June 25, 2008 Doug Bettinger 6723 Mount Leneve Drive San Jose, CA 95120 Re: Employment Offer Dear Doug, Following recent discussion, Avago Technologies Limited (the “Company”) is pleased to offer you the position of Senior Vice President and Chief...
Exhibit 10.1
June 25, 2008
Xxxx Xxxxxxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Re: Employment Offer
Dear Xxxx,
Following recent discussion, Avago Technologies Limited (the “Company”) is pleased to offer
you the position of Senior Vice President and Chief Financial Officer. This letter (the
“Agreement”) sets forth, among other things, the terms of your employment with the Company. For
the purposes of this Agreement, employment with the Company shall be deemed to include employment
with the Company’s United States subsidiaries.
Duties:
Your employment will commence hereunder effective as of August 1, 2008, subject to your current
employment contractual agreement and / or restrictions, or such other date as mutually agreed
upon. You will be employed as the Chief Financial Officer, and will perform the duties customarily
associated with such position. You will report to the Chief Executive Officer, be located at the
Company’s headquarters in San Jose, California, and will perform your services on a full-time
basis. You shall devote your full working time and attention to the business affairs of the
Company.
Base Salary/Bonus:
You will receive an annual base salary of $350,000 for all hours worked to be paid in accordance
with the Company’s customary payroll procedures, less payroll deductions and withholdings. You
will be eligible to receive a cash bonus each year based upon your and/or the Company’s attainment
of certain performance objectives as determined by the Compensation Committee of the Company’s
Board of Directors (the “Board”). The target level for attaining 100% of your objectives will be
75% of your base salary. Based upon actual performance versus such performance objectives, your
cash bonus payouts may exceed your target amount. You must be employed on the date of payment to
receive your bonus.
Options:
You will be eligible to participate in the Amended and Restated Equity Incentive Plan for Executive
Employees of Avago Technologies Limited and Subsidiaries or any successor equity plan and, subject
to Board or Compensation Committee approval, will be granted an initial non-qualified option to
purchase 300,000 ordinary shares of the Company. Your
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initial option will vest in annual installments over a five year period, 50% based on time and 50%
based on the performance of the Company, in each case, assuming your continued employment over
five years. In addition, subject to Board or Compensation Committee approval, you will be required
to invest between $75,000 and $100,000 in the ordinary shares of the Company within two (2) months
of the commencement of your employment with the Company. At the time of your investment, the
Company will pay you a bonus of $100,000, to be tax protected, which amount you agree immediately
to also invest in the ordinary shares of the Company. Nothing herein shall be deemed a guarantee
of employment or to detract from the at-will nature of your employment with the Company.
Benefits:
You will be eligible to participate in all of the employee benefit plans or programs the company
generally makes available to its executive employees, pursuant to the terms and conditions of such
plans. You will be entitled to 16 days of paid flexible time off.
Expenses:
You shall be entitled to reimbursement for all ordinary and reasonable out-of-pocket business
expenses which are reasonably incurred by you in furtherance of the Company’s business and in
accordance with the Company’s standard policies. Any such reimbursement will be paid as soon as
administratively practicable following your submission of supporting documentation and, in any
event, prior to the end of the calendar year following the year in which the expense was incurred.
Indemnification:
You shall be entitled to enter into an indemnification agreement with the Company containing
customary terms no less favorable than the terms of any such indemnification agreement between the
Company and any other officer. You shall be entitled to be covered under the Company’s directors’
and officers’ insurance policy consistent with the coverage of other officers generally.
Company Policies and Confidentiality Agreements:
As an employee of the Company, you will be expected to abide by all of the Company’s policies and
procedures. As a condition of your employment, you agree to abide by the terms of the Company’s
form of Agreement Regarding Confidential Information and Proprietary Developments.
Other Agreements:
As a condition to your employment with the Company, you agree that your performance of your duties
for the Company will not violate any agreements, obligations or understandings that you may have
with any third party or prior employer. You agree not to make any unauthorized disclosure or use,
on behalf of the Company, of any confidential information belonging to any of your former
employers. You also represent that you are not in unauthorized possession of materials containing
a third party’s confidential and proprietary information.
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Outside Activities:
While employed by the Company, you will not engage in any business activity in competition with
the Company nor make preparations to do so. With prior approval of the Board you may serve as a
member of the board of directors of other companies not in competition with the Company; provided
such service does not interfere with the performance of your duties hereunder.
At-will Employment:
As an employee of the Company, you may terminate your employment at any time and for any reason
whatsoever simply by notifying the Company. Similarly, the Company may terminate your employment at
any time and for any reason whatsoever, with or without cause or advanced notice. Your at-will
employment relationship with the Company cannot be changed except in writing signed by an
authorized representative of the Board.
