EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (“Agreement”) is entered into as
of the 4 th day of December, 2008, by and between
Conexant Systems, Inc., a Delaware corporation (the
“Company”), and Dwight W. Decker (the
“Executive”).
WHEREAS , the Executive previously served the Company as
non-executive Chairman of the Board of Directors of the Company
(the “Board”) pursuant to an amended and restated
employment agreement dated as of February 28, 2005 (the
“Prior Employment Agreement”); and
WHEREAS , the Executive has resigned from his position
as non-executive Chairman of the Board;
WHEREAS , the Company and the Executive desire to enter
into a new employment agreement with respect to the terms and
conditions of the Executive’s employment;
WHEREAS , this Agreement will be effective as of the
date the Agreement has been signed by both the Company and the
Executive (the “Effective Date”);
WHEREAS , in order to also comply with Section 409A
of the Internal Revenue Code of 1986, as amended
(`Section 409A”), the parties hereto wish to enter into
this Agreement in accordance with the terms set forth herein;
and
WHEREAS , upon the Effective Date, this Agreement will
replace and supersede any other previous employment agreements or
arrangements (verbal or written) (express or implied) between the
Executive and the Company or any of its Affiliates or predecessors
including without limitation the Prior Employment Agreement and the
employment agreement entered into between the Executive and the
Company as of December 15, 1998, which will automatically be
terminated as of the Effective Date and will be of no force or
effect from and after the Effective Date;
WHEREAS , the parties hereto wish to enter into the
arrangements set forth herein with respect to the terms and
conditions of the Executive’s employment with the Company
from and after the Effective Date;
NOW, THEREFORE , in consideration of the mutual covenants and
agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment Agreement . On the
terms and conditions set forth in this Agreement, the Company
agrees to employ the Executive, and the Executive agrees to be
employed by the Company, for the Employment Period set forth in
Section 2 and with the duties set forth in Section 3.
Terms used herein with initial capitalization are defined in
Section 22.
2. Term . Unless earlier terminated
pursuant to Section 8, the Executive’s employment
hereunder will commence on the Effective Date and will conclude on
December 31, 2009 (the “Employment Period”);
provided however, that, beginning on December 31, 2009 and
each anniversary thereof, the Employment Period will automatically
be extended for an additional one (1) year period beginning
unless either party gives written notice to the other party at
least sixty (60) days before the end of the Employment Period
(or the extended Employment Period, as the case may be) that it
does not wish such automatic one (1) year extensions to
occur.
3. Duties . The Executive will
serve as an advisor to and will report to the Chief Executive
Officer of the Company. The Executive will devote the
Executive’s reasonable best efforts to the performance of his
duties hereunder and the advancement of the business and affairs of
the Company during the Employment Period, it being understood that
the Executive’s employment is not intended to be full-time
and that the Executive may, consistent with the other provisions of
this Agreement, pursue other business interests, including but not
limited to the Executive’s current positions and activities
in respect of Mindspeed Technologies, Inc., BCD Semiconductor,
Inc., Newport Media, Inc. and Pacific Mutual Holding Company, and
may devote time to managing the Executive’s personal
investments and to charitable and community activities.
4. Place of Performance . During
the Employment Period, the Executive’s primary place of
employment and work location will be Newport Beach, California,
except for reasonable travel on Company business and as otherwise
consented to by the Executive.
5. Compensation .
(a) Base Salary . During the
Employment Period, the Company will pay to the Executive an annual
base salary (the “Base Salary”). The Base Salary will
be $100,000 through December 31, 2009. Thereafter, the Base
Salary will be determined by the Board or the Compensation and
Management Development Committee of the Board (the
“Compensation Committee”) no less frequently than
annually and may be increased or decreased at the discretion of the
Board or the Compensation Committee. The Base Salary will be
payable monthly or in such other installments as will be consistent
with the Company’s payroll procedures in effect from time to
time.
