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ALL SECTIONS MARKED WITH TWO ASTERISKS ("**") REFLECT PORTIONS WHICH HAVE
BEEN REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
BY XXXX TECHNOLOGY, INC. AS PART OF A REQUEST FOR CONFIDENTIAL TREATMENT.
SEPARATION AGREEMENT
This Separation Agreement (hereafter the "Agreement"), made this 5th
day of December, 1997 (the "Effective Date"), is entered into by Xxxxx X. Xxxx
(hereinafter "Xxxx"), an individual, and XXXX Technology, Inc., a Delaware
corporation (the "Company").
RECITALS
A. WHEREAS, Xxxx has been employed by the Company, has held the position of
Chairman of the Board, President and Chief Executive Officer of the
Company, and has served as an officer and director of various of its
subsidiaries;
B. WHEREAS, effective March 3, 1997, Xxxx resigned his positions as Chairman
of the Board, President and Chief Executive Officer of the Company, and as
a member of the Executive Committee of the Company's Board of Directors,
but not his positions as a Director and as an employee of the Company;
C. WHEREAS, Xxxx ceased to be a Director of the Company on August 11, 1997;
and
D. WHEREAS, Xxxx and the Company now wish to finally and forever resolve all
existing matters between them, including matters relative to Xxxx'
employment, and to provide for the termination of the employment
relationship;
NOW, THEREFORE, in consideration of the aforementioned recitals and
the mutual covenants and conditions set forth below and in full settlement
of any and all claims arising out of Xxxx' employment or the termination of
that employment which were or could have been raised by either party prior
to the date of this Agreement, Xxxx and the Company hereby agree as
follows:
AGREEMENT
1. Resignation and Termination of Employment. Xxxx has resigned as Chairman,
President and Chief Executive Officer of the Company effective March 3,
1997, and by this Agreement further resigns from any and all positions with
any subsidiary or related company of the Company (including any position as
an officer, board or committee member or nominal or statutory shareholder
of any subsidiary or related companies, including without limitation his
positions with XXXX Semiconductors (Israel) Ltd.) effective as of December
5, 1997 (the "Termination Date"), and the Company has accepted such
resignations. Xxxx agrees to execute such documents as the Company may
reasonably request in order to document or further effectuate such
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resignations. Xxxx hereby further resigns as an employee of the Company,
and his employment by the Company will be deemed terminated effective as of
the Termination Date.
2. Board of Directors. Xxxx hereby acknowledges that he ceased to be a member
of the Board of Directors of the Company (the "Board") effective August 11,
1997.
3. Salary, Bonus, Vacation and Non-Competition Payments.
x. Xxxx acknowledges that he has received all unpaid salary due him
through the Termination Date.
b. Following the execution of this Agreement, the Company shall commence
payments to Xxxx in the gross amount of $234,926.66, representing the
unpaid portion of Xxxx' fiscal 1996 bonus entitlement of $281,912,
plus interest on the amount of said bonus from July 31, 1996 through
the date of payment at the rate of 9% per annum, in full payment of
Xxxx' 1996 bonus entitlement. Xxxx acknowledges that no other bonus
remains unpaid. He further acknowledges that he is entitled to no
further or additional bonuses or consideration for bonus for any year
or portion thereof.
c. Following the execution of this Agreement, the Company shall also
commence payments to Xxxx in the gross amount of $44,000, plus
interest on the portion of said amount remaining unpaid from time to
time, computed from the Effective Date through the date of payment, at
the rate of 9% per annum, representing a settlement and compromise of
Xxxx' claims for unpaid vacation pay.
d. Payment of the amounts set forth in subparagraphs 3(b) and 3(c) above
shall be made to Xxxx as follows: (i) $92,975.55 (plus interest as
provided above) in a lump sum on December 18, 1997 and (ii) the
balance of $185,951.11 (plus interest as provided above) in equal
bi-weekly installments (at the same time as the Company's regular
payroll payments) over a period of 8 months commencing January 1, 1998
and ending August 31, 1998.
e. From the gross amounts set forth above, there shall be withheld all
governmentally-mandated withholding amounts. From the initial lump sum
payment pursuant to subparagraph 3(d) above, there shall also be
deducted an amount equal to $27,917 to reimburse the Company for the
cost of equipment, including two Micron computers, purchased at
Company expense for use by Xxxx, which computers (and any other
equipment for which the Company is so reimbursed) are hereby
transferred and assigned to Xxxx.
f. As additional compensation to Xxxx for his compliance with the
provisions of paragraph 12 and subparagraphs 16(a) and 16(b) hereof
for the period from March 3, 1997 through December 4, 1997, on
December 18, 1997 the Company shall
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pay to Xxxx the lump sum of$75,000. Xxxx acknowledges that no
other amount is due him for such period.
4. Consultancy. Xxxx shall render services to the Company as a consultant on a
non-exclusive and non-full-time basis as an independent contractor for a
term commencing on the Effective Date and ending on May 15, 2000 (the
"Consultancy Period"). During such consultancy Xxxx shall be paid at the
rate of $10,842.77 bi-weekly, from which all governmentally-mandated
withholding amounts shall be deducted, with the first payment to be made on
the Company's first regular payroll payment date occurring on or after the
date of execution of this Agreement. Xxxx shall render services during the
consultancy as follows:
x. Xxxx shall make himself reasonably available for consulting with the
Company at such times as the Company may reasonably require, subject
to Xxxx' prior business and professional commitments, prior vacation
plans and absences due to illness or injury. Xxxx shall not, except in
connection with Xxxx' obligations under paragraph 19, be obligated to
provide an aggregate of more than 120 hours of service during any
twelve (12) month period. On or before the 15th day of each calendar
month, commencing December 15, 1997, Xxxx shall provide to the Company
a written report (the "Monthly Report") setting forth the services
performed hereunder by him during the preceding calendar month. The
Monthly Report shall be forwarded to the Company's Chief Financial
Officer at the address set forth in paragraph 42 and shall include a
daily log showing the number of hours of service performed, a
description of the services performed in reasonable detail, and the
name of the Company official requesting such services. The Company
shall have ten (10) business days from its receipt of the Monthly
Report within which to review and object to Xxxx' calculation of hours
of service performed. If the Company does not object to such report by
written notice sent to Xxxx by the last day of the review period,
Xxxx' report shall become conclusive for the month at issue. If the
Company does object to such report, by written notice sent to Xxxx by
the last day of the review period, the parties shall attempt to
resolve the issue through negotiation and/or mediation. In the event
the matter remains unresolved for sixty (60) days after the date of
the Company's objection, either party may seek final and binding
resolution through arbitration pursuant to paragraph 37.
x. Xxxx shall provide consulting services in the manner and at such
location (including by telephone, or in person at the Company offices)
as the Company reasonably determines in good faith, subject to
subparagraph 4(a) and based on the nature and urgency of the matter(s)
on which Xxxx' services are sought.
c. The existence of this consultancy shall not be deemed to create any
duty of loyalty or any non-competition obligations of Xxxx to the
Company other than as provided in paragraph 12. It is anticipated that
the consultancy will be limited to historical and technical matters
and will not involve or relate to future long-term plans of the
Company.
