CONFIDENTIAL EXECUTIVE SEVERANCE AND RELEASE AGREEMENT
Exhibit 10.34
CONFIDENTIAL EXECUTIVE SEVERANCE
AND RELEASE AGREEMENT
AND RELEASE AGREEMENT
This Confidential Executive Severance and Release Agreement (“Agreement”) is entered into by
and between ILLUMINA, INC. (“the Company”) and Xxxx XxXxxx (“Executive”) (collectively “the
Parties”), as of the date of the last Party to sign it below, with respect to the following facts:
A. By mutual agreement of the Parties, Executive shall resign from his employment with the
Company as its Senior Vice President & General Manager, Life Sciences, effective at midnight on
February 28, 2010 (the “Resignation Date”).
B. Executive and the Company desire to resolve any known or unknown claims as more fully set
forth below.
NOW THEREFORE, the Parties hereby agree as follows:
1. Acknowledgement of Payment of Wages through the Resignation Date. Executive’s
eligibility for the supplemental benefits described in Paragraph 2, below, is separate and apart
from, and in addition to, Executive’s receipt of his final paycheck and all accrued and unused
vacation pay, 2009 bonus if not already paid, deferred compensation payout, all business expense
reimbursement (permitted under the Company’s Travel & Expense Reimbursement Policy) and other wages
(if any) through the Resignation Date. Executive agrees and acknowledges that he has received full
payment of all compensation, wages, commissions, bonuses and/or expense reimbursements of any kind
owed to him through the Resignation Date.
2. Severance Benefits and Stock Vesting and Acceleration. As consideration for the
promises contained in this Agreement, Executive is offered the following supplemental benefits.
Executive acknowledges and agrees that he is not otherwise entitled to these benefits and they
constitute adequate legal consideration for the promises and representations made by him in this
Agreement:
2.1 Severance Payment. The Company agrees to pay Executive a lump sum payment in the
gross amount of Two hundred fifty-nine thousand five hundred forty-four and eight cents
($259,544.08), less all appropriate federal and state tax withholdings, a payment to which
Executive is not otherwise entitled (“Severance Payment”). Subject to paragraph 19, the Severance
Payment will be paid on the first payday following the Effective Date as described in paragraph 7.4
below.
2.2 COBRA Continuation Coverage. As long as Executive timely elects such coverage,
the Company shall pay, directly to its insurance carrier, the cost of COBRA continuation coverage
for Executive and his dependants (if applicable) under the Company’s group medical and/or dental
insurance plans then in effect through September 30, 2010 (“COBRA Payments”). After September 30,
2010, Employee shall
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be responsible for any and all COBRA Payments. The COBRA Payments shall commence after the
Effective Date of this Agreement.
2.3 Stock Option Exercise Period. Executive shall have until March 31, 2011 to
exercise any vested stock options granted to the Executive under grant # 3227, and until August 28,
2010 to exercise any vested stock options granted to the Executive under grant #4103 (collectively
and individually “Extended Exercise Period”). Executive acknowledges, however, that he shall not
be granted additional stock options, restricted stock or shares after the Resignation Date, nor
shall he be entitled to any cash bonuses or other incentive pay. Executive also agrees that,
during the Extended Exercise Period, he will fully comply with all Company rules and policies as
they apply to employees, including any policies applicable to persons with material, non-public
information. The Executive acknowledges and agrees that none of the Accelerated Stock Options will
be exercisable before the later of the Resignation Date and the Effective Date. As used in this
Paragraph 2.3, “vested stock options” means and only includes (i) stock options granted to the
Executive before the Resignation Date that are vested as of the Resignation Date, and (ii)
Accelerated Stock Options as defined in Paragraph 2.4 below.
2.4 Vesting Acceleration Period. The Company agrees to accelerate the vesting of
unvested stock options through August 28, 2010. As used in this Paragraph 2.4, “unvested stock
options” means stock options granted to the Executive before the Resignation Date that are not
vested as of the Resignation Date. Accordingly, unvested stock options that would normally have
vested through August 28, 2010 had the Executive remained a Company employee until August 28, 2010
will become vested on the Resignation Date and are herein referred to as Accelerated Stock Options.
3. Communication of Resignation. Communication regarding Executive’s resignation and
matters related thereto will be made public on a particular date to be determined by the Company.
Executive agrees not to communicate his resignation to any staff prior to a public announcement
unless specifically agreed to in advance by Xxx Xxxxxxx, President and Chief Executive Officer.
