Exhibit 34
FORM OF AGREEMENT FOR TIER II EXECUTIVES
VLSI Technology, Inc.
0000 XxXxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
April __, 1999
[Tier 2 Executive]
[Address]
Dear [Tier 2 Executive]:
The Board of Directors (the "Board") of VLSI Technology, Inc. (the
"Corporation") has determined that it is in the best interests of the
Corporation and its stockholders to assure that the Corporation will continue
to have your dedication and services notwithstanding the possibility, threat
or occurrence of a Change in Control (as defined herein). The Board believes
it is imperative to diminish the distraction that you would face by virtue of
the personal uncertainties created by a pending or threatened Change in
Control and to encourage your full attention and dedication to the
Corporation currently and in the event of any threatened or pending Change in
Control. Further, the Board desires to provide you with compensation and
benefits arrangements upon a Change in Control which ensure that your
compensation and benefits expectations will be satisfied and which are
competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Corporation to enter
into this Agreement (the "Agreement"). [This Agreement constitutes a
complete amendment and restatement of the Executive Change in Control
Severance Agreement that you and the Corporation entered into as of [date of
prior agreement].]
1. TERM OF AGREEMENT. The terms of this Agreement shall become
effective upon the execution hereof by the Corporation and shall continue
unless terminated by written agreement between you and the Corporation;
PROVIDED, that if a Change in Control occurs, then the term of this Agreement
shall continue in effect for a period of not less than twenty-four (24)
months beyond the date (the "Change in Control Date") on which a Change in
Control occurs. No benefits shall be payable hereunder unless there has
been a Change in Control.
2. CHANGE IN CONTROL. A Change in Control shall be deemed to occur
upon the earliest to occur after the date of this Agreement of any of the
following events:
2.1. ACQUISITION OF STOCK BY THIRD PARTY. Any Person (as defined
below) is or becomes the Beneficial Owner (as defined below), directly or
indirectly, of securities of the Corporation representing twenty five percent
(25%) or more of the combined voting power of the Corporation's then
outstanding securities;
April __, 1999
Page 2
2.2. CHANGE IN BOARD OF DIRECTORS. During any period of two (2)
consecutive years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designated by a person who
has entered into an agreement with the Corporation to effect a transaction
described in Sections 2.1, 2.3 or 2.4) whose election by the Board or
nomination for election by the Corporation's stockholders was approved by a
vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute
at least a majority of the members of the Board;
2.3. CORPORATE TRANSACTIONS. The effective date of a merger or
consolidation of the Corporation with any other entity, other than a merger
or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 51% of
the combined voting power of the voting securities of the surviving entity
outstanding immediately after such merger or consolidation and with the power
to elect at least a majority of the board of directors or other governing
body of such surviving entity;
2.4. LIQUIDATION. The approval by the stockholders of the
Corporation of a complete liquidation of the Corporation or an agreement for
the sale or disposition by the Corporation of all or substantially all of the
Corporation's assets; or
2.5. OTHER EVENTS. There occurs any other event of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or a response to any similar item on any similar schedule or
form) promulgated under the Exchange Act (as defined below), whether or not
the Corporation is then subject to such reporting requirement.
2.6. CERTAIN DEFINITIONS. For purposes of this Section 2, the
following terms shall have the following meanings:
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Person" shall have the meaning as set forth in Sections
13(d) and 14(d) of the Exchange Act; PROVIDED, HOWEVER, that Person shall
exclude (i) the Corporation, (ii) any trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation and (iii) any
corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions as their ownership of stock
of the Corporation.
"Beneficial Owner" shall have the meaning given to such term
in Rule 13d-3 under the Exchange Act; PROVIDED, HOWEVER, that Beneficial
Owner shall exclude any Person otherwise becoming a Beneficial Owner by
reason of the stockholders of the Corporation approving a merger of the
Corporation with another entity.
