Exhibit 10.b
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 15th
day of January, 2004, by and between Conexant Systems, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
WHEREAS, the Executive is currently employed as Chief Executive Officer of
GlobespanVirata, Inc., a Delaware corporation ("GlobespanVirata");
WHEREAS, pursuant to that 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 ("Concentric Sub"), and GlobespanVirata,
at the Effective Time (as defined in the Merger Agreement), Concentric Sub will
be merged with and into GlobespanVirata (the "Merger"), with GlobespanVirata
being the surviving corporation in the Merger as a wholly-owned subsidiary of
the Company;
WHEREAS, the Executive is party to an Employment Agreement dated as of
October 1, 2001 with GlobespanVirata (the "Prior Agreement"); and
WHEREAS, the parties hereto wish to enter into the arrangements set forth
herein with respect to the terms and conditions of the Executive's employment
with the Company from and after the Effective Time;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment Agreement. On the terms and conditions set forth in this
Agreement and subject to the consummation of the Merger, the Company agrees to
employ the Executive, and the Executive agrees to be employed by the Company,
for the Employment Period set forth in Section 2 and in the position and with
the duties set forth in Section 3. Terms used herein with initial capitalization
are defined in Section 23. This Agreement shall only become effective at the
Effective Time. At the Effective Time, this Agreement shall replace and
supersede the Prior Agreement and any other employment agreements or
arrangements between the Executive and GlobespanVirata or any of its Affiliates
or predecessors (the "Current Agreements"), which shall automatically be
terminated as of the Effective Time and shall be of no further force or effect
from and after the Effective Time. This Agreement shall be of no force or effect
unless, and until, the Merger is consummated.
2. Term. Unless earlier terminated pursuant to Section 8, the term of the
Executive's employment hereunder shall commence on the day on which the
Effective Time occurs (the "Effective Date") and shall conclude on the second
anniversary of the Effective Date (the "Employment Period"); provided, however,
that beginning on the day following the Effective Date, and on each day
thereafter, the Employment Period shall automatically be extended for one
additional day, unless either party gives written notice to the other party (a
"Notice of Non-Renewal") that it no longer wishes such automatic extensions to
continue.
3. Position and Duties. The Executive shall serve as Chief Executive
Officer of the Company and as a member of the Board during the Employment
Period. As Chief Executive Officer of the Company, the Executive shall render
executive, policy and other management services to the Company of the type
customarily performed by persons serving in a similar capacity and as reasonably
determined by the Board with regard to the Executive's status and position
within the Company. The Executive shall report directly to the Board. The
Executive shall devote the Executive's reasonable best efforts and substantially
full business time to the performance of the Executive's duties hereunder and
the advancement of the business and affairs of the Company during the Employment
Period (provided that the Executive may devote time to (i) managing the
Executive's personal investments, (ii) charitable and community activities and
(iii) service on the board of directors of Commvault, and, with the consent of
the Board, take up other offices and positions during the Employment Period).
4. Place of Performance. During the Employment Period, the Executive's
primary place of employment and work location shall be Red Bank, New Jersey,
except for reasonable travel on Company business and as otherwise consented to
by the Executive.
5. Compensation.
(a) Base Salary. During the Employment Period, the Company shall pay to
the Executive an annual base salary (the "Base Salary"), which initially shall
be $550,000. The Base Salary shall be reviewed by the Board or the Compensation
and Management Development Committee of the Board (the "Compensation Committee")
no less frequently than annually and may be increased (but not decreased) at the
discretion of the Board or the Compensation Committee. If the Executive's Base
Salary is increased, the increased amount shall be the Base Salary for the
remainder of the Employment Period. The Base Salary shall be payable monthly or
in such other installments as shall be consistent with the Company's payroll
procedures in effect from time to time.
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(b) Bonus. During the Employment Period, the Executive shall be eligible
to earn an annual performance bonus in an amount determined at the discretion of
the Board or the Compensation Committee for each fiscal year. It is the
intention of the parties hereto that the Company 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 (it being understood and agreed that the target bonus
shall neither be considered a floor nor a ceiling with respect to the actual
amount of the annual bonus that is paid to the Executive in any period), 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 one hundred percent
(100%) of the Base Salary, provided that in view of GlobespanVirata's pre-merger
calendar fiscal year and the timing of the Effective Date the target bonus for
the fiscal year ending October 1, 2004 shall be multiplied by a fraction, the
numerator of which is the number of days in such fiscal year after December 31,
2003 and the denominator of which is 365. 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.