Executive and the Company agree that Executive will cease reporting to work at the Company
effective at midnight on February 28, 2010, and remain available by telephone to the Company for
one month thereafter, on an as-needed basis and without compensation and benefits other than those
included in this Agreement. Any communications about Executive’s resignation will indicate only
that Executive resigned to pursue other opportunities and that the Company wishes him well in his
endeavors.
4. Confidentiality. The fact of and the terms and conditions of this Agreement,
including Executive’s intent to resign, and any and all actions taken by the Company in accordance
with this Agreement, are strictly confidential. Accordingly, from the date of this Agreement
forward, except and only to the extent required by law and until disclosure pursuant to such legal
requirement, such facts, terms and conditions shall not be disclosed, discussed or revealed by
Executive (directly or indirectly) to any
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current or former Company employee, or to any other person or entity. By way of example but not by
way of limitation, Executive shall keep strictly confidential and shall not disclose any aspect of
his resignation except in accordance with Paragraph 3, above and, after disclosure pursuant to such
legal requirement, only to the extent of such required disclosure. Notwithstanding the
restrictions on disclosure contained in this paragraph, prior to such required disclosure Executive
may disclose in strict confidence such facts, terms and conditions to members of his direct family,
tax advisors, or personal attorneys, but only after such persons have been made aware of the strict
confidential nature of that information and have agreed to maintain that information in confidence.
5. General Mutual Release. In return for the consideration provided by the Company as
set forth in this Agreement, Executive hereby irrevocably and absolutely releases the Company, and
the Company hereby irrevocably and absolutely releases Executive, and each of their related
entities, present and former officers, directors, stockholders, employees, agents, insurers,
attorneys, administrators, successors and assigns (hereafter collectively referred to as
“Releasees”), from any and all claims, known or unknown, suspected or unsuspected, related in any
way to any transactions, affairs or occurrences between the Company and Executive to date to the
fullest extent permitted by law, including, but not limited to, all losses, liabilities, claims,
charges, demands and causes of action arising directly or indirectly out of or in any way connected
with Executive’s employment with the Company and the cessation of Executive’s employment with the
Company. This includes but is not limited to any claim of employment discrimination, harassment, or
retaliation arising under federal, state or local law including but not limited to the Age
Discrimination in Employment Act of 1967, as amended, the Americans with Disabilities Act, the Fair
Employment and Housing Act, the California Family Rights Act, the California Labor Code, as well as
any claim of breach of employment contract, breach of the implied covenant of good faith and fair
dealing, emotional distress, wrongful termination, fraud, defamation, whistle blowing, and any
other tort, contract, constitutional or statutory claims, and all claims for attorneys’ fees,
penalties, and costs. However, this release shall not apply to claims for workers’ compensation
benefits, unemployment insurance benefits, claims under Labor Code Section 2802, or any other
claims that cannot lawfully be waived by this Agreement.
5.1. Executive and the Company acknowledge that they may discover facts or law different from,
or in addition to, the facts or law that they know or believe to be true with respect to the claims
released in this Agreement and agree, nonetheless, that this Agreement and the release contained in
it shall be and remain effective in all respects notwithstanding such different or additional facts
or the discovery of them.
5.2. Executive and the Company declare and represent that they intend this Agreement to be
final and complete and not subject to any claim of mistake. Executive and Company execute this
release with the full knowledge that this release covers all possible claims against the Releasees,
to the fullest extent permitted by law.
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5.3. Executive expressly waives Executive’s right to recover any type of personal relief from
the Company, including monetary damages or reinstatement, in any administrative action or
proceeding, whether state or federal, and whether brought by Executive or on Executive’s behalf by
an administrative agency, related in any way to the matters released herein.
6. Civil Code 1542 Waiver. Executive and the Company understand and agree that this
release extends to all claims of every nature, known or unknown, suspected or unsuspected, past,
present or future, and that any and all benefits and rights granted to Executive or Company under
section 1542 of the California Civil Code are hereby expressly waived. Civil Code section 1542
states:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OF OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Executive understands that he is a “creditor” within the meaning of Civil Code section 1542.
