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EXHIBIT 10.71
EMPLOYMENT AGREEMENT
Employment Agreement, dated as of July 6, 1998 ("Effective Date") between
XXXXXX XXXXX of 0 Xxxxxx Xxxx, Xxxxxx Xxxxxx, XX 00000 ("the Employee") and C.P.
CLARE CORPORATION, a Massachusetts corporation with its principal office at 00
Xxxxxx Xxxx Xxxxx, Xxxxxxx, XX 00000-0000 (the "Company"). Unless the context
otherwise requires, the term "Company" shall include all subsidiary corporations
of the Company.
WHEREAS, on the Effective Date, the Company acquired all of the
outstanding stock of Micronix Integrated Systems, Inc. ("Micronix") pursuant to
a merger with a subsidiary of the Company pursuant to an Agreement and Plan of
Merger dated as of July 6, 1998 between the Company, a wholly owned subsidiary
of the Company, Micronix, the Employee and the other principal shareholders of
Micronix (the "Transaction") and the Employee was previously the President and
principal shareholder of Micronix; and
WHEREAS, as a condition to the Transaction, the parties hereto have agreed
to enter into this Employment Agreement.
NOW THEREFORE, in consideration of the terms and mutual covenants herein
contained, the Employee and the Company agree as follows:
1. TERM OF EMPLOYMENT.
(a) EMPLOYMENT. The Company hereby employs the Employee, and the Employee
hereby accepts employment by the Company, for a period of five years commencing
on the Effective Date and ending on the fifth anniversary of the Effective Date
(the "Initial Term"), subject to extension in accordance with the provisions of
subparagraph (b), below, unless terminated earlier in accordance with the terms
hereof (the "Employment Period").
(b) EXTENSION OF TIME. Unless either party shall have given notice of its
intention to terminate this Agreement 120 days prior to the end of the Initial
Term or any successive one year term or unless this Agreement is terminated
pursuant to Paragraph 8, the term of the employment of the Employee under this
Agreement shall be automatically renewed for successive one year terms.
2. CAPACITY. The Employee shall serve as President of Clare Micronix
Integrated Systems, Inc., a wholly owned subsidiary of the Company or, in the
event Clare Micronix Integrated Systems, Inc. is later combined with the
Company, as President of Clare Micronix, a division of CP Clare Corporation (in
either case, the "Division"), shall report to the Chief Operating Officer of the
Company and shall perform such duties and functions with respect to such
position as are assigned from time to time by the Board of Directors or by the
Chief Operating Officer or Chief Executive Officer of the Company. In all
events, Employee shall have and perform such duties and functions as are
appropriate for a division president. The Employee shall also be a member of the
CP Clare Executive Management Team, as it may be composed and operated from time
to time. During the Employment Period and unless otherwise agreed to by the
parties, the Division will maintain a material business presence in Orange
County, California (which will be the principal place for Employee's performance
of services) and the Employee shall not be required to relocate his personal
residence in order to perform his duties under this Agreement. To the extent
that Clare Micronix Integrated Systems, Inc. remains a wholly owned subsidiary
of the Company, the Employee shall be a director of the subsidiary.
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3. FULL-TIME EMPLOYMENT. The Employee shall devote his entire business
and professional time, attention and energies to the performance of his duties
to the Company and of any of its subsidiaries by which he may be employed and
shall not, directly or indirectly, actively engage in or concern himself with
any other activities or commitments which interfere with the performance of his
duties hereunder or which, even if non-interfering, may be inimical or contrary
to the best interests of the Company. Notwithstanding the foregoing, the
Employee may at all times during the Employment Period (i) subject in each case
to the approval of the Chief Executive Officer of the Company, serve as an
officer, director, trustee, or committee member of any religious, professional,
civic, charitable or educational organization, or as a director of any
corporation whose business is not competitive with that of the Company;
provided, however, that Chief Executive Officer shall have been deemed to
approve the activities set forth in Schedule 3 hereof; and (ii) engage in, and
devote time and effort to, any and all personal investments or business ventures
unrelated to the business or affairs of the Company, in each case so long as
such activities do not materially interfere with his obligations set forth in
this Paragraph 3 and provided that such activities are permitted under Paragraph
13 of this Agreement.
