Management Retation Agreement with Mr. Kelly EXHIBIT 10.33 February 7, 1996 Mr. L. George Klaus 395 Golden Hills Drive Portola Valley, CA 94028 Re: Offer of Employment Dear George: I am happy to extend you the following offer of employment at Platinum Software Corporation (the "Company"). 1. Title. Your position will be President, Chief Executive Officer and Director and you will report to the Board of Directors of the Company. You will be headquartered in the Company's Irvine, California offices. Subject to the authority of the Board, you shall have full and complete authority to run the Company's business and to conduct its operations, including, without limitation the authority, in accordance with the Company's then existing personnel and other policies, to employ and discharge all employees of the Company, and you shall perform, on behalf of the Company, all duties and services as are customarily incident to these offices. The Company acknowledges that you serve as a consultant to or member of the Board of Directors of a number of other companies and that you shall perform such duties as required by those positions for so long as they do not conflict materially with your performance of services hereunder. 2. Base Salary. Your base salary will be $500,000 per year paid semi-monthly in accordance with the Company's normal payroll policies and subject to standard withholding. 3. Annual Bonus. You will receive an annual bonus on a fiscal year basis of up to $250,000 based on a performance plan to be agreed upon between you and the Board of Directors. For fiscal 1996 you will receive a bonus payable on July 15, 1996 equal to $250,000 multiplied by the fraction, the numerator of which is the number of days you were employed by the Company during its 1996 fiscal year and the denominator of which is 365. The Company's fiscal year ends June 30, 1996. <PAGE> 2 February 7, 1996 Mr. L. George Klaus Page 2 4. Additional Incentive Bonus. You will be eligible to receive an annual "additional incentive bonus" of up to $250,000. The performance criteria for this bonus will be agreed upon and determined by you and the Board of Directors before August 1, 1996. This bonus will begin with the Company's 1997 fiscal year. 5. Restricted Stock. The Company offers you the right to purchase 2,000,000 shares of the Company's common stock ("Restricted Stock") on the following terms: (a) The purchase price of the Restricted Stock will be the closing price of the Company's Common Stock on the NASDAQ National Market System on the day before your start date and the purchase will take place on such date. (b) In order to fund the purchase, the Company will provide you a loan in the amount of the purchase price. The loan will be evidenced by a recourse promissory note which will bear simple interest at a rate of 6% per annum or such higher rate of interest as is sufficient to avoid imputed income under Sections 483, 1274 or 7872 of the Internal Revenue Code of 1986, as amended. Interest may be paid annually by you, deferred until the stock is sold, or forgiven by the Board of Directors, at its sole discretion. The principal on the loan will be due on a pro rata basis when the Restricted Stock is sold by you or on the fifth anniversary of the promissory note, whichever occurs first. The promissory note will be secured by a pledge of the Restricted Stock and shall be recourse only to the extent of any deficiency in the value of the Common Stock. If your employment is terminated for cause (as defined below) the repayment of the promissory note shall be accelerated. (c) The Company will retain the right to repurchase the Restricted Stock at a price equal to the initial purchase price. The repurchase rights with respect to 1,400,000 shares of Restricted Stock will lapse according to the following schedule: (i) 350,000 shares immediately upon the date of commencement of your employment. (ii) 29,167 shares on the first day of each month beginning on the date of commencement of your employment and continuing for each month thereafter for a period of 36 months. The Company's repurchase rights with respect to the remaining 600,000 shares of Restricted Stock will lapse according to the following schedule assuming the Company's fiscal year ending June 30, 1996 is the Base Year: (i) 100,000 shares if FY 1997 operating revenues exceed the Base Year revenues by 25% and 100,000 shares if the Company's profit <PAGE> 3 February 7, 1996 Mr. L. George Klaus Page 3 after taxes for FY 1997 is equal to or exceeds 5% of FY 1997 operating revenues. (ii) 100,000 shares if FY 1998 operating revenues exceed the Base Year revenues by 50% and 100,000 shares if the Company's profit after taxes for FY 1998 is equal to or exceeds 10% of FY 1998 operating revenues. (iii) 100,000 shares if FY 1999 operating revenues exceed the Base Year revenues by 75% and 100,000 Shares if the Company's profit after taxes for FY 1999 is equal to or exceeds 15% of FY 1999 operating revenues. (d) All of the Company's repurchase rights with respect to any of the Restricted Stock under this paragraph 5 shall lapse immediately upon a Change of