(c) Equity Compensation. (i) On or about the Effective Date, the Company
shall grant to the Executive options to purchase 600,000 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.
Future annual option grants shall be determined at the discretion of the Board
or the Compensation Committee, with the amount of the annual option grant to be
based on competitive market levels.
(ii) On or about the Effective Date, the Company shall grant to the
Executive options to purchase 450,000 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 Effective Date.
(d) Benefits. During the Employment Period, the Executive will be entitled
to all employee benefits and perquisites (including health, welfare, life
insurance, pension and incentive plans and other arrangements) made available to
similarly situated executives of the Company. Nothing contained in this
Agreement shall prevent the Company from terminating plans, changing carriers or
effecting modifications in employee benefits coverage for the Executive as long
as such modifications are Company-wide modifications that affect all similarly
situated employees of the Company.
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(e) Vacation; Holidays. During the Employment Period, the Executive shall
be entitled to all public holidays observed by the Company and vacation days in
accordance with the applicable vacation policies for senior executives of the
Company, which vacation days shall be taken at a reasonable time or times.
(f) Withholding Taxes and Other Deductions. To the extent required by law,
the Company shall withhold from any payments due to the Executive under this
Agreement any applicable federal, state or local taxes and such other deductions
as are prescribed by law.
6. Expenses. The Executive is expected and is authorized, subject to the
business expense policies as determined by the Company, to incur reasonable
expenses in the performance of the Executive's duties hereunder, including the
costs of entertainment, travel, and similar business expenses. The Company shall
promptly reimburse the Executive for all such expenses upon periodic
presentation by the Executive of an accounting of such expenses on terms
applicable to senior executives of the Company.
7. Confidentiality; Work Product.
(a) Information. The Executive acknowledges that the information,
observations and data obtained by the Executive concerning the business and
affairs of the Company and its Affiliates and their predecessors during the
course of the Executive's performance of services for, or employment with, any
of the foregoing persons (whether or not compensated for such services) are the
property of the Company and its Affiliates, including information concerning
acquisition opportunities in or reasonably related to the business or industry
of the Company or its Affiliates and their predecessors of which the Executive
becomes aware during such period. Therefore, the Executive agrees that the
Executive will not at any time (whether during or after the Employment Period)
disclose to any unauthorized person or, directly or indirectly, use for the
Executive's own account, any of such information, observations, data or any Work
Product (as defined below) or Copyrightable Work (as defined below) without the
Board's consent, unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a direct or
indirect result of the Executive's acts or omissions to act or the acts or
omissions to act of other senior or junior management employees of the Company
and its Affiliates. The Executive agrees to deliver to the Company at the
termination of the Executive's employment, or at any other time the Company may
request in writing (whether during or after the Employment Period), all
memoranda, notes, plans, records, reports and other documents, regardless of the
format or media (and copies thereof), relating to the business of the Company
and its Affiliates and their predecessors (including, without limitation, all
acquisition prospects, lists and contact information) which the Executive may
then possess or have under the Executive's control.
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(b) Intellectual Property. The Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, trade secrets, know-how, ideas, computer programs, and all similar or
related information (whether or not patentable) that relate to the actual or
anticipated business, research and development or existing or future products or
services of the Company or its Affiliates and their predecessors that are
conceived, developed, made or reduced to practice by the Executive while
employed by the Company or any of its predecessors ("Work Product") belong to
the Company, and the Executive hereby assigns, and agrees to assign, all of the
Executive's rights, title and interest in and to the Work Product to the
Company. Any copyrightable work ("Copyrightable Work") prepared in whole or in
part by the Executive in the course of the Executive's work for any of the
foregoing entities shall be deemed a "work made for hire" under the copyright
laws, and the Company shall own all rights therein. To the extent that it is
determined, by any authority having jurisdiction, that any such Copyrightable
Work is not a "work made for hire," the Executive hereby assigns and agrees to
assign to the Company all the Executive's rights, title and interest, including,
without limitation, copyright in and to such Copyrightable Work. The Executive
shall promptly disclose such Work Product and Copyrightable Work to the Board
and perform all actions reasonably requested by the Board (whether during or
after the Employment Period) to establish and confirm the Company's ownership
(including, without limitation, assignments, consents, powers of attorney and
other instruments).
