Exhibit 10.1
EMPLOYMENT SEPARATION AND
GENERAL RELEASE AGREEMENT
This Employment Separation and
General Release Agreement (this “ Separation Agreement
”) is entered into this 1 st day of
October 2008, by and between Brad W. Godfrey, an individual
(“ Executive ”), and Power-One, Inc., a
Delaware corporation (the “ Company
”).
WHEREAS , Executive has been employed as the President
and Chief Operating Officer for the Company;
WHEREAS , Executive and the Company are parties to that
certain Change in Control Agreement dated May 24, 2007 (the
“ Change in Control Agreement ”);
WHEREAS , Executive and the Company are parties to that
certain Indemnification Agreement dated April 25, 2006 (the
“ Indemnification Agreement ”);
WHEREAS , Executive agrees to provide transitional
consulting services to the Company upon the terms and conditions
herein; and
WHEREAS , Executive and the Company mutually agreed to
terminate Executive’s employment relationship with the
Company effective on September 29, 2008 (the “
Separation Date ”) upon the terms set forth
herein.
NOW, THEREFORE,
in consideration of the covenants
undertaken and the releases contained in this Separation Agreement,
Executive and the Company agree as follows:
I.
Resignation / Consulting
Services .
A.
Resignation
. Executive’s employment by
the Company terminated on the Separation Date. Executive hereby
confirms that he resigned as an officer, director, employee,
member, manager and in any other capacity with the Company and each
of its affiliates effective as of the Separation Date and that he
currently holds no such position with the Company or any of its
affiliates. The Company confirms that it and each of its affiliates
accepted such resignation effective as of the Separation Date.
Executive acknowledges and agrees that he has received all amounts
owed for his regular and usual salary (including, but not limited
to, any severance (other than the Severance Benefits expressly
provided for in, and subject to the terms of, this Separation
Agreement), overtime, bonus, accrued vacation, commissions, or
other wages), reimbursement of expenses, and usual benefits, and
that all payments due to Executive from the Company and each of its
affiliates after the Separation Date shall be determined under this
Separation Agreement. Notwithstanding the foregoing, the Company
acknowledges and agrees that Executive is not waiving his right to
file for state unemployment insurance, which the Company will not
contest.
B.
Consulting
Services . For
up to thirty (30) days following the Separation Date, the Executive
shall be available to perform consulting, transition and advisory
services as reasonably requested by the Company. During such
period, the Executive shall not have any right to act for,
represent or otherwise bind the Company or its affiliates and the
Executive shall not be entitled to participate in any employee
benefit plans of the Company or its
affiliates (except as provided in
this Separation Agreement). Executive shall not be entitled to any
additional compensation for such services.
II.
Severance
.
A.
Subject to Sections II(B) and
II(C) below, the Company shall provide to the Executive the
following benefits, collectively the “ Severance
Benefits ”:
(i)
Severance Pay
. The Company shall provide as severance pay to
Executive continued payment of his base salary in effect
immediately prior to the Separation Date during the thirteen (13)
month period following the Separation Date (the “
Severance Pay ”), less standard withholding and
authorized deductions. The Severance Pay shall be paid in
substantially equal biweekly installments beginning in the biweekly
period immediately following the Separation Date.
(ii)
Outplacement Services
Reimbursement . The
Company shall reimburse Executive’s costs for reasonable
outplacement services during the twelve (12) month period following
the Separation Date up to a maximum of $25,000 (twenty-five
thousand and 00/100), payable quarterly in arrears upon the
Company’s receipt of satisfactory invoices (the “
Outplacement Benefits ”).
(iii)
Benefits
Continuation . The
Company shall provide to Executive reimbursement of medical and
dental benefits under COBRA (the “ Benefits
Continuation ”) for up to thirteen (13) months following
the Separation Date. Benefits Continuation shall cease upon the
Executive being eligible to obtain coverage from a new
employer.