3. TERMINATION FOLLOWING A CHANGE IN CONTROL.
3.1. GENERAL. You shall be entitled to the benefits provided in
Section 4 upon the termination of your employment, provided (a) that such
termination occurs after the date on which the stockholders of the
Corporation approve a transaction the consummation of which would result in
the
April __, 1999
Page 3
occurrence of a Change in Control (the "Approval Date") and (b) the
Change in Control actually occurs, unless such termination is (x) because of
your death or Disability (as defined in Section 3.2), (y) by the Corporation
for Cause (as defined in Section 3.3), or (z) by you other than for Good
Reason (as defined in Section 3.4).
3.2. DEFINITION OF DISABILITY. If, as a result of your
incapacity due to physical or mental illness, you shall have been absent from
the full-time performance of your duties with the Corporation for six (6)
consecutive months, and within thirty (30) days after written notice of
termination is given you shall not have returned to the full-time performance
of your duties, your employment may be terminated for "Disability."
3.3. DEFINITION OF CAUSE. Termination by the Corporation of your
employment for "Cause" shall mean termination (a) upon your willful and
continued failure to perform substantially your duties with the Corporation
(other than any such failure resulting from your incapacity due to physical
or mental illness or any such actual or anticipated failure after your
issuance of a Notice of Termination (as defined in Section 3.5) for Good
Reason), after a written demand for substantial performance is delivered to
you by Board which demand specifically identifies the manner in which the
Board believes that you have not substantially performed your duties, (b)
upon your willful and continued failure to follow and comply substantially
with the specific and lawful directives of the Board, as reasonably
determined by the Board (other than any such failure resulting from your
incapacity due to physical or mental illness or any such actual or
anticipated failure after your issuance of a Notice of Termination for Good
Reason), after a written demand for substantial performance is delivered to
you by the Board, which demand specifically identifies the manner in which
the Board believes that you have not substantially followed or complied with
the directives of the Board, (c) upon your willful commission of an act of
fraud or dishonesty resulting in material economic or financial injury to the
Corporation, or (d) upon your willful engagement in illegal conduct which is
materially and demonstrably injurious to the Corporation. For purposes of
this Section 3.3, no act, or failure to act, on your part shall be deemed
"willful" unless done, or omitted to be done, by you not in good faith.
Notwithstanding the foregoing, you shall not be deemed terminated for Cause
pursuant to Sections 3.3(a), (b), (c) or (d) hereof unless and until there
shall have been delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of
the Board at a meeting of the Board (after reasonable notice to you, an
opportunity for you, together with your counsel, to be heard before the Board
and a reasonable opportunity to cure), finding that in the Board's good faith
opinion you were guilty of conduct set forth above in Section 3.3(a), (b),
(c) or (d) and specifying the particulars thereof in reasonable detail. In
the event of a Change in Control under Section 2.3 pursuant to which the
Corporation is not the surviving entity, then on and after the Change in
Control Date all determinations and actions required to be taken by the Board
under this Section 3.3 shall be made or taken by the board of directors of
the surviving entity, or if the surviving entity is a subsidiary, then by the
board of directors of the ultimate parent corporation of the surviving entity.
3.4. GOOD REASON. You shall be entitled to terminate your
employment for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean, without your express written consent, the occurrence after the
Approval Date of any of the following circumstances unless, in the case of
Sections 3.4(a), (f), (g), or (h), such circumstances are fully corrected
(provided such circumstances
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Page 4
are capable of correction) prior to the Date of Termination (as defined in
Section 3.6) specified in the Notice of Termination given in respect thereof:
(a) the assignment to you of any duties inconsistent with
the position in the Corporation that you held immediately prior to the
Approval Date, a significant adverse alteration in the nature or status of
your responsibilities or the conditions of your employment from those in
effect immediately prior to the Approval Date, or any other action by the
Corporation that results in a material diminution in your position,
authority, title, duties or responsibilities;
(b) the Corporation's reduction of your annual base salary
or targeted annual cash incentive bonus as in effect on the Approval Date or
as the same may be increased from time to time;
(c) the relocation of the Corporation's offices at which
you are principally employed immediately prior to the Approval Date (your
"Principal Location") to a location more than fifteen (15) miles from such
location or the Corporation's requiring you, without your written consent, to
