EXHIBIT 10.26
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (the "Agreement") dated as of May 6, 1998 by and
between INTEGRATED CIRCUIT SYSTEMS, INC., a Pennsylvania corporation (the
"Company") and XXXXX X. XXXXXX ("Employee").
1. EMPLOYMENT. The Company hereby employs Employee as its Chief Executive
Officer (the "Position"), and Employee hereby accepts such employment and agrees
to perform Employee's duties and responsibilities hereunder, in accordance with
the terms and conditions hereinafter set forth.
1.1 EMPLOYMENT TERM. The period of Employee's employment by the
Company pursuant to this Agreement (the "Employment Term") shall commence _____
and shall continue for a six-month period thereafter, ending ______, unless
terminated prior thereto in accordance with Section 5 hereof; provided, however,
that the Employment Term shall automatically be extended by the Company, at its
sole option.
1.2 DUTIES AND RESPONSIBILITIES.
(a) During the Employment Term, Employee shall serve in the
previously identified Position and shall perform all duties and accept all
responsibilities incident to such Position or as may be assigned to him by the
Company's Board of Directors.
(b) Employee represents to the Company that Employee is not subject
to or party to (and except for the present Agreement and any other agreement
with the Company, Employee agrees during the Employment Term not to become
subject to or a party to) any employment agreement, non-competition covenant,
non-disclosure agreement or other agreement, covenant, understanding or
restriction of any nature which would prohibit Employee from executing this
Agreement and performing fully Employee's duties and responsibilities hereunder,
or which would in any manner, directly
or indirectly, limit or affect the duties and responsibilities which may now or
in the future be assigned to Employee by the Company, including without
limitation any duties and responsibilities relating to the business in which the
Company (including its subsidiaries) is engaged during the Employment Term or
for which Employee has notice during such Employment Term that the Company is
planning to be engaged within the six (6) month period following any expiration
or termination of this Agreement (the "Business" of the Company).
1.3 EXTENT OF SERVICE. During the Employment Term, Employee agrees
to use best efforts to carry out the duties and responsibilities under Section
1.2 hereof and to devote full time, attention and energy thereto. Employee
further agrees not to work either on a part time or independent contracting
basis, or serve as a director, officer or in any other capacity, or to otherwise
become engage in any business activity or enterprise (including any material
investment therein) during the Employment Term without the prior disclosure to
and consent of the Company in accordance with its policies. The foregoing shall
not, however, be construed as prohibiting the ownership of not more than 5% of
any class of securities registered pursuant to the Securities Exchange Act of
1934, as amended, provided that such ownership represents solely a passive
investment and the Employee does not in any way manage, control, perform
services for or otherwise take any role therein which may create a conflict of
interest or otherwise interfere with Employee's ability to discharge Employee's
duties and responsibilities to the Company.
1.4 BASE COMPENSATION.
(a) For all the services rendered by Employee hereunder, the Company
shall pay Employee a salary at a monthly rate of Ten Thousand ($10,000.00)
dollars per month.
(b) During the Employment Term, Employee shall also be entitled to
participate in such vacation pay, retirement, other fringe benefit plans and
prerequisites, if any, as may be duly authorized from time to time by the
Company, in its sole discretion, the terms and provisions of which plans and
prerequisites shall also be in the sole discretion of the Company, which terms
and provisions shall be controlling with
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respect to the manner in which any such benefit or prerequisite is earned,
accrued, vested, paid or otherwise available.
1.5 INCENTIVE COMPENSATION. In addition to the compensation set forth
in Section 1.4 hereof, Employee shall be entitled to participate in such
incentive compensation plans, if any, as may be applicable to its management
level employees, and as may be duly established from time to time in respect to
the Employment Term by the Company in its sole discretion, which terms and
provisions shall be controlling with respect to the manner in which any such
incentive compensation is earned, accrued, vested, paid or otherwise made
available to its participants.
2. EXPENSES. Employee shall be reimbursed for the reasonable business
expenses incurred by Employee in connection with Employee's performance of
services hereunder during the Employment Term upon presentation of an itemized
account and written proof of such expenses in accordance with policies duly
established by the Company. Termination of Employee's Employment Term in
accordance with Section 5 of this Agreement shall not terminate the obligation
to reimburse expenses properly incurred prior to the date of such termination in
accordance with the Company's policies.