(iv)
Relocation
Reimbursement . The
Company shall provide to Executive reimbursement, or, in the
alternative, the Company shall arrange for direct payment, of
reasonable and documented costs relating to the relocation of
Executive’s personal and household property from
Camarillo/Thousand Oaks to the Dominican Republic to the extent
Executive so relocates within one year after the Separation Date
(the “ Relocation Benefit ”).
(v)
Continued Vesting of Equity
Awards . As
of the Separation Date, Executive holds 320,000 fully vested stock
options to purchase shares of the Company’s common stock (the
“ Options ”). Notwithstanding anything to the
contrary under any equity plan or award agreement evidencing the
Options, the Company shall permit the Options to remain exercisable
for a period of ninety (90) days following the Separation Date
(subject to earlier termination on a change in control or similar
event in accordance with the provisions of the equity compensation
plan under which such awards were granted and the applicable stock
option agreement). As of the Separation Date, Executive also holds
200,000 outstanding and unvested restricted stock units
(collectively, the “ Restricted Awards ”).
Notwithstanding anything to the contrary under any equity plan or
award agreement evidencing the Restricted Awards, the Company shall
permit the Restricted Awards to continue to vest for twelve (12)
months following the Separation Date (to the extent they are
scheduled to vest during that period in accordance with their
customary vesting schedules). Any Restricted Awards not scheduled
(in accordance with the usual vesting schedule applicable to such
awards) to vest
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within one year after the Separation
Date, terminated on the Separation Date and Executive has no
further right with respect thereto or in respect
thereof.
B.
The Company’s obligation to
provide the Severance Benefits (or to continue providing any
portion thereof, as applicable) is subject to the Executive’s
agreement to execute any and all agreements to waive and release,
without additional consideration from the Company other than as
explicitly set forth in this Agreement, all Claims against
Releasees under international laws. In addition, the
Company’s obligation to provide the Severance Benefits (or to
continue providing any portion thereof, as applicable) is subject
to continuing compliance with the restrictive covenants set forth
in Section VII hereof. The Company shall have no obligation to
provide the Severance Benefits at any time after a breach by
Executive of either or both of the covenants set forth in Sections
VII.A and B, or after any material breach of any other covenant set
forth in Section VII. For purposes of clarity, upon any breach
by Executive of either or both of the covenants set forth in
Sections VII.A and B, or after any material breach of any other
covenant set forth in Section VII (which material breach
remains uncured following written notice thereof), the Options and
Restricted Awards shall be immediately forfeited by the Executive.
Notwithstanding the foregoing provisions of this
Section II(B), in no event shall the amount of the Severance
Pay actually paid by the Company to Executive be less than Ten
Thousand Dollars ($10,000) in the aggregate, regardless of any
breach by Executive of the restrictive covenants set forth in
Section VII, which amount the parties agree is good and
sufficient consideration for the Release and other obligations of
Executive under this Separation Agreement.
C.
The Company’s obligation to
provide the Severance Benefits (or any portion thereof, as
applicable) is further subject to the condition that Executive
shall not have revoked the Release set forth in Section III
hereof pursuant to any revocation rights afforded by applicable
law. The Company shall have no obligation to provide the Severance
Benefits to Executive unless and until the Release becomes
irrevocable by Executive under all applicable laws.
D.
To the extent that the Outplacement
Benefits, Benefits Continuation or Relocation Benefit are taxable
to the Executive, any reimbursement payment due to the Executive
pursuant to such provisions shall be paid to the Executive on or
before the last day of the Executive’s taxable year following
the taxable year in which the related expense was incurred. The
Outplacement Benefits, Benefits Continuation and Relocation Benefit
are not subject to liquidation or exchange for another benefit and
the amount of such benefits and reimbursements that the Executive
receives in one taxable year shall not affect the amount of such
benefits or reimbursements that the Executive receives in any other
taxable year.
III.