be based anywhere other than your Principal Location, except for required
travel on the Corporation's business to an extent substantially consistent
with your present business travel obligations;
(d) the Corporation's failure to pay to you any portion of
your current compensation or to pay to you any portion of an installment of
deferred compensation under any deferred compensation program of the
Corporation within seven (7) days of the date such compensation is due;
(e) the Corporation's failure to continue in effect any
material compensation or benefit plan or practice in which you are eligible
to participate in on the Approval Date (other than any equity based plan),
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the
Corporation's failure to continue your participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable,
both in terms of the amount of benefits provided and the level of your
participation relative to other participants, as existed at the time of the
Approval Date;
(f) the Corporation's failure to continue to provide you
with benefits substantially similar in the aggregate to those enjoyed by you
under any of the Corporation's life insurance, medical, health and accident,
disability, pension, retirement, or other benefit plans or practices in which
you and your eligible family members were eligible to participate in on the
Approval Date (other than any equity based plans), the taking of any action
by the Corporation which would directly or indirectly materially reduce any
of such benefits, or the failure by the Corporation to provide you with the
number of paid vacation days to which you are entitled on the basis of years
of service with the Corporation in accordance with the Corporation's normal
vacation policy in effect on the Approval Date;
(g) the Corporation's failure to obtain a satisfactory
agreement from any successor to assume and agree to perform this Agreement,
as contemplated in Section 6 hereof; or
April __, 1999
Page 5
(h) any purported termination of your employment that is
not effected pursuant to a Notice of Termination satisfying the requirements
of Section 3.5 hereof (and, if applicable, the requirements of Section 3.3
hereof), which purported termination shall not be effective for purposes of
this Agreement.
Your right to terminate your employment pursuant to this Section 3.4 shall
not be affected by your incapacity due to physical or mental illness. Your
continued employment shall not constitute consent to, or a waiver of rights
with respect to, any circumstance constituting Good Reason hereunder.
3.5. NOTICE OF TERMINATION. Any purported termination of your
employment by the Corporation or by you (other than termination due to death
which shall terminate your employment automatically) shall be communicated by
written Notice of Termination to the other party hereto in accordance with
Section 7. "Notice of Termination" shall mean a notice that shall indicate
the specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination of your employment under the provision so indicated.
3.6. DATE OF TERMINATION, ETC. "Date of Termination" shall mean
(a) if your employment is terminated due to your death, the date of your
death; (b) if your employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that you shall not have
returned to the full-time performance of your duties during such thirty (30)
day period), and (c) if your employment is terminated pursuant to Section 3.3
or Section 3.4 or for any other reason (other than death or Disability), the
date specified in the Notice of Termination (which, in the case of a
termination for Cause shall not be less than thirty (30) days from the date
such Notice of Termination is given, and in the case of a termination for
Good Reason shall not be less than fifteen (15) nor more than sixty (60) days
from the date such Notice of Termination is given). Notwithstanding anything
to the contrary contained in this Section 3.6, if within fifteen (15) days
after any Notice of Termination is given, the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, then the Date of Termination shall be the date on which the
dispute is finally determined, either by mutual written agreement of the
parties, or otherwise; provided, however, that (i) the Date of Termination
shall be extended by a notice of dispute only if such notice is given in good
faith and the party giving such notice pursues the resolution of such dispute
with reasonable diligence; and (ii) in the event of your death pending a
dispute, and the resolution of such dispute is ultimately in your favor, then
the Date of Termination shall be the date specified in the Notice of
Termination.
4. COMPENSATION UPON TERMINATION. The benefits to which you are
entitled upon termination of your employment, subject to Section 3 and the
other terms and conditions of this Agreement, are:
4.1. CAUSE OR VOLUNTARY TERMINATION. If your employment shall be
terminated by the Corporation for Cause or voluntarily terminated by you
other than for Good Reason, the Corporation shall pay you your full base
salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given, plus all other amounts to which you are
entitled under any compensation plan or practice of the Corporation, and the
Corporation shall have no further obligations to you under this Agreement.
