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EXHIBIT 10.01
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 5th day of April, 2000, by and
between Xxxx Xxxx (the "Executive") and Xxxxxxxxx Semiconductor Corporation, a
Delaware corporation (the "Corporation").
For ease of reference, this Agreement is divided into the following parts,
which begin on the pages indicated:
FIRST PART: TERM OF EMPLOYMENT, DUTIES AND SCOPE, COMPENSATION AND BENEFITS
DURING EMPLOYMENT
(Sections 1-8, beginning on page 2)
SECOND PART: COMPENSATION AND BENEFITS IN CASE OF ACTUAL OR CONSTRUCTIVE
TERMINATION
(Sections 9-11, beginning on page 6)
THIRD PART: COMPENSATION AND BENEFITS IN CASE OF A CHANGE IN CONTROL
(Sections 12-13, beginning on page 8)
FOURTH PART: PARACHUTE PAYMENTS
(Sections 14-15, beginning on page 9)
FIFTH PART: TRADE SECRETS, INTELLECTUAL PROPERTY, NON-COMPETITION, REMEDIES,
SEVERABILITY, SUCCESSORS, MISCELLANEOUS PROVISIONS, SIGNATURE
PAGE
(Sections 16-23, beginning on page 11)
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FIRST PART: TERM OF EMPLOYMENT, DUTIES AND SCOPE, COMPENSATION AND BENEFITS
DURING EMPLOYMENT
SECTION 1. TERM OF EMPLOYMENT
(a) BASIC TERM. Unless sooner terminated as provided herein, the term of
employment under this Agreement shall begin on the effective date of this
Agreement and shall conclude on the third anniversary thereof (the "Initial
Term"). This Agreement shall be renewed automatically for up to two (2)
additional consecutive one (1) year terms (each a "Renewal Term") unless
either the Corporation or the Executive shall give to the other written
notice not less than ninety (90) days prior to the end of the term of the
Initial Term or the first Renewal Term that it or he does not wish to renew
this Agreement. (The Initial Term and any Renewal Term are collectively
referred to herein as the "Term.")
(b) EARLY TERMINATION OR RESIGNATION. The Corporation may terminate the
Executive's employment at any time and for any reason by giving the
Executive not less than thirty (30) days advance written notice. The
Executive may terminate the Executive's employment for any reason by giving
the Corporation not less than thirty (30) days advance notice in writing.
(c) TERMINATION FOR CAUSE. The Corporation may terminate the Executive's
employment at any time for Cause shown. For all purposes under this
Agreement, "Cause" shall mean (1) a willful failure by the Executive to
substantially perform the Executive's duties under this Agreement, other
than a failure resulting from the Executive's complete or partial
incapacity due to physical or mental illness or impairment, (2) a willful
act by the Executive that constitutes gross misconduct and that is
materially injurious to the Corporation, (3) a willful breach by the
Executive of a material provision of this Agreement or (4) a material and
willful violation of a federal or state law or regulation applicable to the
business of the Corporation that is materially and demonstrably injurious
to the Corporation. No act, or failure to act, by the Executive shall be
considered "willful" unless committed without good faith and without a
reasonable belief that the act or omission was in the Corporation's best
interest.
(d) TERMINATION FOR DISABILITY. The Corporation may terminate the Executive's
employment for Disability by giving the Executive not less than thirty (30)
days advance written notice. For all purposes under this Agreement,
"Disability" shall mean that the Executive, at the time the notice is
given, has been unable to perform the Executive's duties under this
Agreement for a period of not less than six (6) consecutive months as a
result of the Executive's incapacity due to physical or mental illness. In
the event that the Executive resumes the performance of substantially all
of the Executive's duties under this Agreement before the termination of
the Executive's employment under this Section becomes effective, the notice
of termination shall automatically be deemed to have been revoked.
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SECTION 2. DUTIES AND SCOPE OF EMPLOYMENT
(a) POSITION. The Corporation agrees to employ the Executive for the term of
employment under this Agreement in the positions of Chief Executive
Officer, Chairman of the Board and President. Executive shall be given such
duties, responsibilities and authorities as are appropriate to his
position.