Control. For purposes of this section, a Change in Control shall mean (i) the sale, lease, conveyance or other disposition of all or substantially all of the Company's assets as an entirety or substantially as an entirety to any person, entity or group of persons acting in concert, (ii) any transaction or series of transactions that results in, or that is in connection with, any person, entity or group acting in concert (other than existing affiliates of the Company), acquiring "beneficial ownership" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of such percentage of the aggregate voting power of all classes of voting equity stock of the Company as shall exceed fifty percent (50%) of such aggregate voting power, (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (iv) a liquidation of the Company. Upon a Change of Control, you may elect, in your sole discretion, not to have any portion of such restrictions lapse in order to avoid any "parachute payment" under Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended. (e) If the Company shall terminate your employment agreement without "cause" or if a "constructive termination" has occurred or if you die or become disabled, the Company shall (i) pay you all compensation (including the base salary and any bonus that would have been payable for the next twelve months under paragraph 4 hereof) and benefits due you to the date of termination and for a period of twelve months following the date of such termination and (ii) cancel the Company's repurchase rights on the Restricted Stock for shares that otherwise could be repurchased by the Company with <PAGE> 4 February 7, 1996 Mr. L. George Klaus Page 4 respect to the twelve months following your termination such that the Restricted Stock shall continue to vest for such twelve-month period. During such period, you shall continue to be entitled to participate in the Company's employee benefits plans or arrangements (as set forth in Section 4 above) on the same basis as if you were an employee. For purposes of this Agreement, disabled shall mean your inability due to any physical or mental condition to perform a substantial portion of your duties as President and CEO for 24 or more consecutive weeks. (f) For the purposes of this paragraph 5: (i) "cause" shall mean (A) willful and repeated failure to comply with the lawful directions of the Company's Board of Directors, (B) gross negligence or willful misconduct in the performance of duties to the Company and/or its subsidiaries, (C) commission of any act of fraud with respect to the Company and/or its subsidiaries, (D) conviction of a felony or a crime involving moral turpitude causing material harm to the standing and reputation of the Company and/or its subsidiaries, in each case as determined in good faith by the Company's Board of Directors; and (ii) "constructive termination" shall be deemed to occur if (A)(1) there is a material adverse change in your position causing it to be of less stature or of less responsibility, (2) a change in the persons to whom you report (other than a change in Board of Director composition) or (3) a reduction of more than 20% of your base compensation and (B) the Company shall fail to correct the occurrence to your reasonable satisfaction following written notice by you within the thirty (30) days following receipt of such notice and you elect to terminate your employment voluntarily. (g) Registration Rights. In connection with the Restricted Stock, the Company will register such shares on Form S-8. If registration of such shares of Restricted Stock is not permissible on Form S-8 the Company will register such shares on Form S-3, subject to customary underwriter lock ups and cutbacks, if applicable, and shall rank in equal priority with the registration rights held by existing preferred stockholders. 6. Relocation Allowances. The Company agrees to assist you in relocating to Irvine, California. In this regard, you agree to list your home in Portola Valley, California for sale and the Company will reimburse you for the carrying costs of the house until the house is sold. Provided that you substantiate that your investment in this residence is approximately $2,600,000, the Company will, upon the sale of your house, make up any shortfall in the sales price from your investment either by, at the Company's election, : (i) reimbursing you the shortfall amount within 30 days following the closing or (ii) by participating in a simultaneous closing and absorbing the shortfall. Any amount of reimbursement will be grossed up to include income taxes on the amount of any reimbursement pursuant to this paragraph 6 such that you will have no additional taxes solely because of any such reimbursements. In addition, in order to assist you in purchasing a home in Orange County, California, the Company will reimburse you for up <PAGE> 5 February 7, 1996 Mr. L. George Klaus Page 5 to three (3) points of financing and closing costs, and will guarantee bridge financing, if necessary. The Company will provide temporary housing to you in its corporate apartment. In addition, the Company will reimburse you for your costs incurred in leasing a vehicle during any temporary living period. Finally, the Company will cover your moving expenses to Southern California as well as return moving expenses to Northern California at a time no earlier than three years unless the Company is sold or relocated in which case they will be provided at the time of the sale or relocation. 