April __, 1999
Page 6
4.2. GOOD REASON OR TERMINATION BY CORPORATION WITHOUT CAUSE. If
your employment by the Corporation shall be terminated by you for Good
Reason, or by the Corporation other than for Cause, Disability or death,
then, subject to Section 4.6, you shall be entitled to the benefits provided
below:
(a) the Corporation shall pay to you your full base salary,
when due, through the Date of Termination at the rate in effect at the time
Notice of Termination is given, at the time specified in Section 4.3, plus
(i) that portion of your targeted cash bonuses prorated through the Date of
Termination, (ii) all accrued but unused vacation time through the Date of
Termination and (iii) all other amounts to which you are entitled under any
compensation plan or practice of the Corporation at the time such payments
are due;
(b) in lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the Corporation shall pay as
severance pay to you, at the time specified in Section 4.3, a lump sum
payment equal to the sum of the following:
(1) one and one-half (1-1/2) times your annual base
salary as in effect at the time the Notice of Termination is given or
immediately prior to the Change in Control Date (or the Approval Date if the
Date of Termination is prior to the Change in Control Date), whichever is
greater; and
(2) one and one-half (1-1/2) times your targeted annual
bonus as in effect at the time the Notice of Termination is given or
immediately prior to the Change in Control Date (or the Approval Date if the
Date of Termination is prior to the Change in Control Date), whichever is
greater;
(c) for a period of two (2) years following the Date of
Termination, the Corporation shall, at its sole expense as incurred, provide
you with outplacement services, the scope and provider of which shall be
selected by you in your sole discretion, at an aggregate cost to the
Corporation not to exceed twenty five percent (25%) of your base salary as in
effect at the time the Notice of Termination is given or immediately prior to
the Change in Control Date (or the Approval Date if the Date of Termination
is prior to the Change in Control Date), whichever is greater;
(d) for a eighteen (18) month period after such
termination, or if later until your 65th birthday if you have attained age 55
on the Change in Control Date, the Corporation shall continue to provide you
and your eligible family members, based on the cost sharing arrangement
between you and the Corporation at the time the Notice of Termination is
given, with medical and dental health benefits and life and disability
benefits at least equal to those which would have been provided to you and
them if your employment had not been terminated or, if more favorable to you,
as in effect generally at any time thereafter; provided, however, that if you
become re-employed with another employer and are eligible to receive such
benefits under another employer's plans, the Corporation's obligations under
this Section 4.2(d) shall be reduced to the extent comparable benefits are
actually received by you during the eighteen (18) month period following your
termination, and any such benefits actually received by you shall be reported
to the Corporation. In the event you are ineligible under the terms of such
benefit plans or programs to continue to be so covered, the Corporation shall
provide you with substantially equivalent coverage through other sources or
will provide you with a lump-
April __, 1999
Page 7
sum payment in such amount that, after all taxes on that amount, shall be
equal to the cost to you of providing yourself such benefit coverage. At the
termination of the medical and dental benefits coverage under the second
preceding sentence, you, your spouse and your dependents shall be entitled to
continuation coverage pursuant to section 4980B of the Internal Revenue Code
of 1986, as amended (the "Code"), sections 601-608 of the Employee Retirement
Income Security Act of 1974, as amended, and under any other applicable law,
to the extent required by such laws, as if you had terminated employment with
the Corporation on the date such benefits coverage terminates. The lump-sum
shall be determined on a present value basis using the interest rate provided
in section 1274(b)(2)(B) of the Code on the Date of Termination;
(e) the Corporation shall furnish you for six (6) years
following the Date of Termination (without reference to whether the term of
this Agreement continues in effect) with directors' and officers' liability
insurance insuring you against insurable events which occur or have occurred
while you were a director or officer of the Corporation, such insurance to
have policy limits aggregating not less than the amount in effect immediately
prior to the Change in Control or the Approval Date (whichever is more
favorable to you), and otherwise to be in substantially the same form and to
contain substantially the same terms, conditions and exceptions as the
liability issuance policies provided for officers and directors of the
Corporation in force from time to time, provided, however, that (i) such
terms, conditions and exceptions shall not be, in the aggregate, materially
less favorable to you than those in effect on the date hereof and (ii) if the
aggregate annual premiums for such insurance at any time during such period
exceed two hundred percent (200%) of the per annum rate of premium currently
paid by the Corporation for such insurance, then the Corporation shall
provide the maximum coverage that will then be available at an annual premium
equal to two hundred percent (200%) of such rate;
(f) the Corporation shall transfer ownership to you,
without additional consideration, the home computer hardware, software and
related equipment purchased by you pursuant to the Corporation's computer
purchase policy; and
(g) all unvested stock options held by you on the Date of
Termination shall immediately vest and become exercisable in full and shall
remain exercisable for the period specified in such options.
