CONFIDENTIAL SEVERANCE AND
GENERAL RELEASE AGREEMENT
THIS CONFIDENTIAL
SEVERANCE AND GENERAL RELEASE AGREEMENT (this
“Agreement”) is entered into as of the last date set
forth on the signature page hereto, and is made effective as of
October 10, 2008 (the “Effective Date”), by and
between Thomas A. Stites (“Employee”) and Mindspeed
Technologies, Inc., a Delaware corporation
(“Mindspeed”).
WHEREAS,
Employee is currently employed by Mindspeed as Senior Vice
President, Communications;
WHEREAS,
Employee and Mindspeed wish to arrange for Employee’s
separation from employment with Mindspeed on mutually agreeable
terms and conditions as set forth in this Agreement;
ACCORDINGLY,
the parties agree as follows:
1.
Termination . Employee will cease active full-time
employment with Mindspeed on the Effective Date. Mindspeed and
Employee agree to affect a thoughtful and professional business
transition. Employee agrees to provide transitional assistance to
Mindspeed beginning October 11, 2008 by working through
November 14, 2008 on a half-time basis at half salary
($2,403.846/week) to prepare for FY08Q4 earnings release and follow
up meetings. Employee will cease active employment entirely on the
November 14, 2008.
2.
Resignation . As of the Effective Date, Employee
hereby resigns his position as an officer of Mindspeed and as a
director or officer in each of Mindspeed’s subsidiaries for
which he holds an office or offices.
3.
Settlement Sum . In consideration of Employee’s
representations and releases in this Agreement, Mindspeed will
provide Employee with salary continuation pay at Employee’s
current salary level of $4,807.69 per week (less applicable
withholdings) for twelve (12) months beginning on
November 15, 2008 and continuing through November 13,
2009 (the “Salary Continuation Period”). The salary
continuation payments will be made in accordance with
Mindspeed’s bi-weekly payroll schedule. Employee will not
accrue additional vacation hours after November 14, 2008.
During the Salary Continuation Period, Mindspeed will continue to
(a) pay the premiums for Employee’s coverage under
Mindspeed’s group medical, dental, and vision insurance
plans, which coverage may be provided under COBRA at
Mindspeed’s election subject to Employee’s payment of
any employee contributions that would have applied if Employee had
remained an officer of the Company; and (b) pay the costs of
Employee’s annual executive physical examination, health club
membership, two (2) airline
1
clubs, and
financial counseling benefits, to the same extent as if Employee
had remained an officer of Mindspeed during such period. In
addition, Company will reimburse (not to exceed a total of $1,000)
membership fees in three (3) professional organizations (PRSA,
IABC, NIRI). Participation in Mindspeed’s long term
disability insurance coverage, Mindspeed’s Group Personal
Excess Liability Coverage, and participation in Mindspeed’s
401(k) plan end on November 14, 2008. Employee agrees to be
available to provide limited consulting services to assist with
FY09Q1 earnings release and call. Following the conclusion of the
Salary Continuation Period, Employee will be placed on unpaid leave
through February 12, 2010 (the “Unpaid LOA
Period”), during which time he will not accrue further pay,
vacation or other compensation. During the Unpaid LOA Period,
Mindspeed will continue to (a) pay the premiums for
Employee’s continued coverage under Mindspeed’s group
medical, dental, and vision insurance plans, which coverage may be
provided under COBRA at Mindspeed’s election subject to
Employee’s payment of any employee contributions that would
have applied if Employee had remained an officer of the Company;
and (b) pay the costs of Employee’s annual executive
physical, health club membership, two (2) airline clubs, and
financial counseling benefits to the same extent as if Employee had
remained an officer of Mindspeed during such period. Additionally,
Mindspeed will provide Employee with outplacement assistance for a
period of six (6) months following November 14, 2008 at
Mindspeed’s expense through Right Management Consultants, or
a similar firm, at the selected firm’s office location. The
foregoing payments and benefits will be referred to collectively as
the “Settlement Sum,” and the parties hereto agree that
the Settlement Sum provides Employee with full recompense for any
and all claims for lost or unpaid wages, benefits, damages,
interest and any other claim related to Employee’s employment
or to the separation of such employment.
4.
Stock Plans . Upon the termination of
Employee’s employment from Mindspeed at the close of business
on the last day of the Unpaid LOA Period (the “Termination
Date”), all stock options for Mindspeed stock that have been
granted to Employee under any of Mindspeed’s or the other
company’s stock plans and which are not vested as of the
Termination Date, shall immediately expire and shall not be
exercisable under any circumstances. Any such options that are
vested as of the Termination Date shall be exercisable for a period
of three (3) months following the Termination Date and shall
expire and shall not be exercisable at the end of such period if
they are not exercised within that period. All unearned restricted
stock as of the Termination Date, together with any dividends
thereon, shall be forfeited, and Employee shall have no further
rights of any kind or nature with respect thereto. Employee’s
Mindspeed stock option and restricted stock awards outstanding as
of the Effective Date are detailed in the attached
Schedule A.
5. No
Section 16 Reporting . Employee understands and agrees
that, as of November 14, 2008, Employee shall no longer be a
Section 16 officer of Mindspeed and all such reporting by
Mindspeed on Employee’s behalf shall cease.
6.
Mindspeed Proprietary Information . Employee
represents, understands and agrees that he is subject to that
certain Employment Agreement, dated January 1,
1999,
2
regarding
Mindspeed’s proprietary information, which he executed in
connection with his employment with Mindspeed, and that the
provisions which survive his employment are enforceable and remain
in full force and effect. Employee represents, as a material
inducement to Mindspeed to enter into this Agreement, that he has
not and will not disclose, use or misappropriate any confidential,
proprietary or trade secret information of Mindspeed to the press,
customers, analysts, investors or competitors. This representation
includes, but is not limited to, product roadmaps, customer lists,
design wins and employee lists. Mindspeed acknowledges that
Employee’s employment with competitors, in and of itself,
will not constitute disclosure. Mindspeed further acknowledges that
the act of meeting with a Mindspeed customer, in and of itself,
will not constitute disclosure, use or misappropriation of
Mindspeed proprietary information.
7.
Termination of Agreement . That certain change of
control Employment Agreement, dated as of June 10, 2008 by and
between Mindspeed and Employee, shall be terminated, and no longer
in effect as of the Effective Date.
8.
Non-Solicit . During the Salary Continuation Period
and Unpaid LOA and for a period of twelve (12) months after
Employee’s Termination Date, Employee shall not directly or
indirectly solicit or assist any other company or person in
soliciting any Mindspeed employee to leave Mindspeed and join
another company.
9. No
Further Claims . Employee agrees that he is not entitled to
receive, and will not claim, any additional right, benefit, payment
or compensation, including but not limited to, any claim for wages,
benefits, damages, interest, attorneys fees and costs, other than
what is expressly set forth in Section 3, and hereby expressly
waives any right to additional rights, benefits, payments or
compensation. Employee further acknowledges that Mindspeed makes
this Agreement without any admission of liability, and agrees, to
the extent permissible by law, that he will not defame, disparage
or make false or deceptive allegations against Mindspeed, whether
to the press, employees, customers, investors or otherwise. In the
event of Employee’s b
|
