EXHIBIT 10-k-12
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT
(“Agreement”) is entered into as of the
day of August, 2007, by and between Conexant Systems, Inc., a
Delaware corporation (the “Company”), and Karen Roscher
(the “Executive”).
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 (as defined in
Section 2);
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 in the positions and with the duties set forth
in Section 3. Terms used herein with initial capitalization
are defined in Section 24.
2. Term . Unless earlier
terminated pursuant to Section 8, the term of the
Executive’s employment hereunder in the positions referenced
under Section 3 will begin as of September 10, 2007 (the
“Effective Date”) and will conclude on
September 9, 2009 (the “Employment Period”);
provided that, beginning on September 10 , 2009 and on
each anniversary of that date thereafter, the Employment Period
will automatically be extended for a one-year period unless either
party gives written notice to the other party at least sixty days
before the end of the Employment Period (or extended Employment
Period, as the case may be) that it no longer wishes such automatic
one year extensions to continue.
3. Position and Duties .
The Executive will serve as Senior Vice President & Chief
Financial Officer of the Company during the Employment Period. As
Senior Vice President & Chief Financial Officer of the Company,
the Executive will be an executive officer of the Company and
render executive, policy, and other management services to the
Company of the type customarily performed by persons serving in a
similar capacity and as reasonably determined by the President
& Chief Executive Officer with regard to the Executive’s
status and position within the Company. The Executive will report
directly to the President & Chief Executive Officer. The
Executive will devote the Executive’s reasonable best efforts
and substantially full business time to the performance of the
Executive’s duties hereunder and the advancement of the
business
and
affairs of the Company during the Employment Period, it being
understood that the Executive may, consistent with the other
provisions of this Agreement, pursue other outside interests,
including but not limited to devoting 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”), which initially
will be $325,000. The Base Salary will be reviewed 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 (but not decreased) at the discretion
of the Board or the Compensation Committee. If the
Executive’s Base Salary is increased, the increased amount
will be the Base Salary for the remainder of the Employment Period.
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) Bonus .
(i) During the Employment Period, the Executive will be
eligible to earn an annual performance bonus in an amount
determined at the discretion of the Board or the Compensation
Committee for each fiscal year. It is the intention of the parties
hereto that the Company shall establish a target bonus for the
Executive with respect to each fiscal year of the Employment Period
based upon overall performance of the Company and upon the
Executive’s individual performance. The Executive’s
initial full year annual target bonus will be 60% of the Base
Salary (pro-rata for the time worked in the fiscal year). In the
event that a target bonus is not established with respect to any
subsequent year, the Executive’s target bonus shall be deemed
to be the target bonus established under this Agreement for the
immediately preceding year. Not withstanding the foregoing, for the
fiscal year 2008 (which commences in October 2007), the
Executive will be guaranteed a bonus of not less than $100,000, to
be disbursed when normal company bonuses are paid.
(ii) In addition to any annual
performance bonus payable under this Section 5(b), the Company
shall pay the Executive within thirty (30) days of commencing
employment, a special “one time” bonus in the gross
amount (before applicable taxes) of $150,000 (of which $50,000 is
targeted to assisting you assimilate to the higher cost area
geography of Orange County, California) . While this
“special” bonus will be paid within thirty
(30) days of commencing employment, it will not be considered
fully earned until
the
first anniversary date of the “Effective Date” of this
Agreement. Should the Executive voluntarily terminate her
employment for any reason (other than as a result of death or
Disability) or be terminated for Cause before the first anniversary
date of this Agreement, the Executive will owe the gross amount
back to the Company within 30 days of her Termination Date. If
the Executive is involuntarily terminated for any other reason than
Cause before the first anniversary date of this Agreement, the
Executive will be deemed to have earned the “special”
bonus.
(c) Equity Compensation
. (i) On the Effective Date, the Company will grant to the
Executive options to purchase 1,000,000 shares of Company Common
Stock (“Stock Options”), with an exercise price equal
to the fair market value of the Company Common Stock on the date of
grant, such options to become exercisable as follows:
(A) one-third of the options will become exercisable on the
first anniversary of the Effective Date; (B) one-third of the
options will be come exercisable on the second anniversary of the
Effective Date; and (C) one-third of the options will become
exercisable on the third anniversary of the Effective Date. In
addition, on the Effective Date, you will be granted 360,000
Restricted Stock Units (“Non-Performance RSU’s”).
These Non-Performance RSU’s will vest one-third each year on
the first, second and third anniversary dates of the Effective
Date. On the Effective Date, you will also be made a grant of
250,000 Performance Restricted Stock Units (“Performance
RSU’s”). These Performance RSU’s are subject to
vest under the following conditions: (A) one-third will vest
if the Company’s Common Stock sustains an average closing
price of $3.00 over a 60 calendar day period; (B) one-third
will vest if the Company’s Common Stock sustains an average
closing price of $4.50 over a 60 calendar day period; and
(C) one-third will vest if the Company’s Common Stock
sustains an average closing price of $6.00 over a 60 calendar day
period. Any unvested portion of the initial Performance RSU grant
after five (5) years will be forfeited.