4. COMPENSATION AND BENEFITS. For all services rendered by the Employee
to the Company, the Company shall pay to the Employee during the Employment
Period the following compensation:
(a) BASE SALARY. The Employee shall be entitled to an annual base salary
of Two Hundred Thousand Dollars ($200,000) from the date of this Agreement until
the expiration of the Employment Period. The base salary may be increased (but
may not be reduced) by approval of the Board of Directors of the Company for any
fiscal year of the Company during the Employment Period. To that end, the
Employee shall receive a performance review at least once in each fiscal year of
the Company, in connection with which he shall be eligible for such merit
increases and other salary adjustments as the Board of Directors of the Company
shall approve.
(b) ANNUAL BONUS. In addition to his regular salary, the Employee shall be
eligible (subject to the provisions of Paragraph 8(e) hereof) to receive an
annual bonus each year of up to 50% of his base salary on terms consistent with
those applicable, from time to time, to the other members of the CP Clare
Executive Management Team including increases to such bonus amount based on
performance multiples that may be in effect from time to time. For the first
fiscal year of employment by the Employee, the bonus, if granted, shall be
prorated for the period from the Effective Date through the end of the fiscal
year.
(c) STOCK OPTION GRANT. In addition to his regular salary, the Employee
shall be eligible (subject to the provisions of Paragraph 8(e) hereof) to
receive grants of options to purchase Common Stock in the Company consistent
with the grants to other members of the CP Clare Executive Management Team.
(d) PERFORMANCE STOCK OPTION BONUS. In addition to his regular salary, the
Employee shall be eligible (subject to the provisions of Paragraph 8(e) hereof)
to receive annual grants of options to purchase Common Stock in the Company in
amounts set forth on Exhibit A to this Agreement ("Performance Options"). Grants
of Performance Options, if any, shall be determined following the end of each
fiscal year of the Company based on the performance of the Division in the
manner described on Exhibit A. Performance Options shall be granted pursuant to
the Company's 1995 Stock Option and Incentive Plan, and/or other option plan
providing for the issuance of stock options as may from time to time be in
effect. Performance Options will be issued at the fair market value
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on the date of grant. Any portion of the Performance Options which are unvested
on the date of termination of Employee's employment with the Company shall lapse
upon the date of termination, if such termination was the result of one of the
following: (i) Company's termination of Employee for Good Cause (as defined in
Paragraph 8(b)) or (ii) Employee's resignation of employment, for any reason.
Notwithstanding anything to the contrary in this Agreement, after the date of
termination of employment, the Employee shall retain Performance Options granted
under this Paragraph 4(d) and vesting shall continue pursuant to the terms and
conditions of the option agreement governing such options, except as provided in
the immediately preceding sentence. Performance Options will have provisions
regarding vesting and duration and registration provisions and will be in the
form substantially similar to Initial Options and any changes will not be
materially adverse to the Employee.
(e) PAYMENT OF SALARY AND BONUS. The Employee's base salary under
subparagraph (a) of this Paragraph 4 shall be payable in substantially equal
installments in accordance with the Company's existing payroll practices for its
executives. Any bonus payable under subparagraph (b) of this Paragraph 4 shall
be paid to the Employee within 60 days following the end of the fiscal year with
respect to which such bonus relates. Any stock option grants payable under
subparagraph (c) of this Paragraph 4 shall be made in a manner consistent with
the manner and time any options are issued to the CP Clare Executive Management
Team. Any Performance Option grants under subparagraph (d) of this Paragraph 4
shall be made within 90 days following the end of each applicable fiscal year to
which each option relates.
(f) WITHHOLDING TAXES. The Employee agrees that the Company shall withhold
from any and all payments required to be made to the Employee pursuant to this
Agreement all federal, state, local and/or other taxes which the Company
determines are required to be withheld in accordance with applicable statutes
and/or regulations from time to time in effect.
(g) ACCELERATION OF OPTIONS. The vesting of the right to exercise all
options granted to the Employee under Paragraphs 4 and 5 of this Agreement shall
be accelerated in the event that there shall be a Change of Control of the
Company (as hereafter defined).
