreement.
7.1 This Agreement shall be binding on and inure to the benefit of
Merix and its successors and assigns.
7.2 This Agreement shall inure to the benefit of and be enforceable by
Executive and Executive's legal representatives, executors, administrators and
heirs.
8. Resignation of Corporate Offices. Executive will resign Executive's
office, if any, as a director, officer or trustee of Merix, its subsidiaries or
affiliates, effective as of the date of termination of employment. Executive
agrees to provide Merix such written resignation(s) upon request and that no
severance will be paid until after such resignation(s) are provided.
9. Governing Law, Arbitration. This Agreement shall be construed in
accordance with and governed by the laws of the States of Oregon and Colorado.
Any dispute or controversy arising under or in connection with this Agreement or
the breach thereof, shall be settled exclusively by arbitration under the Mutual
Agreement to Arbitrate Claims signed by the Executive, and judgment upon the
award rendered by the Arbitrator may be entered in any Court having jurisdiction
thereof.
10. Amendment. No provision of this Agreement may be modified unless such
modification is agreed to in a writing signed by Executive and Merix.
MERIX CORPORATION
By: XXXXX XXXXXXXXX XXXX X. XXXXX
------------------------------ ------------------------------
Title: Vice President Executive
Human Resources
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EXHIBIT A
RELEASE OF CLAIMS
1. PARTIES.
The parties to Release of Claims (hereinafter "Release") are XXXX X.
XXXXX and MERIX CORPORATION, an Oregon corporation, as hereinafter defined.
1.1 XXXX X. XXXXX, XX..
For the purposes of this Release, "XXXXX" means XXXX X. XXXXX, XXXX'x
attorneys, heirs, executors, administrators, assigns, and spouse.
1.2 THE COMPANY.
For purposes of this Release the "Company" means MERIX CORPORATION, an
Oregon corporation, its predecessors and successors, corporate affiliates, and
all of each corporation's officers, directors, employees, insurers, agents, or
assigns, in their individual and representative capacities.
2. BACKGROUND AND PURPOSE.
XXXXX was employed by Company. XXXXX' employment is ending effective
__________.
The purpose of this Release is to settle, and the parties hereby
settle, fully and finally, any and all claims XXXXX may have against Company,
whether asserted or not, known or unknown, including, but not limited to, claims
arising out of or related to XXXXX' employment, any claim for reemployment, or
any other claims whether
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asserted or not, known or unknown, past or future, that relate to XXXXX'
employment, reemployment, or application for reemployment.
3. RELEASE.
Except as reserved in paragraph 3.1, XXXXX waives, acquits and forever
discharges Company from any and all claims XXXXX may have. Except as reserved in
Paragraph 3.1, XXXXX hereby releases Company from any and all claims, demands,
actions, or causes of action, whether known or unknown, arising from or related
in any way to any employment of or past or future failure or refusal to employ
XXXXX by Company, or any other past or future claim (except as reserved by this
Release or where expressly prohibited by law) that relates in any way to XXXXX'
employment, compensation, benefits, reemployment, or application for employment,
with the exception of any claim XXXXX may have against Company for enforcement
of this Release. This release includes any and all claims, direct or indirect,
which might otherwise be made under any applicable local, state or federal
authority, including but not limited to any claim arising under the Oregon and
Colorado statutes dealing with employment, discrimination in employment, Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans
With Disabilities Act, the Family and Medical Leave Act of 1993, the Equal Pay
Act of 1963, Executive Order 11246, the Rehabilitation Act of 1973, the
Uniformed Services Employment and Reemployment Rights Act of 1994, the Age
Discrimination in Employment Act, the Fair Labor
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Standards Act, Oregon wage and hour statutes, all as amended, any regulations
under such authorities, and any applicable contract, tort, or common law
theories.
3.1 Reservations of Rights.
This Release shall not affect any rights which XXXXX may have under
any medical insurance, disability plan, workers' compensation, unemployment
compensation, applicable company stock incentive plan(s), indemnifications, or
the 401(k) plan maintained by the Company.
3.2 No Admission of Liability.
It is understood and agreed that the acts done and evidenced hereby
and the release granted hereunder is not an admission of liability on the part
of XXXXX or Company, by whom liability has been and is expressly denied.
4. CONSIDERATION TO XXXXX.
After receipt of this Release , fully endorsed by XXXXX and the
expiration of the seven (7) day revocation period provided by the Older Workers
Benefit Protection Act without XXXXX' revocation, Company shall pay the lump sum
of $_____________to XXXXX (less proper withholding).
5. NO DISPARAGEMENT.
XXXXX agrees that henceforth XXXXX will not disparage or make false or
adverse statements about Company. The Company should report to XXXXX any actions
or statements that are attributed to XXXXX that the Company believes are
disparaging. The Company may take actions consistent with breach of this Release
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should it determine that XXXXX has disparaged or made false or adverse
statements about Company. The Company agrees to follow the applicable
policy(ies) regarding release of employment reference information.