4.3. TIMING OF PAYMENTS UNDER SECTIONS 4.1 AND 4.2. The payments
provided for in (a) Section 4.1 and (b) Sections 4.2(a) and (b) shall be
made not later than the fifth day following the Date of Termination;
PROVIDED, HOWEVER, that if the amounts of such payments cannot be finally
determined on or before such day, the Corporation shall pay to you on such
day an estimate, as determined in good faith by the Corporation, of the
minimum amount of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in section 1274(b)(2)(B) of the
Code) from the Date of Termination as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the Date of
Termination. In the event that the amount of the estimated payments exceeds
the amount subsequently determined to have been due, such excess shall
constitute a loan by the Corporation to you, payable on the fifth day after
demand by the Corporation (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code) from the date such payment was made by the
Corporation.
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Page 8
4.4. DEATH OR DISABILITY. If your employment by the Corporation
shall be terminated by reason of death or Disability, the Corporation shall
continue payment of your annual base salary, at the rate then in effect on
the date of such termination, for a period of one year.
4.5. NO MITIGATION. You shall not be required to mitigate the
amount of any payment provided for in this Section 4 by seeking other
employment or otherwise nor, except as provided in Section 4.2(d), shall the
amount of any payment or benefit provided for in this Section 4 be reduced by
any compensation earned by you as the result of employment by another
employer or self-employment, by retirement benefits, by offset against any
amount claimed to be owed by you to the Corporation, or otherwise.
4.6 TAXES. You shall bear all expense of, and be solely
responsible for, all federal, state, local or foreign taxes due with respect
to any payment received hereunder, including, without limitation, any excise
tax imposed by Section 4999 of the Code; PROVIDED, HOWEVER, that any payment
or benefit, or the acceleration of any payment or benefit including the
acceleration of vesting of any stock options, received or to be received by
you or for your benefit in connection with a Change in Control or the
termination of your employment (whether payable pursuant to the terms of this
Agreement ("Contract Payments") or any other plan, arrangements or agreement
with the Corporation or an affiliate (collectively with the Contract
Payments, the "Total Payments")) that would constitute a "parachute payment"
within the meaning of Section 280G of the Code, shall be reduced to the
extent necessary so that no portion thereof shall be subject to the excise
tax imposed by Section 4999 of the Code but only if, by reason of such
reduction, the net after-tax benefit received by you shall exceed the net
after-tax benefit received by you if no such reduction were made. For
purposes of this Section 4.6, "net after-tax benefit" shall mean (i) the
Total Payments which you receive or are then entitled to receive from the
Corporation that would constitute "parachute payments" within the meaning of
Section 280G of the Code, less (ii) the amount of all federal, state and
local income and employment taxes payable by you with respect to the
foregoing calculated at the highest marginal income tax rate for each year in
which the foregoing shall be paid to you (based on the rate in effect for
such year as set forth in the Code as in effect at the time of the first
payment of the foregoing), less (iii) the amount of excise taxes imposed with
respect to the payments and benefits described in (i) above by Section 4999
of the Code. The foregoing determination will be made by the Corporation's
independent certified public accountants serving immediately prior to the
Change in Control (the "Accountants"). In the event that the Accountants are
also serving as accountant or auditor for the individual, group or entity
effecting the Change in Control you may appoint another nationally recognized
public accounting firm to make the determination required hereunder (which
firm shall then be referred to as the Accountants hereunder). All fees and
expenses of the Accountants shall be borne by the Corporation. You will
direct the Accountants to submit their determination and detailed supporting
calculations to both you and the Corporation within fifteen (15) days of
receipt from you or the Corporation that you have received or will receive
the Total Payments. If the Accountants determine that such reduction is
required by this Section 4.6, you, in your sole and absolute discretion, may
determine which Total Payments shall be reduced to the extent necessary so
that no portion thereof shall be subject to the excise tax imposed by Section
4999 of the Code, and the Corporation shall pay such reduced amount to you.