7. Age Discrimination Claim Waiver. This Agreement is intended by the Parties to
release and discharge any and all claims of Executive under the Age Discrimination in Employment
Act, 29 U.S.C. section 621 et. seq. It is the intent of Executive and the Company that this
Agreement satisfies the requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C.
section 626(f) for a valid waiver. The following general provisions, along with the other
provisions of this Agreement, are agreed to for this purpose:
7.1. Executive acknowledges and agrees that he has read and understands the terms of this
Agreement;
7.2. Executive is advised to consult with an attorney before executing this Agreement, and
Executive has obtained and considered such legal counsel as he deems necessary, such that he is
entering into this Agreement freely, knowingly and voluntarily;
7.3. Executive shall have twenty-one (21) calendar days after receipt of this Agreement in
which to consider and execute this Agreement. Executive understands that at his option, he may
elect not to use the full 21-day period;
7.4. This Agreement shall not become effective or enforceable until seven (7) calendar days
after Executive signs this Agreement. In other words, Executive may revoke his acceptance of this
Agreement within seven (7) calendar days
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after the date he signs it. Executive’s revocation must be in writing and received by
Xxxxxxxxx X. Xxxxx, Senior Vice President and General Counsel, within the seven (7) calendar day
period in order to be effective. If Executive does not revoke acceptance within the seven (7)
calendar day period, his acceptance of this Agreement shall become binding and enforceable on the
eighth day after it is signed by him and delivered to the Company (the “Effective Date”).
7.5. This Agreement shall not apply to any claims for age discrimination that arise after the
Effective Date.
8. Nondisclosure and Non-Use of Company Confidential Information. Executive
acknowledges and agrees that, by reason of his high-level, sensitive position with the Company, he
has been given access to the Company’s most confidential and proprietary documents, materials and
information, including those regarding the Company’s products, strategic plans and litigation
strategies, research, business affairs, and personnel matters, which he acknowledges and agrees are
of a highly sensitive and confidential nature and considered trade secrets and/or proprietary to
the Company. Such information, documents and materials may include, without limitation, trade
secrets, inventions, research, plans, proposals, acquisitions or divestitures, marketing and sales
programs, litigation strategies, financial projections, cost summaries, pricing formulas and all
concepts or ideas, materials or information related to the products, research, business or sales of
the Company or the Company’s customers or business partners, as well as the Company’s personnel
matters, which has not previously been released to the public at large by an authorized
representative of the Company. Executive represents that he has held all such information
confidential and will continue to do so, and that he will not use such confidential or proprietary
information and/or documents for any purpose whatsoever. Executive understands that this
obligation of confidentiality continues even after the Resignation Date. Executive also reaffirms
his agreement to, and all of his obligations under, his Proprietary Information & Invention
Agreement and At-Will Employment Agreement dated March 18, 2008. The Parties expressly incorporate
all of the terms and conditions of said agreement into this Confidential Executive Severance and
Release Agreement.
8.1. Executive acknowledges and agrees that disclosure and/or use of any such confidential
information would cause irreparable harm to the Company which could not be adequately or reasonably
compensated in damages in an action at law. Accordingly, in the event of such disclosure or use
(whether actual or threatened), Executive agrees that the Company, in addition to exercising any
other rights and remedies available to it under this Agreement or otherwise, is entitled to obtain
injunctive relief and other equitable relief from a court of competent jurisdiction restraining
Executive from such disclosure and use.
8.2. Executive represents and warrants that, as of the Resignation Date, he has irreversibly
destroyed or returned to the Company all Company property, including all confidential, proprietary
and/or trade secret information described above, including all hard copy or electronically stored
copies of any documents, except
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that one copy only of such documents shall be kept confidential and strictly for archival purposes
only by Xx. Xxxx X. Xxxxx, Ropes & Xxxx LLP, the Executive’s personal attorney..
9. Mutual Non-Disparagement. Executive agrees that he will not make any disparaging
or derogatory comments or statements (written or oral) about the Company or any other Releasees,
including the Company’s employees, officers, directors, or agents; further, the Company likewise
agrees to not make any disparaging or derogatory comments or statements (written or oral) about the
Executive, and undertake reasonable steps to ensure that the Company’s directors, officers, and
Vice Presidents do not do so.
10. Agreement To Cooperate. As additional consideration for this Agreement, Executive
agrees that he will, in good faith and with due diligence, assist in, facilitate and cooperate with
the Company and provide information as to matters which he was involved, or has information on,
while he was an employee of the Company and which are the subject of an action, investigation,
proceeding, litigation or otherwise. Executive particularly agrees to make himself available, upon
reasonable notice, to be interviewed, give sworn testimony and statements, declarations, trial
testimony and other such assistance. Nothing herein is intended or should be construed as
requiring anything other than Executive’s cooperation in providing truthful and accurate
information.
