Exhibit 10.22
James
Morlan
This letter
agreement (the “Agreement”) sets forth the terms that
ViewSonic Corporation (the “Company”) is offering to
you to aid in your employment transition.
1.
RESIGNATION AS CHIEF FINANCIAL OFFICER. On
June 8, 2007, you shall resign from your position as Chief
Financial Officer (the “Transition
Date”). This date may be extended by mutual
agreement between you and the Company; if this date is extended,
then the Transition Date shall be the date after June 8, 2007 that
the Company’s new Chief Financial Officer commences
employment. If the Company hires a new Chief Financial
Officer prior to June 8, 2007, and the new Chief Financial Officer
does not want you to continue in the Chief Financial Officer role
until June 8, 2007, then you shall resign your position as Chief
Financial Officer (and your job title will change to Executive
Advisor) but you shall remain as an employee pursuant to the terms
of this Section 1 until June 8, 2007 (and June 8, 2007 shall be
deemed to be the Transition Date). Until the Transition
Date, you shall continue to use your best efforts to perform your
assigned duties and responsibilities, including, without
limitation, the preparation, verification, and filing of the
Company’s required SEC filings. You will continue
to receive your full current salary and benefits until the
Transition Date, and you will continue to comply with all of the
Company’s policies and procedures during this
time. On the Transition Date, the Company will pay you
the gross amount of $5,000.00 for you to select and obtain
appropriate outplacement services.
2.
TRANSITION PERIOD. Provided that you:
(i) sign this Agreement; and (ii) allow the release contained
herein to become effective; and (iii) comply with all of your
obligations under this Agreement, then commencing on the Transition
Date and continuing until June 30, 2008 (the “Termination
Date”), the Company shall retain you as an employee of the
Company in the position of Executive Advisor. This
period shall be referred to herein as the “Transition
Period.” During the Transition Period, the
following terms will apply:
(a)
Duties and responsibilities . During the
Transition Period, you will be available to provide services to the
Company as requested, on a flexible schedule basis. Your
duties will be as assigned by the Company’s CEO and/or new
CFO and will include, among other things, assisting the new CFO
with his duties and responsibilities and with special projects
within the Company’s Finance organization. You
agree to utilize your best efforts in performing your assigned
duties during the Transition Period. The Company agrees
to notify you in writing promptly if at any time during the
Transition Period it believes that you are not in compliance with
your obligations under this Agreement. The Company
further agrees to provide you with twenty (20) days’ notice
and opportunity to cure, if curable, at the time such written
notice is provided specifying the issues involved.
(b)
Other work during the Transition Period
. You may engage in employment, consulting or other work
relationships in addition to your work for the Company during the
Transition Period provided that such employment, consulting or
other work relationship is not with a competitor of the Company and
does not violate your continuing obligations to maintain the
confidence and confidential information of the Company as set forth
in the Employee Confidentiality and Invention Assignment Agreement
executed by you and incorporated by reference herein and attached
hereto as Exhibit A (the “Confidentiality
Agreement”). The Company agrees to make reasonable
arrangements to enable you to perform your work for the Company at
such times and in such a manner so that it does not unreasonably
interfere with other work activities in which you may
engage.
(c)
Transition Period Salary . From the
Transition Date until the Termination Date, the Company will pay
you an amount equal to six (6) months of your current base salary
(the “Transition Period Salary”). The
Transition Period Salary will be paid in equal installment amounts
on the Company’s standard payroll dates during the Transition
Period and will be subject to standard deductions and
withholdings.
(d)
Transition Period Benefits . During the
Transition Period, you will be entitled to continue your
participation in the following Company benefit plans pursuant to
the terms of those plans: (i) group health medical
insurance; (ii) group health dental insurance; (iii)
company-sponsored life insurance; (iv) 401(k) plan (including the
Company’s matching contribution); and (v) short term and long
term disability insurance. You will not, however,
continue to accrue vacation days, sick days or other paid time off
during the Transition Period, nor will you be entitled to any
automobile allowance during this period.
3.
SEVERANCE HEALTH BENEFITS . To the
extent provided by the federal COBRA law and the state Cal-COBRA
law, and by the Company’s current group health insurance
policies, you will be eligible to continue your current group
health insurance benefits for a period of thirty-six (36) months
after the Termination Date. If you: (i)
timely elect continued health insurance coverage under COBRA and
Cal-COBRA; and (ii) sign the Termination Date Release attached
hereto as Exhibit B on or within 21 days after the Termination
Date; and (iii) allow this Termination Date Release to become
effective; then the Company will pay the cost of continuing your
health insurance benefits for a period of three (3) months after
the Termination Date.
4.
TERMINATION DATE PAYMENT. As of the
Termination Date, you will cease to be employed by the Company in
any capacity. On the Termination Date, the Company will
pay you all accrued salary earned through the Termination Date,
subject to standard payroll deductions and
withholdings. However, the Company will pay you for all
accrued and unused Paid Time Off (“PTO”) on the
Transition Date. You are entitled to payment for all
accrued salary, and all accrued and unused PTO, regardless of
whether you sign this Agreement.
5.