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x. Xxxx shall be reimbursed for all reasonable out-of-pocket expenses
incurred in connection with any consulting services rendered pursuant
to this paragraph 4, including but not limited to reasonable expenses
incurred for travel to the location of any consulting services outside
of the Austin, Texas area. Such expenses shall be incurred, documented
and reimbursed in accordance and consistent with the Company's
then-existing policies for consultants. No travel expenses shall be
incurred without the Company's prior written consent.
e. It is expressly contemplated that Xxxx may accept full time employment
during the consultancy. There shall be deducted from the aggregate
consultant's compensation set forth in this paragraph 4 and the lump
sum payment described in subparagraph 3(f) a "Mitigation Adjustment"
in an amount equal to fifty percent (50%) of any amounts received by
Xxxx as "cash" compensation (essentially the aggregate of all wage,
salary, commission and bonus compensation) as an employee of, or
consultant, adviser or independent contractor to, another employer or
from self-employment (excluding amounts payable to him under this
Agreement) in which he is engaged during the Consultancy Period;
provided, however, that should Xxxx be employed by, or render services
to, an entity or venture in which he becomes an investor, stockholder,
optionholder, proprietor, partner or other participant, in, his annual
cash compensation from such venture or entity for purposes of this
paragraph shall be deemed to be the greater of (i) his actual cash
compensation or (ii) $225,000, and further provided that no amount
earned during the first three months following the initial date of
such employment or provision of services shall be included in the
amount of the Mitigation Adjustment, it being understood and agreed
for purposes of such exception that the amount earned during this
period will not be disproportionately high as compared with Xxxx'
earnings during the balance of the Consultancy Period. In the Monthly
Report for each calendar month Xxxx shall report to the Company any
amounts described in this subparagraph 4(e) that he earned during the
preceding calendar month, and the Company shall apply the resulting
Mitigation Adjustment to reduce the next payment(s) due Xxxx from the
Company hereunder. Should the remaining payments, if any, due under
this Agreement be insufficient to offset any Mitigation Adjustment in
full, Xxxx shall promptly refund the net difference to the Company. In
no event shall the aggregate Mitigation Adjustment under this
subparagraph 4(e) exceed the aggregate amount of the consultant's
compensation payable under this paragraph 4 plus the lump sum payment
described in subparagraph 3(f).
f. In the event the Company believes that Xxxx has failed to comply with
his obligations under this paragraph 4, the Company shall provide Xxxx
with written notice and the reasonable opportunity to cure prior to
initiating any action with regard to any alleged breach.
5. Benefits. The Company shall pay the Company's share of the cost of the
Company's group medical program for Xxxx for the period through March 31,
1999, or such shorter period as may be required under the Company's group
medical plan, provided that Xxxx makes a timely COBRA election. The
Company's obligation to continue to pay the Company's share of the cost of
these group medical benefits shall
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cease upon Xxxx' obtaining employment with another employer offering
group medical coverage. In the Monthly Report for each calendar month Xxxx
shall report to the Company any such other employment obtained by him.
6. Stock Options. The parties acknowledge that Xxxx has unexercised, vested
options covering 59,259 shares of Common Stock of the Company as of March
31, 1997. The exercise price of such options is $3.125 share. No other
options will be vested in Xxxx, and all unvested options shall be treated
as having been cancelled and shall be of no further force or effect. Xxxx
may exercise his vested options in accordance with their terms during the
ninety (90) day period following the date of execution of this Agreement.
If such options have not been exercised within such 90 day term, then
automatically, without any need for further action by Xxxx, the time within
which to exercise such options shall be extended to March 31, 2000;
provided, however, that Xxxx understands that this modification regarding
the time within which to exercise the vested options will deprive such
options of any status they may have had as incentive stock options, and the
options shall be treated as nonqualified options for tax purposes, and
provided, further, that, in the event payments to Xxxx under paragraph 4
are terminated at any time pursuant to paragraph 12(e) of this Agreement,
Xxxx must exercise his options, if at all, no later than ninety (90) days
following the date of termination of such payments. The options, if not
exercised within the applicable foregoing exercise period, shall expire as
of the end of such period and be of no further force or effect thereafter.
Xxxx agrees to bear all taxes and other costs resulting from the exercise
of his stock options.
7. Company Computer and Country Club Membership.
a. The Company hereby transfers to Xxxx on the Effective Date of this
Agreement, its ownership interest in the computer system and
commercial personal computer software Xxxx has been using at his
residence. Xxxx, however, shall promptly return to the Company the
originals and any copies of any custom or enterprise software and all
computer software and computer files containing proprietary or
confidential information of, or concerning, the Company or certify to
the Company due destruction of same. Xxxx shall pay any software
license fees, upgrade costs, etc. due or incurred after March 31, 1997
with respect to all hardware and software retained by him.
x. Xxxx has assigned or will assign to the Company, or to a designee of
the Company, the membership standing in his name (and all membership
rights including any right to any membership deposit or investment) at
the Xxxxxx Creek Country Club.
8. Office and Secretarial Support.
a. The Company will continue to lease and provide to Xxxx an office
through February 28, 1998; provided, however, that if Xxxx secures
alternative employment or fails to use the office on a regular basis,
Xxxx agrees to vacate said office promptly and the Company shall have
the right to terminate such lease or sublet such
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space. The Company shall be responsible only for the lease
payments and shall not be responsible for utility payments or any
other payments in connection with such office. Upon the earlier of
vacating the office or February 28, 1998, Xxxx shall promptly allow
the Company to take possession of the office furniture, file cabinets,
etc. owned by the Company located at such premises.
b. The Company will pay to Xxxx a secretarial allowance of $5,000 per
month for the twelve month period commencing when Xxxx has delivered
to the Company a release (in favor of the Company, its subsidiaries
and their respective officers, directors, shareholders, employees and
agents) in a form reasonably satisfactory to the Company from all
persons who have been providing secretarial support to Xxxx since
March 3, 1997. This subparagraph 8(b) shall become null and void if
the release is not provided to the Company prior to December 31, 1997.
9. Sole Entitlement. Xxxx agrees that his sole entitlement to compensation,
payments of any kind, monetary and/or non-monetary benefits and/or
perquisites with respect to his employment with and his services rendered
to, and all other matters between Xxxx and, the Company and the
subsidiaries or affiliated corporations of the Company, is as expressly set
forth in this Agreement. Payment by a third party of any consideration due
to Xxxx under this Agreement shall be treated for all purposes hereunder as
a payment of such consideration by the Company.