5. INITIAL GRANT OF STOCK OPTIONS.
On the Effective Date, the Employee will be granted options to purchase
240,000 shares of Common Stock in the Company vesting cumulatively in five equal
amounts on each anniversary of the Effective Date. Such options shall be (i)
Incentive Stock Options, as such term is defined pursuant to Internal Revenue
Code Section 422, as it may be amended from time to time, and issued under the
Company's 1995 Stock Option and Incentive Plan to the extent that such options
qualify on the date of grant as Incentive Stock Options and (ii) non-qualified
stock options, to the extent that balance of such option do not qualify as
Incentive Stock Options with substantially the same terms and conditions as
options issued under the Plan referenced in clause (i) (collectively, the
"Initial Options"). The forms of Option Agreements to be issued to Employee
pursuant to this Section 5 are attached hereto as Exhibit B-1 and B-2. All
Initial Options shall have been approved in advance by the Board of Directors of
the Company and will be issued at fair market value on the Effective Date. The
shares of stock underlying the Initial Options not already registered for resale
will be registered for resale on Form S-8 within 30 days after the Effective
Date. Any portion of the Initial Options which are unvested on the date of
termination of Employee's employment with the Company shall lapse upon the date
of termination, if such termination was the result of one of the following: (i)
Company's termination of Employee for Good Cause (as defined in Paragraph 8(b))
or
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(ii) Employee's resignation of employment, for any reason. Notwithstanding
anything to the contrary in this Agreement, the Employee shall retain the
Initial Options after the date of termination of employment and vesting shall
continue pursuant to the terms and conditions of the option agreement governing
such options over the initial five year period, except as provided in the
immediately preceding sentence.
6. FRINGE BENEFITS; VACATIONS.
(a) EMPLOYEE BENEFIT PLAN. The Employee shall be eligible to participate
during the Employment Period in such of the employee benefit and health plans
and other fringe benefit programs as the Company shall establish or maintain for
its executive management employees from time to time (commensurate with the
Employee's position and compensation). The employee shall be considered an
officer of the Company for purposes of the Company's bylaw provisions regarding
indemnity.
(b) LIFE AND DISABILITY INSURANCE. The Company shall provide to the
Employee at the expense of the Company and keep in force during the Employment
Period policies of term or other life insurance comparable in scope and amount
to the policies currently owned by the Company for the benefit of the Employee
and set forth in Schedule 6(b)(1). Additionally, the Employee shall be entitled
to participate in the Company's group disability insurance program during the
Employment Period; provided, however, such disability program shall be
comparable in scope and amount to the policies currently owned by the Company
for the benefit of the Employee as set forth in Schedule 6(b)(2). Nothing in
this Paragraph 6(b) shall be deemed to prohibit the Company from modifying or
changing the policies pursuant to which the benefits described in this Paragraph
6(b) are received; provided, however, that the modification or change does not
result in a material detriment to the Employee. Upon termination of the
Employee's employment with the Company, unless the termination was due to Good
Cause or Performance Cause, or unless the Employee resigns, the Employee may
purchase from the Company any life or disability policies owned by the Company
solely for the benefit of the Employee. The purchase price shall be mutually
agreed between the Company and the Employee.
(c) CAR/LEASE ALLOWANCE. The Company shall maintain the leases and pay the
lease payments under the automobile leases referenced on Exhibit C, until the
expiration date or earlier termination (by purchase or otherwise) of each lease
indicated on Exhibit C. Thereafter, the Company's only obligation with respect
to automobiles will be to pay to the Employee a car allowance equal to the
amount of $650 per month or such greater amount as the Company is then providing
to its executive management team during the Employment Period. As of the
Effective Date, the Employee shall carry (or reimburse the Company for)
insurance and provide for gas and all maintenance costs, at Employee's sole
expense, on the vehicles leased pursuant to Exhibit C. All insurance policies
referenced in this Paragraph 6(c) shall name the Employee and the Company as
named insureds. The Employee may, at any time, at his sole expense, have
assigned to him and exercise any purchase options under the automobile leases
referenced on Exhibit C.
(d) VACATIONS. The Employee shall be entitled to vacation time in each
year consistent with the Company's vacation policy for its senior executives as
in effect from time to time. For purposes of determining time of service, years
of service with Micronix shall be included. For the first year of employment
only and in addition to vacation allocated to Employee under this Section,
Employee shall have the right to carry over up to five (5) days of accrued
vacation in Micronix. Employee agrees that, in consideration of the terms of
this Agreement, any additional accrued vacation from
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the period prior to the Effective Date shall be eliminated as of the date of
this Agreement. A copy of the Company's current vacation policy has been
provided to the Employee. The Employee shall also be entitled to all paid
holidays and personal days given by the Company to its executives.
7. REIMBURSEMENT. The Company shall promptly reimburse the Employee for
all reasonable business expenses incurred by him in connection with his
performance of his duties to the Company, upon substantiation of such expenses
in accordance with the policies of the Company in effect from time to time
during the Employment Period. The Company will not reimburse the Employee for
country club membership dues or fees.