7. Country Club Membership. The Company will purchase a membership in Big Canyon Country Club in your name (or the name you choose). You will agree to return any proceeds from the sale of this membership immediately after its sale, unless otherwise agreed in writing by the Board of Directors. 8. Other. The Company understands that you have previously arranged a vacation in March of 1996 and will honor this arrangement. The Company will reimburse you for your reasonable legal expenses incurred for document reviews related to your employment. Effective the beginning of the month following your start date, you will be eligible to participate in the Company's health plan, including the Exec-U-Care plan. After meeting eligibility requirements, you will be able to participate in various company benefit programs including the Company's 401(k) savings program, Section 125 Reimbursement Account, and the Confidential Employee Assistance Program (EAP). 9. Indemnification. In the event you are made, or threatened to be made, a party to any legal action or proceeding, whether civil or criminal, by reason of the fact that you are or were a director or officer of the Company or serves or served any other corporation fifty percent (50%) or more owned or controlled by the Company in any capacity at Company's request, you shall be indemnified by the Company, and the Company shall pay your related expenses when and as incurred, all to the full extent permitted by law. 10. Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. The terms of this Agreement and all of your rights hereunder shall inure to the benefit of, and be enforceable by, your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. This offer is contingent upon execution of the Company's Employee Proprietary Agreement and the Employee Acknowledgment Statement and your having a physical exam within thirty (30) days after commencing employment and remedying any <PAGE> 6 February 7, 1996 Mr. L. George Klaus Page 6 deficiencies from any unsatisfactory results of the physical. Upon accepting this offer, you will be required to sign and agree to the terms therein. Additionally, due to the Immigration Reform Act and Control of 1986, if you are an employee of the Company in the United States, prior to or on your first day of employment, you will be required to show proof of identity and authorization to work in the United States. Please be prepared to show appropriate documentation for evidence of identity and employment eligibility. Please indicate your acceptance of this offer by signing in the space below. Upon receipt, I will have the necessary agreements prepared to document the items described in this offer letter. If you have any questions, please do not hesitate to call. Very truly yours, Accepted: ____________________________ Carmelo J. Santoro L. George Klaus Chief Executive Officer
MANAGEMENT RETENTION AGREEMENT BETWEEN EPICOR AND THOMAS KELLY
EPICOR SOFTWARE CORPORATION
MANAGEMENT RETENTION AGREEMENT
This Management Retention Agreement (the “Agreement”) is made and entered into effective as of February 19, 2008 (the “Effective Date”), by and between Thomas F. Kelly (the “Executive”) and Epicor Software Corporation (the “Company”). Certain capitalized terms used in this Agreement are defined herein.
WHEREAS, Executive has agreed to accept employment with the Company as its Chief Executive Officer (“CEO”); and
WHEREAS, Executive and Company wish to commemorate the terms and conditions of Executive’s employment as Company CEO in a written agreement;
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth herein and for other good and valuable consideration, the receipt of and sufficiency of which are hereby acknowledged, Company and the Executive agree as follows:
1. Definitions. The following terms referred to in this Agreement shall have the following meanings:
(a) “Cause” means (i) any act of personal dishonesty taken by Executive in connection with his responsibilities as an employee which is intended to result in substantial personal enrichment of Executive; (ii) Executive’s conviction of a felony which the Board reasonably believes has had or will have a material detrimental effect on the Company’s reputation or business; (iii) a willful act by Executive which constitutes gross misconduct and is materially injurious to the Company; or (iv) continued willful violations by Executive of Executive’s obligations to the Company after there has been delivered to Executive a written demand for performance from the Company which describes the basis for the Company's belief that Executive has not substantially performed his duties and after Executive has been given at least 10 business days in which to cure the circumstances identified in such written demand.