10. Releases by Xxxx. Xxxx does hereby and forever release and discharge the
Company and any subsidiary and affiliated corporations of the Company as
well as the successors, shareholders (including without limitation Fujitsu
Limited ("Fujitsu")), officers, directors, heirs, predecessors, assigns,
agents, employees, attorneys and representatives of each of them, past or
present (collectively, the "Company Parties"), from any and all cause or
causes of action, actions, judgments, liens, indebtedness, damages, losses,
claims, liabilities, and demands of whatsoever kind or character, known or
unknown, suspected to exist or not suspected to exist, anticipated or not
anticipated, whether or not heretofore brought before any state or federal
court or before any state or federal agency or other governmental entity,
whether statutory or common law, heretofore or hereafter arising out of,
connected with or incidental to any dealings between the parties prior to
the date of execution of this Agreement, including without limitation on
the generality of the foregoing, any and all claims, demands or causes of
action attributable to, connected with, or incidental to the employment of
Xxxx by the Company, the separation of that employment, and any dealings
between Xxxx and any of the Company Parties concerning the Company, Xxxx'
employment or any other matter existing prior to the date of execution of
this Agreement, excepting only those obligations of the Company created by
this Agreement. This release is intended to apply to any claims arising
from federal, state or local laws, including those which prohibit
discrimination on the basis of race, national origin, sex, religion, age,
marital status, pregnancy, handicap, perceived handicap, ancestry, sexual
orientation, family or personal leave or any other form of discrimination,
any common law claims of any kind whatever, any claims for salary,
severance pay, sick leave, family leave, vacation pay, life insurance,
bonuses, stock, stock options, incentive compensation, health insurance,
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disability or medical insurance or any other fringe benefit or
compensation, and all rights and claims arising under the Employee
Retirement Income Security Act of 1974 ("ERISA"), or pertaining to ERISA
regulated benefits. In the event any shareholder released by this Agreement
shall bring an action against Xxxx with regard to any matters occurring
before the Effective Date of this Agreement, Xxxx' release of such party
pursuant to this paragraph shall be null and void from the Effective Date
of this Agreement. This release is not intended to affect any interest Xxxx
may have as the incidental beneficiary of any judgment or settlement
secured by (or for the benefit of) the Company as a result of any
shareholder's derivative action; provided, however, Xxxx agrees he will not
instigate, initiate or assist any such action.
11. Releases by the Company. The Company does hereby release and forever
discharge Xxxx from any and all cause or causes of action, actions,
judgments, liens, indebtedness, damages, losses, claims, liabilities, and
demands of whatsoever kind or character, known or unknown, suspected to
exist or not suspected to exist, anticipated or not anticipated, whether or
not heretofore brought before any state or federal court or before any
state or federal agency or other governmental entity, whether statutory or
common law, heretofore or hereafter arising out of, connected with or
incidental to any dealings between the parties prior to the date of
execution of this Agreement, including without limitation on the generality
of the foregoing, any and all claims, demands or causes of action
attributable to, connected with, or incidental to the employment of Xxxx by
the Company, the separation of that employment, and any dealings between
the parties concerning the Company, Xxxx' employment or any other matter
existing prior to the date of execution of this Agreement, excepting only
those obligations of Xxxx to be performed hereunder and any claim which
arises out of any intentional and dishonest act by Xxxx, such as
embezzlement, discovered by the Company or its auditors after the date of
execution of this Agreement, by which act Xxxx enriched himself improperly
through material misappropriation of Company assets. This release is
intended to apply to any claims arising from federal, state or local laws
including those which prohibit discrimination on the basis of race,
national origin, sex, religion, age, marital status, pregnancy, handicap,
perceived handicap, ancestry, sexual orientation, family or personal leave
or any other form of discrimination, or any common law claims of any kind
whatever, any claims for salary, severance pay, sick leave, family leave,
vacation pay, life insurance, bonuses, stock, stock options, incentive
compensation, health insurance, disability or medical insurance or any
other fringe benefit or compensation, and all rights and claims arising
under the ERISA or pertaining to ERISA regulated benefits.
12. Non-Competition.
a. In consideration of the compensation and other benefits being provided
to him hereunder, Xxxx agrees that he will not directly or indirectly,
at any time during the period commencing on March 3, 1997 and ending
on May 15, 2000 (the "Non-Competition Period"), without the prior
written consent of the Company, except as provided below, compete
with, or render financial or other assistance to or assist or offer
personal or professional services (whether as an employee, officer,
director,
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consultant, advisor or otherwise) anywhere in the world and
for payment or otherwise to, any entity or individual to the extent
that such assistance or services relate to such entity's or
individual's competition with, or efforts to compete with (each a
"Competitor"), any product or service offered or under development by
the Company at such time or intended to be offered in the future
pursuant to the Company's then-applicable Board-approved business plan
or a documented project plan approved by the Company's Chief Executive
Officer. Without limiting the definition of "assistance" for purposes
of this paragraph 12, Xxxx shall be considered to be providing
assistance to a Competitor if Xxxx or a Xxxx Entity (as defined in
subparagraph 16(b)) provides a product to the Competitor for resale or
provides a product design to the Competitor for manufacture,
distribution or sale. The prohibitions set forth in this subparagraph
12(a) shall be interpreted as provided in subparagraphs 12(b) and
12(i).
b. The parties understand that Xxxx will most likely find executive
employment in a business associated with the microprocessor industry.
It is not the intention of the parties to be overly broad in generally
defining competitive activity by Xxxx as described in subparagraph
12(a). However, a very broad specific restriction is intended by the
parties on any activities by Xxxx involving (i) microprocessors or
other chips or logical units supporting the SPARC architecture or (ii)
embedded microcontrollers or other embedded control products based
upon any 32 bit architecture (the activities described in this
sentence being collectively termed "Special Activities"). The parties
agree that, at the commencement of this Agreement, any activities of
Xxxx with regard to (i) the MIPS architecture, (ii) digital signal
processors (DSPs) that do not include a SPARC floating point unit or
co-processor, or (iii) I/O or graphics peripheral chips for embedded
control applications will not violate the prohibitions of subparagraph
12(a), or result in the termination of payments to Xxxx pursuant to
subparagraph 12(e) below, provided that such activities do not violate
the restrictions with respect to Special Activities set forth in the
preceding sentence.