3. CONFIDENTIAL INFORMATION; NON-SOLICITATION AND NON-COMPETITION.
Employee acknowledges and agrees that (i) Employee has executed or will execute
the Company's standard forms of confidential information (the "Confidentiality
Agreements"), (ii) during Employee's employment and for a period of eighteen
(18) months after the employment of Employee by Company has ended, Employee will
not, directly or indirectly, solicit the employment of any person who was
employed by the Company or any of its subsidiaries on a full or part time basis
at the time of Employee's employment, unless such person was (1) involuntarily
discharged by the Company or such subsidiary or (2) voluntarily terminated his
or her relationship with the Company prior to Employee's termination and (iii)
during Employee's employment and for a twelve (12) month period immediately
following any termination of such employment,
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without the prior written consent of the Company, directly or indirectly, engage
in, participate in, have any interest on behalf of Employee or others in, or
permit Employee's name to be used with any corporation or other entity or
enterprise which competes with the Business in the geographical areas where the
Company conducts such Business, whether as an employee, officer, director,
agent, consultant, investor, security holder, creditor, guarantor, partner,
joint venturer, beneficiary under a trust or otherwise (subparagraphs (ii) and
(iii) are collectively the "Restrictive Covenants").
4. ARBITRATION AND EQUITABLE RELIEF.
(a) Employee acknowledges that the restrictions contained in the
Confidentiality Agreements and Restrictive Covenants are reasonable and
necessary to protect the legitimate interests of the Company and its affiliates,
that the Company would not have entered into this Agreement in the absence of
such restrictions, and that any violation of any provision of the
Confidentiality Agreements or Restrictive Covenants will result in irreparable
injury to the Company. Employee represents that Employee's experience and
capabilities are such that the restrictions contained in the Confidentiality
Agreements and Restrictive Covenants will not prevent Employee from obtaining
employment or otherwise earning a living at the same general level of economic
benefit as anticipated by this Agreement. Employee further represents and
acknowledges that (i) as a condition of entering into this Agreement, Employee
has reconfirmed, and does hereby reconfirm that all of the provisions of the
Confidentiality Agreements and Restrictive Covenants are and will continue to be
valid and binding upon Employee, and enforceable against Employee to the full
extent set forth therein, (ii) Employee has been advised by the Company to
consult Employee's own legal counsel in respect of this Agreement and the
statements set forth herein and in respect of the Confidentiality Agreements and
Restrictive Covenants, and (iii) that Employee has, prior to execution of this
Agreement and the Confidentiality Agreements, reviewed this Agreement, the
Confidentiality Agreements and the Restrictive Covenants with Employee's
counsel.
(b) Except as provided in Section 4(c) below, Employee and the Company
agree that any dispute or controversy arising out of or relating to any
interpretation,
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construction, performance or breach of this Agreement, shall be exclusively
settled by arbitration to be held in the county and state set forth in the
following paragraph, in accordance with the National Rules for the Resolution of
Employment Disputes as then in effect of the American Arbitration Association. A
panel of three arbitrators shall be chosen in accordance with such rules to
conduct the arbitration, unless Employee and the Company agree in writing to
have such disputes settled by a single arbitrator. The arbitrators may grant
injunctions or other relief in such dispute or controversy, but shall have no
authority to set aside or review any decision of the board of directors or its
compensation committee which under the terms of this Agreement or the
controlling Company benefit plan or policy are discretionary with the Company,
unless such decisions are shown by clear and convincing evidence to have been
made in bad faith. The decision of the arbitrators shall be final, conclusive
and binding on the parties to the arbitration. Judgment may be entered on the
arbitrators' decision in any court having jurisdiction. The Company and Employee
shall each pay one-half of the costs and expenses of such arbitration, and each
of the Company and Employee shall separately pay its counsel fees and expenses,
subject, however, to the right of the arbitrators to assess costs and expenses
in circumstances where such arbitrators deem it appropriate to do so. If a party
shall attempt to vacate or appeal from an arbitration award or obtain an order
staying the arbitration, and such party (the "non-prevailing party") is
unsuccessful in obtaining such judicial relief, then the non-prevailing party
will be responsible for all attorney's fees and costs incurred by the other
party in connection therewith.
(c) Employee agrees that the Company shall be entitled (in addition to
seeking relief pursuant to an arbitration pursuant to (b) above) to preliminary
and permanent injunctive relief, without the necessity of proving actual
damages, as well as an equitable accounting of all earnings, profits and other
benefits arising from any violation of the Confidentiality Agreements or
Restrictive Covenants, which rights shall be cumulative and in addition to any
other rights or remedies to which the Company may be entitled as set forth in
the Confidentiality Agreements or otherwise. Employee irrevocably and
unconditionally (i) agrees that any such suit, action or other legal proceeding
commenced by the Company may be brought in the United States District Court for,
or in any court of
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general jurisdiction in the county of Xxxxxxxxxx, Commonwealth of Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Employee may
have to the laying of venue of any such suit, action or proceeding in any such
court. Employee also irrevocably and unconditionally consents to the service of
any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 10 hereof.