(b) “Change of Control” means the occurrence of any of the following (i) the sale, lease, conveyance or other disposition of all or substantially all of the Company’s assets as an entirety or substantially as an entirety to any person, entity or group of persons acting in concert, (ii) any transaction or series of transactions that results in, or that is in connection with, any person, entity or group acting in concert (other than existing affiliates of the Company), acquiring “beneficial ownership” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of such percentage of the aggregate voting power of all classes of voting equity stock of the Company as shall exceed fifty percent (50%) of such aggregate voting power, (iii) a merger or consolidation in which the Company is not the surviving entity, except for a transaction, the principal
purpose of which is to change the state in which the Company is incorporated; or (iv) any reverse merger in which the Company is a surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such reverse merger; or (v) a liquidation of the Company.
(c) “Disability” means Executive’s inability due to any physical or mental condition to perform a substantial portion of his employment duties to the Company for twenty-four (24) or more consecutive weeks.
(d) “Involuntary Termination” means, without Executive’s express written consent, (i) a significant reduction of Executive’s duties, position or responsibilities relative to Executive’s CEO duties, position or responsibilities in effect immediately prior to such reduction, or the removal of Executive from such position, duties and responsibilities, unless Executive is provided with comparable duties, position and responsibilities; (ii) a reduction by the Company of Executive’s CEO base salary as in effect immediately prior to such reduction unless such reduction is made pursuant to and proportionately with any Company policy applicable to similarly-situated Company executives; (iii) the relocation of Executive to a facility or a location more than one hundred (100) miles from the Company’s current Irvine, California location; (iv) any purported termination of Executive’s CEO title by the Company which is not effected for Cause or for which the grounds relied upon are not valid; (v) Executive’s death or Disability; or (vi) the failure of the Company to obtain the assumption of this Agreement by any successors contemplated in Section 14 below.
2. Term of Agreement. Executive hereby accepts employment with the Company as Company CEO for a period beginning on the Effective Date and continuing thereafter until Executive’s employment as Company CEO is terminated for any reason, including through Executive’s voluntary termination, Involuntary Termination, or termination for Cause, subject to the terms and conditions set forth herein (the “Employment Term”). As specifically described in this Agreement, the parties’ obligations under specific sections herein continue in certain respects following the Employment Term.
3. At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and shall continue to be at-will, as defined under applicable law. If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be established under the Company’s then existing employee benefit plans or policies at the time of termination.
4. Base Salary. During the Employment Term, the Company will pay Executive a salary at an annualized rate of $500,000 as compensation for his services (the “Base Salary”). The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices and be subject to the usual, required withholdings. Any increases to the Base Salary during the Employment Term may only be authorized by and will be subject to the prior written approval of the Company’s Board of Directors.
5. Annual Incentive. Executive will be eligible to receive annual cash bonus payments under the Company’s cash bonus plan for key employees beginning on the Effective Date. The bonus will be paid on a fiscal year basis based on a performance plan agreed to between the Executive and the Board of Directors of the Company. The initial cash bonus plan to Executive to be entered into following the Executive’s commencement as Company CEO shall provide for an on target bonus amount equal to 60% of Executive’s Base Salary, or $300,000 (the “Initial Target Bonus”). Payment of 50% of the Initial Target Bonus, or $150,000, will be guaranteed for the 2008 fiscal year and will be paid to Executive upon commencing employment as Company CEO, subject to the usual and required withholdings. The remaining 50% of the Initial Target Bonus will be subject to the terms and conditions of the initial cash bonus plan to Executive to be entered into following the Executive’s commencement as Company CEO.