You and the Corporation will each provide the Accountants access to and
copies of any books, records, and documents in the possession of you or the
Corporation, as the case may be, reasonably requested by the Accountants, and
otherwise cooperate with the Accountants in connection with the preparation
and issuance of the determinations and calculations contemplated by this
Section 4.6.
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5. YOUR COVENANTS.
5.1. CONFIDENTIALITY. You agree that all drawings, diaries,
correspondence, files, tapes, discs, project books, notebooks, sketches,
reports, manuals, blueprints, documents, electronic mail messages, voicemail
messages, and any other materials in any form or medium which detail your
employment activities and/or which include Confidential Information (as
defined below), including all copies thereof, are and shall be the
Corporation's sole and exclusive property. You agree that the Corporation
will have unrestricted access to such materials at any time during the term
of your employment with or without notice to you. In addition, you agree to
hold in confidence and not use or disclose, either during or after
termination of your employment with the Corporation, any Confidential
Information which you obtain or create during the period of your employment,
whether or not during working hours, except to the extent authorized by the
Corporation. Upon the Corporation's request, or upon termination of your
employment for any reason, you will deliver to the Corporation all such
Confidential Information in your possession or control in all forms,
including all copies thereof, and destroy all copies that cannot be
delivered. You promise and agree that you shall not misuse, misappropriate,
or disclose any of the trade secrets, including current Corporation products
or services, directly or indirectly, or use them in any way, either during
the term of this Agreement or at any time thereafter, except as required in
the course of your employment. As used in this Agreement, the term
"Confidential Information" means information belonging or relating to the
Corporation that is not publicly available, and includes, but is not limited
to, trade secrets consisting of formulas, patterns, devices, secret
inventions, processes, and compilations of information, including, but not
limited to, marketing, engineering, sales, employment, employees,
compensation, operations, future or proposed products or services (whether
these are planned, under consideration, or in production), and any features
of those products or services, information related to financial lists,
records, and specifications, all of which the Corporation owns and regularly
uses in operating its business. It includes not only the Corporation's
information, but also information which the Corporation has obtained from a
third party under an obligation of confidentiality. Such Confidential
Information may be in writing; may or may not be marked as proprietary or
confidential; may be a sketch or drawing; may be a machine or computer
program; may be verbal; may be stored in an electronics storage medium; or
may be in a combination of forms and/or in forms not enumerated here.
5.2. NONSOLICITATION. You will not, either during the term of
your employment, or for a period of one and one-half (1-1/2) years after your
employment has terminated, solicit any of the Corporation's employees for a
competing business or otherwise induce or attempt to induce such employees to
terminate their employment with the Corporation.
5.3. INTELLECTUAL PROPERTY. You hereby agree promptly to
disclose to the Corporation, and hereby assign and agree to assign to the
Corporation or its designee, your entire right, title, and interest in and to
all Intellectual Property (as defined below) which you develop either alone
or with others during your employment with the Corporation and which: (i)
pertains to any line of the Corporation's business activity, or any of the
Corporation's actual or demonstrably anticipated research and development;
(ii) involves the use of the Corporation's material, facilities, or trade
secret information, whether or not during working hours; (iii) relates to any
of your work during the period of your employment with the Corporation,
whether or not during normal working hours; or (iv) is developed wholly or
partially during the Corporation's normal working hours. You agree to
perform, both during and after your employment, all necessary lawful acts to
permit and assist the Corporation, at its expense, to obtain and enforce the
full benefits, enjoyment, rights and title throughout the world in the
Intellectual
April __, 1999
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Property hereby assigned to it. Such acts include, but are not
limited to, executing documents and assisting or cooperating in legal
proceedings. In addition, you agree to disclose to the Corporation, in
confidence if requested, all Intellectual Property that you have developed to
permit the Corporation to determine whether or not the Intellectual Property
should be the Corporation's property. As used in this Agreement, the term
"Intellectual Property" means patents, designs, trademarks, discoveries,
formulae, processes, manufacturing, techniques, trade secrets, inventions
(whether patentable or not), improvements, ideas, works registerable as "mask
works," or copyrightable works, including all rights to obtain, register,
perfect and enforce these proprietary interests throughout the world.
