EXHIBIT 10.56
AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT
This Amended and Restated Change in Control Severance Agreement (the
"Agreement") is entered into as of December 23, 2008 (the "Effective Date"),
by and between ------------------ ("Executive") and Ramtron International
Corporation, a Delaware corporation (the "Company").
Whereas, the Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its stockholders to
assure that the Company will have the continued dedication of its executive
and senior officers notwithstanding the possibility or occurrence of a Change
in Control (as defined below) of the Company;
Whereas, the Board also believes that it is desirable to encourage
Executive's full attention and dedication to the Company and alleviate
uncertainty, and to provide Executive with compensation and benefits in the
event of a Change in Control and Executive's termination of employment under
the circumstances described in this Agreement;
Whereas, the Board and the Executive entered into a Change in Control
Severance Agreement dated August 25, 2007 (the "Prior Change in Control
Agreement"); and
Whereas, the Board and the Executive desire to amend the Prior Change in
Control Agreement to account for the effect of Section 409A of the Internal
Revenue Code ("Section 409A of the Code");
Now, therefore, in consideration of the agreements contained herein and other
good and valuable consideration, the receipt of which is mutually
acknowledged, Executive and the Company hereby agree as follows:
1. Definitions. The following definitions shall apply for all purposes
under this Agreement:
(a) Affiliate. "Affiliate" shall have the meaning assigned to such term in
Rule 12b-2 promulgated under the Exchange Act.
(b) Change in Control. "Change in Control" means the consummation of a
transaction or series of transactions resulting in one or more of the
following events:
(i) The acquisition, directly or indirectly, in one or more
transactions, by any individual, person or group of persons,
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act),
individually or in the aggregate, of fifty percent (50%) or more
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of either (1) the outstanding shares of common stock of the
Company or (2) the combined voting power of the Company's
outstanding securities entitled to vote generally in the
election of directors; provided, however, that the following
transactions shall not constitute, or be deemed to cause a Change
in Control of the Company: (A) any increase in percentage
ownership by a Person to fifty percent (50%) or more resulting
solely from any acquisition of shares directly from the Company
or any acquisition of shares by the Company that reduces the
number of shares outstanding; or (B) any Business Combination
described in clauses (A) and (B) of Section 1(a)(iii) below;
(ii) A change in the composition of the Board of the Company as a
result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors
who either: (A) are directors of the Company as of the Effective
Date hereof; (B) are elected, or nominated for election, to the
Board of the Company with the affirmative vote of at least a
majority of the directors of the Company who are Incumbent
Directors described in (A) above at the time of such election or
nomination; or (C) are elected, or nominated for election, to the
Board of the Company with the affirmative votes of at least a
majority of the directors of the Company who are Incumbent
Directors described in (B) above at the time of such election or
nomination. Notwithstanding the foregoing, "Incumbent Directors"
shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating
to the election of directors to the Company;
(iii) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of
the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (A) no Person, individually
or in the aggregate, nor any corporation resulting from such
Business Combination or any employee benefit plan (or related
trust) sponsored or maintained by the Company or such corporation
resulting from such Business Combination beneficially owns,
directly or indirectly, individually or in the aggregate, fifty
percent (50%) or more of the then outstanding shares of common
stock of the corporation resulting from such Business Combination
or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination, and (B) at
least a majority of the members of the Board of the corporation
resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such
Business Combination; or
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(iv) Approval by the stockholders of the Company of the liquidation or
dissolution of the Company.
(c) Cause. "Cause" shall mean any of the actions relevant to Executive
committed by Executive (or omitted to be done by Executive) that occur
on or after the Effective Date:
(i) A conviction of or plea of "guilty" or "no contest" to a felony
under the laws of the United States or any state thereof;
(ii) Conviction of any crime constituting fraud, theft or
misappropriation of Company property, or of any other crime that
materially injures the Company's business or reputation;
(iii) Any material violation or breach of the Company's Code of
Business Conduct and Ethics, as determined by the Board;
(iv) Willful or intentional failure by Executive to materially comply
with a specific direction by the Board; or
(v) Any serious misconduct or negligence in the course of Executive's
employment, as determined by the Board.
(d) Change in Control Period. "Change in Control Period" means the twelve
(12) month period immediately following the date of a Change in Control
under this Agreement.
(e) Control. "Control" shall have the meaning assigned to such term in Rule
12b-2 promulgated under the Exchange Act.