6. Restricted Stock Grant. Pursuant to the terms of the Agreement, Executive shall be granted a total of two hundred twenty-eight thousand (228,000) shares of restricted Company common stock, allocated equally (114,000) to each of the 2008 and 2009 fiscal years (the “Restricted Stock Grant”). The Restricted Stock Grant shall provide that the restrictions on the stock shall lift based on achievement of applicable Company performance goals during 2008 and 2009 as determined in accordance with the terms of the Company’s Performance Based Restricted Stock Program (the “Program”) approved by the Company’s Compensation Committee and subject to the Executive’s continued service to the Company through the 2008 and 2009 performance periods. Notwithstanding the foregoing, for the 2008 fiscal year, all Company performance goals applicable to the 114,000 shares of restricted stock allocated to such fiscal year will be deemed achieved at 100% target, subject to the Executive’s continued service to the Company through the 2008 performance period. The Restricted Stock Grant is also subject to the terms, definitions and provisions of the Company’s applicable stock incentive plan, as may be amended from time to time (the “Plan”) and the restricted stock agreement by and between Executive and the Company (the “Restricted Stock Agreement”), both of which documents are incorporated herein by reference.
7. Relocation Expenses. For the six (6) month period following the execution of this Agreement, the Company will reimburse Executive for the actual reasonable rental expense incurred by Executive in renting a residence in Orange County, California while Executive searches for permanent housing for himself and his family. During the same six (6) month period, Company shall reimburse Executive for the actual reasonable commercial air travel expense incurred by Executive and his spouse in traveling back and forth to Executive’s current Northern California home. Additionally, the Company will reimburse Executive for his actual reasonable expenses incurred in moving and relocating his family and household to Southern California. Company will not pay or reimburse Executive for any costs or expenses associated with Executive’s (i) sale of his current residence, or (ii) purchase of a residence in Orange County. Executive agrees that he will submit all such reimbursable expenses to the Company with appropriate documentation as such expenses are incurred and the Company shall reimburse Executive promptly thereafter in accordance with the Company’s expense reimbursement policy. Notwithstanding the prior sentence, Executive agrees that he shall have submitted all such expenses to Company by no later than December 1, 2008 so that Company will be in a position to reimburse Executive for all such expenses by no later than December 31, 2008.
8. Country Club Membership. The Company will assist Executive in acquiring a local to Orange County, Country Club/Golf Membership by reimbursing Executive for actual Membership initiation fees incurred by Executive in joining such Country Club up to a maximum reimbursement of $50,000. Executive shall be responsible for payment of any monthly dues or fees associated with such membership. In the event that Executive should voluntarily terminate his position as Company CEO before the end of the three year period following the Effective Date, Executive shall be required to pay back to Company the expense reimbursement paid by Company to Executive upon Executive’s sale of his membership in such Club.
9. Other. Upon Commencement as Company CEO, Executive shall be eligible to participate in the Company's health plan, including the Exec-U-Care plan. After meeting eligibility requirements, Executive will be able to participate in various company benefit programs including the Company's 401(k) savings program, Employee Stock Purchase Plan, Section 125 Reimbursement Account, Deferred Compensation Program and the Confidential Employee Assistance Program (EAP).
10. Severance Benefits Upon Involuntary Termination.
Section 10(i) below governs severance benefits to be received by Executive upon the occurrence of an Involuntary Termination at any time during the term of this Agreement which Involuntary Termination does not occur within twelve months following a Change of Control. Section 10(ii) below governs severance benefits to be received by Executive upon the occurrence of an Involuntary Termination at any time during the term of this Agreement which Involuntary Termination does occur within twelve months following a Change of Control. The payment of Severance benefits to Executive under this Section 10 is subject to Section 14 herein.
(i) Upon the occurrence of an Involuntary Termination at any time during the term of this Agreement which Involuntary Termination does not occur within twelve months following a Change of Control, Executive shall be entitled to only the following benefits:
(a) An amount equal to twelve (12) months of Executive’s Base Salary as in effect as of the date of the Involuntary Termination, to be paid periodically in accordance with the Company’s normal payroll policies;
(b) An amount equal to 100% of the Executive’s target annual bonus as calculated from the Executive’s bonus plan in effect at the time of the Executive’s Involuntary Termination.