Severance Benefits:
Termination by The Company Without Cause or for Good Reason, Death or Disability. If you experience
a Separation from Service (as defined below) initiated by the Company without Cause (as defined
below), by you for Good Reason (as defined below) or because of your death or permanent disability,
as determined by the Company, and if, within sixty (60) days of such Separation from Service, you
(or your estate’s executor) sign, and fail to revoke during any applicable revocation period, a
general release of all clams against the Company and its affiliates in a form acceptable to the
Company (a “Release”), the Company shall provide you with continuation of your base salary for a
period of nine (9) months commencing on the sixtieth (60th) day following your
Separation from Service at the rate in effect immediately prior to your Separation from Service,
less applicable withholdings and payment of an amount equal to the lesser of fifty percent (50%) of
(a) your prior year’s bonus and (b) your prior year’s target bonus, both payable in nine (9)
substantially equal installments commencing on the sixtieth (60th) day following your
Separation from Service pursuant to the Company’s normal and customary payroll procedures;
provided, however, that for your first year of employment, your prior year’s bonus and your prior
year’s target bonus shall both be deemed to be your first year’s target bonus. The Company or one
of its subsidiaries shall also pay the group health, dental and vision plan continuation coverage
premiums for you and, if relevant, your covered dependents’ COBRA for the lesser of (i) six (6)
months from the date of your Separation from Service, or (ii) the date upon which you are covered
by similar plans of a new employer.
Change in Control Benefits:
If you experience a Separation from Service (as defined below) initiated by the Company without
Cause (as defined below), by you for Good Reason (as defined below) or because of your death or
permanent disability, as determined by the Company, in each case within the twelve (12) month
period commencing on a Change in Control (as defined below), and if, within sixty (60) days of
your Separation from Service, you sign and fail to revoke during any applicable revocation period
a Release, then in lieu of the severance benefits described in the preceding paragraph, the
Company shall proved you (or your estate) with
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continuation of your base salary for a period of twelve (12) months commencing on the sixtieth
(60th) day following your Separation from Service at the rate in effect immediately
prior to your Separation from Service, less applicable withholdings, and payment of an amount
equal to 100% of the lesser of (a) your prior year’s bonus and (b) your prior year’s target bonus,
both payable in twelve (12) substantially equal installments commencing on the sixtieth
(60th) day following your Separation from Service pursuant to the Company’s normal and
customary payroll procedures; provided, however, that for your first year of employment, your
prior year’s bonus and your prior year’s target bonus shall both be deemed to be your first year’s
target bonus. The Company or one of its subsidiaries shall also pay the group health, dental and
vision plan continuation coverage premiums for you and, if relevant, your covered dependents’
COBRA for the lesser if (i) twelve (12) months from the date of your Separation from Service, or
(ii) the date upon which you are covered by similar plans of a new employer. Finally, your then
outstanding options shall immediately accelerate and become vested and exercisable for that number
of shares subject thereto with respect to which such options would have become vested and
exercisable over the succeeding twelve (12) month period based solely on the passage of time and
your performance of services (i.e., you will receive twelve (12) month accelerated vesting on your
time vesting options). The Company shall provide you with a Release within 10 business days of
your Separation from Service.
Gross-up Payment:
Prior to the Company becoming listed on an established stock exchange or national market system,
Kohlberg Kravis & Xxxxxxx Co., L.P. and Silver Lake Partners, LLC (the “Sponsors”) shall use
commercially reasonable efforts to obtain shareholder approval for any payments that would
otherwise result in an excise tax liability under Section 4999 of the Code following your timely,
written request therefore. In the event the Company becomes listed on any established stock
exchange or a national market system, the Board shall negotiate in good faith with you regarding
whether to amend this Agreement to provide for a payment to offset any excise taxes imposed by
Section 4999 of the Code.
Termination By The Company With Cause or Termination By You:
If your employment by the Company is terminated by the Company with Cause, or if you voluntarily
terminate your employment with the Company (other than for Good Reason), you shall not be entitled
to any severance pay, severance benefits, or any compensation or benefits from the Company
whatsoever, other than as required under applicable law.
Definitions:
Cause: For purposes of this Agreement, “Cause” shall mean (A) your willful refusal to
perform in any material respect your duties or responsibilities for the Company or its affiliates
or willful disregard in any material respect of any financial or other budgetary limitations
established in good faith by the Board; or (B) your material breach of any provision of this
Agreement that is not cured upon ten (10) days notice thereof; or (C) the engaging by you in
conduct that causes material and demonstrable injury, monetarily or otherwise, to the Company or
any affiliates, including, but not limited to, misappropriation or conversion of assets of the
Company or any affiliates (other than
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non-material assets); or (D) your engagement in an act of moral turpitude or conviction of or
entry of a plea of nolo contendere to a felony.
Change in Control: For purposes of this Agreement, “Change in Control” shall mean (i) the
sale of all or substantially all of the assets of the Company and its subsidiaries, taken as a
whole to a person who is not an affiliate of the Company or the Sponsors; (ii) a sale by the
Sponsors or any of their respective affiliates resulting in more than fifty percent (50%) of the
voting shares of the Company being held by a person or related group of persons that does not
include the Sponsors or any of their respective affiliates or (iii) a merger or consolidation of the
Company into another person which is not an affiliate of the Company or the Sponsors, if and only
if as a result of such merger or consolidation the Sponsors lose the ability to elect a majority of
the Board (or the resulting entity).