(f) Good Reason. "Good Reason" shall mean, without the express written
consent of Executive, the occurrence after a Change in Control of any of
the following circumstances, unless such circumstances are fully
corrected prior to the date of termination specified in a notice of
termination by Executive:
(i) the material diminishment of Executive's authority, duties or
responsibilities, or the assignment to Executive of any duties
inconsistent with Executive's authority, duties or
responsibilities from those in effect immediately prior to the
Change in Control;
(ii) a reduction in Executive's base salary as in effect immediately
prior to the Change in Control, or diminishment of Executive's
bonus opportunity at the Company;
(iii) a reduction by the Company in the kind or level of employee
benefits to which Executive was entitled to immediately prior to
such reduction with the result that Executive's overall benefits
package provided by the Company is materially reduced;
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(iv) the Company requiring Executive to be based at any office or
location more than 50 miles from the Company's principal
headquarters prior to the Change in Control event, except for
travel reasonably required in the performance of Executive's
responsibilities; or
(v) the failure of the Company to obtain agreement from any successor
to assume and agree to perform this Agreement.
(g) Termination Date. "Termination Date" means (i) the date on which the
Executive's employment is terminated by the Company or (ii) the date on
which the Executive terminates his employment with the Company.
(h) Total Disability. "Total Disability" of Executive shall be deemed to
occur on the one-hundred and eightieth (180th) consecutive, or non-
consecutive calendar day, within any twelve (12) month period that
Executive is unable to perform the duties commensurate with Executive's
position with the Company due to physical or mental disability or
illness.
2. Severance Payment and Other Benefits.
(a) Eligibility for Severance Payment. Executive shall be entitled to
receive the severance payment (the "Severance Payment") and benefits set
forth in this Section 2 from the Company if any of the below events
occurs during the Change in Control Period:
(i) Executive resigns his employment with the Company for Good
Reason, which notice must be given by Executive to the Board
within seventy-five (75) days following the occurrence of the
event giving rise to Good Reason for termination;
(ii) The Company terminates Executive's employment with the Company
for any reason other than Cause;
(iii) In the event of Executive's death; or
(iv) In the event of Executive's "separation from service" (within the
meaning of Section 409A of the Code), due to Executive's Total
Disability.
Notwithstanding anything in this Agreement to the contrary, if a Change
in Control occurs and not more than 60 days prior to the date on which
the Change in Control occurs, Executive's employment with the Company is
terminated by the Company, such termination of employment will be deemed
to be a termination of employment after a Change in Control for purposes
of this Agreement if Executive reasonably demonstrates that such
termination of employment (i) was at the request of a third party who
has taken steps reasonably calculated to effect a Change in Control, or
(ii) otherwise arose in connection with or in anticipation of such
Change in Control.
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(b) Severance Payment.
(i) For all purposes under this Agreement, upon Executive becoming
eligible for the Severance Payment as provided above in Section
2(a), the Company shall pay to Executive in cash, subject to
Sections 2(g) and 2(h), an amount equal to (A) Executive's base
salary multiplied by two (2) plus (B) an amount equal to the
greater of (1) 200% of the bonus paid to Executive for the
preceding fiscal year or (2) 200% of the target bonus for
Executive approved by the Board for the fiscal year during which
the Change in Control occurs plus (C) an amount equal to the
difference between (1) the Company's reasonable determination of
present value of the continuation of the benefits described in
Section 2(e) for 24 months and (2) the Company's reasonable
determination of the present value of the benefits Executive may
receive under Section 2(e)(ii).
(ii) The Severance Payment shall be paid, subject to Sections 2(g) and
(h), in equal monthly installments over the twelve (12) month
period commencing on the sixty-first (61st) day after the
Executive's Termination, provided that the Executive has signed
(and not revoked) the Release.
(c) Accrued and Unpaid Compensation. In addition to the Severance Payment
provided above, Executive will receive a lump cash payment on the
Termination Date, of any accrued and unpaid salary through the
Termination Date and/or bonuses earned for any completed performance
period but not yet paid as of the Termination Date and any earned,
unused vacation time through the Termination Date. Any accrued and
unpaid bonuses that would be considered deferred compensation under
Section 409A will be subject to Section 2(g) and 2(h) of this Agreement
and will be paid pursuant to the schedule set forth in 2(b)(ii) of this
Agreement.
(d) Other Compensation Programs. A termination of employment as described
in this Section 2 will not affect any rights that Executive may have
pursuant to any other agreement, policy, plan, program or arrangement of
the Company providing for benefits, which rights will be governed by the
terms thereof. Notwithstanding any provision to the contrary in any
applicable plan, program or agreement, upon the occurrence of a Change
in Control, all restricted stock or other equity incentive awards held
by Executive will become fully vested and all stock options held by
Executive will become fully exercisable.