(b) Equity Compensation . Through
December 31, 2009, if the Company grants equity awards to
members of the Board, the Company will grant to the Executive twice
the amount of equity awards, and in the same form of equity award,
granted to other non-executive members of the Board during such
periods. Thereafter; the Company will grant to the Executive such
equity awards as the Board or the Compensation Committee will
determine. All outstanding unvested equity awards granted to the
Executive before, on or after the Commencement Date will continue
to vest during the Employment Period in accordance with their
terms.
(c) Benefits . During the
Employment Period, the Executive will be entitled certain employee
benefits (including, but not limited to, health, dental, life and
disability insurance and 401(k) plan participation) made available
to other employees, provided that the Executive will not accrue
vacation. Nothing contained in this Agreement will prevent the
Company from terminating plans, changing carriers or effecting
modifications in employee benefits coverage for the Executive as
long as such modifications are Company-wide modifications that
affect all similarly situated employees of the Company.
(d) Withholding Taxes and Other
Deductions . To the extent required by law, the Company will
withhold from any payments due to the Executive under this
Agreement any applicable federal, state or local taxes and such
other deductions as are prescribed by law.
6. Expenses . The Executive is
expected and is authorized, subject to the business expense
policies as determined by the Company, to incur reasonable expenses
in the performance of his duties hereunder, including the costs of
entertainment, travel, and similar business expenses. The Company
will promptly reimburse the Executive for all such expenses upon
periodic presentation by the Executive of an accounting of such
expenses on terms applicable to other employees of the
Company.
7. Confidentiality: Work Product
.
(a) Information . The Executive
acknowledges that the information, observations and data obtained
by the Executive concerning the business and affairs of the Company
and its Affiliates and their predecessors during the course of the
Executive’s performance of services for, or employment with,
any of the foregoing persons (whether or not compensated for such
services) are the property of the Company and its Affiliates,
including information concerning acquisition opportunities in or
reasonably related to the business or industry of the Company or
its Affiliates and their predecessors of which the Executive
becomes aware during such period. Therefore, the Executive agrees
that the Executive will not at any time (whether during or after
the Employment Period) disclose to any unauthorized person or,
directly or indirectly, use for the Executive’s own account,
any of such information, observations, data or any Work Product (as
defined below) or Copyrightable Work (as defined below) without the
Board’s consent, unless and to the extent that the
aforementioned matters become generally known to and available for
use by the public other than as a direct or indirect result of the
Executive’s acts or omissions to act or the acts or omissions
to act of other senior or junior management employees of the
Company and its Affiliates. The Executive agrees to deliver to the
Company at the termination of the Executive’s employment, or
at any other time the Company may request in writing (whether
during or after the Employment Period), all memoranda, notes,
plans, records, reports and other documents, regardless of the
format or media (and copies thereof), relating to the business of
the Company and its Affiliates and their predecessors (including,
without limitation, all acquisition prospects, lists and contact
information) which the Executive may then possess or have under the
Executive’s control.
(b) Intellectual Property . The
Executive acknowledges that all inventions, innovations,
improvements, developments, methods, designs, analyses, drawings,
reports, trade secrets, know-how, ideas, computer programs, and all
similar or related information (whether or not patentable) that
relate to the actual or anticipated business, research and
development or existing or future products or services of the
Company or its Affiliates and their predecessors that are
conceived, developed, made or reduced to practice by the Executive
while employed by the Company or any of its predecessors
(“Work Product”) belong to the Company, and the
Executive hereby assigns, and agrees to assign, all of the
Executive’s rights, title and interest in and to the Work
Product to the Company. Any copyrightable work
(“Copyrightable Work”) prepared in whole or in part by
the Executive in the course of the Executive’s work for any
of the foregoing entities will be deemed a “work made for
hire” under the copyright laws, and the Company will own all
rights therein. To the extent that it is determined, by any
authority having jurisdiction, that any such Copyrightable Work is
not a “work made for hire,” the Executive hereby
assigns and agrees to assign to the Company all of the
Executive’s rights, title and interest, including, without
limitation, copyright in and to such Copyrightable Work. The
Executive will promptly disclose such Work Product and
Copyrightable Work to the Board and perform all actions reasonably
requested by the Board (whether during or after the Employment
Period) to establish and confirm the Company’s ownership
(including, without limitation, assignments, consents, powers of
attorney and other instruments).