STOCK OPTIONS. During your employment with the
Company, you were granted options to purchase shares of the
Company’s common stock (the “Options”) under the
Company’s 1999 Stock Option Plan (the
“Plan”). All of the Options currently are
vested. Pursuant to the terms of the Plan, you shall
have the right to exercise your Options up to the date that is
three (3) months after the Termination Date (the
“Post-Termination Date Exercise Period”); provided,
however, that if you are unable to exercise your vested Options and
sell the shares acquired upon such exercise during the
Post-Termination Date Exercise Period due to a lock-up agreement
entered into in connection with the Company’s initial public
offering, then the Board will extend your Post-Termination Date
Exercise Period for an additional thirty (30) days for each full
thirty (30) day period during the Post-Termination Date Exercise
Period during which the shares acquired upon exercise of your
Options are subject to lock-up; provided, however, that in no event
shall the Post-Termination Exercise Date be extended to a date that
is after December 31, 2008. Except as modified herein,
the Options shall continue to be governed by the terms of the Plan
and the applicable grant notices.
6.
LONG TERM INCENTIVE PLAN . You will
continue to participate in the Company’s Long Term Incentive
Program (the “Incentive Program”) pursuant to the terms
of that Program; provided, however, that you shall be eligible to
receive vesting of one-third (1/3) of your Target Award (as defined
in the Incentive Program) if the Company meets or exceeds both its
Revenue Target and Income Target for the first two quarters of the
fiscal year ending December 31, 2007. For purposes of
this Section 6 only, the Performance Targets set forth on Exhibit B
to the Incentive Program shall be prorated based upon the first two
quarters of fiscal year
2007. Notwithstanding the terms of the
Program, the Determination Date (as defined in the Incentive
Program) for you shall occur within thirty (30) days following the
date the Company files its Quarterly Report on Form 10-Q with the
SEC for the second quarter of fiscal year 2007. You also
hereby waive and release any eligibility or entitlement you may
have to any further compensation or benefits under the Incentive
Program except as set forth herein. Except as expressly
modified in this Section 6, any compensation or benefits under the
Incentive Program shall be governed by the terms of the Incentive
Program.
7.
INDEMNIFICATION. Nothing in this
Agreement shall affect any rights you may have to indemnification
from the Company or its insurance carriers pursuant to agreement,
statute, insurance policy, or otherwise. The Indemnity
Agreement between you and the Company shall remain in full force
and effect.
8.
NO OTHER COMPENSATION OR BENEFITS THEREAFTER.
You acknowledge and agree that except as expressly
provided in this Agreement, you will not receive any additional
compensation, severance or benefits (including, but not limited to,
long term disability, short term disability or life insurance)
after the Termination Date.
9.
EXPENSE REIMBURSEMENTS. You agree that
within thirty (30) days after the Termination Date, you will submit
your request for reimbursement of any business expenses incurred
during your employment which have not previously been
reimbursed. The Company will reimburse you for these
expenses pursuant to its standard business practice.
10.
RETURN OF COMPANY PROPERTY. You agree
that on or before the Termination Date, you will make a diligent
search and return to the Company all Company documents (in
electronic, paper or any other form as well as all copies thereof)
and other Company property that you have had in your possession at
any time, including, but not limited to, Company files, notes,
drawings, records, business plans and forecasts, financial
information, specifications, computer-recorded information,
tangible property including, but not limited to, computers, credit
cards, entry cards, identification badges and keys; and any
materials of any kind that contain or embody any proprietary or
confidential information of the Company (and all reproductions
thereof). You agree to make a diligent search for all
such Company property. If you have used any personal
computer, server, or e-mail system to receive, store, review,
prepare or transmit any Company confidential or proprietary data,
materials or information, you agree to provide the Company with a
computer-useable copy of such information and then permanently
delete and expunge such Company confidential or proprietary
information from those systems; and you agree to provide the
Company access to your system as requested to verify that the
necessary copying and/or deletion is done. You agree
that, after the Termination Date, you will neither use nor possess
Company property.
11.
PROPRIETARY INFORMATION OBLIGATIONS.
You acknowledge your continuing obligations under your
Confidentiality Agreement, which you entered into when you began
your employment with ViewSonic.
12.
NONDISPARAGEMENT. You agree not to
disparage the Company, and its officers, directors, employees,
shareholders and agents, in any manner likely to be harmful to it
or them, or to its or their business, business reputation or
personal reputation; provided that you shall respond accurately and
fully to any question, inquiry or request for information when
required by legal process. You further agree that any
material breach of this provision on your part shall be considered
a material breach of this Agreement. The Company likewise agrees
that its management shall not disparage you in any manner likely to
be harmful to your future employment, business reputation, or
personal reputation, provided that you refer all inquiries about
you to the attention of Tim Ashcroft and the Company shall respond
accurately and fully to any question, inquiry, or request for
information when required by legal process. The Company
agrees that any material breach of this provision on its part shall
be considered a material breach of this Agreement; provided,
however, that even in the event of a material breach of this
Section 12 by the Company, your Releases set forth in Sections 14,
15, and 16, and Exhibit B, herein shall remain in full force and
effect. Both you and the Company agree to provide each
other with immediate written notice of a claimed breach of this
provision and to meet and confer in good faith over any alleged
breach prior to ceasing performance or filing a demand for
arbitration hereunder.
13.
NO WORKERS’ COMPENSATION OR LEAVE CLAIMS.
You acknowledge and agree that you have not filed any
claims for workers’ compensation, short-term disability, or
long-term disability nor are you aware of any medical condition
that could give rise to such a claim. You also
agree that you have received any leave benefits to which you are
entitled pursuant to the federal Family and Medical Leave Act and
similar state statutes.
14.
RELEASE BY YOU. In exchange for the
benefits to be provided under this Agreement (including the
Transition Period compensation and benefits and Severance Health
Benefits), and other consideration under this Agreement to which
you would no
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