(c) Enforcement. The Executive acknowledges that the restrictions
contained in this Section 7 are reasonable and necessary, in view of the nature
of the Company's business, in order to protect the legitimate interests of the
Company, and that any violation thereof would result in irreparable injury to
the Company. Therefore, the Executive agrees that in the event of a breach or
threatened breach by the Executive of the provisions of this Section 7, the
Company shall be entitled to obtain from any court of competent jurisdiction,
preliminary or permanent injunctive relief restraining the Executive from
disclosing or using any such confidential information. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach, including, without limitation,
recovery of damages from the Executive.
8. Termination of Employment. Any termination of the Employment Period by
the Company or the Executive shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 12. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon,
if any, and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employment Period under the
provision so indicated. Termination of the Employment Period shall take effect
on the Date of Termination. The Employment Period shall be terminated under the
following circumstances:
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(a) Death. The Employment Period shall terminate upon the Executive's
death;
(b) By the Company. The Company may terminate the Employment Period (i) if
the Executive shall have been unable to perform all of the Executive 's duties
hereunder by reason of illness, physical or mental disability or other similar
incapacity, which inability shall continue for more than three consecutive
months, or any six months in a twelve-month period (a "Disability"); or (ii)
with or without Cause; provided, however, that with respect to any termination
by the Company during the first two years after the Effective Date, any
purported termination by the Company of the Executive's employment hereunder for
any reason shall only be effective upon the affirmative vote of directors
constituting at least seventy-five percent of the then current members of the
full Board, after a duly constituted meeting of the Board held to consider such
matter, with reasonable advance notice to the Executive that such Board meeting
is to occur, and with an opportunity provided to the Executive to be represented
at such Board meeting with counsel (and, after such period, such termination
shall be effectuated upon a simple majority vote of the Board);
(c) By the Executive. The Executive may terminate the Employment Period at
any time for Good Reason or without Good Reason; or
(d) Non-Renewal. The Employment Period may terminate pursuant to the terms
of Section 2.
9. Compensation upon Termination.
(a) Death. If the Employment Period terminates as a result of the
Executive's death, the Company shall promptly pay to the Executive's estate, or
as may be directed by the legal representatives of such estate, after the Date
of Termination any accrued but unpaid Base Salary through the Date of
Termination and all other unpaid amounts, if any, which the Executive has
accrued and is entitled to as of the Date of Termination in connection with any
fringe benefits or under any bonus or incentive compensation plan or program of
the Company pursuant to Sections 5(b), (c) and (d), and the Company shall have
no further obligations to the Executive under this Agreement or otherwise (other
than pursuant to any employee benefit plan and any life insurance, death in
service or other equivalent policy for the benefit of the Executive).
(b) Disability. If the Company terminates the Employment Period because of
the Executive's Disability, the Company shall promptly pay to the Executive
after the Date of Termination any accrued but unpaid Base Salary through the
Date of Termination and all other unpaid amounts, if any, which the Executive
has accrued and is entitled to as of the Date of Termination in connection with
any fringe benefits or under any bonus or
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incentive compensation plan or program of the Company pursuant to Sections 5(b),
(c) and (d), and the Company shall have no further obligations to the Executive
under this Agreement or otherwise (other than pursuant to any employee benefit
plan and any disability or other medical insurance policy for the benefit of the
Executive).
(c) By the Company for Cause; By the Executive Without Good Reason. If the
Company terminates the Employment Period for Cause or if the Executive
terminates the Employment Period without Good Reason, the Company shall promptly
pay to the Executive after the Date of Termination any accrued but unpaid Base
Salary through the Date of Termination and all other unpaid amounts, if any,
which the Executive has accrued and is entitled to as of the Date of Termination
in connection with any fringe benefits or under any bonus or incentive
compensation plan or program of the Company pursuant to Sections 5(b), (c) and
(d), and other than pursuant to any employee benefit plan, the Company shall
have no further obligations to the Executive under this Agreement.