(e) Health Coverage. If Executive is entitled to the Severance Payment
under Section 2(b), the Company shall reimburse Executive for the full
cost of any group health continuation coverage that the Company is
otherwise required to offer under the Consolidated Omnibus Budget
Reconciliation Act of 1986 ("COBRA") until the earlier of the date that:
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(i) Executive becomes covered by health coverage offered by another
employer that does not have a preexisting condition limitation or
exclusion with respect to the Executive, or
(ii) Is eighteen months (18) months after the Termination Date.
As long as the Company's group health plan is fully insured, the Company
will provide coverage to the Executive on a tax-free basis in accordance
with this Section 2(e). If the health plan is or becomes self-insured,
the Executive will be required to purchase the COBRA coverage in
accordance with the terms of the plan and the Company will, subject to
Sections 2(g) and (h), reimburse the Executive for the premiums paid in
accordance with this Section 2(e) on an after-tax basis. Such
reimbursements will be made, subject to Sections 2(g) and (h), within
five (5) business days after delivery of Executive's written requests
for payment, accompanied by such evidence of payment of the COBRA
premiums as the Company may reasonably require, provided, however, that
any such reimbursement shall be for expenses incurred during the period
of subsidized coverage provided in this Section 2(e) and that such
reimbursements shall be made no later than December 31 of the
Executive's taxable year following the taxable year in which the
premiums were paid by the Executive. In no event will the amount of
expenses eligible for reimbursement under this Section 2(e) by the
Company in one year affect the amount of expenses eligible for
reimbursement under this Section 2(e) to be provided in any other
taxable year.
(f) Conditions. All payments and benefits provided under this Section 2
(other than Section 2(c)) are conditioned on Executive's continuing
compliance with this Agreement (including, but not limited to Section 4
hereof). No payments shall be made under this Section 2 (other than
Section 2(c)) unless the Executive, on or before the 60th day following
the Executive's Termination Date, (a) signs and returns the Release of
Claims and Covenant not to ▇▇▇ substantially in the form provided in
Exhibit A (the "Release Agreement") within the number of days that the
Company determines is required under applicable law, but in no event
more than forty-five (45) days after the Company delivers the Release
Agreement to the Executive and (b) does not revoke such Release
Agreement within the time period provided therein, such time period not
to exceed seven (7) days. If the Executive becomes entitled to payments
under Section 2 hereof (other than Section 2(c)), the Company shall
deliver to the Executive a copy of the Company's standard form of
Release Agreement within seven (7) days of the Executive's Termination
Date.
(g) Termination as a "Separation from Service". If the Executive is
entitled to payment pursuant to Section 2(a)(i), (ii) or (iv) or the
last sentence of Section 2(a) of this Agreement but has not experienced
a "separation from service" within the meaning of Section 409A of the
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Code, the payments will not begin, subject to Section 2(h), until the
later of (i) the payment date identified in Section 2(b) or (ii) the
date first to occur of the Executive's "separation from service" within
the meaning of Section 409A of the Code, a "change of control" of the
Company within the meaning of Section 409A of the Code, the Executive's
"disability" within the meaning of Section 409A of the Code or the
Executive's death.
(h) Delay in Payment Due to "Specified Employee" Status. Notwithstanding
the foregoing, if the Executive is a "specified employee" (as determined
pursuant to procedures adopted by the Company in compliance with Section
409A of the Code) on the date of the Executive's "separation from
service" with the Company within the meaning of Section 409A(a)(2)(A)(i)
of the Code, and any payment, reimbursement, or the provision of any
benefit under this Agreement is made on account of the Executive's
"separation from service" (within the meaning of Section
409A(a)(2)(A)(i) of the Code) and would constitute a "deferral of
compensation" under Section 409A of the Code, then the payment,
reimbursement, or the provision of any benefit to the Executive (or the
Executive's beneficiary) shall commence on the earlier of (i) the first
business day of the seventh month following the Executive's "separation
from service" within the meaning of Section 409A(a)(2)(A)(i) of the
Code, or (iii) the Executive's death. The total amount of monthly
installment payments and reimbursements or the provision of any benefit
to which such Executive would otherwise be entitled during the six-month
period following the date of such "separation from service" within the
meaning of Section 409A(a)(2)(A)(i) shall also be paid on the first
business day of the seventh month following such "separation from
service" (or, if earlier, the date of death).
3. Certain Additional Payments by the Company.
(a) Definitions. The following terms shall have the following meanings for
purposes of this Section 3:
(i) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(ii) "Excise Tax" shall mean the excise tax imposed by Section 4999 of
the Code, together with any interest or penalties imposed with
respect to such excise tax.