8. TERMINATION OF EMPLOYMENT.
(a) TERMINATION WITHOUT CAUSE. The Company expressly reserves the right to
terminate the employment of the Employee hereunder without Good Cause or
Performance Cause, and other than as provided in subparagraphs (b),(c) and (d),
of this Paragraph 8. In the event that the Employee's employment shall have been
terminated by the Company other than for Good Cause or Performance Cause, the
Employee shall be entitled to receive (x) his base salary as provided in
Paragraph 4(a) hereof to the date of such termination and no other benefits,
including, without limitation, those provided for under Paragraphs 4(b), 4(c),
4(d) and 6 of this Agreement (except those that cannot be divested pursuant to
the Employee Retirement Income Security Act of 1974, as amended or other
applicable law) and except as otherwise provided in Section 8(c) hereof and (y)
for the remaining term of this Agreement following the date of termination, his
base salary as provided for in Paragraph 4(a) hereof at the rate in effect on
the date of termination, payable in equal installments in the same amounts and
in the same periodic intervals as his base salary was paid immediately prior to
such termination.
(b) VOLUNTARY TERMINATION AND TERMINATION FOR GOOD CAUSE OR PERFORMANCE
CAUSE.
(i) The Employee's employment may be voluntarily terminated by him
at any time by giving not less than four weeks written notice thereof to the
Company. Additionally, the Employee's employment may be terminated at any time
for Good Cause or for Performance Cause (each as hereinafter defined) effective
upon the giving of written notice of such termination for Good Cause or for
Performance Cause by the Company to the Employee.
(ii) If at any time during the term of this Agreement (A) the
Employee shall have voluntarily terminated his employment with the Company or
(B) the Company shall have terminated the employment of the Employee for Good
Cause the Employee shall be entitled to receive only his base salary as provided
in Paragraph 4(a) hereof to the date of such termination and no other benefits,
including, without limitation, those provided for under Paragraphs 4(b), 4(c),
4(d) and 6 of this Agreement (except those that cannot be divested pursuant to
the Employee Retirement Income Security Act of 1974, as amended or other
applicable law).
(iii) If at any time during the term of this Agreement, the Company
shall have terminated the employment of the Employee for Performance Cause, the
Employee shall be entitled to receive (x) his base salary as provided in
Paragraph 4(a) hereof to the date of such termination and no other benefits,
including, without limitation, those provided for under Paragraphs 4(b), 4(c),
4(d) and 6 of this Agreement (except those that cannot be divested pursuant to
the Employee Retirement Income Security Act of 1974, as amended or other
applicable law and except as otherwise provided in Section 8(e) hereof) and (y)
for the period of 18 months following such termination, his base
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salary as provided for in Paragraph 4(a) hereof at the rate in effect on the
date of termination, payable in equal installments in the same amounts and in
the same periodic intervals as his base salary was paid immediately prior to
such termination.
(iv) For purposes of this Agreement, the term "Good Cause" shall
mean (i) conviction of the Employee of any criminal offense involving dishonesty
or breach of trust or any felony or crime of moral turpitude, (ii) willful
substantial misconduct in the performance of his duties, (iii) the willful
continuous neglect of the duties and responsibilities of his office (other than
failure to perform his duties and fulfill his responsibilities resulting from
the Employee's incapacity due to a physical or mental illness), or (iv) the
Employee's failure to perform any material term, covenant or condition required
to be performed by the Employee pursuant to this Agreement which failure remains
uncured 30 days after notice of such failure from the Company to the Employee
(provided, however, that this clause (iv) shall not be deemed to include
termination for Performance Cause as set forth in Paragraph 8(b)(5)), all to be
finally determined in the reasonable discretion of the Board of Directors of the
Company.
(v) For purposes of this Agreement, the term "Performance Cause"
shall mean the failure of the Employee to perform his duties under this
Agreement in a manner which is consistent with the standards of performance
generally applicable to an executive similarly situated in the industry in which
the Division operates to be finally determined in the reasonable discretion of
the Board of Directors, which failure remains uncured 30 days after notice of
such failure from the Company to the Employee.
(c) DISABILITY. In the event that the Employee shall sustain a disability
and be unable to perform his duties and responsibilities during the term of this
Agreement, shall have been certified by at least two (2) duly licensed and
qualified physicians approved by the Board of Directors of the Company (the
"Examining Physicians"), the Company shall continue to pay to the Employee while
such disability continues the full amount of his base salary as set forth in
Paragraph 4(a) hereof for a period following the Date of Disability equal to the
lesser of (i) six months or (ii) the period ending upon the last date of
inception of the payment of benefits under all disability insurance policies to
which the Employee may become entitled pursuant to Paragraph 6(b) hereof.