(c) For the twelve (12) month period following such Involuntary Termination, Executive will have the right to continue his group health insurance (medical, dental, and vision) under COBRA and the Company will reimburse Executive or pay directly for the actual COBRA premiums for which Executive is responsible during such 12 month period.
(ii) Upon the occurrence of an Involuntary Termination at any time during the term of this Agreement and which Involuntary Termination occurs within twelve (12) months following a Change of Control, Executive shall be entitled to only the following benefits:
(a) An amount equal to eighteen (18) months of Executive’s Base Salary as in effect as of the date of the Involuntary Termination, to be paid periodically in accordance with the Company’s normal payroll policies;
(b) An amount equal to 150% of the Executive’s target annual bonus as calculated from the Executive’s bonus plan in effect at the time of the Executive’s Involuntary Termination; and
(a) For the eighteen (18) month period following such Involuntary Termination, Executive will have the right to continue his group health insurance (medical, dental, and vision) under COBRA and the Company will reimburse Executive or pay directly for the actual COBRA premiums for which Executive is responsible during such 18 month period.
11. Other Termination. If the Executive's employment as CEO with the Company terminates for any reason other than as a result of an Involuntary Termination (whether or not within 12 months following a Change of Control), then subject to the requirements of applicable law and Section 12 below, the Executive shall not be entitled to receive any of the severance or other benefits hereunder, but Executive may still be eligible for those benefits (if any) as may then be established under the Company's then existing severance and benefits plans and policies at the time of such termination.
12. Accrued Wages and Vacation; Expenses. Without regard to the reason for, or the timing of Executive's termination of employment: (i) the Company shall pay Executive any unpaid base salary due for periods prior to any termination of employment; (ii) the Company shall pay Executive all of his accrued and unused vacation, if any, through any termination of employment, as well as all earned but as-yet unpaid bonuses; and (iii) following submission of proper expense reports by Executive, the Company shall reimburse Executive for all expenses reasonably and necessarily incurred by Executive in connection with the business of the Company prior to any termination of employment. Executive acknowledges that as mandated by established Company policy, the Company CEO position does not accrue vacation/PTO time. These payments shall be made promptly upon termination and within the period of time mandated by law.
13. Golden Parachute Excise Tax Gross-Up. In the event that any of the severance and other benefits provided for in this Agreement constitute "parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") and will be subject to the excise tax imposed by Section 4999 of the Code, then Executive shall receive (i) a payment from the Company sufficient to pay such excise tax, and (ii) an additional payment from the Company sufficient to pay the excise tax and federal and state income taxes arising from the payments made by the Company to Executive pursuant to this sentence. Unless the Company and Executive otherwise agree in writing, the determination of Executive's excise tax liability and the amount required to be paid under this Section shall be made in writing by the Company’s independent accountants (the “Auditors”). In the event that the excise tax incurred by Executive is determined by the Internal Revenue Service to be greater or lesser than the amount so determined by the Auditors, the Company and Executive agree to promptly make such additional payment, including interest and any tax penalties, to the other party as the Auditors reasonably determine is appropriate to ensure that the net economic effect to Executive under this Section, on an after-tax basis, is as if the Code Section 4999
excise tax did not apply to Executive. For purposes of making the calculations required by this Section, the Auditors may make reasonable assumptions and approximations concerning applicable taxes and may rely on interpretations of the Code for which there is a “substantial authority” tax reporting position. The Company and Executive shall furnish to the Auditors such information and documents as the Auditors may reasonably request in order to make a determination under this Section. The Company shall bear all costs the Auditors may reasonably incur in connection with any calculations contemplated by this Section.
14. Conditions to Receipt of Severance.
(a) Separation Agreement and Release of Claims. The receipt of any severance pursuant to Section 10 will be subject to Executive signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to the Company. No severance will be paid or provided until the separation agreement and release agreement becomes effective and non-revocable.