(iii) "Parachute Value" of a Payment shall mean the present value as of
the date of the change of control for purposes of Section 280G of
the Code of the portion of such Payment that constitutes a
"parachute payment" under Section 280G(b)(2), as determined by
the accounting firm for purposes of determining whether and to
what extent the Excise Tax will apply to such Payment.
(iv) "Payment" shall mean any payment, distribution or other benefit
in the nature of compensation (within the meaning of Section
280G(b)(2) of the Code) to or for the benefit of Executive to be
paid or provided pursuant to this Agreement or any other
agreement contingent upon a change in control.
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(v) "Safe Harbor Amount" shall mean 2.99 times Executive's "base
amount," within the meaning of Section 280G(b)(3) of the Code.
(vi) "Value" of a Payment shall mean the economic present value of a
Payment as of the date of the Change in Control for purposes of
Section 280G of the Code, as determined by the accounting firm
using the discount rate required by Section 280G(d)(4) of the
Code.
(b) Anything in this Agreement to the contrary notwithstanding and except as
set forth below, in the event it shall be determined that any Payment
would be subject to the Excise Tax, then Executive shall be entitled to
receive an additional payment (the "Excise Tax Gross-Up Payment") in an
amount such that, after payment by Executive of all taxes (and any
interest or penalties imposed with 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 Excise Tax
Gross-Up Payment, Executive retains an amount of the Excise Tax Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding any other provision of this Section 3 to the contrary,
all taxes and expenses described in this Section 3 shall be paid or
reimbursed within fifteen (15) days after the Executive submits evidence
of the incurrence of such taxes and/or expenses, provided that in all
events such payment or reimbursement shall be made on or before the last
day of the year following (a) the year in which the applicable taxes are
remitted or expenses are incurred or (b), in the case of reimbursement
of expenses incurred due to a tax audit or litigation in which there is
no remittance of taxes, the year in which the audit is completed or
there is a final or nonappealable settlement or other resolution of the
litigation, in accordance with Treasury Regulation Section 1.409A-
3(i)(1)(v). The Executive shall be required to submit all requests for
payment or reimbursement no later than thirty (30) days prior to the
last day for payment or reimbursement described in the preceding
sentence. Any expense paid or reimbursed by the Company in one taxable
year in no event will affect the amount of expenses required to be paid
or reimbursed by the Company in any other taxable year.
(c) Subject to the provisions of Section 3(d), all determinations required
to be made under this Section 3, including whether and when an Excise
Tax Gross-Up Payment is required, the amount of such Excise Tax Gross-Up
Payment and the assumptions to be utilized in arriving at such
determination, shall be made by such nationally recognized accounting
firm as may be selected by the Company and reasonably acceptable to
Executive; provided, that the accounting firm's determination shall be
made based upon "substantial authority" within the meaning of Section
6662 of the Code. The accounting firm shall provide detailed supporting
calculations both to the Company and Executive as is requested by the
Company. All fees and expenses of the accounting firm shall be borne
solely by the Company. Any Excise Tax Gross-Up Payment, as determined
pursuant to this Section 3, shall be paid by the Company to Executive
within five days of the receipt of the accounting firm's determination.
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Any determination by the accounting firm shall be binding upon the
Company and Executive, unless the Company obtains an opinion of outside
legal counsel, based upon at least "substantial authority" within the
meaning of Section 6662 of the Code, reaching a different determination,
in which event such legal opinion shall be binding upon the Company and
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 Excise Tax Gross-Up
Payments will not have been made by the Company that should have been
made ("Underpayment"), consistent with the calculations required to be
made hereunder. In the event Executive is required to make a payment of
any Excise Tax after the initial determination, 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 Executive. Notwithstanding the foregoing, no Excise Tax
Gross-Up Payment shall be paid later than December 31 of the Executive's
taxable year next following the Executive's taxable year in which the
Executive pays the taxes (including the Excise Tax and any interest or
penalties imposed with respect to such taxes) related to such Excise Tax
Gross-Up Payment.
(d) 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 Excise Tax Gross-Up Payment. Such notification
shall be given as soon as practicable, but no later than 10 business
days after Executive is informed in writing of such claim. Executive
shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on
which Executive 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 Executive in writing prior to the
expiration of such period that the Company desires to contest such
claim, 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;
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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
Executive harmless, on an after-tax basis, for any Excise Tax or income
tax (including interest and penalties) imposed as a result of such
representation and payment of costs and expenses. Without limitation on
the foregoing provisions of this Section 3(d), the Company shall control
all proceedings taken in connection with such contest, and, at its sole
discretion, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the applicable taxing
authority in respect of such claim and may, at its sole discretion,
either direct Executive to pay the tax claimed and ▇▇▇ for a refund or
contest the claim in any permissible manner, and 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 Executive to pay such claim and ▇▇▇ for a
refund, the Company shall advance the amount of such payment to
Executive, on an interest-free basis, and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties) imposed with respect to such
advance or with respect to any imputed income in connection with such
advance; and provided, further, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of
Executive with respect to which such contested amount is claimed to be
due is limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with respect
to which the Excise Tax Gross-Up Payment would be payable hereunder, and
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.