Thereafter, if the Employee's disability shall continue (as evidenced by the
continued absence of the Employee from his duties), the employment of the
Employee under this Agreement shall terminate and all obligations of the
Employee shall cease and the Employee shall be entitled to receive only the
benefits, if any, as may be provided by any insurance to which he may have
become entitled pursuant to Paragraph 6(b) hereof, the payment of any amounts of
the Employee's base salary then remaining to be paid under Paragraph 4(a) hereof
through the date of the termination of the Employee's employment and except as
provided in Section 8(e) hereof. "Disability" means the complete disability of
the Employee resulting from injury, sickness, disease or infirmity due to age,
whereby the Employee is unable to perform his usual services for the Company,
with or without reasonable accommodation as required by law; the "Date of
Disability" shall be deemed to be the date on which the Board of Directors of
the Company receives written notice from the Examining Physicians stating that
the Employee is suffering a Disability as defined herein. Following the Date of
Disability, Employee shall also be eligible to receive the benefits pursuant to
the (i) Initial Options as may be set forth in the Option Agreements, the forms
of which are set forth as Exhibits B-1 and B-2 hereof and (ii) the Performance
Options and other options that may have been granted to the Employee during the
Employment Period.
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(d) DEATH. In the event of the Employee's death during the term of this
Agreement, the Employee's employment hereunder shall immediately terminate and,
in such event, the Employee's estate shall be entitled to receive the Employee's
base salary as provided in Paragraph 4(a) hereof to the last day of the month
during which the Employee's death shall have occurred and such additional
benefits, if any, as may be provided by any insurance to which the Employee may
have become entitled pursuant to Paragraph 6(b) hereof. Following the Employee's
death, the Employee's estate shall also be eligible to receive the benefits
pursuant to the (i) Initial Options as may be set forth in the Option
Agreements, the forms of which are set forth as Exhibits B-1 and B-2 hereof and
(ii) the Performance Options and other options that may have been granted to the
Employee during the Employment Period.
(e) TERMINATION FOR GOOD REASON FOLLOWING CHANGE OF CONTROL. The
Employee's employment may be terminated by him by notice for a Good Reason (as
hereinafter defined), effective upon the giving of such notice, at any time
within one hundred eighty (180) days following a Change of Control (as
hereinafter defined), in which event, notwithstanding the provisions of
Paragraph 8(b) hereof, the Employee shall be entitled to receive for the period
of 12 months following such termination, his base salary provided for in
Paragraph 4(a) hereof at the rate in effect on the date of termination, payable
in equal installments in the same amounts and in the same periodic intervals as
his base salary was paid immediately prior to such termination.
For purposes of this Agreement, the term "Good Reason" means any of the
following:
(i) A material diminution by the Company in the Employee's authority,
functions, duties or responsibilities in the capacity specified in
Paragraph 2 hereof; provided that such material diminution is not in
connection with a termination of the Employee's employment hereunder by the
Company otherwise in accordance with this Agreement; or
(ii) A failure by the Company to comply with any material provision of
this Agreement which has not been cured within thirty (30) days after notice
of such noncompliance has been given by the Employee to the Company.