(d) In the event that any of the provisions of the Confidentiality
Agreements or Restrictive Covenants should ever be held or adjudicated to exceed
the time, geographic, product or service, or other limitations permitted by
applicable law in any jurisdiction, then such provisions shall be deemed
reformed in such jurisdiction to the maximum time, geographic, product or
service, or other limitations permitted by applicable law.
(e) Employee agrees that Employee will provide, and that the Company may
similarly provide, a copy of the Confidentiality Agreements and Restrictive
Covenants to any business or enterprise (i) which Employee may directly or
indirectly own, manage, operate, finance, join, control or participate in the
ownership, management, operation, financing, control or control of, or (ii) with
which Employee may be connected with as an officer, director, employee, partner,
principal, agent, representative, consultant or otherwise, or in connection with
which Employee may use or permit Employee's name to be used.
5. TERMINATION. The Employment Term shall terminate prior to its
expiration as set forth in Section 1.1 above, and Employee's employment by the
Company shall be terminated, upon the occurrence of any of the following events
(and in accordance with the following provisions associated with such events):
5.1. DISABILITY. In the event that Employee is unable fully to perform
Employee's duties and responsibilities hereunder to the full extent required by
the board of directors of the Company by reason of illness, injury or incapacity
for more than ninety (90) days, during which time Employee shall continue to be
compensated as provided in Section 1.4 hereof (less any payments due Employee
under disability benefit
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programs, including Social Security disability, worker's compensation and
disability retirement benefits), the Employment Term may be terminated by the
Company, and the Company shall have no further liability or obligation to
Employee for compensation hereunder; provided, however, that Employee will be
entitled to receive the payments prescribed under any disability benefit plan
which may be in effect for employees of the Company and in which Employee
participated at the date of such disability, and a pro-rata portion to the date
of disability of any earned incentive compensation, if any, referred to in
Section 1.5 hereof in respect of the fiscal year during which Employee first
became disabled. In the event of any dispute under this Section 5.1 and to the
extent determined by the Company to be job-related and consistent with business
necessity, Employee shall submit to a physical examination by a licensed
physician selected by the Company.
5.2. DEATH. In the event that Employee dies during the Employment Term,
the Company shall pay to Employee's executors, legal representatives or
administrators an amount equal to the installment of Employee's Monthly Salary
set forth in Section 1.4 hereof for the month in which Employee dies, and a pro-
rata portion to the date of such death of any earned incentive compensation, if
any, referred to in Section 1.5 hereof in respect of the fiscal year during
which Employee died, and thereafter the Company shall have no further liability
or obligation hereunder to Employee's executors, legal representatives,
administrators, heirs or assigns or any other person claiming under or through
him; provided, however, that Employee's estate or designated beneficiaries shall
be entitled to receive the payments prescribed for such recipients under any
death benefit plan which may be in effect for employees of the Company and in
which Employee participated at the date of such death.
5.3. CAUSE. Nothing in this Agreement shall be construed to prevent
termination of the Employment Term by the Company at any time for "cause." For
purposes of this Agreement, "cause" shall mean (a) dishonesty, wanton or willful
misconduct, commission of a crime involving moral turpitude, substance abuse,
misappropriation of funds, disparagement of the Company (or its management or
employees), or (b) failure of
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Employee to perform, observe and fully comply during the Employment Term with
any of the terms or provisions of this Agreement or the lawful directives of the
Company, or at any time any of the terms or provisions of the Confidentiality
Agreements or Restrictive Covenants, or any other proper cause determined in
good faith by the Company; provided, however, that Employee's conduct shall not
constitute "cause" within the meaning of (b) above unless and until (i) the
Company shall have provided Employee with notice setting forth with specificity
(1) the conduct deemed to constitute such "cause," (2) reasonable action, if
any, that would remedy the objectionable conduct, and (3) a reasonable time
within which Employee may take such remedial action (provided, however, that the
Company shall not be required to provide additional time for remedial action in
the event of repeated instances of the conduct deemed to constitute cause for
which it has already given prior notice and time for remedial action in
accordance with the provisions of this Agreement), and (ii) Employee shall not
have taken and accomplished such specified remedial action within such specified
reasonable time. The Company's liability, if any, for payments to Employee by
virtue of any wrongful termination of Employee's employment pursuant to this
Agreement shall be reduced by and to the extent of any earnings received by or
accrued for the benefit of Employee during any unexpired part of the Employment
Term.
