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This Separation
Agreement (“Agreement”) is made by and between
Pixelworks, Inc. and Anthony Simon (“Executive”)
(collectively, “Parties”), effective as of the
11 th
day of February, 2009
(“Effective Date”). As used in this Agreement,
“Pixelworks” refers to Pixelworks, Inc. and all of its
subsidiaries.
A.
Executive has accepted a position of employment with a competitor
of Pixelworks. Executive desires to leave his employment with
Pixelworks after the date on which the Pixelworks Board of
Directors approves the 2008 Senior Management Bonus payout,
currently thought to be February 11, 2009 (the “Bonus
Payout”). The 2008 Senior Management Bonus plan includes the
following requirement for eligibility: “[The employee must
be] actively employed by the Company on the day the bonus is
approved by the [Board of Directors], anticipated to be on a date
in the first quarter of 2009. If employment is terminated for any
reason other than death, retirement or extended disability before
the [Board of Directors] approves the bonus, the award shall be
forfeited.”
B.
Pixelworks desires to end Executive’s employment immediately,
so as to limit Executive’s exposure to business plans,
strategies, technologies and other Pixelworks confidential and
proprietary information.
C.
The Executive does not believe that the forfeiture clause in the
2008 Senior Management Bonus is valid or applicable.
D
. The Parties have come to an amicable agreement to terminate
the Executive’s employment relationship with
Pixelworks.
NOW THEREFORE
for good and valuable consideration the adequacy of which is hereby
acknowledged, the Parties agree as follows:
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1.
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Employment
Termination . Executive’s last day of
employment shall be February 6, 2009 (“Termination
Date”).
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2.
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Payments; End of Employment
Matters .
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2.1.
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As
consideration for section 3 of this Agreement, Pixelworks will pay
Executive a gross Bonus Payout of $97,500.00, payable in equal
quarterly installments according to the following schedule and
provided that Executive has not breached this Agreement:
February 26, June 30, September 30 and
December 31. Pixelworks will instruct its legal counsel to
hold the Bonus Payout and to disperse the payments to Executive
according to the terms of this Agreement. Pixelworks will also
instruct its legal counsel in advance to release all remaining
funds to Executive on the date of either of the following events:
(a) a court of competent jurisdiction issues a final order to
either (i) wind up or otherwise dissolve Pixelworks as an
entity, or (ii) subject Pixelworks to voluntary or involuntary
bankruptcy; (b) the closing of a Change in Control
transaction. “Change in Control” means that an entity
acquires either the majority of Pixelworks’ voting stock
or all or substantially all of Pixelworks’ assets in a
single transaction or series of related transactions; or that
Pixelworks has merged with, or into, another entity.
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2.2.
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On
the Termination Date, Pixelworks paid Executive all of his accrued
and unpaid wages and vacation pay through the Termination Date. The
amount of accrued vacation pay was $5,664.38.
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2.3.
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Pixelworks has and will withhold all
applicable taxes due in connection with any amounts paid to
Executive under this Agreement. Executive understands and agrees
that he is liable for such taxes. Executive agrees to indemnify
Pixelworks against any claim or demand made against it for such tax
liabilities.
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2.4.
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Pixelworks provided Executive with a
Closing Statement of Stock Options. Executive agrees that the
Closing Statement sets forth the deadline by which Executive must
exercise any vested stock options. Pixelworks returned to Executive
in a lump sum on the Terminati
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