(b) OBLIGATIONS. During the term of employment under this Agreement, the
Executive shall devote the Executive's full business efforts and time to
the business and affairs of the Corporation as needed to carry out his
duties and responsibilities hereunder subject to the overall supervision of
the Corporation's Board of Directors. The foregoing shall not preclude the
Executive from engaging in appropriate civic, charitable or religious
activities or from devoting a reasonable amount of time to private
investments or from serving on the boards of directors of other entities,
as long as such activities and service do not interfere or conflict with
the Executive's responsibilities to the Corporation.
SECTION 3. BASE COMPENSATION
During the Term, the Corporation agrees to pay the Executive as compensation for
services a base salary at the annual rate of $660,000, or at such higher rate as
the Compensation Committee of the Board of Directors may determine from time to
time. Such salary shall be payable in accordance with the standard payroll
procedures of the Corporation. Once the Corporation's Compensation Committee of
the Board of Directors has increased such salary, it thereafter shall not be
reduced. The annual compensation specified in this Section 3, together with any
increases in such compensation that the Compensation Committee of the Board of
Directors may grant from time to time, is referred to in this Agreement as "Base
Compensation."
SECTION 4. INCENTIVE COMPENSATION
During the Term, the Corporation from time to time shall award the Executive
annual incentive compensation ("Incentive Compensation") based upon a target
which shall be 90% of the Base Compensation, with the actual annual incentive
award determined in accordance with the achievement of financial or other
performance measures contained in and subject to the other terms and conditions
of the Corporation's Executive Officer Incentive Plan. Any compensation paid to
the Executive as Incentive Compensation shall be in addition to the Base
Compensation.
SECTION 5. STOCK OPTIONS
On the date of the Corporation's annual meeting of stockholders in 2000,
Executive will be granted one (1) million stock options to purchase the
Corporation's common stock under the Corporation's 2000 Executive Stock Option
Plan; provided, however, that such plan is approved by the stockholders. The per
share exercise price for such option shall equal the fair market value of one
(1) share of the Corporation's common stock at the close of trading on the date
of the 2000 Annual Meeting. Such options will have a five (5) year cliff vesting
schedule with accelerated vesting as follows: 20% of the Option shall vest at
the time the Share price reaches $55.00 and stays at or above that price for
twenty (20) days during any thirty (30) day consecutive trading period; an
additional 20% of the Option shall vest at the time the Share price reaches
$64.00 and stays at or above that price for twenty (20) days during any
thirty (30)
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consecutive day trading period; an additional 30% of the Option shall vest at
the time the Share price reaches $77.00 and stays at or above that price for
twenty (20) days during any thirty (30) consecutive day trading period; and the
remaining 30% of the Option shall vest at the time the Share price reaches
$90.00 and stays at or above that price for twenty (20) days during any thirty
(30) consecutive day trading period. In addition, beginning in 2001, the
Executive may be considered for awards under the Corporation's existing and any
new compensation and benefit plans in order to ensure that Executive's long-term
incentives are competitive.
SECTION 6. EXECUTIVE BENEFITS
(a) IN GENERAL. During the Term, the Executive shall be eligible to participate
in all employee and executive benefit plans and executive compensation
programs maintained by the Corporation, including (without limitation)
savings or profit-sharing plans, deferred compensation plans, stock option,
incentive or other bonus plans, life, disability, health, accident and
other insurance programs, and similar plans or programs.
(b) PAID VACATION. During the Term, the Executive shall be entitled to five (5)
weeks paid vacation per calendar year, such vacation to extend for such
periods and to be taken at such intervals as shall be appropriate and
consistent with the proper performance of the Executive's duties hereunder.
(c) ADDITIONAL BENEFITS. During the Term, the Executive shall also receive
supplemental life and disability policies, and financial and legal planning
expenses (up to $25,000 per year) paid for by the Corporation.
SECTION 7. BUSINESS EXPENSES AND TRAVEL
During the Term, the Executive shall be authorized to incur and shall be
reimbursed for all necessary and reasonable travel, entertainment and other
business expenses in connection with the Executive's duties hereunder.