c. In the event the Company chooses to modify its business emphasis with
additional products or services (other than Special Activities, which
are generally prohibited by subparagraph 12(a) and as to which the
Company shall not be obligated to comply with the provisions of this
subparagraph 12(c)) based upon architectures other than the SPARC
architecture (including without limitation a modification that
encompasses activities previously permitted to Xxxx under subparagraph
(a) or (b)), then from and after the earlier of (i) the date that the
Company actually commences development of such additional products or
services or (ii) the date that the Company's Board approves a business
plan or the Company's Chief Executive Officer approves a documented
project plan to implement a modified business emphasis (the earlier
date being herein termed a "New Activity Date"), any activities by
Xxxx relating to such modified business emphasis will be considered
competitive within the scope of the provisions of subparagraph 12(a),
provided that no activity engaged in by Xxxx as of the New Activity
Date that is not otherwise competitive will be deemed competitive
pursuant to this sentence. For purposes of the preceding sentence,
Xxxx shall be considered to be engaged in a particular activity if he
or a Xxxx Entity has actually commenced development of a product or
service implementing, or the Board of Directors of a Xxxx
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Entity has approved a business plan or documented project plan to
implement, the activity. Xxxx acknowledges and agrees that as of the
date of execution of this Agreement (i) the Company's business
emphasis has been modified to include microprocessors, co-processors
and chipsets that either (A) execute the Java programming language in
native mode or (B) are designed or integrated, and marketed, as more
efficient, enhanced performance or lower cost solutions to execute
Java applications natively or through the Java virtual machine (the
activities in "(A)" and "(B)" being collectively termed "Java
Activities"), (ii) neither Xxxx nor any Xxxx Entity is presently
engaged in Java Activities, and (iii) consequently any Java Activities
engaged in by Xxxx or a Xxxx Entity will be considered competitive
within the scope of subparagraph 12(a).
d. In the event Xxxx shall seek to engage in activities which could
arguably fall within the prohibitions of subparagraph 12(a), Xxxx
shall first make a written disclosure of such proposed activities to
the Company. Such disclosure shall be made at least 30 calendar days
in advance of Xxxx' intended commencement date and shall provide
sufficient detail to permit the Company to make the judgments required
in this paragraph 12. Within 15 calendar days after its receipt of the
disclosure, the Company shall respond to Xxxx in writing advising Xxxx
whether the Company does or does not consider his proposed activities
to be within the scope of the prohibitions of subparagraph 12(a). If
the Company does not consider the proposed activities to be within the
scope of the prohibitions of subparagraph 12(a), Xxxx may pursue such
activities subject to any other applicable restrictions under this
Agreement. If the Company does consider the proposed activities to be
within the prohibitions of subparagraph 12(a), the parties shall
attempt to resolve the issue through negotiation and/or mediation. In
the event the matter remains unresolved for thirty (30) days after the
date of the Company's response to Xxxx, either party may seek final
and binding resolution through arbitration pursuant to paragraph 37.
If Xxxx suspends his proposed activities and is not entitled to
current or deferred compensation therefrom during the course of such
negotiation, mediation and/or arbitration proceedings, then the
payments described in paragraph 4 shall continue during such
proceedings. If Xxxx does not suspend his proposed activities or is
entitled to current or deferred compensation therefrom during the
course of such negotiation, mediation and/or arbitration proceedings,
then the payments described in paragraph 4 shall be suspended during
such proceedings.
x. Xxxx may at any time elect to engage in activities, other than Special
Activities, that are competitive within the meaning of subparagraph
12(a), and the Company shall have no right or power to seek damages or
injunctive relief with respect to any such non-Special Activity
competition. If Xxxx so elects, or shall acknowledge or be found to
have engaged in competitive activities during the Non- Competition
Period prohibited by subparagraph 12(a): (i) all obligations of the
Company pursuant to paragraph 4 of this Agreement to make payments to
Xxxx shall cease as of the date Xxxx first so elects or otherwise
undertook such competitive activities and be forever extinguished,
(ii) Xxxx shall be obligated to promptly refund to the Company any
such amounts paid to Xxxx after such date, (iii) Xxxx shall have no
further non-
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competition obligations to the Company with respect to
activities other than Special Activities (although his agreement not
to engage in Special Activities shall continue in full force and
effect), and (iv) so long as such competitive activities do not
constitute Special Activities, Xxxx' obligation to provide consulting
services under paragraph 4 shall cease and forever terminate;
provided, however, that all other obligations of the parties to this
Agreement (including without limitation the obligations of Xxxx under
paragraphs 13, 14, 16 and 19) shall remain in full force and effect.
In the event that such competitive activities constitute Special
Activities, Xxxx shall also be liable to the Company for any damages
it incurs as a result of such Special Activities.
x. Xxxx represents and warrants that he is not in breach of the
provisions of subparagraph 12(a) as of the date of execution of this
Agreement. In addition to the remedies set forth in subparagraphs
12(d) and 12(e), the Company shall be entitled to injunctive relief to
specifically enforce the provisions of subparagraph 12(a) with respect
to any breach thereof to the extent and only to the extent that such
breach consists of Xxxx' engagement in Special Activities and occurs
during the Non-Competition Period. The Company shall not be entitled
to injunctive relief to specifically enforce the provisions of
subparagraph 12(a) with respect to any breach thereof that does not
arise by reason of Special Activities.
g. Except as may reasonably be required to implement the provisions of
this Agreement (including without limitation paragraphs 12, 13, 14, 16
and 19), neither party shall be obligated at any time to disclose to
the other, or to any third party, confidential information regarding
its then-current or prospective business or project plans or products
or services then-existing or planned or under development. All
communications between the parties under this Agreement that involve
confidential information shall be subject to an appropriate
non-disclosure and confidentiality agreement.
h. Nothing contained in this paragraph 12 shall affect Xxxx' obligation
at all times to comply with the provisions of paragraphs 13, 14, 16
and 19.
i. Notwithstanding the provisions of this paragraph 12, Xxxx shall be
entitled to engage in the activities described in subparagraph
16(b)(iii) to the extent provided therein.
13. Confidential Information.
x. Xxxx recognizes and understands that the Company is engaged in
businesses in which it is crucial to develop and retain proprietary
technology and other confidential information. Accordingly in
furtherance of his prior confidentiality agreements with the Company
and in consideration of the compensation and other benefits being
provided to him hereunder, Xxxx agrees that he will not at any time,
either directly or indirectly, divulge, or convey to any person,
except as may be expressly authorized by the Company or required
during and in the course of his consultancy or required by court order
or applicable law, or use for his own benefit or
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the benefit of anyone else but the Company, any confidential
information obtained by him in the course of his employment or
consultancy with the Company, whether concerning the Company or any
aspect thereof, or concerning a third party; provided that the
foregoing restrictions shall not apply with respect to any information
that becomes generally available to the public other than through
Xxxx' unauthorized disclosure or fault, and provided, further, that
the foregoing restrictions shall lapse seven (7) years after the
Effective Date except as to details of relationships and
communications between or among the Company, its employees, directors,
and shareholders, which details Xxxx shall not divulge at any time.
b. The confidential information to which Xxxx has had or will or may have
access includes, but is not limited to, matters of a technical nature
such as inventions, designs, software, improvements, processes of
discovery, techniques, methods, ideas, discoveries, developments,
know-how, formulae, compounds, compositions, product plans, technology
roadmaps, specifications, trade secrets, design methodologies,
specialized knowledge, internal affairs of the Company, relationships
and communications between or among the Company, its employees,
directors and shareholders, and matters of a business nature such as
information about costs and profits, records, customer lists and
customer contact information, customer data, sales data, or product,
marketing or business plans.