(b) Nondisparagement. During the Employment Term and while the Executive is receiving the benefits under Section 10 (“Severance Period”), Executive will not knowingly disparage, criticize, or otherwise make any derogatory statements regarding the Company, its directors, or its officers. The Company will instruct its officers and directors to not knowingly disparage, criticize, or otherwise make any derogatory statements regarding the Executive during the Employment Term and Severance Period. Notwithstanding the foregoing, nothing contained in this agreement will be deemed to restrict the Executive, the Company or any of the Company’s current or former officers and/or directors from providing information to any governmental or regulatory agency (or in any way limit the content of any such information) to the extent they are requested or required to provide such information pursuant to applicable law or regulation.
(c) Other Requirements. Executive’s receipt of continued severance payments will be subject to Executive continuing to comply with the terms of the Company’s Confidential/Proprietary Information Agreement and the provisions of this Section 14.
15. Code Section 409A.
(a) Six-Month Delay. Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder (“Section 409A”) at the time of Executive’s termination of employment (other than due to death), then the severance benefits payable to Executive under this Agreement, if any, and any other severance payments or separation benefits that may be considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”) otherwise due to Executive on or within the six (6) month period following Executive’s termination of employment will accrue during such six (6) month period and will become payable in a lump sum payment (less applicable withholding taxes) on the date six (6) months and one (1) day following the date of Executive’s termination of employment. All subsequent payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following his or her termination of employment but
prior to the six (6) month anniversary of his or her date of termination, then any payments delayed in accordance with this paragraph will be payable in a lump sum (less applicable withholding taxes) to Executive’s estate as soon as administratively practicable after the date of Executive’s death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.
(b) Amendments to this Agreement to Comply with Section 409A. This provision is intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to the Employee under Section 409A.
(a) Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the Company’s obligations under this Agreement and agree expressly to perform the Company’s obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company's business and/or assets which executes and delivers the assumption agreement described in this subsection or which becomes bound by the terms of this Agreement by operation of law.
(b) Executive’s Successors. Without the written consent of the Company, Executive shall not assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
(a) General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices shall be addressed to him at the home address that he most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.
(b) Notice of Termination. Any termination by the Company for Cause or by Executive as a result of a voluntary resignation or an Involuntary Termination shall be communicated by a notice of termination to the other party hereto given in accordance with this
Section. Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than 30 days after the giving of such notice). The failure by Executive to include in the notice any fact or circumstance which contributes to a showing of Involuntary Termination shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder.
(a) Any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by binding arbitration to be held in Orange County, California in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court having jurisdiction.
(b) The arbitrator(s) shall apply California law to the merits of any dispute or claim, without reference to conflicts of law rules. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law. Executive hereby consents to the personal jurisdiction of the state and federal courts located in California for any action or proceeding arising from or relating to this Agreement or relating to any arbitration in which the parties are participants.
(c) Executive understands that nothing in this Section modifies Executive’s at-will employment status. Either Executive or the Company can terminate the employment relationship at any time, with or without Cause.
(d) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR
INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et seq;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
19. Miscellaneous Provisions.
(a) No Duty to Mitigate. Executive shall not be required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by earnings that Executive may receive from any other source.
(b) Waiver. No provision of this Agreement may be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
(c) Integration. This Agreement and any outstanding stock option agreements and restricted stock purchase agreements referenced herein represent the entire agreement and understanding between the parties as to the subject matter herein and supersede all prior or contemporaneous agreements, whether written or oral, with respect to this Agreement, including but not limited to any other offer letter and any stock option agreement, restricted stock purchase agreement or severance agreement. Executive agrees and acknowledges that in the event of any conflict, redundancy or discrepancy between the terms and conditions of this Agreement and any other agreement regarding the subject matter herein, the terms and conditions of this Agreement shall govern.
(d) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules, of the State of California.
(e) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.
(f) Employment Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable income and employment taxes.
(g) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.
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