(d) By the Company Without Cause; By the Executive for Good Reason. If the
Company terminates the Employment Period other than for Cause, Disability or
death, or the Executive terminates the Employment Period for Good Reason, (i)
the Company shall promptly pay to the Executive after the Date of Termination a
cash lump sum equal to (A) any accrued but unpaid Base Salary through the Date
of Termination and all other unpaid amounts, if any, which the Executive has
accrued and is entitled to as of the Date of Termination; (B) the product of (I)
100% of the Executive's target bonus for the fiscal year in which the
termination of employment occurs times (II) a fraction, the numerator of which
is the number of days of the then current fiscal year that have elapsed prior to
the Date of Termination, and the denominator of which is 365; (C) an amount
equal to the product of (I) the Base Salary and (II) two; (D) an amount equal to
the product of (I) the Executive's target bonus for the fiscal year in which
such termination of employment occurs and (II) two; and (E) an additional
payment of $500,000; (ii) the Company shall continue to provide welfare benefits
pursuant to Section 5(d) to the Executive for the twelve-month period commencing
on the Date of Termination (or, to the extent such benefits cannot be so
provided, the Company shall make a cash payment to the Executive in an amount
sufficient (on an after-tax basis) to allow the Executive to obtain comparable
benefits for such period), unless and until the Executive receives any such or
similar benefits while employed in any capacity by any other employer during
such twelve-month period; and (iii) all unvested options to purchase Company
Common Stock and shares of restricted Company Common Stock held by the Executive
shall become fully vested and, in the case of options, fully exercisable on the
Date of Termination, and the Executive shall be entitled to exercise all such
options for three years following the Date of Termination. Other than as set
forth herein, the Company shall have no further obligations to the Executive
under this Agreement or otherwise (other than pursuant to any employee benefit
plan).
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If requested by the Company, the Executive will execute a customary
general release in a form satisfactory to the Company in furtherance of this
Agreement and as a condition to the receipt of any benefits under this Section
9(d). Nothing in this Section 9(d) shall be deemed to operate or shall operate
as a release, settlement or discharge of any liability of the Executive to the
Company or others for any action or omission by the Executive, including without
limitation any actions which formed the basis for termination of the Executive's
employment for Cause.
(e) Liquidated Damages. The parties acknowledge and agree that damages
suffered by the Executive as a result of termination by the Company without
Cause shall be extremely difficult or impossible to establish or prove, and
agree that the payments and benefits provided pursuant to Section 9(d) shall
constitute liquidated damages for any breach of this Agreement by the Company
through the Date of Termination. The Executive agrees that, except for such
other payments and benefits to which the Executive may be entitled as expressly
provided by the terms of this Agreement or any applicable Company plan, such
liquidated damages shall be in lieu of all other claims that the Executive may
make with respect to termination of the Executive's employment, the Employment
Period or any such breach of this Agreement. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement, and, except as specifically provided in clause (ii) of Section 9(d),
such amounts shall not be reduced whether or not the Executive obtains other
employment.
10. Noncompetition and Nonsolicitation.
(a) Noncompetition. The Executive acknowledges that in the course of the
Executive's employment with the Company and its Affiliates and their
predecessors, the Executive has and will continue to become familiar with the
trade secrets of, and other confidential information concerning, the Company and
its Affiliates and their predecessors, that the Executive's services will be of
special, unique and extraordinary value to the Company and its Affiliates and
that the Company's ability to accomplish its purposes and to successfully pursue
its business plan and compete in the marketplace depends substantially on the
skills and expertise of the Executive. Therefore, and in further consideration
of the compensation being paid to the Executive hereunder, the Executive agrees
that, during the Employment Period and for a period of twelve months following
the Executive's termination of employment with the Company for any reason other
than a termination of employment in which Section 9(d) hereof applies (in which
case the restrictions set forth in this Section 10 shall not apply) (the
"Restricted Period"), the Executive shall not directly or indirectly own,
manage, control, participate in, consult with, render services for, or in any
manner engage in any business competing with the businesses of the Company or
its Affiliates, in any country where the Company or its Affiliates conducts
business; provided, however, that passive investments amounting to
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no more than three percent of the voting equity of a business shall not be
prohibited hereby.
