EXHIBIT 10.1
[CONEXANT SYSTEMS, INC. LETTERHEAD]
February 27, 2004
PERSONAL & CONFIDENTIAL
X. Xxxxx Xxxxxx
00 Xxxxxxxx Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Re: Amendment to Employment Agreement
Dear Xxxxx:
This letter agreement (the "Amendment") hereby amends, effective as of
the date hereinafter set forth, the Employment Agreement dated as of December
18, 2002 between you and Conexant Systems, Inc. (the "Company") (the
"Agreement").
This Amendment shall only become effective at the Effective Time, as
defined in the Agreement and Plan of Reorganization dated as of November 3,
2003, as amended as of January 15, 2004 (the "Merger Agreement"), by and among
the Company, Concentric Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Company, and GlobespanVirata, Inc., a Delaware corporation.
This Amendment shall be of no force or effect unless, and until, the Merger (as
defined in the Merger Agreement) is consummated. The date this Amendment becomes
effective is referred to as the "Amendment Effective Date".
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Agreement.
1. Section 4 of the Agreement is hereby amended in its entirety to
read as follows:
"4. Employment Period. Subject to the provisions of Section 6
hereof, and the Executive's right to voluntarily terminate employment at any
time during the Employment Period, the Company hereby employs, and agrees to
continue the Executive in its employ, and the Executive hereby agrees to remain
in the employ of the Company subject to the terms and conditions of this
Agreement, for the period commencing on the Amendment Effective Date and ending
on the second anniversary of the Amendment Effective Date (the "Renewal Date")
(the "Employment Period"); provided, however, that the Employment Period shall
be automatically extended for an additional one-year term on the Renewal Date
and on each anniversary of the Renewal Date, unless either party gives at least
sixty days' advance written notice to the other party that it no longer wishes
such automatic extensions to continue."
2. Section 5(a)(i) of the Agreement is hereby amended in its entirety to
read as follows:
"(i) During the Employment Period, the Executive shall be employed
as Senior Vice President and Chief Accounting Officer of the Company. The
Executive will initially report directly to the Chief Financial Officer of the
Company. The Executive shall have the authority typically held by the chief
accounting officer of a major corporation and the Executive's services shall be
performed in Newport Beach, California or at any other office or location less
than 35 miles from Newport Beach, California."
3. Section 5(a)(ii) of the Agreement is hereby amended in its entirety to
read as follows:
"(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote his full attention and time during normal Business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, including without limitation the board of directors of
SiRF Technology, Inc. ("SiRF"), (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions or (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the Company in
accordance with this Agreement. The Company shall recommend to the board of
directors of SiRF that the Executive serve as the Company's representative on
the board of directors of SiRF, subject to the approval of the board of
directors of SiRF."
4. Section 5(b)(i) of the Agreement is hereby amended in its entirety to
read as follows:
"(i) Base Salary. During the Employment Period, the Executive shall
receive an annual base salary (the "Annual Base Salary") which shall be paid at
a monthly rate. Effective as of the Amendment Effective Date, the Annual Base
Salary shall be $300,000. During the Employment Period, the Annual Base Salary
shall be reviewed at least annually. Any increase in the Annual Base Salary
shall not serve to limit or reduce any other obligation to the Executive under
this Agreement. The Executive's Annual Base Salary shall not be reduced after
any increase and the term Annual Base Salary as utilized in this Agreement shall
refer to the Annual Base Salary as so increased."
5. Section 5(b)(ii) of the Agreement is hereby amended in its entirety to
read as follows:
"(ii) Incentive Bonus. In addition to Annual Base Salary, for fiscal
year 2003, the Executive shall be awarded an incentive bonus which shall be
delivered as a cash-
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based award subject to achievement of pre-determined operating profit goals.
After fiscal year 2003, during the Employment Period, the Executive shall be
eligible to earn an annual performance bonus payable in cash in an amount
determined at the discretion of the Board or the Compensation and Management
Development Committee of the Board (the "Compensation Committee") or each fiscal
year. The Board or the Compensation Committee shall establish a target bonus for
the Executive with respect to each fiscal year of the Employment Period based
upon overall performance of the Company and upon the Executive's individual
performance, with the amount of the target bonus to be based on competitive
market levels and with bonus payments to be based on actual performance. The
Executive's annual target bonus for the fiscal year ending October 1, 2004 will
be sixty percent (60%) of the Base Salary. In the event that a target bonus is
not established with respect to any subsequent year, the Executive's target
bonus shall be deemed to be the target bonus established under this Agreement
for the immediately preceding year."
6. A new Section 5(b)(ix) of the Agreement is hereby added to read as
follows:
"(ix) Cash Retention Bonuses.
(A) In addition to any other bonuses payable under this Agreement,
within 14 days after the Amendment Effective Date, the Company shall pay to the
Executive a lump sum cash bonus in the amount of $125,000 (the "Initial Cash
Retention Bonus"). The Initial Cash Retention Bonus will be deemed to be earned
on the one year anniversary of the Amendment Effective Date. Should the
Executive voluntarily terminate his employment without "Good Reason" (as defined
in Section 6(c) of this Agreement) or be terminated for "Cause" (as defined in
Section 6(b) of this Agreement) before the first anniversary of the Amendment
Effective Date, the Executive shall repay to the Company in cash an amount equal
to the Initial Cash Retention Bonus.