14. Ownership of Ideas.
a. The Company will own, and Xxxx hereby transfers and assigns to it, all
rights in and to any material and/or ideas and all results and
proceeds of Xxxx' services as an employee of the Company prior to May
1, 1997, conceived of or produced during the period of such
employment. Xxxx agrees to execute and deliver to the Company such
assignments, certificates of authorship, or other instruments in
accordance with standard industry practice, and otherwise provide
proper assistance, at the Company's request and expense and for its
benefit or that of its nominees, during and after Xxxx' employment by
the Company in order to more fully vest in the Company all right,
title and interest in and to such material, ideas, results and
proceeds or to obtain patents, copyrights, or other legal protection
for inventions or innovations in any country;
x. Xxxx' agreement to assign to the Company any of his rights as set
forth above does not apply to any materials, ideas or inventions (i)
developed by Xxxx entirely upon his own time without using the
Company's equipment, supplies, facilities or confidential information
and (ii) which do not, at the time of conception or reduction to
practice, relate to the Company's present or anticipated business, or
to actual or demonstrably anticipated research or development of the
Company, and (iii) which do not result from any work or consulting
services performed by Xxxx for the Company.
15. Return of Property of the Company. Except as and then only to the extent
specifically provided above in subparagraphs 3(e) and 7(a), and except for
the personal automobile previously provided to Xxxx by the Company, all
memoranda, notes, records,
12
papers, data and documents concerning the business of the Company or
any of its subsidiaries or affiliates, whether in tangible or intangible
form (including all information stored in electronic form), all computer
programs and software, and all copies of any of the foregoing, made,
obtained, compiled by or made available to Xxxx during the period of his
employment with the Company through the Effective Date, all equipment
(including personal computers and other computer equipment) made available
to or obtained by Xxxx from the Company, and all other property of the
Company or any of its subsidiaries or affiliates (including without
limitation identification and access cards, keys, personal digital
assistants, pagers, cellular phones, airline tickets and travel vouchers,
but excluding personal diaries and memorabilia) in the possession of Xxxx
(collectively referred to as "Company Property"), will be and remain the
exclusive property of the Company, subsidiary or affiliate during and after
the termination of Xxxx' employment with the Company. Xxxx will within
seven days of the date of execution of this Agreement return (and, with
regard to intangible property or documents, return a copy to the Company
and destroy all originals and copies in Xxxx' possession) any and all of
the Company Property that he may have taken off the Company's premises,
and, if requested by the Company to do so, will execute a statement
confirming compliance with this paragraph.
All memoranda, notes, records, papers, data and documents concerning
the business of the Company or any of its subsidiaries or affiliates,
whether in tangible or intangible form (including all information stored in
electronic form), all computer programs and software, and all copies of any
of the foregoing, made, obtained, compiled by or made available to Xxxx
during the period of his consultancy with the Company, and all equipment
(including personal computers and other computer equipment) and all other
property of the Company or any of its subsidiaries or affiliates (including
without limitation identification and access cards, keys, personal digital
assistants, pagers, cellular phones, airline tickets and travel vouchers,
but excluding personal diaries and memorabilia) made available to or
obtained by Xxxx from the Company during the period of his consultancy with
the Company (collectively referred to as "Consultancy Property"), will be
and remain the exclusive property of the Company, subsidiary or affiliate
during and after the termination of Xxxx' consultancy with the Company.
Upon termination of his consultancy for any reason, Xxxx will within seven
days return (and, with regard to intangible property or documents, return a
copy to the Company and destroy all originals and copies in Xxxx'
possession) any and all Consultancy Property to the Company, and, if
requested by the Company to do so, will execute a statement confirming
compliance with this paragraph.
16. Interference with Xxxx, Its Employees and Customers. In consideration of
the compensation and other benefits being provided to him hereunder, Xxxx
agrees that he will not, without the Company's prior written consent,
whether for his own benefit or for the benefit of any other individual,
partnership, firm, corporation or other business organization (other than
the Company), directly or indirectly:
a. At any time prior to March 31, 2000, solicit or discuss the employment
services of, hire, or otherwise interfere with the relationship of the
13
Company with any person who is either then employed by or otherwise
engaged to perform services for the Company or has been so employed or
engaged by the Company within the four months preceding any such
solicitation, discussion or hire. In the event that for purposes of
complying with this subparagraph 16(a) Xxxx shall seek confirmation
from the Company with regard to any person who Xxxx believes has
ceased to be an employee of the Company, the Company shall promptly
provide Xxxx with written confirmation of the person's employment
status and termination date.
b. (i) At any time prior to March 1, 1999, solicit business from or
otherwise call upon any person or entity with whom the Company then
has or has had a customer relationship (collectively, "Solicitation
Activities"). On the date of execution of this Agreement, the Company
has provided to Xxxx a list of its past and present customers with
respect to which the parties agree that the prohibitions of this
subparagraph 16(b) will apply (the "Customer List"). The parties
further agree that the Customer List is a complete list of all
customers with respect to which the prohibitions of this subparagraph
16(b) apply as of the date hereof, and that the prohibitions of this
subparagraph 16(b) will not apply to any customers or other entities
that are not either (i) on the Customer List as of the date hereof or
(ii) subsequently added to the Customer List pursuant to the
provisions of this subparagraph. The Company shall be entitled to
update the Customer List from time to time by written notice to Xxxx
to include new customers of the Company, and the restrictions of this
subparagraph 16(b) shall apply with respect to such new customers for
the period from the date of Xxxx'x receipt of the updated Customer
List through February 28, 1999; provided, however, that the
restrictions of this subparagraph 16(b) shall not apply with respect
to any such new customers that have been identified as customers of
Xxxx or a Xxxx Entity (as hereinafter defined) in a written notice
delivered to the present Chairman of the Company's Board of Directors
(or a successor to such Chairman reasonably agreed to by the parties
hereto) prior to the date of Xxxx'x receipt of notice from the Company
designating such new customer as a Company customer. For purposes of
this subparagraph 16(b), (A) a "customer" of a party shall mean a
person or entity that has purchased product from the party, signed a
purchase order for product of the party, or entered into a written
memorandum of understanding for the purchase of product from the party
and (B) contacts with employees and other representatives of a
customer shall be subject to the same restrictions as those applicable
to the customer itself.