(e) If, after the receipt by Executive of an Excise Tax Gross-Up Payment or
an amount advanced by the Company pursuant to Section 3(d), Executive
becomes entitled to receive any refund with respect to the Excise Tax to
which such Excise Tax Gross-Up Payment relates or with respect to such
claim, Executive shall (subject to the Company's complying with the
requirements of Section 3(d), if applicable) 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
Executive of an amount advanced by the Company pursuant to Section 3(d),
a determination is made that Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify
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 Excise Tax Gross-Up Payment required to be paid.
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(f) Notwithstanding any other provision of this Section 3, the Company may,
in its sole discretion, withhold and pay over to the Internal Revenue
Service or any other applicable taxing authority, for the benefit of
Executive, all or any portion of any Excise Tax Gross-Up Payment, and
Executive hereby consents to such withholding.
(g) Any other liability for unpaid or unwithheld Excise Taxes shall be borne
exclusively by the Company, in accordance with Section 3403 of the Code.
The foregoing sentence shall not in any manner relieve the Company of
any of its obligations under this Change in Control Severance Agreement.
4. Non-Competition Agreement. During the course of Executive's employment
with the Company, Executive has gained access to or knowledge of, or has
worked on the development or creation of, confidential and proprietary
information within the Restricted Field (as defined below), including: (a)
supplier and customer lists and supplier and customer-specific information;
(b) marketing plans and proposals; (c) product and process designs, formulas,
processes, plans, drawings and concepts; (d) research and development data
and materials, including those relating to the research and development of
products, materials or manufacturing and other processes; (e) financial and
accounting records; and (f) other information with respect to the Company and
its subsidiaries which if divulged to the Company's competitors would impair
the Company's ability to compete in the marketplace (such information is
collectively referred to as "Proprietary Information"). The "Restricted
Field," as used herein means the field of non-volatile memory technologies
that are novel, including, by way of example, FRAM, MRAM, RRAM, ovonics and
phase-change, but excluding FLASH and EEPROM.
Executive agrees that during his employment with the Company and, if
Executive has received a Severance Payment pursuant to this Agreement, for a
period of 24 months following termination of employment, Executive shall not
directly or indirectly engage in any business activity for the development,
production or sale of any product, material or process within the Restricted
Field, whether on Executive's own behalf or as an employee, consultant or
independent contractor of any other person or entity within the Americas,
Canada, Europe or the Asia Pacific region or otherwise utilize Proprietary
Information or his or her relationships with Company customers, suppliers or
others to engage or facilitate others to engage in any facet of the business
associated with the Restricted Field.
The non-competition covenant set forth above will not impose undue hardship
on Executive and is reasonable in both geographic scope and duration in view
of: (a) the Company's legitimate interest in protecting its Proprietary
Information, the disclosure of which to the Company's competitors would
substantially and unfairly impair the Company's ability to compete in the
marketplace or substantially and unfairly benefit the Company's competitors;
(b) the specialized knowledge and experience gained by Executive during the
course of Executive's employment with the Company; (c) the fact that the
services rendered by Executive on behalf of the Company were specialized,
unique and extraordinary; (d) the fact that the Company directly competes
within the Americas, Canada, Europe and the Asia Pacific region in the sale,
production and development of products, materials or processes; and (e) the
consideration, including the Severance Payment, provided by the Company to
Executive as provided herein.
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Executive shall not disclose or divulge Proprietary Information to any person
or entity at any time during the course of Executive's employment with the
Company or at any time thereafter, except as may be required in the ordinary
course and good-faith performance of Executive's employment with the Company.
At the time of termination of Executive's employment with the Company for any
reason, or at such time as the Company may request, Executive shall promptly
deliver or return, without retaining any copies, all Proprietary Information
in Executive's possession or control, whether in the form of computer-
generated documents or otherwise, and, pursuant to the Company's
instructions, shall erase, destroy or return all stored data, whether stored
on computer or otherwise, and shall not attempt to use or restore any such
data.
Following termination of Executive's employment, Executive will not employ,
hire, solicit, induce or identify for employment or attempt to employ, hire,
solicit, induce or identify for employment, directly or indirectly, any
employee(s) of the Company to leave his or her employment and become an
employee, consultant or representative of any other entity, including but not
limited to Executive's new employer, if any.