For purposes of this Agreement, a "Change of Control" means that any of
the following events has occurred:
(i) any "person," as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended, (the "Act") (other than the
Company, any of its Subsidiaries (as hereinafter defined), or any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Company or any of its Subsidiaries), together
with all "affiliates" and "associates" (as such terms are defined in Rule
12b-2 under the Act) of such person, shall become the "beneficial owner" (as
such term is defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 50% or more of either (A) the combined
voting power of the Company's then outstanding securities having the right to
vote in an election of the Company's Board of Directors ("Voting Securities")
or (B) the then outstanding shares of Stock (as hereinafter defined) of the
Company (in either such case other than as a result of an acquisition of
securities directly from the Company); or
(ii) persons who, as of the Effective Date, constitute the Company's
Board of Directors (the "Incumbent Directors") cease for any reason,
including, without limitation, as
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a result of a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board, provided that any person becoming a
director of the Company subsequent to the Effective Date whose election or
nomination for election was approved by a vote of at least a majority of the
Incumbent Directors shall, for purposes of this Plan, be considered an Incumbent
Director; or
(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the
shareholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate 60% or more of
the voting shares of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any), (B)
any sale, lease, exchange or other transfer (in one transaction or a series
of transactions contemplated or arranged by any party as a single plan) of
all or substantially all of the assets of the Company or (C) any plan or
proposal for the liquidation or dissolution of the Company;
Notwithstanding the foregoing, a "Change of Control" shall not be deemed
to have occurred for purposes of the foregoing clause (i) solely as the result
of an acquisition of securities by the Company which, by reducing the number of
shares of Stock or other Voting Securities outstanding, increase (x) the
proportionate number of shares of Stock beneficially owned by any person to 50%
or more of the shares of Stock then outstanding or (y) the proportionate voting
power represented by the Voting Securities beneficially owned by any person to
50% or more of the combined voting power of all then outstanding Voting
Securities; provided, however, that if any person referred to in clause (x) or
(y) of this sentence shall thereafter become the beneficial owner of any
additional shares of Stock or other Voting Securities (other than pursuant to a
stock split, stock dividend, or similar transaction), then a "Change of Control"
shall be deemed to have occurred for purposes of the foregoing clause (i).
For purposes of the foregoing definition of "Change of Control":
(A) the term "Stock" means the Common Stock, par value $.01 per
share, of the Company, subject to adjustment or change as a result of any
merger, consolidation, sale of all or substantially all of the assets of the
Company, or any reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or similar transaction; and
(B) the term "Subsidiary" means any corporation or other entity
(other than the Company) in any unbroken chain of corporations or entities,
beginning with the Company if each of the corporations or entities (other than
the last corporation or entity in the unbroken chain) owns stock or other
interests possessing 50% or more of the economic interest or the total combined
voting power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
(e) TREATMENT OF COMPENSATION ON TERMINATION.
(i) Current Year's Bonus and Option Grants. In the event of the
termination of the employment of the Employee for any reason, the Employee shall
not be entitled to receive any bonus payment or option awards pursuant to
Paragraphs 4(b), 4(c) and 4(d) hereof in respect of the fiscal year of the
Company in which the termination shall take place.
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(ii) Previous Year' s Bonus and Option Grants. In the event that at
the time of his termination, the Employee is due, but has not yet received,
payment of an annual bonus or option award in respect of the preceding fiscal
year of the Company pursuant to Paragraph 4(b), 4(c) or 4(d), such bonus or
option award shall be paid to the Employee as set forth in Paragraph 4(e),
except that, notwithstanding the foregoing, if the Employee shall have been
terminated for Good Cause as provided in subparagraph (b) of this Paragraph 8,
the Employee shall forfeit and shall not be entitled to receive payment of any
such annual bonus or issuance of such stock options in respect of the preceding
fiscal year which the Employee shall not have received on or before the date of
such termination for Good Cause.
(iii) Previously Granted Options. Performance Options and Initial
Options granted to the Employee prior to the date of termination of Employee's
employment with the Company shall lapse or remain in place pursuant to the
provisions of Paragraphs 4(d) and 5 respectively.
9. INVENTIONS AND PATENTS.
(a) DISCLOSURE OF DEVELOPMENTS. The Employee will promptly and fully
disclose to the Company any and all inventions, discoveries, trade secrets and
improvements, whether or not patentable and whether or not they are made,
conceived or reduced to practice during working hours or using the Company's
data or facilities, which the Employee develops, makes, conceives or reduces to
practice during his employment by the Company, either solely or jointly with
others or which Employee developed, made, conceived or reduced to practice
during his employment by Micronix, either solely or jointly with others, except
pursuant to activities permitted under Paragraph 3 (collectively,
"Developments"). All such Developments shall be the sole property of the
Company, and the Employee hereby assigns to the Company, without further
compensation, all his right, title and interest in and to such Developments and
any and all related patents, patent applications, copyrights, copyright
applications, trademarks and trade names in the United States and elsewhere.
(b) MAINTENANCE OF RECORDS. The Employee will keep and maintain adequate
and current written records of all Developments (in the form of notes, sketches,
drawings and as may be specified by the Company), which records shall be
available to and remain the sole property of the Company at all times.
