EXHIBIT 10.22
August 13, 1996
Xxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Dear Xxxx:
This letter sets forth the substance of the separation and consulting
agreement (the "Agreement") which RF Monolithics, Inc. (the "Company") is
offering to you to aid in your employment transition.
1. SEPARATION. Your last day of employment with the Company was July 15,
1996 (the "Separation Date"). The Company has accepted your resignations from
the positions of President, Chief Executive Officer, and Director of the
Company.
2. ACCRUED SALARY AND PAID TIME OFF. You acknowledge that the Company
has paid you all accrued salary, and all accrued and unused vacation earned
through the Separation Date, subject to standard payroll deductions and
withholding. You are entitled to these payments regardless of whether you sign
this Agreement.
3. CONSULTANCY. The Company agrees to retain you, and you agree to make
yourself available and perform, as a consultant, beginning on the Separation
Date.
a. CONSULTING PERIOD. The Company will continue to retain you as a
consultant until you obtain other regular and ongoing employment, or until
February 28, 1998, whichever occurs earlier. "Regular and ongoing employment",
as used in this subparagraph, refers to any arrangement in which you are an
employee and not an independent contractor, without regard to the number of
hours worked by you in any given period. You agree to notify the Company in
writing at least ten (10) days before engaging in any such regular and ongoing
employment, and you agree that your acceptance of such employment shall be
subject to the restrictions set forth in Paragraph 4, below. The Company agrees
to re-engage you as a consultant if any such other regular and ongoing
employment accepted by you terminates within sixty (60) days of your acceptance
of that employment, but no such re-engagement shall extend the duration of the
Consulting Period beyond February 28, 1998. Acceptance of consulting engagements
as an independent contractor, as defined by the Internal Revenue Service, shall
not constitute "permanent and ongoing employment" for the purposes of this
subparagraph 3(a). The Company may terminate the Consulting Period at any time
for good cause, including, but not limited to, any breach by you of any
provision of this Agreement.
Xxxx X. Xxxxxxxx
August 13, 1996
Page 2
b. CONSULTING DUTIES. You agree that, while you are retained by the
Company as a consultant, you will remain available to provide consulting in any
area of your expertise upon request by a duly authorized officer of the Company.
You agree to exercise the highest degree of professionalism and creative talents
in performing consulting services for the Company. You further agree to openly
support the Company and its management.
c. CONSULTING FEES. During the Consulting Period, the Company agrees to
pay you $12,917.00 per month, which equals the gross salary most recently paid
you during your employment by the Company. The Company will no longer deduct or
withhold any amount from your Consulting Fees for taxes, social security, or
other payroll deductions, but will instead issue you a 1099 form with respect to
your Consulting Fees. You acknowledge that you will be entirely responsible for
the payment of all employment taxes and any other taxes due and owing as a
result of your Consulting Fees, and you hereby indemnify the Company and hold it
harmless from any liability for any taxes, penalties, and interest which may be
assessed by any taxing authority.
d. PERFORMANCE BONUS. Within a reasonable period of time after the
completion of the Company's final audited financial statements for fiscal year
1996, if the Company achieves its target corporate performance objectives, the
Company agrees to pay you the same achievement percentage of your target bonus
as the percentage of target bonus earned by and paid to Xxx Xxxxxxxx. A Schedule
detailing the Company's 1996 Corporate Objective and Executive Bonus Plan is
attached as Exhibit A. You will not receive a performance bonus for consulting
work performed during fiscal years 1997 or 1998, unless the Company in its sole
discretion elects to award you such a bonus.
4. OTHER WORK ACTIVITIES. During the Consulting Period, you retain the
right to engage in other consulting relationships in addition to your work for
the Company. The Company agrees to make reasonable arrangements to enable you to
perform your work for the Company at such times and in such a manner so that it
does not interfere with other activities in which you may engage.
a. AGREEMENT NOT TO COMPETE. In order to protect the trade secrets and
confidential and proprietary information of the Company, you agree that, during
the Consulting Period and for an additional one year after the last day of the
Consulting Period, that you will not perform work for any business entity, or
engage in any work activity which is in competition, or is preparing to compete,
with the Company ("Competitive Activity"). "Competitive Activity" shall include
any consulting engagement or employment with Thomson Microsonics SA, Sawtek,
Inc., Xxxxxxxx Laboratories, Inc., Dallas Semiconductor Corporation,
Xxxx X. Xxxxxxxx
August 13, 1996
Page 3
Vectron Technologies Incorporated, Siemens Automotive AG, and their parent or
subsidiary companies, or any company competing or preparing to compete with the
Company in developing, manufacturing, or marketing components and modules based
on Surface Acoustic Wave (SAW) technology for markets currently served by the
Company, including low-power wireless communications, high-frequency timing, and
telecommunications filters. However, you will be allowed to develop,
manufacture, and market products using the types of components and modules
marketed by the Company. You agree that, if you are in doubt as to whether a
particular work activity may comprise Competitive Activity, you will obtain the
written consent of the Company's Board of Directors, which will not be
unreasonably withheld, before undertaking such work activity. For purposes of
this paragraph, the holding of less than five percent (5%) of the outstanding
voting securities of any firm or business organization in competition with the
Company shall not constitute activities or services precluded by this paragraph.