Release
. Executive, on behalf of himself, his
descendants, dependents, heirs, executors, administrators, assigns,
and successors, and each of them, hereby covenants not to sue and
fully releases and discharges the Company and each of its parents,
subsidiaries and affiliates, past and present, as well as its and
their trustees, directors, officers, members, managers, partners,
agents, attorneys, insurers, employees, stockholders,
representatives, assigns, and successors, past and present, and
each of them, hereinafter together and collectively referred to as
the “ Releasees ,” with respect to and from any
and all claims, wages, demands, rights, liens, agreements or
contracts (written or oral), covenants, actions, suits, causes
of
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action, obligations, debts, costs,
expenses, attorneys’ fees, damages, judgments, orders and
liabilities of whatever kind or nature in law, equity or otherwise,
whether now known or unknown, suspected or unsuspected, and whether
or not concealed or hidden (each, a “ Claim ”),
which he now owns or holds or he has at any time heretofore owned
or held or may in the future hold as against any of said Releasees
(including, without limitation, any Claim arising out of or in any
way connected with Executive’s service as an officer,
director, employee, member or manager of any Releasee,
Executive’s separation from his position as an officer,
director, employee, manager and/or member, as applicable, of any
Releasee, or any other transactions, occurrences, acts or omissions
or any loss, damage or injury whatever), whether known or unknown,
suspected or unsuspected, resulting from any act or omission by or
on the part of said Releasees, or any of them, committed or omitted
prior to the date of this Release Agreement including, without
limiting the generality of the foregoing, any Claim under Title VII
of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act, the
Family and Medical Leave Act of 1993, the California Fair
Employment and Housing Act, the California Family Rights Act, or
any other federal, state or local law, regulation, or ordinance, or
any Claim for severance pay, bonus, sick leave, holiday pay,
vacation pay, life insurance, health or medical insurance, pension,
retirement or any other fringe benefit, workers’ compensation
or disability (the “ Release ”); provided,
however, that the foregoing Release does not apply to any
obligation of the Company to Executive pursuant to any of the
following: (1) the Executive’s rights to receive the
Severance Benefits pursuant to the terms and conditions of this
Agreement; (2) any right to indemnification that Executive may
have pursuant to the Bylaws of the Company, its Articles of
Incorporation, the laws of the State of Delaware, or under any
written indemnification agreement with the Company (or any
corresponding provision of any subsidiary or affiliate of the
Company) with respect to any loss, damages or expenses (including
but not limited to attorneys’ fees to the extent otherwise
provided) that Executive may in the future incur with respect to
his service as an employee, officer or director of the Company or
any of its subsidiaries or affiliates; (3) with respect to any
rights that Executive may have to insurance coverage for such
losses, damages or expenses under any Company (or subsidiary or
affiliate) directors and officers liability insurance policy;
(4) any rights to continued medical or dental coverage that
Executive may have under COBRA; or (5) any rights to payment
of benefits that Executive may have under a retirement plan
sponsored or maintained by the Company that is intended to qualify
under Section 401(a) of the Internal Revenue Code of
1986, as amended. In addition, this Release does not cover any
Claim that cannot be so released as a matter of applicable law.
Executive acknowledges and agrees that he has received any and all
leave and other benefits that he has been and is entitled to
pursuant to the Family and Medical Leave Act of 1993.
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IV.
1542 Waiver
. It is the intention of Executive in executing
this Separation Agreement that the same shall be effective as a bar
to each and every Claim hereinabove specified. In furtherance of
this intention, Executive hereby expressly waives any and all
rights and benefits conferred upon him by the provisions of
SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly
consents that this Separation Agreement (including, without
limitation, the Release set forth above) shall be given full force
and effect according to each and all of its express terms and
provisions, including those related to unknown and unsuspected
Claims, if any, as well as those relating to any other Claims
hereinabove specified. SECTION 1542 provides:
“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.”
Executive acknowledges that he may hereafter
discover Claims or facts in addition to or different from those
which Executive now knows or believes to exist with respect to the
subject matter of this Separation Agreement and which, if known or
suspected at the