(c) ASSISTANCE IN OBTAINING PATENTS. The Employee will assist the Company
in obtaining and enforcing patent, copyright and other forms of legal protection
for the Developments in any country. Upon request, the Employee will sign all
applications, assignments, instruments and papers and perform all acts necessary
or reasonably desired by the Company to assign all such Developments fully and
completely to the Company and to enable the Company, its successors, assigns and
nominees, to secure and enjoy the full and exclusive benefits and advantages
thereof. During his employment, the Employee will perform his obligations under
this subparagraph (c) without further compensation, except for reimbursement of
expenses incurred at the request of the Company. If the Employee is not employed
by the Company as an the Employee at the time he is requested to perform any
obligations under this subparagraph, he shall receive for such performance a
reasonable per diem fee, as well as reimbursement of any expenses incurred at
the request of the Company.
10. PROPRIETARY INFORMATION.
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(a) OBLIGATION TO KEEP CONFIDENTIAL. The Employee recognizes that his
relationship with the Company is one of high trust and confidence by reason of
his access to and contact with the trade secrets and confidential and
proprietary information of the Company. The Employee will not at any time,
either during his employment with the Company or thereafter, except as necessary
in connection with his duties under this Agreement, disclose to others, or use
for his own benefit or the benefit of others, any confidential or proprietary
information, and all other knowledge, information, documents or materials,
owned, developed or possessed by the Company, whether in tangible or intangible
form, the confidentiality of which the Company takes reasonable measures to
protect, and which pertains, in any manner, to subjects which include, but are
not limited to, the Company's research operations, inventions, discoveries,
trade secrets and improvements, whether or not patentable, customers (including
identities of customers and prospective customers, identities of individual
contacts at business entities which are customers or prospective customers,
preferences, businesses or habits), business relationships, products (including
prices, costs, sales or content), financial information or measurements,
business methods, future business plans, data bases, computer programs,
marketing plans, forecasts, licenses, pricing information and other information
owned, developed or possessed by the Company ("Proprietary Information") The
term "Proprietary Information" shall also include information described in the
immediately preceding sentence which is owned, developed or possessed by
Micronix.
(b) EXCEPTIONS. The Employee's undertakings and obligations under this
Paragraph 10 will not apply to any Proprietary Information which: (a) is or
becomes generally known to the public through no action on the part of the
Employee, (b) is generally disclosed to third parties by the Company without
restriction on such third parties, (c) is approved for release by written
authorization of the Board of Directors of the Company, or (d) is the subject
matter of a lawful request or subpoena by and within the authority of a court or
governmental agency or other body.
(c) RETURN OF PROPRIETARY INFORMATION. Upon termination of the employment
of the Employee with the Company or at any other time upon request, the Employee
will promptly deliver to the Company all notes, memoranda, notebooks, drawings,
records, reports, files and other documents (and all copies of reproductions of
such materials) in his possession or under his control, whether prepared by him
or others, which contain Proprietary Information. The Employee acknowledges that
the material is the sole property of the Company.
11. ABSENCE OF RESTRICTIONS UPON DISCLOSURE AND COMPETITION. The Employee
represents that his performance of all the terms of this Agreement does not and
will not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him in confidence or in trust prior to the date of
this Agreement, and he will not disclose to the Company or induce the Company to
use any confidential or proprietary information or material belonging to any
previous company or others.
12. OTHER OBLIGATIONS REGARDING PROPRIETARY INFORMATION. The Employee
acknowledges that the Company from time to time may have agreements with other
persons or with the US Government, or agencies thereof, which impose
obligations or restrictions on the Company regarding inventions made during the
course of work under such agreements or regarding the confidential nature of
such work. The Employee agrees to be bound by all such obligations and
restrictions which are made known to him and to take all action necessary to
discharge the obligations of the Company under such agreements.
13. NONCOMPETITION.
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(a) During the Employment Period, the Employee agrees not to compete in
any manner, either directly or indirectly, with the Company, or to assist any
other person or entity to compete with the Company.
(b) During the Employment Period and for one (1) year following the
termination, for any reason, of his employment, the Employee agrees either on
his behalf or on behalf of any other person or entity, directly or indirectly,
not to hire, solicit, or encourage to leave the employ of the Company any person
who is then an employee of the Company. The restrictions described herein shall
apply to the activities of the Employee in any state or other jurisdiction in
which the Company engaged in business during the term of employment.