b. AGREEMENT NOT TO SOLICIT. You agree that, during the Consulting
Period and for two years after the last day of the Consulting Period, you will
not, directly or indirectly, induce or attempt to induce any employee of the
Company to accept employment or affiliation involving competitive work with
another firm or corporation of which you are an employee, owner, partner, or
consultant.
5. HEALTH INSURANCE. During the Consulting Period defined above at
Paragraph 3(a), you will continue in the Company's health care plan at your
present level of enrollment. However, the Company will not deduct from your
Consulting Fees any amount representing your contribution payment for health
care benefits; instead, you agree to make your contribution payment directly to
the Company each month. After your consulting relationship with the Company
terminates, and to the extent permitted by the federal COBRA law and by the
Company's current group health insurance policies, you will be eligible to
continue your health insurance benefits at your own expense. You will be
provided with a separate notice of your COBRA rights.
6. EQUITY. Please note that the share figures for the 1987, 1989 and
1993 option grants have been adjusted to reflect the 1:6 stock split effected in
connection with the Company's initial public offering.
a. DECEMBER 18, 1995 OPTION GRANT. As of the Separation Date, you hold
an option to purchase 30,000 shares of the Company's common stock at an exercise
price of $6.25 per share granted to you on December 18, 1995. A total of 3,750
shares have vested as of the Separation Date. In connection with the execution
of this Agreement, the Company hereby
Xxxx X. Xxxxxxxx
August 13, 1996
Page 4
agrees to accelerate the vesting with respect to the remaining 26,250 shares
subject to this option. You may exercise the option for some or all of the
option shares until the date the option terminates (the "Termination Date"). The
Termination Date shall be the later of: (i) thirty (30) days from the Separation
Date or (ii) that period of time to exercise set forth in section 5(c) of the
stock option agreement evidencing the option (the "Option Agreement") to the
extent such exercise within thirty (30) days might result in liability under
Section 16 of the Securities Exchange Act of 1934. The option will terminate and
cease to remain outstanding to the extent it is not exercised prior to the
Termination Date. You acknowledge that you will remain bound by all of the
terms, conditions and limitations of the Option Agreement and the Company's 1982
Amended and Restated Stock Option Plan (the "1982 Plan") to which your option is
subject.
b. NOVEMBER 18, 1993 OPTION GRANT. As of the Separation Date, you hold
an option to purchase 20,833 shares of the Company's common stock at an exercise
price of $4.50 per share granted to you on November 18, 1993. A total of 13,455
shares have vested as of the Separation Date. In connection with the execution
of this Agreement, the Company hereby agrees to accelerate the vesting with
respect to the remaining 7,378 shares subject to this option. You may exercise
the option for some or all of the remaining option shares until the Termination
Date, which shall be the later of: (i) three (3) months from the Separation Date
or (ii) that period of time to exercise set forth in section 5(c) of the Option
Agreement to the extent such exercise within three (3) month might result in
liability under Section 16 of the Securities Exchange Act of 1934. The option
will terminate and cease to remain outstanding to the extent it is not exercised
prior to the Termination Date. You acknowledge that you will remain bound by all
of the terms, conditions and limitations of the Option Agreement and the 1982
Plan to which your option is subject.
c. DECEMBER 1, 1989 OPTION GRANT. As of the Separation Date, you hold
an option to purchase 70,000 shares of the Company's common stock at an exercise
price of $0.60 per share granted to you on December 1, 1989. This option is
fully exercisable for all of the option shares, and will expire in accordance
with its terms if not exercised prior to its Termination Date (see Section 5 of
the Option Agreement). You acknowledge that you will remain bound by all of the
terms, conditions and limitations of the Option Agreement and the option plan to
which this option is subject.
d. APRIL 30, 1987 OPTION GRANT. As of the Separation Date, you hold an
option to purchase 19,167 shares under that 80,000-share option granted to you
on April 30, 1987 at an exercise price of $0.60 per share. You acknowledge that
you have previously exercised the option with respect to 60,833 of the 80,000
shares. The unexercised portion of this option is fully exercisable with respect
to the remaining option shares. The unexercised portion
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August 13, 1996
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of this option will expire in accordance with its terms if not exercised prior
to its Termination Date (see Section 5 of the Option Agreement). You acknowledge
that you will remain bound by all of the terms, conditions and limitations of
the Option Agreement and the option plan to which this option is subject.
e. NOVEMBER 27, 1995 RESTRICTED STOCK BONUS. As of the Separation Date,
you hold 10,000 shares of the Company's common stock pursuant to that Restricted
Stock Bonus Agreement dated November 27, 1995 (the "Bonus Agreement"). No shares
will be vested in accordance with the vesting schedule in section 5(a) of the
Bonus Agreement as of the ninetieth (90th) day following the Separation Date.