Notwithstanding the foregoing, this Section 5.3 does not apply to an
Invention which qualifies fully under the provisions of Section 2870 of the
California Labor Code.
5.4. MODIFICATION. If the covenants contained in this Section 5
are, in the view of any court or arbitrator asked to rule upon the issue,
deemed unenforceable by reason of being too extensive in nature or scope,
then the same shall be deemed to cover only the greatest nature or scope, as
the case may be, that will not render it unenforceable.
5.5. SPECIFIC PERFORMANCE. You acknowledge and agree that the
Corporation cannot be fully or adequately compensated in damages for a
violation of the covenants contained in this Section 5, and that, in addition
to any other relief to which the Corporation may be entitled, it shall be
entitled to injunctive and equitable relief.
6. SUCCESSORS; BINDING AGREEMENT.
6.1. SUCCESSOR TO ASSUME AGREEMENT. The Corporation shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Corporation to expressly assume and agree to perform
this Agreement. Failure of the Corporation to obtain such assumption and
agreement prior to the Change in Control Date shall be a breach of this
Agreement and shall entitle you to terminate your employment and receive
compensation from the Corporation in the same amount and on the same terms to
which you would be entitled hereunder if you terminate your employment for
Good Reason following the Approval Date, except that for purposes of
implementing the foregoing, the Change in Control Date shall be deemed the
Date of Termination. Unless expressly provided otherwise, "Corporation" as
used herein shall mean the Corporation as defined in this Agreement and any
successor to its business and/or assets as aforesaid.
6.2. BINDING AGREEMENT. This Agreement shall inure to the
benefit of and be enforceable by you and your personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amount would still be
payable to you hereunder had you continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to your devisee, legatee or other designee or, if there is no such
designee, to your estate.
7. NOTICE. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing
and shall be deemed to have been duly given when received if personally
delivered; when transmitted if transmitted by telecopy; the day after it is
sent, if sent for next day delivery to a domestic address by recognized
overnight delivery service (E.G., Federal Express); and upon receipt, if sent
by certified or registered mail, return receipt requested. All notices,
requests, demands and other communications shall be addressed to the
respective addresses set
April __, 1999
Page 11
forth on the first page of this Agreement, provided that all notices to the
Corporation shall be directed to the attention of the Board with a copy to
the Secretary of the Corporation, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
8. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by you and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement. All references to sections of the Exchange Act or the Code shall
be deemed also to refer to any successor provisions to such sections. Any
payments provided for hereunder shall be paid net of any applicable
withholding required under federal, state or local law. The obligations of
the Corporation under Section 4 shall survive the expiration of the term of
this Agreement. The section headings contained in this Agreement are for
convenience only, and shall not affect the interpretation of this Agreement.
9. SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force and
effect.
10. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
11. SUITS, ACTIONS, PROCEEDINGS, ETC.
11.1. COMPENSATION DURING DISPUTE, ETC. Your compensation during
any disagreement, dispute, controversy, claim, suit, action or proceeding
(collectively, a "Dispute"), arising out of or relating to this Agreement or
the interpretation of this Agreement shall be as follows:
If there is a termination followed by a Dispute as to whether you are
entitled to the payments and other benefits provided under this Agreement,
then, during the period of that Dispute the Corporation shall pay you fifty
percent (50%) of the amount specified in Sections 4.2(a) and 4.2(b) hereof,
and the Corporation shall provide you with the other benefits provided in
Section 4.2 of this Agreement, if, but only if, you agree in writing that if
the Dispute is resolved against you, you shall promptly refund to the
Corporation all payments you receive under Sections 4.2(a) and 4.2(b) of this
Agreement plus interest at the rate provided in Section 1274(d) of the Code,
compounded quarterly. If the Dispute is resolved in your favor, promptly
after resolution of the dispute the Corporation shall pay you the sum that
was withheld during the period of the Dispute plus interest at the rate
provided in Section 1274(d) of the Code, compounded quarterly.