SECTION 8. RETIREMENT
If Executive retires on or after the expiration of the Initial Term of this
Agreement, or terminates at any time due to death, Disability or in a Qualifying
Termination, Executive shall receive (a) life-time health coverage, comparable
to that provided to other senior executives of the Corporation, for himself and
his family until the later of either Executive's or his surviving spouse's death
and (b) life insurance coverage with a face value of $1.5 million on his life
until his death. To the extent that the Corporation finds it undesirable to
cover the Executive under the group life insurance and health plans of the
Corporation, the Corporation shall provide the Executive (at its own expense)
with the same level of coverage under individual policies. Executive shall also
be fully vested in all stock options granted pursuant to the Corporation's Stock
Option Plan, as amended and restated June 24, 1999, and shall have the full
option term to exercise such fully vested options. Executive shall have until
the seventh anniversary of the Date of Option Grant to exercise his grant of one
(1) million stock options under the Corporation's 2000 Executive Stock Option
Plan and the vesting will continue as provided in the applicable option
agreement.
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The obligation of the Corporation to provide continued benefits under this
Section 8 shall cease and Executive's unexercised stock options shall terminate
at such time Executive breaches any of the provisions of Section 16 or 18.
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SECOND PART: COMPENSATION AND BENEFITS IN CASE OF TERMINATION WITHOUT CAUSE OR
FOR GOOD REASON
SECTION 9. TERMINATIONS
This Second Part of the Agreement, consisting of Sections 9 through 11,
describes the benefits and compensation, if any, payable in case of a Qualifying
Termination of employment. The Third Part of the Agreement, consisting of
Sections 12 through 15, describes benefits and compensation, if any, payable in
case of a Change in Control.
SECTION 10. TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON
In the event that, during the Term, the Executive's employment terminates in a
Qualifying Termination, as defined in Subsection (a), then, after executing the
release of claims described in Section 10(c), the Executive shall be entitled to
receive the payments and benefits described in Subsection (b) and Section 8.
(a) QUALIFYING TERMINATION. A Qualifying Termination occurs if:
(1) The Corporation terminates the Executive's employment for any reason
other than Cause; or
(2) The Executive resigns for Good Reason, which means a greater than 10%
reduction in base compensation, incentive compensation target and
benefits, a material change in status or responsibilities, the
Corporation's failure to elect and continue Executive as Chief
Executive Officer or Chairman (but not the failure to continue him as
President) or to nominate Executive for reelection as a member of the
Board of Directors unless Executive is terminated for good cause, or a
requirement to relocate, except for office relocations that would not
increase the Executive's one-way commute distance by more than
thirty-five (35) miles; provided that in no event shall the expiration
of the Term, by virtue of either party's having given notice of
non-renewal pursuant to Section 1(a) or by virtue of the expiration of
the Second Renewal Term, constitute a Qualifying Termination.
(b) SEVERANCE (3X PAYMENT). The Corporation shall pay to the Executive
following the date of the employment termination and ratably spread over
the succeeding thirty-six (36) months, in accordance with standard payroll
procedures, an aggregate amount equal to the following:
(1) Three (3) times the Executive's Base Compensation in effect on the
date of the employment termination;
(2) Three (3) times the Executive's target Executive Offer Incentive Bonus
for the year in which he is terminated; and
(3) Executive shall also be fully vested in all stock options granted
pursuant to the Corporation's Stock Option Plan, as amended and
restated June 24, 1999, and
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shall have the full option term to exercise such fully vested options.
Executive shall have until the seventh anniversary of the Date of
Option Grant to exercise his grant of one (1) million stock options
under the Corporation's 2000 Executive Stock Option Plan and the
vesting will continue as provided in the applicable option agreement.
(c) RELEASE OF CLAIMS. As a condition to the receipt of the payments and
benefits described in this Section 10, the Executive shall be required to
execute a release of all claims arising out of the Executive's employment
or the termination thereof including, but not limited to, any claim of
discrimination under state or federal law, but excluding claims for
indemnification from the Corporation under any indemnification agreement
with the Corporation, its certificate of incorporation and by-laws or
applicable law or claims for directors and officers' insurance coverage.
(d) CONDITIONS TO RECEIPT OF PAYMENTS AND BENEFITS. The obligation of the
Corporation to provide the payments and benefits described in this Section
10 shall cease, and all unexercised stock options shall terminate, at such
time the Executive breaches any of the provisions of Section 16 or 18.
(e) NO MITIGATION. The Executive shall not be required to mitigate the amount
of any payment or benefit contemplated by this Section 10, nor shall any
such payment or benefit be reduced by any earnings or benefits that the
Executive may receive from any other source; provided that if the Executive
becomes employed by another employer following termination of his
employment by the Corporation and such employer provides the Executive with
comparable life insurance and health plan coverage, the Corporation shall
no longer be obligated to provide the benefits described in Section 8.