5.4. WITHOUT CAUSE. The Company shall have the right to terminate the
Employment Term without cause at any time by giving Employee written notice of
such termination. Under such circumstances the Company shall continue for a
period of ___ (_) months from the effective date of such termination (the
"Severance Period") (a) the Monthly Salary, (b) in accordance with (and to the
extent permitted by) the provisions of the Company's health plans then in
existence and the provisions of the Consolidated Omnibus Reconciliation Act of
1985 ("COBRA") as supplemented or amended, and subject to any deductibles,
limitations, exclusions, and any co-payments and other cost sharing features
thereof, any medical insurance benefits to which Employee was entitled
immediately prior to the receipt of notice of termination (or, at the Company's
option, pay Employee an amount in cash equal, on an after-tax basis, to the
premiums for such coverages), and (c) to continue to vest and permit the
exercise of such stock options as
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have been granted to the employee prior to the effective date of such
termination, in accordance with and subject to the provisions of the applicable
stock option plans and the option agreements pursuant to which the options were
granted. The foregoing notwithstanding, (i) any obligation to provide medical
insurance or payment in lieu thereof, shall expire when Employee is employed by
a new employer that provides health insurance to its employees on a comparable
cost-sharing basis to that provided by the Company, and (ii) Employee
acknowledges that as a result of the foregoing, any stock options intended to
qualify as incentive stock options will no longer qualify and accordingly will
be treated as non-qualified stock options. Employee shall only have the right to
receive payment for incentive compensation, if any, referred to in Section 1.5
hereof to which Employee would have been entitled in accordance with and subject
to the provisions of the applicable plans or programs as duly adopted by the
Company. Except as expressly stated in this paragraph, upon the termination of
this Agreement Employee shall not be entitled to any payments or benefits which
may be provided to employees of the Company. Payments and benefits to be
provided hereunder shall in all respects be conditioned upon (1) the prior
receipt by the Company from Employee of a general release of all claims of any
nature whatsoever which Employee had, has or may have against the Company and
related parties relating to Employee's employment by the Company (other than
Employee's entitlement under any employee benefit plan or program sponsored by
the Company in which Employee participated and under which Employee has accrued
a benefit) or the termination thereof, such release and covenant to be in form
and substance reasonably satisfactory to counsel for the Company, and (2)
continued compliance by Employee with the Confidentiality Agreements and, for
the duration of the Severance Period, the Restrictive Covenants.
5.5 RESIGNATION FOR GOOD REASON. Employee shall have the right to
terminate the Employment Term at any time for Good Reason, by giving the Company
ninety (90) days' prior written notice of such termination. For purposes of this
Agreement "Good Reason" shall mean, exclusively, a resignation based upon (a) a
failure of the Company to observe or perform any of the material terms or
provisions of this Agreement (including, for example, any reduction in the
Monthly Salary other than a
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reduction which is a concurrent reduction on a
comparable basis of the other management level employees), or (b) a material
reduction in Employee's level of responsibility, position (including office and
title, but not including reporting relationships), authority or duties
(including changes resulting from the assignment to Employee of any duties and
responsibilities inconsistent with Employee's Position as in effect on the date
of this Agreement), in each case as determined by Employee acting reasonably and
in good faith. Employee's notice of termination hereunder shall specify the
basis for Employee's determination of "Good Reason"; provided, however, that the
Company's conduct shall not constitute "Good Reason" unless and until (i)
Employee shall have given the Company written notice setting forth with
specificity (1) the conduct deemed to constitute "Good Reason," (2) reasonable
action that would remedy the objectionable conduct, and (3) a reasonable time
within which the Company may take such remedial action, and (ii) the Company
shall not have taken and accomplished such specified remedial action within such
specified reasonable time. Under such circumstances the Company shall continue
for the Severance Period (as defined in the previous paragraph) (a) the Monthly
Salary, (b) in accordance with (and to the extent permitted by) the provisions
of the Company's health plans then in existence and the provisions of the
Consolidated Omnibus Reconciliation Act of 1985 ("COBRA") as supplemented or
amended, and subject to any deductibles, limitations, exclusions, and any co-
payments and other cost sharing features thereof, any medical insurance benefits
to which Employee was entitled immediately prior to the receipt of notice of
termination (or, at the Company's option, pay Employee an amount in cash equal,
on an after-tax basis, to the premiums for such coverages), and (c) to continue
to vest and permit the exercise of such stock options as have been granted to
the employee prior to the effective date of such termination, in accordance with
and subject to the provisions of the applicable stock option plans and the
option agreements pursuant to which the options were granted. The foregoing
notwithstanding, (i) any obligation to provide medical insurance or payment in
lieu thereof, shall expire when Employee is employed by a new employer that
provides health insurance to its employees on a comparable cost-sharing basis to
that provided by the Company, and (ii) Employee acknowledges that as a result of
the foregoing, any stock options intended to qualify as incentive stock options
will no longer qualify and
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accordingly will be treated as non-qualified stock options. Employee shall only
have the right to receive payment for incentive compensation, if any, referred
to in Section 1.5 hereof to which Employee would have been entitled in
accordance with and subject to the provisions of the applicable plans or
programs as duly adopted by the Company. Except as expressly stated in this
paragraph, upon the termination of this Agreement Employee shall not be entitled
to any payments or benefits which may be provided to employees of the Company.
