Confidential treatment has been requested for
portions of this exhibit. The copy filed herewith omits the
information subject to the confidentiality request. Omissions are
designated as [***]. A complete version of this exhibit has been
filed separately with the Securities and Exchange
Commission.
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
April 3, 2009 (the “Effective Date”), by and
between Preetinder S. Virk (“Employee”) and Mindspeed
Technologies, Inc., a Delaware corporation
(“Mindspeed”).
WHEREAS,
Employee is currently employed by Mindspeed as Senior Vice
President and General Manager, Enterprise and Customer Premise
Equipment (“CPE”);
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 employment
with Mindspeed on the Effective Date. Mindspeed accepts
Employee’s decision to leave the company. Mindspeed and
Employee agree to affect a thoughtful and professional business
transition. Employee agrees to provide transitional assistance to
Mindspeed through September 11, 2009 to contribute to a
structured CPE business transition and Mindspeed’s strategy
development.
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 twenty-three (23) weeks beginning on
April 4, 2009 and continuing through September 11, 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 the Effective Date. During
the Salary Continuation Period, Mindspeed will continue to pay
the costs of Employee’s health club membership, two
(2) airline clubs, and financial
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counseling
benefits, to the same extent as if Employee had remained an officer
of Mindspeed during such period. Participation in Mindspeed’s
life insurance plan, long term disability insurance coverage, group
personal excess liability coverage and 401(k) plan end on the
Effective Date. Coverage under Mindspeed’s group medical,
dental, and vision insurance plans ends on April 30, 2009.
Employee agrees to pay Mindspeed $37,500 within thirty
(30) days from the Effective Date to satisfy Employee’s
repayment obligations for the unearned amount of the special bonus
Employee received pursuant to that certain April 8, 2008
letter from Raouf Halim. If Employee does not pay Mindspeed $37,500
within such period, Employee agrees that the foregoing payments and
benefits will terminate on July 17, 2009. 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 Salary Continuation Period (the
“Termination Date”), all stock options for Mindspeed
stock that have been granted to Employee under any of
Mindspeed’s or any 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 the period of time specified in the terms of the
option following the Termination Date and shall expire and shall
not be exercisable at the end of such period if they are not
exercised within such 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 the Effective Date, 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 February 1, 2000, with
Mindspeed, as successor in interests to Conexant Systems, Inc.,
regarding Mindspeed’s proprietary information, 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 any of its competitors, in and of
itself, will not constitute disclosure. Mindspeed further
acknowledges that the act of meeting with a Mindspeed
customer,
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Confidential treatment has been requested for
portions of this exhibit. The copy filed herewith omits the
information subject to the confidentiality request. Omissions are
designated as [***]. A complete version of this exhibit has been
filed separately with the Securities and Exchange
Commission.
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 December 15, 2008,
by and between Mindspeed and Employee, shall be terminated, and no
longer in effect as of the Effective Date.
8.
Non-Compete . For a period of one year from the
Effective Date, Employee agrees not to perform services for a
division or unit of one of the following companies directly
competing with Mindspeed in the Enterprise/CPE and VoIP space:
[***] . In the event of Employee’s breach of this
Section 8, in addition to any other remedy available by law,
Mindspeed may immediately terminate Employee’s employment for
cause, and Employee shall forfeit any unpaid remainder of the
Settlement Sum. During the Salary Continuation Period, Employee
shall be permitted to perform services for one of the foregoing
companies in portions of their operations that do not directly
compete in the markets and technologies described above, including
a Chief Executive Officer, Chief Operating Officer, or
“Group” executive role with responsibility for multiple
business units, provided that Employee complies with
Section 6.
9.
Non-Solicit . During the Salary Continuation Period
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.
10. 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 breach of this Section 10, Mindspeed
may immediately terminate Employee’s employment for cause,
and Employee shall forfeit any unpaid remainder of the Settlement
Sum. For their part, the specific Mindspeed executives aware of
this Agreement, Raouf Y. Halim, Thomas O. Morton and Bret W.
Johnsen, agree not to defame, disparage or make false or deceptive
allegations against Employee, whether to the press, employees,
customers, investors or otherwise, or furthermore to knowingly
allow other Mindspeed employees to defame or disparage
Employee.
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Employee should
direct all prospective employment inquiries or requests for
employment references to either Mr. Halim or
Mr. Morton.
11.
Release . In exchange for the Settlement Sum,
Employee agrees to, and by signing this Agreement does, waive and
release all claims (known and unknown) which he might otherwise
have had against Mindspeed and each of its past and present
employees, officers, directors, agents, representatives, attorneys,
insurers, related entities, assigns, successors, and predecessors
of Mindspeed, and all persons acting by, through, under or in
concert with any of them (collectively, the
“Releasees”), from any and all charges, complaints,
claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including back wages,
and attorneys’ fees and costs actually incurred) of any
nature whatsoever, known or unknown, suspected or unsuspected,
including, but not limited to, rights arising out of alleged
violations of any contract, express or implied (including but not
limited to any contract of employment, partnership, independent
contractor, fiduciary, special or confidential relationship); any
covenant of good faith and fair dealing (express or implied); any
tort, including fraud and deceit, negligent misrepresentation,
promise without intent to perform, conversion, breach of fiduciary
duty, defamation, libel, slander, invasion of privacy, negligence,
intentional or negligent infliction of emotional distress,
malicious prosecution, abuse of process, intentional or negligent
interference with prospective economic advantage and conspiracy;
any “wrongful discharge” and “constructive
discharge” claims; any claims relating to any breach of
public policy; any violations or breaches of corporate by-laws; any
legal restrictions on Mindspeed’s right to terminate
employees or take other employment actions; or any federal, state,
local, municipal or other governmental statute, regulation or
ordinance, including, without limitation, Title VII of the Civil
Rights Act of 1964, the California Fair Employment and Housing Act,
the Americans with Disabilities Act, and the Age Discrimination in
Employment Act (collectively “Claim” or
“Claims”) arising prior to the execution of this
Agreement.
12.
Waiver . Employee expressly waives and relinquishes
all rights and benefits afforded by Section 1542 of the Civil
Code of the State of California, and does so understanding and
acknowledging the significance of such specific waiver of
Section 1542. Section 1542 of the Civil Code of the State
of California states as follows:
“A
general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the
debtor.”
Thus,
notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release and discharge
of all Releasees, Employee expressly acknowledges that this
Agreement is intended to include in its effect, without limitation,
all Claims which Employee does not know or suspect to exist in his
favor against the Releasees, or any of them, at the time
of
4
execution
hereof, and that this Agreement contemplates the extinguishment of
any such Claim or Claims. If Employee hereafter institutes any
legal action against the Releasees, and each of them (except to
enforce the specific provisions of this Agreement or for any future
cause of action unrelated to Employee’s employment with
Mindspeed or its predecessor companies), Mindspeed shall be
entitled to payment from Employee of all costs, expenses and
attorney’s fees incurred as a result of
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