(ii) Notwithstanding
the foregoing, in the event of a Change of Control, any unvested
Stock Options, Non-Performance RSUs and shares of non-performance
based Restricted Company Common Stock will become fully vested
contingent upon and immediately prior to such Change of Control. In
addition, in the event of a Change of Control, if and to the extent
not already vested, (A) one-third of the Performance RSUs granted
as of the Effective Date will vest contingent upon and immediately
prior to such Change of Control if the closing price of the
Company’s Common Stock (or, in the event of a Change of
Control that is a Corporate Transaction, the price per share of
Common Stock in such Corporate Transaction) is at least $3.00 on
the date of such Change of Control, (B) an additional one-third of
such Performance RSUs will vest contingent upon and immediately
prior to such Change of Control if the closing price of the
Company’s Common Stock (or, in the event of a Change of
Control that is a Corporate Transaction, the price per share of
Common Stock in such Corporate Transaction) is at least $4.50 on
the date of such Change of Control, and (C) the
remaining one-third of such Performance RSUs will vest contingent
upon and immediately prior to such Change of Control if the closing
price of the Company’s Common Stock (or, in the event of a
Change of Control that is a Corporate Transaction, the price per
share of Common Stock in such Corporate Transaction) is at least
$6.00 on the date of such Change of Control.
(iii) Notwithstanding
any other provision of this Agreement to the contrary, except as
otherwise provided in Section 1 of the respective
Non-Performance RSU and Performance RSU award agreements, any
vested Non-Performance RSUs or Performance RSUs will be paid out
immediately upon vesting and in any event no later than
March 15 th of the calendar
year of the year following the year in which such Non-Performance
RSUs or Performance RSUs vest.
(d) Benefits . During
the Employment Period, the Executive will be entitled to all
employee benefits and perquisites made available to senior
executives of the Company. 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 affect all similarly
situated employees and/or officers of the Company.
Upon the
Executive’s start date, the Executive will be eligible to
utilize the Company’s relocation benefits as outlined in the
summary sheet included in her offer package. Upon formal
acceptance, a relocation coordinator will be assigned to the
Executive to help facilitate the move process. Per Company policy,
the Executive will be required to sign an employee reimbursement
agreement in order to initiate relocation benefits. Such agreement
outlines the Executive’s responsibilities (repayment of
relocation costs) should she voluntarily terminate her employment
or be terminated for Cause within 24 months of the
Executive’s relocation date. The repayment schedule would be
100% within the first 12 months after the relocation and a
pro-rata schedule in the second twelve months (at the same
percentage rates found in Appendix A). The Executive will have
twelve months from her start date to exercise her relocation
benefits.
(e) Vacation; Holidays .
During the Employment Period, the Executive will be entitled to all
public holidays observed by the Company and vacation days in
accordance with the applicable vacation policies for senior
executives of the Company, which vacation days will be taken at a
reasonable time or times. The Executive will initially be entitled
to four (4) weeks vacation per year.
(f) 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 the Executive’s 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
senior executives 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 will 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 12. For purposes of this Agreement, a “Notice of
Termination” will mean a notice which will indicate the
specific termination provision in this Agreement relied upon, if
any, and will set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Employment Period under the provision so indicated. 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 will have been unable to perform all of the
Executive’s duties hereunder by reason of illness, physical
or mental disability or other similar incapacity, which inability
will continue for more than three consecutive months, or any six
months in a twelve-month period (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 tendered 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 voluntary termination of the Employment Period by
the Executive.
9. Compensation upon
Termination . The Executive’s employment as Senior Vice
President and Chief Financial Officer of the Company must be
terminated in order for the Executive to receive any payment or
other benefit under this Section 9.
(a) Death . If the
Employment Period terminates as a result of the Executive’s
death, the Company will promptly pay to the Executive’s
estate, or as may be directed by the legal representatives of such
estate, after the Date of Termination any accrued but unpaid Base
Salary through the Date of Termination. 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 bonus or incentive compensation plan or program of the
Company pursuant to Sections 5(b), (c) and (d) will be
paid in accordance with the terms of such arrangements. In
addition, if the Employment period terminates as a result of the
Executive’s death, then all unvested Stock Options,
Non-Performance RSUs and shares of non-performance based Restricted
Company Common Stock held by the Executive will become fully vested
and, in the case of the Stock Options, fully exercisable on the
Date of Termination, and the Executive will be entitled to exercise
all such options until the earlier of (i) the third
anniversary of the Executive’s Date of Termination and
(ii) the expiration date of such option set forth in the grant
notice for the option award. 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, death in service or other equivalent policy for the
benefit of the Executive).
(b) Disability . If the
Company terminates the Employment Period because of the
Executive’s Disability, the Company will promptly pay to the
Executive after the Date of Termination any accrued but unpaid Base
Salary through the Date of Termination. 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 bonus or incentive compensation plan or program of the
Company pursuant to Sections 5(b), (c) and (d) will
be paid in accordance with the terms of such arrangements. In
addition, if the Company terminates the Employment Period because
of the Executive’s Disability, then the Executive will be
entitled to the equity and health insurance portions of the
Separation
Benefits
set forth in Section 9(e)(ii) and (iii). 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
disability or other medical insurance policy for the benefit of the
Executive).
(c)
By the Company for Cause; By the Executive For Any Reason .
If the Company terminates the Employment
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