The non-competition and disclosure covenants set forth above are of a
special, unique, extraordinary and intellectual character, which gives them a
peculiar value, the loss of which cannot be reasonably or adequately
compensated for in damages in an action at law. A breach by Executive of the
provisions set forth in this Section 4 of this Agreement will cause the
Company great and irreparable injury and damage. Therefore, the Company
shall be entitled to the remedies of injunction, specific performance and
other equitable relief to prevent a breach of this Agreement by Executive.
This paragraph shall not, however, be construed as a waiver of any of the
rights which the Company may have for damages or otherwise.
5. Successors.
(a) Company's Successors. This Agreement shall inure to the benefit of and
be binding upon the Company and its successors and assigns. Any
successor (whether direct or indirect and whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the Company's
business and/or assets, shall be obligated to perform this Agreement,
and the Company shall require any such successor to assume expressly and
agree to perform this Agreement, in the same manner and to the same
extent as the Company would be required to perform it in the absence of
a succession. As used in this Agreement, "Company" shall mean the
Company as defined herein and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement
by operation of law, contract or otherwise.
(b) Executive's Successors. This Agreement and all rights of Executive
hereunder shall inure to the benefit of, and be enforceable by,
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, devisees and legatees.
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6. Legal Fees and Expenses/Funding of Benefits. It is the intent of the
Company that Executive not be required to incur legal fees and the related
expenses associated with the interpretation, enforcement or defense of
Executive's rights in connection with any dispute arising under this
Agreement because the cost and expense thereof would substantially detract
from the benefits intended to be extended to Executive hereunder.
Accordingly, if it should appear to Executive that the Company has failed to
comply with any of its obligations under this Agreement or in the event that
the Company or any other person takes or threatens to take any action to
declare this Agreement void or unenforceable, or institutes any proceeding
designed to deny, or to recover from, Executive the benefits provided or
intended to be provided to Executive hereunder, the Company irrevocably
authorizes Executive from time to time to retain counsel of Executive's
choice, at the expense of the Company as hereafter provided, to advise and
represent Executive in connection with any such dispute or proceeding.
Notwithstanding any prior attorney-client relationship between the Company
and such selected counsel, the Company irrevocably consents to Executive's
entering into an attorney-client relationship with such counsel, and in that
connection the Company and Executive agree that a confidential relationship
will exist between Executive and such counsel, provided, however, that this
consent shall not apply to any counsel with which the Company has an existing
attorney-client relationship, nor as to any counsel as to which the Company
previously had an attorney-client relationship and pursuant to which such
counsel may have received confidential information relating to the Company or
Executive's performance of this Agreement. The Company will pay and be
solely financially responsible for any and all attorneys' and related fees
and expenses incurred by Executive in connection with any of the foregoing,
provided, however, that in the event Executive shall be finally determined in
accordance with Section 7(g) to not be entitled to payments and benefits
under this Agreement, then Executive shall immediately repay to the Company
all attorneys' and related fees and expenses paid by the Company on
Executive's behalf pursuant to this Section 6. All reimbursements under this
Section 6 will be for expenses incurred during the Executive's lifetime.
Reimbursement will be made within ninety (90) days following the date the
Executive submits evidence of the incurrence of such expense, and in all
events prior to the last day of the calendar year following the calendar year
in which the Participant incurs the expense. In no event will the amount of
expenses reimbursed in one year affect the amount of expenses eligible for
reimbursement, or in-kind benefit to be provided, to the Participant in any
other taxable year.
7. Miscellaneous Provisions.
(a) 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 Executive, mailed notices shall be addressed to him at the home
address which he most recently communicated to the Company in writing.
In the case of the Company, mailed notices shall be addressed to Ramtron
International Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇, and all notices shall be directed to the attention of
its Corporate Secretary.
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(b) Amendment; Waiver; Remedies. No provision of this Agreement may be
amended, modified, waived or discharged unless the amendment,
modification, waiver or discharge is agreed to in writing and signed by
Executive (or Executive's personal or legal representative(s),
executor(s), administrator(s), successor(s), heir(s), distribute(s),
devisee(s) and legatee(s)) and by two (2) authorized officers of the
Company (other than 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.
Executive's or the Company's failure to insist upon strict compliance
with any provision of this Agreement or the failure to assert any right
of Executive or the Company may have hereunder, including the right of
Executive to terminate employment for any reason pursuant to Section
2(a) and therefore become entitled to receive the Severance Payment,
shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement. The rights and remedies of
the parties to this Agreement are cumulative and not alternative of any
other remedy conferred hereby or by law or equity, and the exercise of
any remedy will not preclude the exercise of any other.
