EXHIBIT 10.1
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (this “
Agreement ”) is entered into by and between Mindspeed
Technologies, Inc., a Delaware corporation (the “
Company ”), and
(the “ Executive ”), as of the
day of
,
20 .
The
Board of Directors of the Company (the “ Board
”) has determined that it is in the best interests of the
Company and its shareholders to assure that the Company will have
the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as
defined below) of the Company. The Board believes it is
imperative to diminish the inevitable distraction of the Executive
by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the
Executive’s full attention and dedication to the Company
currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and
benefits arrangements upon a Change of Control which ensure that
the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this
Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS
FOLLOWS:
1.
Certain
Definitions . (a) The “Effective
Date” shall mean the first date during the Change of Control
Period (as defined in Section 1(b)) on which a Change of
Control (as defined in Section 2) occurs. Anything in
this Agreement to the contrary notwithstanding, if a Change of
Control occurs and if the Executive’s employment with the
Company is terminated prior to the date on which the Change of
Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the
request of a third party who has taken steps reasonably calculated
to effect a Change of Control or (ii) otherwise arose in
connection with or anticipation of a Change of Control, then for
all purposes of this Agreement the “Effective Date”
shall mean the date immediately prior to the date of such
termination of employment.
(b)
The “Change of
Control Period” shall mean the period commencing on the date
hereof and ending on the third anniversary of the date hereof;
provided , however , that commencing on the date one
year after the date hereof, and on each annual anniversary of such
date (such date and each annual anniversary thereof shall be
hereinafter referred to as the “ Renewal Date
”), unless previously terminated, the Change of Control
Period shall be automatically extended so as to terminate three
years from such Renewal Date, unless at least 60 days prior to the
Renewal Date the Company shall give notice to the Executive that
the Change of Control Period shall not be so extended.
2.
Change of
Control .
For the purpose of this Agreement, a “Change of
Control” shall mean:
(a)
The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “ Exchange Act
”)) (a “ Person ”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 35% or more of either (i) the then
outstanding shares of common stock of the Company (the “
Outstanding Company Common Stock ”) or (ii) the
combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the “ Outstanding Company Voting Securities ”);
provided , however , that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any
acquisition by Mindspeed Technologies, Inc., (iv) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company, Mindspeed
Technologies, Inc. or any corporation controlled by the
Company or Mindspeed Technologies, Inc. or (iv) any
acquisition pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this
Section 2; or
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(b)
Individuals who, as of the
date of the distribution of the Outstanding Company Common Stock to
the holders of capital stock of Mindspeed Technologies, Inc.,
constitute the Board (the “ Incumbent Board ”)
cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(c)
Consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another entity (a “
Business Combination ”), in each case, unless,
following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding Mindspeed Technologies, Inc.,
any employee benefit plan (or related trust) of the Company, of
Mindspeed Technologies, Inc. or of such corporation resulting
from such Business Combination) beneficially owns, directly or
indirectly, 35% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business
Combination and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
(d)
Approval by the
Company’s shareholders of a complete liquidation or
dissolution of the Company.
3.
Employment
Period .
The Company hereby agrees to continue the Executive in its employ,
and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for
the period commencing on the Effective Date and ending on the third
anniversary of such date (the “ Employment Period
”).
4.
Terms of
Employment . (a) Position and Duties
. (i) During the Employment Period, (A) the
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the
most significant of those held, exercised and assigned at any time
during the 120-day period immediately preceding the Effective Date
and (B) the Executive’s services shall be performed at
the location where the Executive was employed immediately preceding
the Effective Date or any office or location less than 35 miles
from such location.
(ii)
During the Employment
Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder,
to use the Executive’s reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for
the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do
not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood
and agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the
Company.
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(b)
Compensation
. (i) Base
Salary . During the Employment Period, the Executive
shall receive an annual base salary (“ Annual Base
Salary ”), which shall be paid at a monthly rate, at
least equal to twelve times the highest monthly base salary paid or
payable, including any base salary which has been earned but
deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs.
During the Employment Period, the Annual Base Salary shall be
reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter
at least annually. Any increase in Annual Base Salary shall
not serve to limit or reduce any other obligation to the Executive
under this Agreement. Annual Base Salary shall not be reduced
after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term
“affiliated companies” shall include any company
controlled by, controlling or under common control with the
Company.
(ii)
Annual Bonus
. In addition to
Annual Base Salary, the Executive shall be awarded, for each fiscal
year ending during the Employment Period, an annual bonus (the
“ Annual Bonus ”) in cash at least equal to the
Executive’s highest bonus under the Company’s annual
incentive plans for the last three full fiscal years prior to the
Effective Date (annualized in the event that the Executive was not
employed by the Company for the whole of such fiscal year) (the
“ Recent Annual Bonus ”). Each such Annual
Bonus shall be paid no later than the end of the third month of the
fiscal year next following the fiscal year for which the Annual
Bonus is awarded, unless the Executive shall elect to defer the
receipt of such Annual Bonus.
(iii)
Incentive and Savings
Plans .
During the Employment Period, the Executive shall be entitled to
participate in all incentive and savings plans, practices, policies
and programs applicable generally to other peer executives of the
Company and its affiliated companies, but in no event shall such
plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable) and savings opportunities, in each case,
less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in
effect at any time during the 120-day period immediately preceding
the Effective Date or if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company and its affiliated
companies.
(iv)
Welfare Benefit
Plans .
During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
peer executives of the Company and its affiliated companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company and its affiliated companies.
(v)
Expenses
. During the
Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices
and procedures of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
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(vi)
Fringe
Benefits . During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without
limitation, tax and financial planning services, payment of club
dues, and, if applicable, use of an automobile and payment of
related expenses, in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated
companies in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
(vii)
Office and Support
Staff .
During the Employment Period, the Executive shall be entitled to an
office or offices of a size and with furnishings and other
appointments, and to exclusive personal secretarial and other
assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated
companies at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
(viii)
Vacation
. During the
Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
5.
Termination of
Employment . (a) Death or Disability
. The Executive’s employment shall terminate
automatically upon the Executive’s death during the
Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability set
forth below), it may give to the Executive written notice in
accordance with Section 12(b) of this Agreement of its
intention to terminate the Executive’s employment. In
such event, the Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of such notice by
the Executive (the “ Disability Effective Date
”), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement,
“Disability” shall mean the absence of the Executive
from the Executive’s duties with the Company on a full-time
basis for 180 consecutive business days as a result of incapacity
due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company or its
insurers and acceptable to the Executive or the Executive’s
legal representative.
(b)
Cause
. The Company may
terminate the Executive’s employment during the Employment
Period for Cause. For purposes of this Agreement,
“Cause” shall mean:
(i)
the willful and continued
failure of the Executive to perform substantially the
Executive’s duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company which specifically identifies the
manner in which the Board or Chief Executive Officer believes that
the Executive has not substantially performed the Executive’s
duties, or
(ii)
the willful engaging by
the Executive in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company.
For
purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered “willful” unless
it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or
omission was in the best interests of the Company. Any act,
or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer or a senior officer of the Company or
based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive shall
not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly
adopted
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