SECTION 11. OTHER TERMINATIONS UNDER THIS PART
If termination of employment occurs and the termination is not described in
Section 10 (or Section 8), then the Executive is entitled only to the
compensation, benefits and reimbursements payable under the terms of Sections 3,
4, 5, 6 and 7 of this Agreement for the period preceding the effective date of
the termination including any Disability or death benefits to which Executive
(or his estate or beneficiary(s)) may be entitled as a result of termination of
his employment on account of Disability or death. This Section 11 applies,
without limitation, to any termination of employment initiated by the Executive
(except an Executive-initiated termination that is described in Paragraph 2 of
Section 10(a)), termination of employment caused by the Executive's death, and
to a termination of the Executive for Cause.
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THIRD PART: COMPENSATION AND BENEFITS IN CASE OF A CHANGE IN CONTROL
SECTION 12. CHANGE IN CONTROL
In the event of a Change in Control, and if Executive's employment is terminated
within the time period beginning six (6) months before the Change in Control and
ending twelve (12) months after the Change in Control, in a Qualifying
Termination, the cash severance payment under Section 10(b) will be paid in a
lump sum within fourteen (14) days of the Qualifying Termination. If Executive
is employed by the Corporation at the time of a Change in Control or if his
employment with the Corporation was terminated no more than six (6) months
before the Change in Control in a Qualifying Termination, Executive's stock
options shall vest upon a Change in Control unless the Change in Control is
initiated by the Corporation and the Executive continues as the Chief Executive
Officer of the successor corporation. If a Change in Control occurs within three
(3) months before or after the end of the Term, the Term shall automatically be
extended an additional twelve (12) months from the expiration date of the prior
Term.
SECTION 13. DEFINITION OF CHANGE IN CONTROL
For all purposes under this Agreement, "Change in Control" shall be as defined
in the Executive's Stock Option Agreement dated April ___, 2000, in which
Executive was granted an option to purchase 1,000,000 shares of the Corporation.
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FOURTH PART: PARACHUTE PAYMENTS
SECTION 14. TAX RESTORATION PAYMENT.
In the event it is determined that any payment or distribution of any type to or
for the benefit of the Executive, pursuant to this Agreement or otherwise, by
the Corporation, any person who acquires ownership or effective control of the
Corporation, or ownership of a substantial portion of the assets of the
Corporation (within the meaning of section 280G of the Code and the regulations
thereunder) or any affiliate of such person (the "Total Payments") would be
subject to the excise tax imposed by section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are collectively referred to as , the "Excise
Tax"), then the Executive shall be entitled to receive an additional payment (a
"Tax Restoration Payment") in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including any Excise Tax, imposed upon the Tax Restoration
Payment, the Executive retains an amount of the Tax Restoration Payment equal to
the Excise Tax imposed upon the Total Payments.
SECTION 15. DETERMINATION BY ACCOUNTANT
All mathematical determinations and determinations as to whether any of the
Total Payments are "parachute payments" (within the meaning of section 280G of
the Code), in each case which determinations are required to be made under this
Section 15, including whether a Tax Restoration Payment is required, the amount
of such Tax Restoration Payment, and amounts relevant to the last sentence of
this Section 15, shall be made by an independent accounting firm selected by the
Executive from amount the largest five accounting firms in the United States
(the "Accounting Firm"). The Accounting Firm shall provide to the Corporation
and to the Executive its determination (the "Determination"), together with
detailed supporting calculations regarding the amount of any Tax Restoration
Payment and any other relevant matter, within ten (10) days after termination of
the Executive's employment, if applicable, or at such earlier time following
termination of employment as is requested by the Executive (if the Executive
reasonably believes that any of the Total Payments may be subject to the Excise
Tax). If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive with a written statement that such
Accounting Firm has concluded that no Excise Tax is payable (including the
reasons therefor) and that the Executive has substantial authority not to report
any Excise Tax on the Executive's federal income tax return. If a Tax
Restoration Payment is determined to be payable, it shall be paid to the
Executive within ten (10) days after the Determination is delivered to the
Corporation or the Executive. Any determination by the Accounting Firm shall be
binding upon the Corporation and the Executive, absent manifest error.