Payments and benefits to be provided hereunder shall in all respects be
conditioned upon (1) the prior receipt by the Company from Employee of a general
release of all claims of any nature whatsoever which Employee had, has or may
have against the Company and related parties relating to Employee's employment
by the Company (other than Employee's entitlement under any employee benefit
plan or program sponsored by the Company in which Employee participated and
under which Employee has accrued a benefit) or the termination thereof, such
release and covenant to be in form and substance reasonably satisfactory to
counsel for the Company, and (2) continued compliance by Employee with the
Confidentiality Agreements, and, for the duration of the Severance Period, the
Restrictive Covenants.
6. COORDINATION OF BENEFITS; NO SET-OFF. Other severance plans generally,
or policies or agreements, if any, applicable to Employee or to employees of the
Company generally, and any other severance payments required by applicable
statutes or provided under government programs, may provide compensation and
benefits to Employee upon events which would also require the Company pursuant
to this Agreement to provide compensation or continue benefits. In such event,
Employee shall be entitled only to the largest cash compensation provided for
under any of such agreements, plans, policies, statutes or programs, including
this Agreement, and the maximum benefit continuance provided for under any of
such agreements, plans, policies, statutes or programs, including this
Agreement.
7. CERTAIN REDUCTION OF PAYMENTS.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event that it shall be determined as set forth herein that any payment or
distribution by, or benefit
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provided by, the Company to or for the benefit of Employee, whether paid or
payable, made available to or distributed or distributable pursuant to the terms
of this Agreement or otherwise (a "Payment"), would constitute an "excess
parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), and that it would be economically
advantageous to the Company to reduce the Payment to avoid the limitation of the
Company's deduction for such excess parachute payments under Section 280G of the
Code, the aggregate present value of amounts payable or distributable to or for
the benefit of Employee pursuant to this Agreement (such payments, benefits or
distributions pursuant to this Agreement are hereinafter referred to as
"Agreement Payments") shall be reduced (but not below zero) to the Reduced
Amount. The "Reduced Amount" shall be an amount expressed in present value which
maximizes the aggregate present value of Agreement Payments without causing any
Payment not to be deductible by the Company under Section 280G of the Code. For
purposes of this Section 7, present value shall be determined in accordance with
Section 280G(d)(4) of the Code.
(b) All determinations to be made under this Section 7 shall be made by
the Company's firm of independent public accountants (the "Accounting Firm"),
which firm shall use its best efforts to provide its determinations and any
supporting calculations both to the Company and Employee within fifteen (15)
days of any termination for which payment under Section 5 is required hereunder.
Any such determination by the Accounting Firm shall be final and binding upon
the Company and Employee. Employee shall in Employee's sole discretion determine
which and how much of the Agreement Payments shall be eliminated or reduced
consistent with the requirements of this Section 7. Within ten (10) days after
the Company's determination, the Company shall pay (or cause to be paid) or
distribute (or cause to be distributed) to or for the benefit of Employee such
amounts as are then due to Employee under this Agreement.
(c) As a result of the uncertainty in the application of Section 280G of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments, as the case may be, will have
been made by the Company
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which should not have been made ("Overpayment") or that additional Agreement
Payments which have not been made by the Company could have been made
("Underpayment"), in each case, consistent with the calculations required to be
made hereunder. Within two years after the applicable termination of employment,
the Accounting Firm shall review the determination made by it pursuant to the
preceding paragraph. In the event that the Accounting Firm determines that an
Overpayment has been made, any such Overpayment shall be treated for all
purposes as a loan to Employee which Employee shall repay to the Company
together with interest at the applicable Federal rate provided for in Section
7872(f)(2) of the Code (the "Federal Rate"); provided, however, that no amount
shall be payable by Employee to the Company if and to the extent such payment
would not affect the limitations on the amount which is not deductible under
Section 280G of the Code. In the event that the Accounting Firm determines that
an Underpayment has occurred, any such Underpayment shall be promptly paid by
the Company to or for the benefit of Employee together with interest at the
Federal Rate.