11.2. LEGAL FEES. The Corporation shall pay to you all legal
fees and expenses incurred by you in connection with any Dispute arising out
of or relating to this Agreement or the interpretation thereof (including,
without limitation, all such fees and expenses, if any, incurred in
contesting or disputing any termination of your employment or in seeking to
obtain or enforce any right
April __, 1999
Page 12
or benefit provided by this Agreement, or in connection with any tax audit or
proceeding to the extent attributable to the application of section 4999 of
the Code to any payment or benefit provided hereunder), regardless of the
outcome of such proceeding, provided that in the event you commence such
action, you shall not be entitled to recover such fees and costs if the court
determines that you brought the claim in bad faith. Any attorneys' fees and
costs incurred by you shall be paid by the Corporation in advance of the
final disposition of such action or challenge, as such fees and expenses are
incurred, provided that you hereby agree to repay such amounts, net of any
income taxes paid or payable by you with respect to such amounts, if such
amounts are incurred in connection with an action commenced by you if it is
ultimately determined by the court that you brought such claim in bad faith.
11.3. CHOICE OF LAW; ARBITRATION. The internal laws of the State
of California, United States of America, applicable to contracts entered into
and wholly to be performed in California by California residents, without
reference to any principles concerning conflicts of law, shall govern the
validity of this Agreement, the construction of its terms and the
interpretation of the rights and duties of the parties hereunder. Any
controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled by the following procedures: Either party
may send the other written notice identifying the matter in dispute and
involving the procedures of this Section 11.3. Within fourteen (14) days
after such written notice is given, one or more principals of each party
shall meet at a mutually agreeable location in San Francisco, California, for
the purpose of determining whether they can resolve the dispute themselves by
written agreement, and, if not, whether they can agree upon a third-party
impartial arbitrator (the "Arbitrator") to whom to submit the matter in
dispute for final and binding arbitration. If the parties fail to resolve
the dispute by written agreement or agree on the Arbitrator within such
twenty-one (21) day period, either party may make written application to the
Judicial Arbitration and Mediation Services ("JAMS"), 0 Xxxxxxxxxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx, for the appointment of a single Arbitrator to
resolve the dispute by arbitration and at the request of JAMS, the parties
shall meet with JAMS at its offices or confer with JAMS by telephone within
ten (10) calendar days of such request to discuss the dispute and the
qualifications and experience which each party respectively believes the
Arbitrator should have; PROVIDED, HOWEVER, the selection of the Arbitrator
shall be the exclusive decision of JAMS and shall be made within thirty (30)
days of the written application to JAMS. Within 30 days of the selection of
the Arbitrator, the parties shall meet in San Francisco, California with such
Arbitrator at a place and time designated by the Arbitrator after
consultation with the parties and present their respective positions on the
dispute. Each party shall have no longer than one day to present its
position, the entire proceedings before the Arbitrator shall be on no more
than three consecutive days, and the award shall be made in writing no more
than 30 days following the end of the proceeding. Such award shall be a
final and binding determination of the dispute and shall be fully enforceable
as an arbitration award in any court having jurisdiction and venue over the
parties. The non-prevailing party (as determined by the Arbitrator) shall
pay the Arbitrator's fees and expenses.
12. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all other prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by
any officer, employee or representative of any party hereto; and any prior
agreement of the parties hereto in respect of the subject matter contained
herein, including, without limitation, any prior severance agreements, is
hereby terminated and canceled. Any of your rights hereunder shall be in
addition to any rights you may otherwise have under benefit plans or
agreements of the Corporation to which you are a party or in which you are a
participant, including, but not limited to, any Corporation sponsored
employee benefit plans and stock options plans. Provisions of this Agreement
shall not in any
April __, 1999
Page 13
way abrogate your rights under such other plans and agreements.
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Corporation the enclosed copy of this letter.
A duly authorized officer of the Corporation will sign this letter and a
fully executed copy will be returned to you, constituting our agreement on
this subject. Unless and until accepted in writing by the Corporation, this
Agreement is deemed to be neither executed nor effective.
Sincerely,
VLSI TECHNOLOGY, INC.
By:________________________________
Its:_______________________________
Agreed and Accepted,
this ___ day of April, 1999.
___________________________________