The restrictions against competition set forth in this Paragraph 13 are
considered by the parties to be reasonable for the purposes of protecting the
business of the Company. However, if any such restriction is found by any court
of competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
14. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the Company and the Employee and their respective heirs, executors,
administrators, legal representatives, successors and assigns. This Agreement
and the rights and obligations of the parties hereunder are personal to the
Company and the Employee and are not assignable or transferable to any other
person, firm or corporation without the consent of the other party, provided,
however, that the Company may assign its rights and obligations hereunder to any
person or entity who or which succeeds to all or substantially all of the
Company's business and assets.
15. NOTICES. All notices required or permitted hereunder shall be in
writing and deemed effectively given upon personal delivery or upon deposit in
the United States mails, by registered or certified mail, postage prepaid,
addressed to the other party hereto at the address set forth in the introductory
paragraph of this Agreement, or at such other address or addresses as either
party shall designate to the other in accordance with this Paragraph 15. Any
notice to the Employee pursuant to this Section 15 shall be copied to The Xxxxx
Firm, 0000 Xxxxxx Xxxxx, Xxxxxx, XX 00000, Attn.: Xxx Xxxxx.
16. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties, and supersedes all prior agreements and understandings,
relating to the subject matter of this Agreement.
17. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Employee.
18. HEADINGS. The Paragraph and subparagraph headings used in this
Agreement are for convenience only and shall not be deemed to be a party of this
Agreement.
19. SEVERABILITY. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
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20. GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the state of California applicable to
agreements made-to be performed entirely within such state, without giving
effect to the conflicts of laws principles thereof.
21. CONSTRUCTION OF AGREEMENT. The parties mutually acknowledge that they
and their attorneys have participated in the preparation and negotiation of this
Agreement. In cases of uncertainty this Agreement shall be construed without
regard to which of the parties caused the uncertainty to exist. Each party also
acknowledges that each has been represented by legal counsel in the preparation
and negotiation of this Agreement.
22. DISPUTE RESOLUTION. If there is a dispute between the parties arising
out of or relating to this Agreement or their relationship, including but not
limited to its alleged breach or termination, the parties shall first attempt in
good faith to settle this dispute by mediation, either under the rules of the
American Arbitration Association, or with the assistance of another organization
established to provide mediation services. If no resolution is reached within
thirty days following the first mediation meeting, any remaining unresolved
controversy or claim arising out of or relating to this contract, its alleged
breach or termination, shall be resolved by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall occur in Los Angeles, California.
There shall be a single arbitrator agreed upon mutually by the parties. If
the parties cannot agree upon the selection of an arbitrator within 30 days
after the demand for arbitration given by one party to the other, the selection
of the arbitrator shall be made by obtaining a list of seven arbitrators from
the Los Angeles office of the American Arbitration Association. After obtaining
this list, the parties shall alternately strike names from the list, with the
Company to be the party striking first. After each party has stricken three
names from the list, the remaining name shall be the single arbitrator for this
proceeding. Alternatively, the parties may agree, by written stipulation, to
appoint a single arbitrator whose name is not on a list supplied by the American
Arbitration Association. The arbitrator shall have the authority to order such
discovery, by way of deposition, interrogatory, document production, or
otherwise, as the arbitrator considers necessary to a full and fair exploration
of the issues in dispute, consistent with the expedited nature of arbitration.
Each party shall be responsible for paying one half of the arbitrator's
fees, and its own costs and attorneys fees, except that the arbitrator shall be
empowered to award costs and attorneys fees to the prevailing party, should he
or she find that the position of the other party is without substantial merit.
The arbitrator's award shall be in writing and shall be accompanied by a written
opinion explaining the reasons for the arbitrator's decision.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written
C.P. CLARE CORPORATION
/s/ _________________________________
its: Chief Executive Officer
EMPLOYEE:
/s/ _________________________________
Xxxxxx Xxxxx
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EXHIBIT A
PERFORMANCE OPTIONS
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EXHIBIT B-1
FORM OF OPTION AGREEMENT
15
EXHIBIT B-2
FORM OF OPTION AGREEMENT
16
EXHIBIT C
CAR LEASES AS OF EFFECTIVE DATE
CAR MAKE/MODEL LEASE DESCRIPTION EFFECTIVE DATE OF TERMINATION DATE MONTHLY PAYMENT
LEASE OF LEASE
2
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SCHEDULE 3
APPROVED ACTIVITIES
Member and Director of Xx. Xxxx Xxxxxx, Xxxxxx Xxxxxx, XX
Member and active participant in Legatus (professional organization)
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SCHEDULE 6(b)(1)
LIFE INSURANCE POLICIES
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SCHEDULE 6(b)(2)
DISABILITY INSURANCE POLICIES