Good Reason: For purposes of this Agreement, the term “Good Reason” shall mean any of the
following: (A) a material reduction in your base salary (other than as part of a broad salary
reduction program instituted because the Company or its affiliates is in financial distress); (B) a
substantial reduction in your duties and responsibilities as Chief Financial Officer; this does not
include the removal of other non-Finance functions such as Legal, Human Resources, Information
Technology and/or Workplace Services from reporting to you; (C) the elimination or reduction of
your eligibility to participate in the Company’s benefit programs that is inconsistent with the
eligibility of executive employees of the Company to participate therein; (D) the Company informs
you of its intention to transfer your primary workplace to a location that is more than 50 miles
from your workplace as set forth herein; (E) the Company’s material breach of this Agreement that
is not cured within sixty (60) days written notice thereof; and (F) any serious chronic mental or
physical illness of a member of your family that requires you to terminate your employment because
of substantial interference with your duties at the Company; provided, that at the Company’s
request you shall provide the Company with a written physician’s statement confirming the existence
of such mental or physical illness.
Separation from Service: For the purposes of this Agreement, the term “Separation from
Service” shall mean “separation from service” within the meaning of Section 409A of the Code and
the Department of Treasury regulations and other guidance promulgated thereunder.
Section 409A:
Notwithstanding any provision to the contrary in this Agreement, if you are deemed by the Company
at the time of your Separation from Service to be a “specified employee” for purposes of Section
409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to
which you are entitled under this Agreement is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of your benefits shall not
be provided to you prior to the earlier of (a) the expiration of the six-month period measured
from the date of your Separation from Service or (b) the date of your death. Upon the expiration
of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this
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paragraph shall be paid in a lump sum to you, and any remaining payments due under the Agreement
shall be paid as otherwise provided herein.
For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury
Regulation Section 1.409A-2(b)(2)(iii)), your right to receive the installment payments under this
Agreement shall be treated as a right to receive a series of separate payments and, accordingly,
each installment payment hereunder shall at all times be considered a separate and distinct payment.
Entire Agreement:
This Agreement and the documents referenced herein (including, without limitation, the
equity-related documents) constitute the complete, final and exclusive embodiment of the entire
agreement between you and the Company with respect to the terms and conditions of your employment
specified herein. This Agreement supersedes any other such promises, warranties, representations
or agreements. This Agreement may not be amended or modified except by a written instrument signed
by you and an authorized representative of the Board.
Governing Law:
This Agreement will be governed by and construed in accordance with the laws of the State of
California without regard to the conflicts of law provisions thereof.
Dispute Resolution:
To ensure the timely and economical resolution of disputes that arise in connection with your
employment with the Company, you and the Company agree that any and all disputes, claims, or
causes of action arising from or relating to the enforcement, breach, performance or
interpretation of this Agreement, your employment, or the termination of your employment, shall be
resolved to the fullest extent permitted by law by final, binding and confidential arbitration, by
a single arbitrator, in Santa Xxxxx County, California, conducted by Judicial Arbitration and
Mediation Services, Inc. (“JAMS”) under the applicable JAMS employment rules. By agreeing to this
arbitration procedure, both you and the Company waive the right to resolve any such dispute
through a trial by jury or judge or administrative proceeding. The arbitrator shall: (a) have the
authority to compel adequate discovery for the resolution of the dispute and to award such relief
as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include
the arbitrator’s essential findings and conclusions and a statement of the award. The arbitrator
shall be authorized to award any or all remedies that you or the Company would be entitled to seek
in a court of law. The Company shall pay all JAMS’ arbitration fees in excess of the amount of
court fees that would be required if the dispute were decided in a court of law. Nothing in this
Agreement is intended to prevent either you or the Company from obtaining injunctive relief in
court to prevent irreparable harm pending the conclusion of any such arbitration. Notwithstanding
the foregoing, you and the Company each have the right to resolve any issue or dispute over
intellectual property rights by Court action instead of arbitration.
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As required by law, this Agreement is subject to satisfactory proof of your right to work in
the United States. This Agreement and your employment by the Company are also conditioned on the
Company completing, to its satisfaction, a review of your personal and/or business references as
well as a background check.
Xxxx, we are looking forward to a long and fruitful working relationship with you. If you
choose to accept this Agreement under the terms described above, please acknowledge your acceptance
of our offer by returning a signed copy of this letter to our attention.
| Sincerely, |
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| /s/ Xxxx X. Xxx | ||||
| Xxxx X. Xxx | ||||
| President and Chief Executive Officer Avago Technologies Limited |
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| Agreed and Accepted this 4th day of July,
2008 |
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| /s/ Xxxx Xxxxxxxxx | ||||
| Xxxx Xxxxxxxxx | ||||
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