(d) All of the fees and expenses of the Accounting Firm in performing the
determinations referred to in subsections (b) and (c) above shall be borne
solely by the Company. The Company agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and expenses of any
nature resulting from or relating to its determinations pursuant to subsections
(b) and (c) above, except for claims, damages or expenses resulting from the
gross negligence or willful misconduct of the Accounting Firm.
8. SURVIVAL. Notwithstanding expiration or termination of the Employment
Term and except as is expressly set forth herein, Employee's obligations under
the Confidentiality Agreements and Restrictive Covenants shall survive and
remain in full force and effect for the periods therein provided, and Employee's
agreements, covenants and representations under Sections 1.2(b) and 3 of this
Agreement, the provisions for arbitration and equitable relief under Section 4
of this Agreement, the provisions for certain payments after the Employment Term
in Sections 5, 6 and 7 of this Agreement,
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and Sections 9, 10, 11, 12, 13 and 14 of this Agreement shall survive and
continue to remain in full force and effect.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAWS PROVISIONS.
10. NOTICES. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):
If to the Company, to:
Integrated Circuit Systems, Inc.
2435 Blvd. of the Generals
X.X. Xxx 000
Xxxxxx Xxxxx, XX 00000-0000
Attention: Chief Financial Officer and Chief Operating Officer
With a copy to the Company's Legal Department.
If to Employee, to:
XXXXX X. XXXXXX
0000 Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
or to such other names or addresses as the Company or Employee, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
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11. CONTENTS OF AGREEMENT; AMENDMENT AND ASSIGNMENT.
(a) This Agreement (including the Restrictive Covenants) and the
Confidentiality Agreements supersede all prior agreements and set forth the
entire understanding among the parties hereto with respect to the subject matter
hereof or thereof and cannot be changed, modified, extended or terminated except
upon written amendment approved by the parties and executed on their behalf by a
duly authorized officer in the case of the Company and Employee in the case of
Employee. Without limitation of the foregoing, Employee acknowledges that the
effect of this provision is that no oral modifications of any nature whatsoever
to this Agreement or the Confidentiality Agreements shall be permitted. In
addition, nothing in this Agreement or in the Confidentiality Agreements shall
be construed as giving Employee any right to be retained in the employ of the
Company beyond the expiration of the Employment Term, and Employee specifically
acknowledges that if Employee's employment by the Company continues beyond the
expiration of the Employment Term, Employee shall be an employee-at-will of the
Company, and thus subject to discharge at any time by the Company with or
without cause and without compensation of any nature hereunder.
(b) Employee acknowledges that from time to time, the Company may
establish, maintain and distribute employee manuals or handbooks or personnel
policy manuals, and officers or other representatives of the Company may make
written or oral statements relating to personnel policies and procedures. Such
manuals, handbooks and statements are intended only for general guidance. No
policies, procedures or statements of any nature by or on behalf of the Company
(whether written or oral, and whether or not contained in any employee manual or
handbook or personnel policy manual), and no acts or practices of any nature,
shall be construed to modify this Agreement or the Confidentiality Agreements or
to create express or implied obligations of any nature to Employee.
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(c) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Employee
hereunder are of a personal nature and shall not be assignable or delegatable in
whole or in part by Employee.
12. SEVERABILITY. If any provision of this Agreement or application
thereof to anyone or under any circumstances is held to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.
13. REMEDIES CUMULATIVE; NO WAIVER. No remedy conferred upon the Company
by this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given hereunder or now or hereafter existing at law or in equity. No
delay or omission by the Company in exercising any right, remedy or power
hereunder, under the Confidentiality Agreements, or existing at law or in equity
shall be construed as a waiver thereof, and any such right, remedy or power may
be exercised by the Company from time to time and as often as may be deemed
expedient or necessary by the Company in it sole discretion.
14. MISCELLANEOUS. All section headings are for convenience only. This
Agreement may be executed in several counterparts, each of which is an original.
It shall not be necessary in marking proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement on May 6, 1998.
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INTEGRATED CIRCUIT SYSTEMS, INC.