(ii) Nothing in this subparagraph 16(b) shall be applied or construed
to limit or preclude ** and its affiliates (other than any entity
controlled or managed by Xxxx or in which Xxxx owns more than two
percent (2%) of the stock, profits interests, capital interests,
units, or other equity ownership interests (including without
limitation stock options and convertible securities) (a "Xxxx
Entity"), which Xxxx Entities shall be subject to the
restrictions of this subparagraph 16(b) to the same extent as
Xxxx) from engaging in Solicitation Activities provided that
neither Xxxx nor any Xxxx Entity provides advice or assistance to
such activities or divulges to ** or any of its affiliates the
names of any Company customers (or the names of any contacts at
customers) set forth on the Customer List in effect from time to
time.
14
(iii)Nothing in this subparagraph 16(b) shall be applied or construed
to limit or preclude Xxxx, or any other person or entity, from
engaging in Solicitation Activities with respect to the sale of
embedded microcontrollers, and other embedded control products,
based upon the MIPS 64 bit architecture with respect to any of
the following companies or their affiliates: **.
c. At any time, interfere with the relationship of the Company with any
person or entity with whom the Company then has a business
relationship or a prospective business relationship.
d. At any time, instigate, initiate, participate in (except to the extent
required by law, including compulsory process) or assist any
litigation or arbitration proceeding brought against the Company or
any of the Company Parties attributable to, connected with, or
incidental to any claim, liability, action, failure to act or any
other matter existing prior to the Effective Date, including without
limitation any such matters that may be continuing after the Effective
Date and any matters released by Xxxx pursuant to paragraph 10 of this
Agreement.
17. Injunctive and Other Relief. Subject to the provisions of paragraph 12,
including without limitation subparagraphs 12(d) and 12(e), Xxxx and the
Company acknowledge that any action taken by Xxxx constituting a breach of
any of his obligations under paragraphs 12 through 16 of the Agreement
would leave the Company without an adequate remedy and would entitle the
Company to seek relief in any court of competent jurisdiction in the form
of an injunction or temporary restraining order prohibiting any such breach
in addition to any other applicable remedies. In addition, in the event of
a material breach by Xxxx of paragraphs 13 or 16, the Company may in
addition to any other remedy terminate Xxxx' consultancy and cease making
the payments described in paragraph 4.
18. Prohibition Against Defamation and Willful Disparagement and Provision for
Favorable References. **.
15
19. Cooperation. Subject to the provisions of subparagraph 4(a) concerning his
reasonable availability, Xxxx agrees to cooperate fully with the Company
and to assist the Company in connection with any future or currently
pending disputes, litigation or arbitration proceedings based upon or
arising out of acts, omissions, events or circumstances occurring or
existing during the period from January 1, 1988 through April 30, 1997,
including without limitation the Xxxxxxxxx, Megatest and Vorm disputes and
any actions brought by creditors of the Company. Such cooperation by Xxxx
shall include, but not be limited to, making himself reasonably available
for interviews by Company counsel and to testify in any action as
reasonably requested by the Company. Xxxx shall not be separately
compensated for such cooperation and assistance but his reasonable and
documented out-of-pocket expenses shall be reimbursed. The obligations of
Xxxx set forth in this paragraph 19 shall continue during and after the
Consultancy Period and notwithstanding any early termination of payments to
Xxxx pursuant to the provisions of paragraphs 12 or 17 or any termination
of the parties' other obligations pursuant to paragraph 36. With respect to
any such action, in the event Xxxx is named
16
as a defendant by any party thereto, the Company shall indemnify,
defend and hold harmless Xxxx, to the extent the Company was obligated as
of March 2, 1997 to indemnify, defend and hold harmless Xxxx, against all
losses, claims, damages, costs, expenses, liabilities, judgments or amounts
of or in connection with any claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part
out of Xxxx' actions as a director, officer or employee of the Company,
whether pertaining to any matter existing at March 2, 1997 or occurring at
or prior to such date, and whether asserted prior to, at, or after March 2,
1997.
20. Legal Advice. Each party has received independent legal advice from his or
its attorneys with respect to the advisability of making the settlement
provided for herein and with respect to the advisability of executing this
Agreement.
21. Factual Investigation. Each party to this Agreement has made such
investigation of the facts pertaining to the matters resolved by this
Agreement and of all the matters pertaining thereto as he or it deems
necessary.
22. Later Discovered Facts. Each party hereto is aware that he or it may
hereafter discover claims or facts in addition to or different from those
he or it now knows or believes to be true with respect to the matters
resolved herein. Nevertheless, it is the intention of each party to fully,
finally and forever settle and release all such matters and all claims
relative thereto which may exist or may heretofore have existed between
them, whether known or unknown, to the extent provided in the releases
contained herein.
23. Confidentiality. Except as may be required to satisfy the Company's public
disclosure or financial or accounting requirements or as may be compelled
by court order, neither the Company nor Xxxx shall disclose or publicize to
any person, firm or corporation the terms of this Agreement except (a) as
otherwise specifically provided in this Agreement or (b) with the written
consent of the other party. As reasonably necessary, Xxxx may discuss this
Agreement with his wife, attorney, assistant, financial advisor, tax
advisor, benefit advisor or compensation advisor and the Company may
discuss this Agreement with its attorneys, accountants, officers, directors
and managers, provided, however, that each such recipient of confidential
information agrees to be bound by the terms of this paragraph to keep the
information confidential. Xxxx shall advise any employer, prospective
employer or Competitor, and may advise any financial institution with which
he does business, of the limitations set forth in paragraphs 12 through 16
above.
24. Assignment. Each of the parties represents and warrants that he or it has
not heretofore assigned, transferred or granted or purported to assign,
transfer or grant any claims, matters, demands or causes of action herein
released, disclaimed, discharged or terminated, and agrees to indemnify,
defend and hold harmless the other party from and against any and all
costs, expense, loss or liability incurred as a consequence of any such
actual or purported assignment, transfer or grant.
17
25. Recitals and Paragraph Headings. Each term of this Agreement is contractual
and not merely a recital. All recitals are hereby incorporated by reference
into this Agreement. Captions and paragraph headings are used herein for
convenience only, are not part of this Agreement and shall not be used in
interpreting or construing it.
26. Additional Documents. The parties will execute all such further and
additional documents and undertake all such other actions as shall be
reasonable, convenient, necessary or desirable to more fully effectuate and
carry out the provisions of this Agreement.
27. No Admissions. This Agreement effects the settlement of claims which are
denied, disputed and/or contested, and nothing contained herein shall be
construed as an admission by any party hereto of any liability of any kind
to any other party or to any third party. Each of the parties hereto denies
any and all liability whatsoever in connection with any claim and intends
merely to avoid the uncertainties and costs of litigation and buy his or
its peace.
28. Texas Law. This Agreement was executed and delivered within the State of
Texas, and the rights and obligations of the parties hereto shall be
construed and enforced in accordance with and governed by the laws of the
State of Texas applicable to agreements made and to be performed entirely
within Texas. Should any litigation arise concerning this Agreement, it
will be filed only in a court in Austin, Texas, and then only if consistent
with the parties' obligations under paragraph 37 hereof with regard to
arbitration.