As a result of uncertainty in the application of section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Tax Restoration Payments not made by the Corporation and members
of the Corporation should have been made ("Underpayment"), or that Tax
Restoration Payments will have been made by the Corporation and members of the
Corporation that should not have been made ("Overpayments"). In either such
event, the Accounting Firm shall determine the amount of the Underpayment or
Overpayment that has occurred. In the case of an Underpayment, the Corporation
promptly shall pay, or cause to be paid, the amount of such Underpayment to or
for the benefit of the Executive.
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In the case of an Overpayment, the Executive shall, at the direction and expense
of the Corporation, take such steps as are reasonably necessary (including the
filing of returns and claims for refund), follow reasonable instructions from,
and procedures established by, the Corporation, and otherwise reasonably
cooperate with the Corporation to correct such Overpayment; provided, however,
that (1) Executive shall not in any event be obligated to return to the
Corporation an amount greater than the net after-tax portion of the Overpayment
that he has retained or recovered as a refund from the applicable taxing
authorities and (2) this provision shall be interpreted in a manner consistent
with the intent of Section 14, which is to make the Executive whole, on an
after-tax basis, from the application of the Excise Tax, it being understood
that the correction of an Overpayment may result in the Executive repaying to
the Corporation an amount that is less than the Overpayment.
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FIFTH PART: TRADE SECRETS, SUCCESSORS, MISCELLANEOUS PROVISIONS, SIGNATURE
PAGE
SECTION 16. CONFIDENTIAL INFORMATION
(a) ACKNOWLEDGEMENT. The Corporation and the Executive acknowledge that the
services to be performed by the Executive under this Agreement are unique
and extraordinary and that, as a result of the Executive's employment, the
Executive will be in a relationship of confidence and trust with the
Corporation and will come into possession of "Confidential Information" (1)
owned or controlled by the Corporation, (2) in the possession of the
Corporation and belonging to third parties or (3) conceived, originated,
discovered or developed, in whole or in part, by the Executive. As used
herein "Confidential Information" includes trade secrets and other
confidential or proprietary business, technical, personnel or financial
information, whether or not the Executive's work product, in written,
graphic, oral or other tangible or intangible forms, including but not
limited to specifications, samples, records, data, computer programs,
drawings, diagrams, models, customer names, ID's or e-mail addresses,
business or marketing plans, studies, analyses, projections and reports,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under
their direction (including attorney work product), and software systems and
processes. Any information that is not readily available to the public
shall be considered to be a trade secret and confidential and proprietary,
even if it is not specifically marked as such, unless the Corporation
advises the Executive otherwise in writing.
(b) NONDISCLOSURE. The Executive agrees that the Executive will not, without
the prior written consent of the Corporation, directly or indirectly, use
or disclose Confidential Information to any person, during or after the
Executive's employment, except as may be necessary in the ordinary course
of performing the Executive's duties under this Agreement. The Executive
will keep the Confidential Information in strictest confidence and trust.
This Section 16 shall apply indefinitely, both during and after the term of
this Agreement.
(c) SURRENDER UPON TERMINATION. The Executive agrees that in the event of the
termination of the Executive's employment for any reason, the Executive
will immediately deliver to the Corporation all property belonging to the
Corporation, including all documents and materials of any nature pertaining
to the Executive's work with the Corporation, and will not take with the
Executive any documents or materials of any description, or any
reproduction thereof of any description, containing or pertaining to any
Confidential Information. It is understood that the Executive is free to
use information that is in the public domain (not as a result of a breach
of this Agreement).
SECTION 17. ASSIGNMENT OF RIGHTS OF INTELLECTUAL PROPERTY
The Executive shall promptly and fully disclose all Intellectual Property to the
Corporation. The Executive hereby assigns and agrees to assign to the
Corporation (or as otherwise directed by the Board) the Executive's full right,
title and interest in and to all Intellectual Property. The Executive agrees to
execute any and all applications for domestic and foreign patents, copyrights
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or other proprietary rights and to do such other acts (including without
limitation the execution and delivery of instruments of further assurance or
confirmation) requested by the Corporation to assign the Intellectual Property
to the Corporation and to permit the Corporation and its affiliates to enforce
any patents, copyrights or other proprietary rights to the Intellectual
Property. For purposes of this Section 17, "Intellectual Property" means
inventions, discoveries, developments, methods, processes, compositions, works,
concepts and ideas (whether or not patentable or copyrightable or constituting
trade secrets) conceived, made, created, developed or reduced to practice by the
Executive (whether alone or with others, whether or not during normal businesses
hours or on or off Corporation premises) during the Executive's employment that
relate to either any business, venture or activity being conducted or proposed
to be composed by the Corporation or its affiliates at any time during the terms
of this Agreement.