The Company hereby exercises its reacquisition right with respect to all 10,000
shares and shall instruct the Escrow Holder (as such term is defined in the
Bonus Agreement) to release the certificate representing the 10,000 shares to
the Company.
You acknowledge that you have no other rights to vest in or acquire stock
of the Company other than those rights enumerated in subparagraphs (a) through
(e) of this Paragraph 6.
7. LOAN REPAYMENT. The Company acknowledges that you have repaid in full
that certain Promissory Note, in the amount or $71,117.38, dated March 28, 1996
and executed by you and the Company.
8. OUTPLACEMENT. The Company will provide you with outplacement services,
including reimbursement for office services, telephone services, and
outplacement counseling from the provider of your choice, upon your provision to
the Company of invoices for such services, up to a total cap of $20,000.00.
9. COMPUTER PURCHASE PROGRAM PARTICIPATION. The Company authorizes you
to participate, during the Consulting Period defined above at Paragraph 3(a), in
its Computer Purchase Program. Your payment for any obligation incurred by you
under the Computer Purchase Program during the Consulting Period shall become
due in full immediately upon the end of the Consulting Period defined above at
Paragraph 3(a).
10. OTHER COMPENSATION OR BENEFITS. You acknowledge that, except as
expressly provided in this Agreement, you will not receive any additional
compensation, severance or benefits after the Separation Date. Specifically, you
acknowledge that, because you will no longer be an employee of the Company after
the Separation Date, you will not be eligible to participate in the Company's
401(k) Plan. You acknowledge that, as of the Separation Date, your participation
in the Company's Employee Stock Purchase Plan terminated, and any
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August 13, 1996
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accumulated payroll deductions which have not been applied to the purchase of
stock will be refunded to you as soon as reasonably practical.
11. EXPENSE REIMBURSEMENTS. You acknowledge that you have submitted your
final documented expense reimbursement statement reflecting all business
expenses you incurred through the Separation Date, if any, for which you seek
reimbursement. The Company will reimburse you for these expenses pursuant to
its regular business practice. In addition, during the Consulting Period defined
above at Paragraph 3(a), the Company will reimburse you, upon your provision of
proper documentation, for reasonable expenses actually incurred by you in the
course of consulting services performed by you at the Company's request.
12. RETURN OF COMPANY PROPERTY. By August 1, 1996, you agree to return to
the Company all Company documents (and all copies thereof) and other Company
property which you have had in your possession at any time, including, but not
limited to, Company files, notes, drawings, records, business plans and
forecasts, financial information, specifications, computer-recorded information,
tangible property (including, but not limited to, computers), credit cards,
entry cards, identification badges and keys; and, any materials of any kind
which contain or embody any proprietary or confidential information of the
Company (and all reproductions thereof).
13. PROPRIETARY INFORMATION OBLIGATIONS. You acknowledge your continuing
obligations under your Proprietary Information and Inventions Agreement, both
during and after your employment, not to use or disclose any confidential or
proprietary information of the Company without prior written authorization from
a duly authorized representative of the Company. A copy of your Proprietary
Information and Inventions Agreement is attached hereto as Exhibit B.
14. CONFIDENTIALITY. The provisions of this Agreement shall be held in
strictest confidence by you and the Company and shall not be publicized or
disclosed in any manner whatsoever; provided, however, that: (a) you may
disclose this Agreement to your immediate family; (b) the parties may disclose
this Agreement in confidence to their respective attorneys, accountants,
auditors, tax preparers, and financial advisors; (c) the Company may disclose
this Agreement as necessary to fulfill standard or legally required corporate
reporting or disclosure requirements; and (d) the parties may disclose this
Agreement insofar as such disclosure may be necessary to enforce its terms or as
otherwise required by law.
15. NONDISPARAGEMENT. Both you and the Company agree not to disparage the
other party, and the other party's officers, directors, employees, shareholders
and agents, in any
Xxxx X. Xxxxxxxx
August 13, 1996
Page 7
manner likely to be harmful to them or their business, business reputation or
personal reputation; provided that both you and the Company shall respond
accurately and fully to any question, inquiry or request for information when
required by legal process.