(b) Nonsolicitation. During the Restricted Period, the Executive shall not
directly or indirectly through another entity (i) induce or attempt to induce
any employee of the Company or any Affiliate to leave the employ of the Company
or such Affiliate, or in any way willfully interfere with the relationship
between the Company or any Affiliate and any employee thereof; or (ii) induce or
attempt to induce any customer, supplier, licensee or other business relation of
the Company or any Affiliate to cease doing business with the Company or such
Affiliate, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any
Affiliate.
(c) Enforcement. If, at the time of enforcement of this Section 10, a
court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum duration,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum
duration, scope and area permitted by law. If the provisions of this Section 10
shall be deemed illegal by any jurisdiction, the provisions in this Section 10
shall be deemed ineffective within such jurisdiction. Because the Executive's
services are unique and because the Executive has access to confidential
information, the parties hereto agree that money damages would be an inadequate
remedy for any breach of any provision of this Agreement. Therefore, in the
event of a breach or threatened breach by the Executive of any provision of this
Agreement, the Company may, in addition to other rights and remedies existing in
its favor, apply to any court of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce, or prevent any violations
of, the provisions hereof (without posting a bond or other security).
11. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and except
as set forth below, in the event it shall be determined that any payment or
distribution by the Company or its Affiliates to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 11) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties imposed with
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respect to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 11(a), if it shall be determined that the Executive
is entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of
the greatest amount (the "Reduced Amount") that could be paid to the Executive
such that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 11(c), all determinations
required to be made under this Section 11, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by Deloitte &
Touche LLP or such other nationally recognized public accounting firm agreed to
by the Executive and the Company (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the event that
the Accounting Firm is serving as an accountant or auditor for the individual,
entity or group (other than the Company) effecting the change of control
resulting in an Excise Tax, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 11, shall be paid
by the Company to the Executive within five days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting Firm shall
be binding upon the Company and the Executive. As a result of the 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 Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 11(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim
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is requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which it gives such notice
to the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies the Executive
in writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) give the Company any information reasonably requested by the Company
relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such
claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 11(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and ▇▇▇ for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and ▇▇▇ for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Further, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be
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payable hereunder and the Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 11(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 11(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 11(c), a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
12. Notices. All notices, demands, requests or other communications
required or permitted to be given or made hereunder shall be in writing and
shall be delivered, telecopied or mailed by first class registered or certified
mail, postage prepaid, addressed as follows:
(a) If to the Company:
Conexant Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, Senior Vice President, Chief Legal
Officer and Secretary
(b) If to the Executive:
at the address on the books and records of the Company at the time of such
notice, or to such other address as may be designated by either party in a
notice to the other. Each notice, demand, request or other communication that
shall be given or made in the manner described above shall be deemed
sufficiently given or made for all purposes three days after it is deposited in
the U.S. mail, postage prepaid, or at such time as it is delivered to the
addressee (with the return receipt, the delivery receipt, the answer back or the
affidavit of messenger being deemed conclusive evidence of such delivery) or at
such time as delivery is refused by the addressee upon presentation.
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13. Severability. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
the other provisions of this Agreement, which shall remain in full force and
effect.
14. Survival. It is the express intention and agreement of the parties
hereto that the provisions of Sections 7, 9, 10, 11 and 12 shall survive the
termination of employment of the Executive. In addition, all obligations of the
Company to make payments hereunder shall survive any termination of this
Agreement on the terms and conditions set forth herein.