SECTION 18. RESTRICTIONS ON ACTIVITIES OF THE EXECUTIVE
(a) ACKNOWLEDGMENTS. The Executive agrees that he is being employed hereunder
in a key management capacity with the Corporation, that the Corporation is
engaged in a highly competitive business and that the success of the
Corporation's business in the marketplace depends upon its goodwill and
reputation for quality and dependability. The Executive further agrees that
reasonable limits may be placed on his ability to compete against the
Corporation and its affiliates as provided herein so as to protect and
preserve their legitimate business interests and goodwill.
(b) AGREEMENT NOT TO COMPETE OR SOLICIT.
(1) During the Non-Competition Period (as defined below), the Executive
will not engage or participate in, directly or indirectly, as
principal, agent, employee, employer, consultant, investor or partner,
or assist in the management of, any business which is Competitive with
the Corporation (as defined below).
(2) During the Non-Competition Period, the Executive will not directly or
indirectly through any other entity, hire or attempt to hire, any
officer, director, consultant, executive or employee of the
Corporation or any of its affiliates during his or her engagement with
the Corporation or such affiliate. During the Non-Competition Period,
the Executive will not call upon, solicit, divert or attempt to
solicit or divert from the Corporation or any of its affiliates any of
their customers or suppliers or potential customers or suppliers of
whose names he was aware during the Term (other than customers or
suppliers or potential customers or suppliers contacted by the
Executive solely in connection with a business that is not Competitive
with the Corporation).
(3) The "Non-Competition Period" shall mean the period during which
Executive is employed by the Corporation plus the greater of (i)
twelve (12) months after termination of employment or (ii) the
remaining number of months in the Initial Term. Additionally, the
"Non-Competition Period" shall consist of any period during which the
Executive is receiving benefits under this Agreement or would have
been receiving such benefits but for their acceleration due to the
terms of this Agreement.
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(4) A business shall be considered "Competitive with the Corporation" if
it is engaged in any business, venture or activity in the Restricted
Area (as defined below) which competes or plans to compete with any
business, venture or activity being conducted or actively and
specifically planned to be conducted within the Non-Competition Period
(as evidence by the Corporation's internal written business plans or
memoranda) by the Corporation, or any group, division or affiliate of
the Corporation, at the date the Executive's employment hereunder is
terminated.
(5) The "Restricted Area" shall mean the United States of America and any
other country where the Corporation, or any group, division or
affiliate of the Corporation, is conducting, or has proposed to
conduct within the Non-Competition Period (as evidenced by the
Corporation's internal written business plans or memoranda), any
business, venture or activity, at the date the Executive's employment
hereunder is terminated.
(6) Notwithstanding the provisions of this Section 18(b), the parties
agree that (i) ownership of not more than three percent (3%) of the
voting stock of any publicly held corporation shall not, of itself,
constitute a violation of this Section 18(b) and (ii) working as an
employee of an entity that has a stand-alone division or business unit
which is Competitive with the Corporation shall not, of itself,
constitute a violation of this Section 18(b) if the Executive is not,
in any way (directly or indirectly, as principal, agent, employee,
employer, consultant, advisor, investor or partner), responsible for,
compensated with respect to, or involved in the activities of such
stand-alone division or business unit and does not (directly or
indirectly) provide information or assistance to such stand-alone
division or business unit).
SECTION 19. REMEDIES
It is specifically understood and agreed that any breach of the provisions of
Section 16 or 18 of this Agreement is likely to result in irreparable injury to
the Corporation and that the remedy at law alone will be an inadequate remedy
for such breach, and that in addition to any other remedy it may have, the
Corporation shall be entitled to enforce the specific performance of this
Agreement by the Executive and to obtain both temporary and permanent injunctive
relief without the necessity of proving actual damages.
SECTION 20. SEVERABLE PROVISIONS
The provisions of this Agreement are severable and the invalidity of any one or
more provisions shall not affect the validity of any other provision. In the
event that a court of competent jurisdiction shall determine that any provision
of this Agreement or the application thereof is unenforceable in whole or in
part because of the duration of scope thereof, the parties hereby agree that
said court in making such determination shall have the power to reduce the
duration and scope of such provision to the extent necessary to make it
enforceable and that the Agreement in its reduced form shall be valid and
enforceable to the full extent permitted by law.