(B) In addition to any other bonuses payable under this Agreement,
within 14 days after the first anniversary of the Amendment Effective Date, the
Company shall pay to the Executive a lump sum cash bonus in the amount of
$75,000 (the "Subsequent Cash Retention Bonus"). The Subsequent Cash Retention
Bonus will be deemed to be earned on the second anniversary of the Amendment
Effective Date. Should the Executive voluntarily terminate his employment
without "Good Reason" (as defined in Section 6(c) of this Agreement) or be
terminated for "Cause" (as defined in Section 6(b) of this Agreement) before the
second anniversary of the Amendment Effective Date, the Executive shall repay to
the Company in cash an amount equal to the Subsequent Cash Retention Bonus."
Should the Executive be terminated by the Company without Cause or if the
Executive Resigns for Good Reason after the Amendment Effective Date and prior
to the one (1) year anniversary of the Amendment Effective Date, Executive will
be entitled to receive the "Subsequent Cash Retention Bonus" outlined in this
section 6(B).
7. A new Section 5(b)(x) is hereby added to read as follows:
"(x) Additional Equity Compensation.
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(A) In addition to any other equity compensation provided for
under this Agreement, on or about the Amendment Effective Date, the Company
shall grant to the Executive options to purchase 200,000 shares of common stock,
par value $.01 per share, of the Company (the "Company Common Stock"), with an
exercise price equal to the fair market value of the Company Common Stock on the
date of grant. Such options shall become exercisable in four equal installments
on the first, second, third and fourth anniversaries of the date of grant.
(B) On or about the Amendment Effective Date, the Company shall
grant to the Executive options to purchase 175,000 shares of Company Common
Stock, with an exercise price equal to the fair market value of the Company
Common Stock on the date of grant. Such options shall become exercisable on the
second anniversary of the Amendment Effective Date."
8. Section 6(c) of the Agreement is hereby amended in its entirety to read
as follows:
"(c) Good Reason - Initiated By The Executive. The Executive's
employment may be terminated by the Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
(i) The Company's assignment to the Executive of duties materially
inconsistent with respect to the Executive's position, authority, duties or
responsibilities as defined in Section 5(a) of this Agreement;
(ii) The Company's requiring the Executive to be based at any
office or location other than as provided in Section 5(a)(i) hereof;
(iii) Any purported termination by the Company of the Executive's
employment other than as expressly permitted by this Agreement;
(iv) Any failure by the Company to comply with and satisfy Section
14(c) of this Agreement; or
(v) The failure by the Company to expand substantially the duties,
responsibilities and title of the Executive within 18 months after the Amendment
Effective Date.
For purposes of Section 6(c) of this Agreement, any good faith determination of
"Good Reason" made by the Executive shall be conclusive."
9. Section 7(a) of the Agreement is hereby amended in its entirety as
follows:
"(a) Good Reason - Initiated By The Executive; Other Than for
Cause, Death or Disability. If the Executive terminates his employment with the
Company for Good Reason as defined in Section 6(c) of this Agreement, or his
employment is terminated by the Company other than for Cause, Death or
Disability, then the Company shall:
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(i) Within thirty (30) days after the Executive's Date of
Termination, pay to the Executive (A) his Annual Base Salary through his Date of
Termination, (B) the amount of any compensation previously deferred by the
Executive and (C) any other amounts or benefits required to be paid or provided
or which the Executive is eligible to receive under any plan, program, policy or
practice or contract or agreement of the Company and its affiliates ("Other
Benefits"), in each case to the extent theretofore unpaid. The amounts referred
to in subclauses (A) and (B) are referred to collectively as "Accrued
Obligations";
(ii) Continue to pay to the Executive Annual Base Salary for a
period of two years from the Date of Termination in accordance with normal
Company pay practices;
(iii) Pay to the Executive promptly after the end of the fiscal year
in which the Date of Termination occurs the full amount of the target bonus for
the fiscal year in which the Executive's Date of Termination occurs;
(iv) Provide welfare benefits coverage described in Section
5(b)(iv) and fringe benefits coverage described in Section 5(b)(vii) to the
Executive for a period of two years from the Date of Termination; and
(v) Provide the Executive with continued vesting in all unvested
options to purchase Company Common Stock and shares of restricted Company Common
Stock then held by the Executive pursuant to their terms for a period of two
years from the Date of Termination (the "Continuation Period") and the Executive
shall be entitled to exercise all such vested options during the Continuation
Period and the ninety-day period commencing at the end of the Continuation
Period."
10. The second sentence of Section 11 of this Agreement is hereby amended
in its entirety as follows:
"A competing business, for purposes of this Agreement, is any of the
following companies: Broadcom Corporation, ST Microelectronics, LSI Logic
Corporation, Texas Instruments Inc. or Philips Electronics."
11. Section 15(b) of the Agreement is hereby amended to change the address
for notices and other communications to the Company to read as follows:
"If to the Company:
Conexant Systems, Inc.
0000 XxxXxxxxx Xxxxxxxxx, Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. X'Xxxxxx, Senior Vice President, Chief Legal
Officer and Secretary"
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Except as hereinabove modified, the Agreement shall remain in full
force and effect.
Please confirm your agreement with the foregoing by signing and
returning the enclosed copy of this Amendment.
CONEXANT SYSTEMS, INC.
By:/s/ Xxxxxxx X. Xxxxxx
-----------------------------
Name: X.X. Xxxxxx
Title: Sr. Vice President
Human Resources
Accepted and Agreed to as of
the date set forth above:
X. XXXXX XXXXXX
/s/ X. Xxxxx Xxxxxx
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