(c) Entire Agreement. This Agreement contains all the legally binding
understandings and agreements between Executive and the Company
pertaining to the subject matter of this Agreement and supersedes all
such agreements, whether oral or in writing, previously entered into
between the parties. In the event of any inconsistency, conflict or
ambiguity as to the rights and obligations of the parties under this
Agreement and any other agreement entered into by the Company and
Executive, the terms of this Agreement shall control unless otherwise
expressly provided in such other agreement, if any, and the parties
further acknowledge and agree that there shall not be any duplication of
benefits or payments under this Agreement and any other agreement,
including any employment agreement.
(d) Withholding Taxes. All payments made under this Agreement shall be
subject to reduction to reflect taxes required to be withheld by law.
(e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State
of Colorado without regard to the conflicts of laws principles thereof.
(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.
Page-14
(g) Arbitration. Any dispute, controversy or claim between the parties
arising out of or relating to this Agreement (or any subsequent
amendments thereof or waiver thereto), including as to its existence,
enforceability, validity, interpretation, performance, breach or
damages, shall be settled by binding arbitration in Colorado Springs,
Colorado in accordance with applicable rules then in effect of the
American Arbitration Association (the "Association"). All proceedings
and documents prepared in connection with any arbitration under this
Agreement shall constitute confidential information and, unless
otherwise required by law, the contents or the subject matter thereof
shall not be disclosed to any Person other than the parties to the
proceedings, their counsel, witnesses and experts, the arbitrator, and,
if court enforcement of the award is sought, the court and court staff
hearing such matter.
(h) No Assignment. The Company may not assign its rights and obligations
under this Agreement, unless such assignment is made in compliance with
the second sentence of Section 5(a). This Agreement may not be assigned
by Executive otherwise than by will or the laws of descent and
distribution.
(i) Interpretation. When a reference is made in this Agreement to sections,
subsections or clauses, such references shall be to a section,
subsection or clause of this Agreement, unless otherwise indicated. The
words "herein" and "hereof" mean, except where a specific section,
subsection or clause reference is expressly indicated, the entire
Agreement rather than any specific section, subsection or clause. The
words "include", "includes" and "including" when used in this Agreement
shall be deemed to in each case to be followed by the words "without
limitation". The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(j) Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the
same agreement.
(k) Section 409A of the Code. Each payment or reimbursement and the
provision of each benefit under this Agreement shall be considered to be
a separate payment and not one of a series of payments for purposes of
Section 409A of the Code. To the extent applicable, it is intended that
this Agreement comply with the provisions of Section 409A of the Code.
To the extent applicable, it is intended that this Agreement comply
with the provisions of Section 409A of the Code, so that the income
inclusion provisions of Section 409A(a)(1) of the Code do not apply to
the Executive. This Agreement shall be administered in a manner
consistent with this intent. Notwithstanding the foregoing, the Company
Page-15
shall not be obligated to guarantee any particular tax result for
Executive with respect to any payment or benefit provided to Executive
hereunder, and, except as provided in Section 3, Executive shall be
responsible for any taxes imposed on Executive in connection with any
such payment or benefit. Reference to Section 409A of the Code is to
Section 409A of the Internal Revenue Code of 1986, as amended, and will
also include any regulations or any other formal guidance promulgated
with respect to such Section by the U.S. Department of the Treasury or
the Internal Revenue Service.
8. Term of Agreement. This Agreement shall continue in effect from the
Effective Date hereof until the two (2) year anniversary of the Effective
Date and then shall automatically renew for successive one (1) year terms
unless notice of non-renewal is given 90 days prior to such renewal date;
provided, however, that, notwithstanding the foregoing, this Agreement shall
continue in effect for a period of thirteen (13) months after a Change in
Control, if such Change in Control shall have occurred during the above term
of this Agreement, and, further, this Agreement if applicable, shall continue
thereafter, until all payments and provision of benefits under Section 2 have
been provided to Executive, if such Change in Control shall have occurred
during the above initial two (2) year term of this Agreement and Executive
becomes entitled to such payments and benefits hereunder. This Agreement
shall terminate without notice or action if, prior to the Change in Control
Period, Executive's employment with the Company is terminated.
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the
day and year first above written.