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SECTION 21. SUCCESSORS
(a) CORPORATION'S SUCCESSORS. The Corporation shall require any successor
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Corporation's business and/or assets, by an agreement in substance and form
satisfactory to the Executive, to assume this Agreement and to agree
expressly to perform this Agreement in the same manner and to the same
extent as the Corporation would be required to perform it in the absence of
a succession. The Corporation's failure to obtain such agreement prior to
the effectiveness of a succession shall be a breach of this Agreement and
shall entitle the Executive to all of the compensation and benefits to
which the Executive would have been entitled hereunder if the Corporation
had involuntarily terminated the Executive's employment without Cause or
Disability, on the date when such succession becomes effective. For all
purposes under this Agreement, the term "Corporation" shall include any
successor to the Corporation's business and/or assets that executes and
delivers the assumption agreement described in this Subsection (a) or that
becomes bound by this Agreement by operation of law.
(b) EXECUTIVE'S SUCCESSORS. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of, and be enforceable by, the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
SECTION 22. MISCELLANEOUS PROVISIONS
(a) WAIVER. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Executive and by an authorized officer of the
Corporation (other than the Executive). No waiver by either party of any
breach of, or of compliance with, any condition or provision of this
Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another
time.
(b) WHOLE AGREEMENT. No agreements, representations or understandings (whether
oral or written and whether express or implied) that are not expressly set
forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof. In addition, the Executive hereby
acknowledges and agrees that this Agreement supersedes in its entirety any
employment agreement between the Executive and the Corporation in effect
immediately prior to the effective date of this Agreement. As of the
effective date of this Agreement, such employment agreement shall terminate
without any further obligation by either party thereto, and the Executive
hereby relinquishes any further rights that the Executive may have had
under such prior employment agreement.
(c) NOTICE. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Executive,
mailed notices shall be addressed to the Executive at the home address that
the Executive most recently communicated to the Corporation in
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writing. In the case of the Corporation, mailed notices shall be addressed
to its corporate headquarters, and all notices shall be directed to the
attention of its Chief Executive Officer.
(d) NO SETOFF. Except as provided in Sections 8 and 10, there shall be no right
of setoff or counterclaim, with respect to any claim, debt or obligation,
against payments to the Executive under this Agreement.
(e) CHOICE OF LAW. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Maine,
irrespective of Maine's choice-of-law principles.
(f) SEVERABILITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full
force and effect.
(g) ARBITRATION. Except as otherwise provided in Section 15 and in the
enforcement of Sections 16 and 18, any dispute or controversy arising out
of the Executive's employment or the termination thereof, including, but
not limited to, any claim of discrimination under state or federal law,
shall be settled exclusively by arbitration in Portland, Maine, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.
(h) NO ASSIGNMENT OF BENEFITS. The rights of any person to payments or benefits
under this Agreement shall not be made subject to option or assignment,
either by voluntary or involuntary assignment or by operation of law,
including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this Subsection (h)
shall be void.
(i) LIMITATION OF REMEDIES. If the Executive's employment terminates for any
reason, the Executive shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement.
(j) EMPLOYMENT TAXES. All payments made pursuant to this Agreement shall be
subject to withholding of applicable taxes.
(k) BENEFIT COVERAGE NON-ADDITIVE. In the event that the Executive is entitled
to life insurance and health plan coverage under more than one provision
hereunder, only one provision shall apply, and neither the periods of
coverage nor the amounts of benefits shall be additive.
(l) DISCHARGE OF RESPONSIBILITY. The payments under this Agreement, when made
in accordance with the terms of this Agreement, shall fully discharge all
responsibilities of the Corporation to the Executive that existed at the
time of termination of the Executive's employment.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Corporation by its duly authorized officer, as of the day and year first
above written. Executive has consulted (or has had the opportunity to consult)
with his own counsel (who is other than the Corporation's counsel) prior to
execution of this Agreement.
EXECUTIVE
/s/ Xxxx X. Xxxx
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Xxxx Xxxx
XXXXXXXXX SEMICONDUCTOR CORPORATION
By /s/ Xxxxxx X. Xxxxxx
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Its Executive Vice President & CFO
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