Exhibit 10.1
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement") is entered into by
and between Cherokee International Corporation (the "Company"), a Delaware
corporation, and Xxxxxx Xxxxx (the "Executive").
R E C I T A L S
- - - - - - - -
WHEREAS, the Executive is currently employed by the Company
as its Executive Vice President, Global Operations; and
WHEREAS, the Executive and the Company desire to provide for
severance benefits payable to the Executive in the event his employment is
terminated by the Company other than for Cause (as defined in Section 3 below).
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual agreements and covenants herein contained, the Company and the
Executive agree as follows:
1. At Will Employment. The Executive's employment with the Company is
currently on an at-will basis, meaning that either the Executive or
the Company may terminate the employment relationship at any time for
any reason or for no reason, and without further obligation or
liability, except as set forth in this Agreement.
2. Term of Agreement. This Agreement shall remain in effect for so long
as the Executive is employed as the Executive Vice President, Global
Operations of the Company.
3. Severance Payment. Subject to the Executive's having executed and, if
applicable, not revoked, a release of claims reasonably satisfactory
to the Company (the "Release of Claims"), in the event the Executive's
employment is terminated by the Company other than for Cause (as such
term is defined below), the Executive shall be entitled to a cash
payment (the "Severance Payment"), in lieu of any other severance
payment pursuant to any other plan or agreement of the Company or any
subsidiary thereof to which the Executive is otherwise entitled, of an
amount equal to his then annual base salary as in effect immediately
prior to the date of termination. Subject to Section 409A of the
Internal Revenue Code of 1986, as amended, the Severance Payment shall
be payable in a lumpsum commencing within 10 business days following
the effective date of the Release of Claims. If required by Section
409A, the Severance Payment may be delayed for a period of six months.
For purposes of this Agreement, "Cause" for termination by the Company
of the Executive's employment shall mean (i) the willful and continued
failure by the Executive to perform his or her duties with the
Company, (ii) the Executive's conviction of, or entry of a plea of
guilty or nolo contendere to, a felony or other crime involving moral
turpitude, (iii) the commission by the Executive of any act of theft,
embezzlement or fraud in connection with his employment with the
Company, or (iv) the Executive's appropriation (or attempted
appropriation) of a material business opportunity of the Company,
including attempting to secure or securing from anyone other than the
Company any personal profit without the Company's consent in
connection with any transaction entered into on behalf of the Company.
The Executive shall not be entitled to the Severance Payment if (i)
the Executive's employment is terminated by the Company for Cause or
as a result of the Executive's death or Disability or (ii) the
Executive terminates his employment with the Company for any reason.
4. No Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment or otherwise.
5. Successors. Any successor to the Company (whether direct or indirect,
by purchase, merger, consolidation or otherwise) or to all or
substantially all of the business and/or assets of the Company shall
assume all obligations of the Company under this Agreement and all
rights of the Company under this Agreement shall inure to such
successor, in the same manner and to the same extent that the Company
would be required to perform and be entitled to the benefits of this
Agreement if no such succession had taken place.
6. Notices. All notices and other communications under this Agreement
shall be in writing and delivered to the addresses set forth below and
shall be effective when delivered, if hand delivered; three (3) days
after mailing by first class mail, certified or registered with return
receipt requested; and 24 hours after transmission of a fax :
If to the Company: Cherokee International Corporation
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chairman of the Board
If to the Executive:
Either party may change such party's address for notices by notice
duly given pursuant hereto.
7. Arbitration. The Company and Executive agree that any dispute arising
as to the parties' rights and obligations hereunder shall, at the
election and upon written demand of either party, be submitted to
arbitration before a single neutral arbitrator in Orange County,
California and will be conducted in accordance with the National Rules
for the Resolution of Employment Disputes of the American Arbitration
Association, which Rules shall be modified by the arbitrator to the
extent necessary to comply with applicable law. The arbitrator shall
not have authority to add to, modify, change or disregard any lawful
terms of this Agreement or to issue an award that is contrary to
applicable law. The decision of the arbitrator shall be final and
binding and enforceable in any court of competent jurisdiction. The
parties further agree, notwithstanding the foregoing, that (i) the
provisions of the California Arbitration Act, including Sections
1281.8 and 1283.05 of the California Code of Civil Procedure, will
apply to any arbitration hereunder; (ii) the Company shall pay any
costs and expenses that the Executive would not otherwise have
incurred if the dispute had been adjudicated in a court of law, rather
than through arbitration, provided, however, that if either party
prevails on a statutory claim that affords the prevailing party an
award of attorney's fees, the arbitrator may award reasonable
attorney's fees to the prevailing party, consistent with applicable
law; and (iii) any hearing must be transcribed by a court reporter and
any decision of the arbitrator must be set forth in writing,
consistent with the applicable state or federal law and supported by
essential findings of fact and conclusion of law. The provisions of
this Section 7 shall survive the termination or revocation of this
Agreement.
8. Miscellaneous.
(a) Modification and Waiver. Except as otherwise specifically
provided in this Agreement, no provision of this Agreement
may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by both the Company and the Executive. No waiver at any time
by either party to this Agreement of any breach by the other
party hereto of, or failure to comply with, any provision
hereof shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or
similar time.
(b) Entire Agreement. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject
matter hereof have been made by either party which are not
expressly set forth in this Agreement. This Agreement
supercedes any and all prior agreements between the parties
and/or any of their affiliates with respect to the subject
matter hereof.
(c) Governing Law. This Agreement and the legal relations thus
created between the parties hereto shall be governed by and
construed under and in accordance with the internal laws of
the State of California.
(d) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Executive has executed this
Agreement, as of the date set forth below.
EXECUTIVE CHEROKEE INTERNATIONAL CORPORATION
/s/ Xxxxxx Xxxxx /s/ Xxx Xxxxxxx
----------------------------- ------------------------------------
By: Xxx Xxxxxxx
Date: June 16, 2005 Its: Chief Financial Officer
Date: June 16, 2005