11. Breach of Specified Provisions. Executive agrees that any violation of his
obligations under Paragraphs 2.3, 3, 4, 5, 6, 8, 9 or 10 of this Agreement shall constitute a
material breach of this Agreement and shall terminate any further obligations of the Company to
provide the Severance Payment, Vesting Acceleration Period, or the Extended Exercise Period to
Executive. This Agreement may be pled as a full and complete defense to, and may be used as a
basis for an injunction against, any action, suit or other proceeding that may be prosecuted,
instituted or attempted by Executive in breach hereof. Executive agrees that in the event an
action or proceeding is instituted by the Releasees to enforce the terms or provisions of this
Agreement, the Releasees shall be entitled to an award of reasonable costs and attorneys’ fees
incurred in connection with the enforcement of this Agreement. This attorneys’ fee provision shall
not apply to any action brought by the Company to enforce Executive’s release of claims under the
Age Discrimination in Employment Act.
12. Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be delivered as follows, with notice deemed given as indicated: (a) by personal delivery,
when delivered personally; (b) by overnight courier, upon written verification of receipt; (c) by
telecopy or facsimile transmission, upon acknowledgment of receipt of electronic transmission; or
(d) by certified or registered mail, return receipt requested, upon verification of receipt.
Notice shall be sent to the addresses set forth below:
As to Company: Attn: Xxxxxxxxx X. Xxxxx, Senior Vice President and General
Counsel, 0000 Xxxx Xxxxxx Xxxxx, Xxx Xxxxx, XX 00000.
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As to Executive: Attn: Xxxx X. Xxxxx, Ropes & Xxxx LLP, Xxx Xxxxxxxxxxx
Xxxxxx, 00x Xxxxx, Xxx Xxxxxxxxx, XX 00000
Copy to: Xxxx XxXxxx,
X.X. Xxx 000, Xxxxxx Xxxxx Xx, Xxxxxxxxxx, 00000.
13. Entire Agreement. This Agreement contains the entire agreement between Executive
and the Company and supersedes any prior agreement or understanding between the parties (whether
oral or written) regarding the subject matter herein including, without limitation, those
agreements and understandings included in the Company’s offer letter to the Executive of January 2,
2008 (bearing the date of January 2, 2007); provided, however that Executive’s Proprietary
Information & Invention Agreement and At-Will Employment Agreement dated March 18, 2008 remains in
full force and effect. Executive acknowledges that no promise has been made to Executive that is
not contained in this Agreement.
14. Severability. The provisions of this Agreement are severable, and if any one or
more provisions may be determined to be judicially unenforceable, in whole or in part, the
remaining provisions shall nevertheless be binding and enforceable.
15. No Admission. By entering into this Agreement, the Parties make no admission that
they have engaged, or are now engaging, in any unlawful conduct. Executive further acknowledges
that he is aware of no improprieties by the Company or any Releasees. The Parties understand and
acknowledge that this Agreement is not an admission of liability and shall not be used or construed
as such in any legal proceeding.
16. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors, heirs, and assigns. Executive shall
not assign any of his rights or obligations under this Agreement or any other agreements
incorporated herein.
17. Modification. This Agreement may be amended only by a written agreement executed
by all Parties hereto.
18. Applicable Law. The validity, interpretation and performance of this Agreement
shall be construed and interpreted according to the laws of the State of California.
19. Section 409(A) of the Internal Revenue Code. Notwithstanding anything herein to
the contrary, if Executive is a “Specified Employee,” for purposes of Section 409A of the Internal
Revenue Code (“Section 409A”), on the date on which he incurs a Separation from Service, any
payment or benefit provided in this Agreement that provides for the “deferral of compensation”
within the meaning of Section 409A shall not be paid or provided or commence to be paid or provided
on any date prior to the first business day after the date that is six months following Executive’s
“Separation from Service” (the “409A Suspension Period”); provided, however, that a payment or
benefit
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delayed pursuant to the preceding clause shall commence earlier in the event of Executive’s death
prior to the end of the six-month period. Within 14 calendar days after the end of the 409A
Suspension Period, Executive shall be paid a lump sum payment in cash equal to any payments delayed
because of the preceding sentence. Thereafter, Executive shall receive any remaining benefits as
if there had not been an earlier delay. For purposes of this Agreement, “Separation from Service”
shall have the meaning set forth in Section 409A(a)(2)(i)(A) of the Internal Revenue Code and shall
be determined in accordance with the default rules under Section 409A. “Specified Employee” shall
have the meaning set forth in Section 409A(a)(2)(B)(1) of the Internal Revenue Code, as determined
in accordance with the uniform methodology and procedures adopted by the Company and then in
effect.
THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND
EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE
DATES INDICATED BELOW.
| /s/ Xxxx XxXxxx | Dated: February 22, 2010 | |||||
| Xxxx XxXxxx | ||||||
| ILLUMINA, INC. | ||||||
By:
|
/s/ Xxx Xxxxxxx | Dated: February 22, 2010 | ||||
| Xxx Xxxxxxx, President & CEO | ||||||
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