15. Assignment. The rights and obligations of the parties to this
Agreement shall not be assignable or delegable, except that (i) in the event of
the Executive's death, the personal representative or legatees or distributees
of the Executive's estate, as the case may be, shall have the right to receive
any amount owing and unpaid to the Executive hereunder; and (ii) the rights and
obligations of the Company hereunder shall be assignable and delegable in
connection with any subsequent merger, consolidation or sale of all or
substantially all of the assets of the Company and any similar event with
respect to any successor corporation. Notwithstanding anything herein to the
contrary, the rights and obligations of the Company hereunder shall inure to the
benefit of, and shall be binding upon, any successor to the Company or its
business by merger or otherwise, whether or not there is an express assignment,
delegation or assumption of such rights and obligations.
16. Binding Effect. Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon the parties hereto and shall
inure to the benefit of the parties and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.
17. Amendment; Waiver. This Agreement shall not be amended, altered or
modified except by an instrument in writing duly executed by the parties hereto.
No waiver by either of the parties hereto of a breach of or a default under any
of the provisions of this Agreement shall thereafter be construed as a waiver of
any subsequent breach or default of a similar nature. The failure of either of
the parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder shall not be construed
as a waiver of any such provisions, rights or privileges hereunder, or a waiver
of any subsequent breach or default of a similar nature.
18. Headings. Section and subsection headings contained in this Agreement
are inserted for convenience of reference only, shall not be deemed to be a part
of this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
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19. Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of New Jersey (but not
including the choice of law rules thereof).
20. Entire Agreement. This Agreement constitutes the entire agreement
between the parties respecting the employment of the Executive and replaces and
supersedes the Current Agreements upon commencement of the Employment Period,
there being no representations, warranties or commitments between the parties
except as set forth herein. The Executive agrees and acknowledges that following
the Effective Time, the Executive shall have no rights under the Current
Agreements and shall have no claim against the Company or any of its Affiliates
or predecessors with respect to the Current Agreements.
21. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
22. Legal Expenses. The Company shall pay or reimburse the Executive for
reasonable attorneys' fees incurred by the Executive in connection with the
negotiation of this Agreement and the Executive's commencement of employment
hereunder.
23. Definitions.
"Affiliate" means any entity from time to time designated by the Board and
any other entity directly or indirectly controlling or controlled by or under
common control with the Company. For purposes of this definition, "control"
means the power to direct the management and policies of such entity, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Board" means the board of directors of the Company.
"Cause" means (i) the Executive's indictment or conviction of or entering
into a plea of guilty or no contest to a felony or a crime involving moral
turpitude or the intentional commission of any other act or omission involving
dishonesty or fraud that is materially injurious to the Company or any of its
Affiliates; (ii) the Executive's substantial and repeated failure to perform
duties of the office held by the Executive as reasonably directed by the Board,
if such failure is not cured within thirty days after the Executive receives
written notice thereof; (iii) gross negligence or willful misconduct in the
performance of the Executive's duties which materially injures the Company or
its
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reputation; or (iv) the Executive's willful breach of the material covenants of
this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Date of Termination" means (i) if the Executive's employment is
terminated by the Executive's death, the date of the Executive's death; (ii) if
the Executive's employment is terminated because of the Executive's Disability,
thirty days after Notice of Termination, provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during such thirty-day period; (iii) if the Executive's employment is terminated
by the Company for Cause, the date specified in the Notice of Termination; or
(iv) if the Executive's employment is terminated during the Employment Period
for any other reason, the date on which Notice of Termination is given.
"Good Reason" means, in the absence of a written consent of the Executive:
(i) the assignment to the Executive (other than an isolated, insubstantial or
inadvertent assignment not occurring in bad faith) of any duties inconsistent
with, or material reduction in or material change of, the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 3 and which is not
remedied by the Company within ten days after receipt of notice thereof given by
the Executive; (ii) any failure by the Company to comply with any of the
provisions of Section 5, other than an isolated, insubstantial or inadvertent
failure not occurring in bad faith and which is remedied by the Company within
ten days after receipt of notice thereof given by the Executive; (iii) the
Company's requiring the Executive to be based at any office or location more
than fifty miles from that identified in Section 4; or (iv) the Company's
delivery of a Notice of Non-Renewal to the Executive.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or
have caused this Agreement to be duly executed on their behalf, as of the day
and year first hereinabove written.
CONEXANT SYSTEMS, INC.
By: /s/ Conexant Systems, Inc.
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President,
Human Resources
▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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