Attest:
(SEAL)/s/ Xxxx X. Xxx By /s/ Xxxx X. Xxxxxxx
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Secretary Name: Xxxx X. Xxxxxxx
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Title: Board of Director
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EMPLOYEE:
/s/ Xxxxx Xxxxxx
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AMENDMENT NO. 1
TO
EMPLOYMENT AGREEMENT
BY AND BETWEEN
INTEGRATED CIRCUIT SYSTEMS, INC.
AND
XXXXX X. XXXXXX
This Amendment, which is effective September 14, 1998, modifies the
Employment Agreement dated May 6, 1998 between Integrated Circuit Systems, Inc.
and Xxxxx X. Xxxxxx as follows:
1. Under Section 1.1, Employment Term, the words "September 11, 1998"
appearing in the third and fourth lines shall be deleted and the words
"December 31, 1998" shall be inserted in lieu thereof.
2. Under Section 1.4, Base Compensation, subparagraph (a), the words "Ten
Thousand ($10,000.00) dollars" appearing in the second line shall be
deleted and the words "Twelve Thousand ($12,000.00) dollars" shall be
inserted in lieu thereof.
All other terms and conditions of the Employment Agreement between the parties
dated May 6, 1998 shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be executed as of the date first written above.
Attest: INTEGRATED CIRCUIT SYSTEMS, INC.
/s/ Xxxx X. Xxx By: /s/Xxxx X. Xxxxxxx
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Secretary
Name: Xxxx X. Xxxxxxx
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Title: Board of Director
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EMPLOYEE: /s/Xxxxx Xxxxxx
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18
STOCK OPTION GRANT FOR
XXXXX X. XXXXXX AS CHIEF EXECUTIVE OFFICER
1. PURPOSE. The purpose of this grant is to provide compensation for
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Xxxxx X. Xxxxxx for his services as Chief Executive Officer ("CEO") as
adopted and approved by the Board of Directors (the "Board") of Integrated
Circuit Systems, Inc. (the "Company") on September 11, 1998.
2. GRANT. As approved by the Board, Xx. Xxxxxx will be granted an option to
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purchase 30,000 shares of the Company's Common Stock, under the Company's
1997 Equity Compensation Plan, at the closing price as reported on the
NASDAQ interdealer quotation system on September 11, 1998, the date of this
grant. Such grant is not intended to qualify as an incentive stock option
under Section 422 of the Internal Revenue Code.
3. VESTING. Such option shall vest immediately upon the execution of this
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grant by the Company and Xx. Xxxxxx.
4. EXERCISE OF OPTIONS. The period during which options shall be exercisable
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shall be five years after the date of grant. Subject to the foregoing,
options shall be exercisable at such times and be subject to such
restrictions and conditions as the Board shall in each instance determine,
which restrictions and conditions need not be the same for all options.
5. PAYMENT OF OPTION PRICE. No shares of Common Stock shall be issued upon
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exercise of an option until full payment of the option price therefor has
been made. To the extent permitted by the Board, payment of the option
price may be made: (i) in cash; (ii) by exchange of Common Stock valued at
its fair market value on the date of exercise; (iii) by requesting that the
Company withhold from the number of shares of Common Stock otherwise
issuable upon exercise of the option that number of shares of Common Stock
having an aggregate fair market value on the date of exercise (the
difference between the exercise price and the fair market value on the date
of exercise) equal to the exercise price for all of the shares of Common
Stock as to which the option is being exercised; (iv) by means of a
brokers' cashless exercise procedure; or (v) by any combination of the
foregoing. Where payment of the option price is to be made with shares of
Common Stock acquired under any compensation plan of the Company, such
shares will not be accepted as payment unless the optionee has acquired
such shares at least six months prior to such payment.
6. RIGHTS OF SHAREHOLDERS. Neither an optionee nor his or her legal
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representatives or beneficiaries shall have any of the rights of a
shareholder with respect to any shares subject to any option until such
shares shall have been issued upon the proper exercise of such option.
7. NON-TRANSFERABILITY OF OPTIONS. No option may be sold, transferred,
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pledged, assigned or otherwise alienated or hypothecated otherwise than by
will or by the laws of descent and distribution or, with respect to non-
qualified stock options, pursuant to a qualified domestic relations order
as defined by the Code, or Title I of the Employee Retirement Income
Security Act, or the rules thereunder. Except as otherwise specifically
provided
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herein, all Options granted to an Optionee under the Plan shall be
exercised during the lifetime of such Optionee only by such Optionee. When
an optionee dies, the personal representative or other person entitled to
succeed to the rights of the optionee (the "Successor Optionee") may
exercise such rights, subject to furnishing to the Company proof
satisfactory to the Company of his or her right to receive the option under
optionee's will or under the applicable laws of descent and distribution.