29. Entire Agreement. This Agreement constitutes a single integrated contract
expressing the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous oral and written
agreements and discussions with respect to the subject matter hereof. There
are no other agreements, written or oral, express or implied, between the
parties hereto, concerning the subject matter hereof, except as set forth
herein. This Agreement may be amended only by an agreement in writing.
30. Binding Effect. This Agreement is binding upon and shall inure to the
benefit of the parties hereto, their heirs, permitted assignees and
successors in interest (including successors in any reorganization or
merger with any other entity).
31. Construction of Agreement. Each party has cooperated in the drafting and
preparation of this Agreement, and, accordingly, in any construction or
interpretation of this Agreement, the same shall not be construed against
any party by reason of the source of drafting.
32. Costs and Attorneys' Fees. Each party is to bear his or its own costs and
attorneys' fees incurred in connection with the matters resolved by this
Agreement and in connection with the negotiation and the preparation of
this Agreement. However, in the
18
event of litigation or arbitration relating to or for the enforcement
of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and costs actually incurred.
33. Taxes. Xxxx acknowledges his responsibility for any and all taxes due with
respect to the sums paid to him under this Agreement, represents that he
has received independent advice concerning his tax obligations, and states
that he has not relied upon representations or advice, if any, of the
Company or its accountants or legal counsel concerning the taxable or
nontaxable nature of the consideration received by him hereunder or any
other consideration received from the Company. Xxxx agrees that he will
indemnify, defend and hold the Company harmless from any and all claims for
taxes, penalties and/or interest related to the foregoing consideration.
34. Counterparts. This Agreement may be executed in counterparts. When each
party has signed and delivered at least one such counterpart, each
counterpart shall be deemed an original, and, when taken together with
other signed counterparts, shall constitute one Agreement which shall be
binding upon and effective as to all parties. No counterpart shall be
effective until all parties hereto have executed and exchanged an executed
counterpart hereof.
35. No Waiver. The failure to enforce at any time any of the provisions of this
Agreement, or to require at any time performance by the other party of any
of the provisions hereof, shall in no way be construed to be a waiver of
such provisions or to affect either the validity of this Agreement or any
part hereof or the right of either party thereafter to enforce each and
every provision in accordance with the terms of this Agreement.
36. Non-performance by the Company.
a. The Company agrees that all payments due to Xxxx under this Agreement
shall be paid when due. If the Company is unable to make any payment
because of the Company's financial condition, the Company shall treat
Xxxx no less favorably than other unsecured creditors. In addition,
any sum unpaid shall bear interest at the rate of 9% per annum from
the due date until the date of actual payment, and Xxxx shall be
entitled to reasonable attorney's fees in the event he brings a
successful action to collect any amounts due but unpaid. In the event
of an alleged non-payment by the Company, Xxxx shall also be entitled
to an expedited arbitration in which the arbitrator shall, in addition
to any other authority, have the right to issue a preliminary order
requiring payment by the Company. In addition to, and not in exclusion
of, any other remedies Xxxx may have under this Agreement or otherwise
with respect to any failure by the Company to pay amounts due under
this Agreement in a timely fashion, in the event that such a failure
continues and is not cured by the later of (i) ninety (90) days after
the payment due date (provided that the Company's payments to Xxxx
under this Agreement during the preceding 365 day period have not been
more than thirty (30) days late) or (ii) thirty (30) days after
delivery of written notice of such failure by Xxxx to the Company (the
later date being termed herein the "Notice Date"), then:
19
1. If, after the Notice Date, any of the gross amounts
described in subparagraphs 3(b) (bonus) and 3(c) (vacation
pay) have not yet been paid to Xxxx, and amounts due under
this Agreement remain late and unpaid, Xxxx may in his sole
discretion elect by written notice to the Company to do any
one or more of the following: (i) accelerate all amounts
remaining due under paragraph 3, (ii) terminate all future
obligations of the parties under paragraphs 4, 5, 8, 12, 16
and 18, and (iii) rescind the releases set forth in
paragraph 10. If Xxxx rescinds the releases set forth in
paragraph 10, the releases set forth in paragraph 11 shall
also be automatically rescinded. In all other respects, this
Agreement shall remain in full force and effect.
2. If, after the Notice Date, all of the gross amounts
described in subparagraphs 3(b) (bonus) and 3(c) (vacation
pay) have been paid in full to Xxxx, but other amounts due
under this Agreement remain late and unpaid, Xxxx may in his
sole discretion elect by written notice to the Company to do
any one or more of the following: (i) accelerate all amounts
remaining due under paragraph 3, and (ii) terminate all
future obligations of the parties under paragraphs 4, 5, 8,
12, 16 and 18. In all other respects, this Agreement shall
remain in full force and effect.
3. Under either clause (1) or clause (2) above, Xxxx shall be
entitled to retain all amounts paid to him under the
Agreement prior to his election of such remedies (except for
any amounts subject to refund to the Company pursuant to
subparagraphs 4(e) or 12(e)).
b. In the event that the Company's continued failure to make a payment
described in this paragraph 36 after the Notice Date is the result of
a dispute in good faith between the parties or a bankruptcy filing by
or against the Company, then Xxxx shall have the remedies described in
subparagraph 36(a)(2) but not the additional remedies described in
subparagraph 36(a)(1), and in the case of a bankruptcy filing against
the Company Xxxx shall be entitled to exercise remedies only if the
failure to pay continues ninety (90) days after the bankruptcy filing.
If a dispute in good faith is resolved in the Company's favor, at the
Company's election any acceleration or termination by Xxxx pursuant to
subparagraph 36(a)(2) shall be set aside and the parties shall be
restored to their respective positions existing prior to Xxxx'
exercise of such remedies.
c. If Xxxx elects to accelerate amounts remaining due under paragraph 3
or to terminate certain future obligations of the parties as provided
in subparagraphs 36(a)(1) and 36(a)(2) above, the Company shall have
the right in its sole discretion to terminate any remaining future
obligations of the parties under paragraphs 4, 5, 8(a), 12, 16 and 18
by written notice to Xxxx. In all other respects, this Agreement shall
remain in full force and effect.
d. Nothing contained in this paragraph 36 or elsewhere in this Agreement
nor the Company's failure to make any payment due hereunder shall
affect
20
the validity or finality of any release described in subparagraph
8(b) that may have been delivered to the Company at any time or the
obligations of Xxxx under paragraphs 13, 14, 15 or 19.