6. CONFIDENTIALITY, PROPRIETARY, TRADE SECRET AND RELATED
INFORMATION.
XXXXX acknowledges the duty and agrees not to make unauthorized use or
disclosure of any confidential, proprietary or trade secret information learned
as an employee about Company, its products, customers and suppliers, and
covenants not to breach that duty. Moreover, XXXXX acknowledges that, subject to
the enforcement limitations of applicable law, the Company reserves the right to
enforce the terms of XXXXX' Employment Agreement with Company and any
paragraph(s) therein. Should XXXXX, XXXXX' attorney or agents be requested in
any judicial, administrative, or other proceeding to disclose confidential,
proprietary or trade secret information XXXXX learned as an employee of Company,
XXXXX shall promptly notify the Company of such request by the most expeditious
means in order to enable the Company to take any reasonable and appropriate
action to limit such disclosure.
7. ARBITRATION OF CERTAIN DISPUTES.
XXXXX and Company agree that should the issue arise of whether either
party to this Agreement has failed to satisfy or has breached the terms of this
Agreement, any dispute regarding the issue, except for any claim excepted under
the Mutual Agreement to Arbitration Claims, shall be submitted to arbitration
pursuant to
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the Mutual Agreement to Arbitrate Claims signed by XXXXX. In such event, each
party shall pay its own costs and attorneys' fees.
8. SCOPE OF RELEASE.
The provisions of this Release shall be deemed to obligate, extend to,
and inure to the benefit of the parties; Company's parents, subsidiaries,
affiliates, successors, predecessors, assigns, directors, officers, and
employees; and each parties insurers, transferees, grantees, legatees, agents
and heirs, including those who may assume any and all of the above-described
capacities subsequent to the execution and effective date of this Release.
9. OPPORTUNITY FOR ADVICE OF COUNSEL.
XXXXX acknowledges that XXXXX has been encouraged to seek advice of
counsel with respect to this Release and has had the opportunity to do so.
10. ENTIRE RELEASE.
This Release, the Mutual Agreement to Arbitrate Claims and the
Employment Agreement signed by XXXXX contain the entire agreement and
understanding between the parties and supersede and replace all other prior
negotiations and proposed agreements, written or oral. XXXXX and Company
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acknowledge that no other party, nor agent nor attorney of any other party, has
made any promise, representation, or warranty, express or implied, not contained
in this Release concerning the subject matter of this Release to induce this
Release, and XXXXX and Company acknowledge that they have not executed this
Release in reliance upon any such promise, representation, or warranty not
contained in this Release.
11. SEVERABILITY.
Every provision of this Release is intended to be severable. In the
event any term or provision of this Release is declared to be illegal or invalid
for any reason whatsoever by a court of competent jurisdiction or by final and
unappealed order of an administrative agency of competent jurisdiction, such
illegality or invalidity should not affect the balance of the terms and
provisions of this Release, which terms and provisions shall remain binding and
enforceable.
12. PARTIES MAY ENFORCE RELEASE.
Nothing in this Release shall operate to release or discharge any
parties to this Release or their successors, assigns, legatees, heirs, or
personal representatives from any rights, claims, or causes of action arising
out of, relating to, or connected with a breach of any obligation of any party
contained in this Release .
13. COSTS AND ATTORNEY'S FEES.
The parties each agree to bear their own costs and attorneys' fees
which have been or may be incurred in connection with any matters released
herein or in connection with the negotiation and consummation of this Release.
In the event of any administrative or civil action to enforce the provisions of
this Release, the prevailing party shall be entitled to attorney fees and costs
through trial and/or on appeal.
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14. ACKNOWLEDGEMENTS.
XXXXX acknowledges that the Release provides severance pay and
benefits which the Company would otherwise have no obligation to provide.
XXXXX acknowledges that Company has provided the following
information: (a) the class or group of employees offered the opportunity to
obtain severance benefits similar to those in the Release, (b) the eligibility
factors required to obtain severance benefits similar to those in the Release,
(c) the time limits required to obtain severance benefits similar to those in
the Release, (d) the job titles and ages of employees eligible or selected for
severance benefits similar to those in the Release, and (e) the ages of
employees in the same classification either not eligible or not selected.
15. REVOCATION.
As provided by the Older Workers Benefit Protection Act, XXXXX is
entitled to have forty-five (45) days to consider this Release. For a period of
seven (7) days from execution of this Release, XXXXX may revoke this Release.
Upon receipt of XXXXX' signed Release and the end of the revocation period,
payment by Company as described in paragraph 4 above will be forwarded by mail
in a timely manner.
_______________________________________ Dated: __________ __, 199_
XXXX X. XXXXX
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STATE OF OREGON )
) ss.
County of _________ )
Personally appeared the above named XXXX X. XXXXX and acknowledged the
foregoing instrument to be XXXXX' voluntary act and deed.
Before me: ____________________________________
Notary Public for __________________
My commission expires: _____________
MERIX CORPORATION
By: ___________________________________ Dated: _______________________
Its: __________________________________
On Behalf of "Company"
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