8. TERMINATION OF EMPLOYMENT OR SERVICE OF OPTIONEE. Subject to the condition
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that no option shall be exercisable after the expiration of the period
fixed by the Board in accordance with Section 4 hereof:
8.1 In the event that Xx. Xxxxxx ceases to be an employee or director
of the Company or its subsidiaries by reason of a discharge for
cause or a voluntary separation of the optionee from the Company
without the consent of the Company or its subsidiary, the options
granted to such optionee under the Plan shall terminate
immediately, unless the Board shall otherwise determine.
8.2 In the event that the optionee shall die while employed by the
Company or while serving as a director or within three months
after (i) termination of employment or service due to disability
or (ii) retirement of an optionee who is an employee on the
employee's Retirement Date, any option granted to such optionee
under the Plan shall be exercisable to the extent then
exercisable or on such accelerated basis as the Board may
determine, by his successor in interest, within one year after
the death of the optionee, unless the Board shall otherwise
determine.
8.3 In the event that the employment or service of the optionee
terminates due to disability (within the meaning of Code Section
422(e)(3)) and, with respect to an employee, retirement on the
employee's Retirement Date (as hereinafter defined), any option
granted to such optionee under the Plan shall be exercisable to
the extent then exercisable or on such accelerated basis as the
Board may determine, within a period of three months after such
termination, unless the Board shall otherwise determine.
8.4 For purposes of this Paragraph 8, "Retirement Date" shall mean
any date an employee is otherwise entitled to retire under the
Company's retirement plans and shall include normal retirement at
age 65, early retirement at age 62, and retirement at age 60
after 30 years of service.
9. RIGHTS OF EMPLOYEES. Nothing in the Plan shall interfere with or limit in
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any way the right of the Company or any subsidiary to terminate any
employee's employment or service for the Company at any time, nor confer
upon any optionee any right to continue in the employ of the Company or any
subsidiary. No optionee shall have the right to be selected as an optionee,
or having been so selected, to be selected again as an optionee.
10. ADJUSTMENTS IN SHARES SUBJECT TO PLAN. If the Company shall at any time
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change the number of issued shares of Common Stock without new
consideration to the Company (such as a stock dividend or stock split), the
total number of shares available under the Plan, hereof, and the number and
price of shares of Common Stock subject to outstanding
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options, shall be adjusted so that the aggregate consideration payable to
the company and the value of each option shall not be changed. If, during
the term of any option granted under this Plan, the Common Stock shall be
changed into another kind of stock or into securities of another
corporation, whether as a result of a reorganization, recapitalization,
sale, merger, consolidation, or other similar transaction, or if additional
rights shall be offered with respect to the Common Stock, the Board shall
cause adequate provision to be made so that the optionees shall thereafter
be entitled to receive, upon the due exercise or any outstanding options,
the securities or right that the optionees would have been entitled to
receive had they owned the Common Stock acquired on the exercise of such
options on the effective date of any such transaction.
11. ADDITIONAL RESTRICTIONS. All options shall be subject to and shall contain
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such provisions, limitations and restrictions as may be required on the
date of grant to permit the grant of the options to comply with or qualify
for the exemptions with respect to grants of options and stock provided by
regulations under Section 16 of the Exchange Act and other applicable
provisions of federal and state securities laws, and to satisfy the
requirements of other applicable regulatory authorities.
12. COMPLIANCE WITH RULE 16B-3. With respect to persons subject to Section 16
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of the Exchange Act, transactions under this Plan are intended to comply
with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the plan or action by the
Board fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Board.
13. SUBSTITUTION OF OPTIONS IN A MERGER, CONSOLIDATION OR SHARE EXCHANGE.
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In the event that the Company becomes a party to a merger, consolidation or
share exchange (a "Business Combination") and in connection therewith
substitutes options under the Plan for options of another party to such
Business Combination, notwithstanding the provisions of the Plan, the terms
of such substituted options may have the same terms and conditions
(provided that the number of shares issuable and the exercise prices are
adjusted in accordance with the terms of the Business Combination) as the
former options of such other part to the Business Combination, provided,
however, that the exercise price of the options to be granted under the
Plan shall be lawful consideration as determined by the Board.
IN WITNESS WHEREOF, the Board of Directors has granted this Option as of
the effective date set forth above.
INTEGRATED CIRCUIT SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxx
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ACKNOWLEDGEMENT AND AGREEMENT:
Xx. Xxxxxx acknowledges receipt of this Grant and agrees to all of the
terms and conditions contained herein.
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
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