37. Arbitration. Except in connection with an action by the Company or Xxxx for
injunctive or other equitable relief pursuant to paragraphs 12 through 17,
any controversy, dispute, or claim between the parties to this Agreement or
any party released pursuant to it, including without limitation any claim
arising out of, in connection with, or in relation to the interpretation,
performance or breach of this Agreement, shall be finally resolved, at the
request of either party, by confidential binding arbitration conducted in
Austin, Texas in accordance with the then most applicable rules of the
American Arbitration Association, and judgment upon any award rendered by
the arbitrator may be entered by any state or federal court having
jurisdiction thereof. In any such arbitration, the arbitrator shall have
the jurisdiction and authority to issue any remedy (but only such remedy)
that a court of competent jurisdiction could have provided based upon the
facts found by the arbitrator. After soliciting the views of each party,
the arbitrator shall order such discovery as he or she may consider
reasonable and appropriate given the subject matter of the dispute. At the
conclusion of the proceeding, the arbitrator shall issue a written opinion
setting forth the legal analysis and basis for his or her decision and
material findings of fact. In the event either party shall suspend its
performance on the basis that its performance has been excused by a
material breach by the other party, either party seeking performance may
request preliminary relief from the arbitrator and both parties agree to
cooperate to have such issue heard on an expedited basis. The arbitrator
may hear such issue on a preliminary basis and may grant such preliminary
relief, and under such conditions, as the arbitrator shall deem to be
appropriate and equitable. In the event the parties are unable to agree
upon an arbitrator, the parties shall select a single arbitrator from a
list designated by the nearest office of the American Arbitration
Association of seven arbitrators, all of whom shall be retired judges who
have had experience in the employment law, who are actively involved in
hearing private cases and who are resident in the greater Austin area. If
the parties are unable to select an arbitrator from the list provided by
the American Arbitration Association, then the parties shall each strike
names alternatively from the list, with the first to strike being
determined by lot. After each party has used three strikes, the remaining
name on the list shall be the arbitrator. The parties intend that this
agreement to arbitrate be valid, enforceable and irrevocable and that it
provide the exclusive remedy with respect to all disputes within its scope.
The fees and expenses of the arbitrator shall initially be divided evenly
between the parties. Thereafter they shall be treated as costs pursuant to
paragraph 32.
38. Xxxx' Understanding. Xxxx represents and warrants that he has carefully
read this Agreement, that it has been fully explained to him by his
attorney, that he fully understands its final and binding effect and
understands that he is releasing certain rights and entitlements, that the
only promises made to him to sign the Agreement are those stated above, and
that he is signing this Agreement voluntarily.
21
39. Age Discrimination in Employment Act Waiver. The waiver given below is
given only in exchange for consideration in addition to anything of value
to which Xxxx is already entitled. The waiver set forth below does not
waive rights or claims which may arise after the date of execution of this
Agreement. Xxxx acknowledges that (i) this paragraph is written in a manner
calculated to be understood by Xxxx, (ii) that by reviewing this paragraph
or drafts thereof he has been advised in writing to consult with an
attorney before executing this Agreement, (iii) he was given a period of 21
days within which to consider this paragraph, and (iv) to the extent he
executes this Agreement, including this paragraph, before the expiration of
the 21 day period, he does so knowingly and voluntarily and only after
consulting with an attorney. Xxxx shall have the right to cancel and revoke
this paragraph during a period of seven days following his execution of the
Agreement and this paragraph shall not become effective, and no money shall
be paid hereunder, until the expiration of such 7-day period. All other
provisions of this Agreement shall become effective upon execution. Xxxx
shall notify the Company's counsel in writing of the date of the execution
of this Agreement by faxing to the Company's counsel a signed and dated
copy of the signature page signed by him. The 7-day period of revocation
shall commence upon the date of Xxxx' execution of this Agreement. Within
the 7-day revocation period, Xxxx or his counsel shall forward to the
Company and the Company's counsel a copy of this Agreement fully executed
by Xxxx. In order to revoke this paragraph, Xxxx shall deliver to the
Company, prior to the expiration of said 7-day period, a written notice of
cancellation.
In addition to the release set forth in paragraph 10 hereof, Xxxx
hereby voluntarily and knowingly waives all rights or claims arising under
the Federal Age Discrimination in Employment Act. The consideration for
this paragraph shall be the compensation due Xxxx with respect to the final
month of the Consultancy Period.
40. Effectiveness of Agreement. This Agreement shall be a binding agreement
upon its execution except that the provisions of paragraph 39 shall be
effective, if at all, only in accordance with its provisions.
41. Severability and Reformation. In the event that any of the provisions of
this Agreement, as applied to either Xxxx or the Company or to any
circumstances, shall be found to be impermissibly broad (with regard to
scope, period of time, or geographic reach) or otherwise adjudged void or
unenforceable, or in conflict with any applicable law, the parties intend
such provisions to be enforced to the greatest extent legally possible, and
the body adjudicating such provisions void, unenforceable, or in conflict
with any applicable law, shall be vested with the authority to reform such
provisions in any manner necessary to effectuate the parties' intent to the
greatest extent allowable by law.
42. Notices. Any notice that a party shall desire or be required to provide
under this Agreement shall be in writing and shall be delivered by personal
delivery (including confirmed delivery by a reputable messenger or courier
service), by confirmed facsimile transmission or by deposit in the United
States Mail, registered and return receipt requested, as follows:
22
Notices to Xxxx: Xx. Xxxxx X. Xxxx
**
with a copy by the same means to:
---------------------------------
**
Notices to the Company: XXXX Technology, Inc.
0000 Xxxxxxx 000 Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy by the same means to:
---------------------------------
Irell & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
Such addresses may be changed from time to time by written notice
provided hereunder. Any notice delivered hereunder shall be deemed to be
delivered on the date of actual delivery (in the case of personal
delivery), on the next regular business day in the recipient's locality (in
the case of facsimile transmission), or five (5) days after deposit in the
United States Mail (in the case of registered mail).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
23
EXECUTION AND ACKNOWLEDGMENT BY XXXXX X. XXXX:
I received this Separation Agreement on December 5, 1997. I understand
that I have twenty-one (21) days thereafter within which to consider
paragraph 39 of this Agreement with my legal counsel. I have freely chosen
to sign this Separation Agreement on the date shown below. I understand
that I will have seven (7) days thereafter within which to revoke my
acceptance of paragraph 39 of this Separation Agreement and that such
paragraph of the Separation Agreement shall not be effective under the
expiration of that seven (7) day period. I understand that all other
provisions of this Separation Agreement will be effective, as of the
Effective Date, upon its execution by both parties.
Executed at Austin, Texas, this 5th day of December, 1997.
/s/ Xxxxx X. Xxxx
-----------------
Xxxxx X. Xxxx
24
EXECUTION AND ACKNOWLEDGMENT BY XXXX TECHNOLOGY, INC:
XXXX TECHNOLOGY, INC.
Date: December 5, 1997 By: /s/ Xxxx X. Xxxxxxx, Xx.
--------------------------
Xxxx X. Xxxxxxx, Xx.
President and Chief Executive Officer
25
EXHIBIT A
**