16. RELEASE. In exchange for the payments and other consideration under
this Agreement to which you would not otherwise be entitled, you agree to
execute the Employee Agreement and Release attached hereto as Exhibit C.
17. CONFIDENTIAL ARBITRATION. To ensure rapid and economical resolution
of any and all disputes which may arise in connection with the Agreement, you
and the Company agree that any and all disputes, claims, causes of action, in
law or equity, arising from or relating to this Agreement or its enforcement,
performance, breach, or interpretation, with the sole exception of those
disputes which may arise from your Proprietary Information and Inventions
Agreement, shall be resolved by final and binding confidential arbitration held
in Dallas, Texas thorough the American Arbitration Association, under its then-
existing Rules and Procedures. Any such arbitration shall be conducted in the
utmost secrecy. Nothing in this paragraph 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.
18. MISCELLANEOUS. This Agreement, including Exhibits A, B, and C,
constitutes the complete, final and exclusive embodiment of the entire agreement
between you and the Company with regard to this subject matter. It is entered
into without reliance on any promise or representation, written or oral, other
than those expressly contained herein, and it supersedes any other such
promises, warranties or representations. This Agreement may not be modified or
amended except in a writing signed by both you and a duly authorized officer of
the Company. This Agreement shall bind the heirs, personal representatives,
successors and assigns of both you and the Company, and inure to the benefit of
both you and the Company, their heirs, successors and assigns. If any provision
of this Agreement is determined to be invalid or unenforceable, in whole or in
part, this determination will not affect any other provision of this Agreement
and the provision in question shall be modified by the court so as to be
rendered enforceable. This Agreement shall be deemed to have been entered into
and shall be construed and enforced in accordance with the laws of the State of
Texas as applied to contracts made and to be performed entirely within Texas.
Xxxx X. Xxxxxxxx
August 13, 1996
Page 8
If this Agreement is acceptable to you, please sign below and on the
attached Employee Agreement and Release, which is part of this Agreement, and
return the originals of both to me.
I wish you luck in your future endeavors.
Sincerely,
RF MONOLITHICS, INC.
By: /s/ Xxx X. Xxxxxxxx
--------------------------------
XXX X. XXXXXXXX
CHIEF EXECUTIVE OFFICER
Exhibit A - Schedule: 1996 Corporate Objective and Executive Bonus Plan
Exhibit B - Proprietary Information and Inventions Agreement
Exhibit C - Employee Agreement and Release
AGREED:
/s/ Xxxx X. Xxxxxxxx
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XXXX X. XXXXXXXX
EXHIBIT C
EMPLOYMENT AGREEMENT AND RELEASE
Except as otherwise set forth in this Agreement, I hereby release, acquit
and forever discharge the Company, its parents and subsidiaries, and their
officers, directors, agents, servants, employees, attorneys, shareholders,
successors, assigns and affiliates, of and from any and all claims, liabilities,
demands, causes of action, costs, expenses, attorneys' fees, damages,
indemnities and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising out of or in any way related to agreements, events, acts or
conduct at any time prior to and including the execution date of this Agreement,
including but not limited to: all such claims and demands directly or indirectly
arising out of or in any way connected with my employment with the Company or
the termination of that employment; claims or demands related to salary,
bonuses, commissions, stock, stock options, or any other ownership interests in
the Company, vacation pay, fringe benefits, expense reimbursements, severance
pay, or any other form of compensation; claims pursuant to any federal, state or
local law, statute, or cause of action including, but not limited to, the
federal Civil Rights Act of 1964, as amended; the federal Americans with
Disabilities Act of 1990; the federal Age Discrimination in Employment Act of
1967, as amended ("ADEA"); the Texas Commission on Human Rights Act, as amended;
tort law; contract law; wrongful discharge; discrimination; harassment; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing.
I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (a) my waiver and release do not apply to any rights or claims that may
arise after the execution date of this Agreement; (b) I have been advised hereby
that I have the right to consult with an attorney prior to executing this
Agreement; (c) I have twenty-one (21) days to consider this Agreement (although
I may choose to voluntarily execute this Agreement earlier); (d) I have seven
(7) days following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement shall not be effective until the date upon
which the revocation period has expired, which shall be the eighth day after
this Agreement is executed by me, provided that the Company has also executed
this Agreement by that date ("Effective Date").
In giving this release, which includes claims which may be unknown to me at
present, I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of Texas or
any other jurisdiction of similar effect with respect to my release of any
claims I may have against the Company.
By: /s/ Xxxx Xxxxxxxx
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XXXX X. XXXXXXXX
Date: August 13, 1996
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