EXECUTIVE
Name:
Its:
RAMTRON INTERNATIONAL CORPORATION
By:
Name:
Its:
And
By:
Name:
Its:
Page-16
Exhibit A
Form of Release of Claims and Covenant Not to ▇▇▇
In consideration of the payments and other benefits that Ramtron
International Corporation, a Delaware corporation (the "Company"), is
providing to ------------------- ("Executive") under the Amended and Restated
Change in Control Severance Agreement entered into by and between Executive
and the Company, dated as of ------------------, Executive, on his/her own
behalf and on behalf of Executive's representatives, agents, heirs,
executors, administrators and assigns, hereby waives, releases, discharges
and promises not to assert any claims, demands, actions, rights or
obligations of every kind and nature, whether known or unknown, suspected or
unsuspected that Executive ever had, now has or might have as of the date of
Executive's termination of employment with the Company against the Company or
its predecessors, affiliates, subsidiaries, directors, officers, employees,
agents, insurers, successors, or assigns (including all such persons or
entities that have a current and/or former relationship with the Company) for
any claims arising from or related to Executive's employment with the
Company, its parent or any of its affiliates and subsidiaries and the
termination of that employment.
These claims include, but are not limited to: any and all claims, causes of
action, suits, claims for attorneys' fees, damages or demand; all claims of
discrimination, on any basis, including, without limitation, claims of race,
sex, age, ancestry, national origin, religion and/or disability
discrimination; any and all claims arising under federal, state and/or local
statutory, or common law, such as, but not limited to, Title VII of the Civil
Rights Act, as amended, including the amendments to the Civil Rights Act of
1991, the Employee Retirement Income Security Act, the Equal Pay Act, the
Americans with Disabilities Act, the Age Discrimination in Employment Act of
1967, the Older Workers Benefit Protection Act, any U.S. State laws against
discrimination; any and all claims arising under any other state and/or local
anti-discrimination statute or any other federal, state or local
constitution, law, regulation or ordinance governing the terms and conditions
of employment or the termination of employment; and the law of contract and
tort; and any and all claims, demands and causes of action, including, but
not limited to, breach of public policy, unjust discharge, wrongful
discharge, intentional or negligent infliction of emotional distress,
misrepresentation, negligence or breach of contract. Executive further
waives, releases, and promises never to assert any such claims,
notwithstanding any belief Executive has no such claims.
Executive also agrees not to initiate or pursue any complaint or charge
against the Company, its affiliates or any of the released parties identified
above with any local, state or federal agency or court for the purpose of
recovering damages on Executive's own behalf for any claims of any type
Executive might have against the Company based on any act or event occurring
on or before the effective date of this release, including claims based on
Page-17
future effects of any past acts. Additionally, Executive agrees not to
accept any individualized relief arising out of suits brought by any other
party on Executive's behalf. Executive also represents that Executive has
not filed or initiated any such complaint or charge against the Company or
any Company affiliate or released party, and Executive acknowledges that the
Company is relying on such representations in entering into the Agreement
with Executive.
Executive understands that the claims Executive is releasing do not include
rights or claims which may arise out of acts occurring after the effective
date of this release which do not in any way relate to the facts and
circumstances of this release or Executive's employment relationship with the
Company.
Executive also understands that the above provisions do not preclude
Executive from instituting an action to enforce the terms of the Agreement,
or from challenging the validity of the Agreement.
Furthermore, Executive acknowledges that this waiver and release is knowing
and voluntary and that the consideration given for this waiver and release is
in addition to anything of value to which Executive was already entitled.
Executive acknowledges that there may exist facts or claims in addition to or
different from those which are now known or believed by Executive to exist.
Nonetheless, this Agreement extends to all claims of every nature and kind
whatsoever, whether known or unknown, suspected or unsuspected, past or
present, and Executive further waives all rights under Section 1542 of the
California Civil Code, as applicable, which section Executive acknowledges to
be fully understood by him or her and which Section states:
"A general release does not extend to claims which the creditor does not know
or suspect to exist in his favor at the time of executing the release, which
if known by him must have materially affected his settlement with the
debtor."
FOR EXECUTIVES AGE 40 OR OLDER. Executive further acknowledges that he/she
has been advised by this writing that:
- Executive should consult with an attorney prior to executing this
release;
- Executive has at least twenty-one (21) days within which to consider this
release;
- Executive has up to seven (7) days following the execution of this
release, to revoke the release; and to revoke, Executive must deliver to
the Company a written statement of revocation by hand-delivery or
registered/certified mail, return receipt requested. To be effective the
Company must receive this revocation by the close of business on the
seventh (7th) day after execution of this release; and
Page-18
- this release shall not be effective until such seven (7) day revocation
period has expired.
- Executive agrees that the release set forth above shall be and remain in
effect in all respects as a complete general release as to the matters
released.
- Executive agrees that if he fails to sign this Release within 45 days
after his receipt of this agreement or if he revokes his assent to this
Release, Executive's eligibility for the Severance Payment will expire.
EXECUTIVE
Name:
Date:
Page-19