(c) Enforcement . The Executive
acknowledges that the restrictions contained in this Section 7
are reasonable and necessary, in view of the nature of the
Company’s business, in order to protect the legitimate
interests of the Company, and that any violation thereof would
result in irreparable injury to the Company. Therefore, the
Executive agrees that in the event of a breach or threatened breach
by the Executive of the provisions of this Section 7, the
Company may be entitled to obtain from any court of competent
jurisdiction, preliminary or permanent injunctive relief
restraining the Executive from disclosing or using any such
confidential information. Nothing herein will be construed as
prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach, including, without
limitation, recovery of damages from the Executive.
8. Termination of Employment . Any
termination of the Employment Period by the Company or the
Executive will be communicated by written Notice of Termination to
the other party hereto in accordance with Section 11 of this
Agreement. For purposes of this Agreement, a “Notice of
Termination” means a notice that indicates the specific
termination provision in this Agreement relied upon, if any, and
sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Employment Period if the
termination is being effected by the Company for Cause. Termination
of the Employment Period will take effect on the Date of
Termination. The Employment Period will be terminated under the
following circumstances:
(a) Death . The Employment Period
will terminate upon the Executive’s death;
(b) By the Company . The Company
may terminate the Employment Period (i) if the Executive has a
Disability, or (ii) with or without Cause;
(c) By the Executive . The
Executive may terminate the Employment Period at any time;
or
(d) Non-Renewal . The Employment
Period may terminate pursuant to the terms of Section 2. The
expiration of the Employment Period due to a notice of non-renewal
by the Company to the Executive will be treated as a termination of
the Employment Period by the Company without Cause. The expiration
of the Employment Period due to a notice of non-renewal tendered by
the Executive to the Company will be treated as a termination of
the Employment Period by the Executive.
9. Compensation upon Termination
.
(a) Accrued Benefits . If the
Employment Period terminates for any reason, the Company will
promptly pay to the Executive (or his estate, or as may be directed
by the legal representatives of such estate, in the event of his
death), any accrued but unpaid Base Salary through the Date of
Termination and all other unpaid amounts, if any, which the
Executive has accrued and is entitled to as of the Date of
Termination in connection with any fringe benefits or under any
other applicable compensation plan or program of the Company
pursuant to Sections 5(b) and(c) of this Agreement, and, except as
otherwise provided in Section 9(b), (c) or
(d) below, the Company will have no further obligations to the
Executive under this Agreement or otherwise (other than pursuant to
any employee benefit plan and any life insurance, disability,
medical insurance, death in service or other equivalent policy for
the benefit of the Executive).
(b) By the Executive . If the
Executive terminates the Employment Period, all unvested options to
purchase Company Stock, shares of restricted Company Common Stock
and any restricted stock units held by the Executive will become
fully vested on the Date of Termination, and, in the case of the
Executive’s stock options, the Executive will be entitled to
exercise all such stock options until the second anniversary of the
Date of Termination, but in no event may any option be exercised on
a date later than the expiration date of such option set forth in
the option award.
(c) By the Company Without Cause .
If the Company terminates the Employment Period on or before
December 31, 2009, other than for Cause, Disability, or death,
then the Company will (i) continue to pay to the Executive his Base
Salary less applicable taxes through December 31, 2009 in
accordance with the Company’s regular payroll practices and
(ii) continue to provide the Executive the Executive’s
normal medical and dental benefits through December 31, 2009
while he is being paid and (iii) reimburse the Executive for
the cost of coverage of the Executive and/or the Executive’s
covered dependents pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, or similar state statute
(“COBRA”) for premiums under the Company’s health
insurance plans for a period of up to eighteen (18) months
following the December 31, 2009 date, provided that the
Executive timely elects COBRA coverage and submits proof of premium
payments to the Company and provided further that (A) to the
extent any such benefit is provided v
