Document/Exhibit Description Pages Size
1: 10-K Annual Report 37 198K
2: EX-10.20 Agreement Between Company and Sear 11 49K
3: EX-10.21 Agreement Between Company & Tan 19 58K
4: EX-11 Computation of Per Share Income 1 6K
5: EX-23.1 Consent of Independent Auditors 1 7K
6: EX-27 Financial Data Schedule 2 6K
EXHIBIT 10.20
SEVERANCE AGREEMENT
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This Severance Agreement (the "Agreement") is made on this 2nd day of
August, 1996 (the "Effective Date"), by and among Integrated Circuit Systems,
Inc., a Pennsylvania corporation (the "Company"), and David W. Sear, Ph.D.
("Employee").
WHEREAS, Employee has served as the President and Chief Executive Officer
of the Company;
WHEREAS, by mutual consent Employee is resigning as the President and
Chief Executive Officer;
WHEREAS, the parties hereto desire to enter into this Agreement on the date
hereof to set forth their agreement with respect to said resignation and certain
other matters in connection therewith upon the terms and conditions hereinafter
set forth; and
WHEREAS, the parties desire that this Agreement supersede any agreement,
arrangement or understanding with respect to the terms of the employment of
Employee by the Company binding on Employee and the Company, except as referred
to in Section 13(a) hereof.
NOW, THEREFORE, in consideration of the covenants and conditions set forth
in this Agreement, the parties, intending to be legally bound, agree as follows:
1. Termination of Employment.
(a) Employee hereby voluntarily and irrevocably resigns from all of his
positions as a director, officer, employee, partner, principal, agent,
representative, consultant or otherwise, with or in (i) the Company and its
affiliates, or (ii) any other corporation, partnership or other entity in
respect of which he was serving at the request of the Company, in each case
effective as of 5:00 p.m., Philadelphia time, on the Effective Date. The Company
and Employee acknowledge and agree that all rights and obligations of any nature
of the Company and Employee with respect to such employment or positions shall
be duly and effectively terminated at 5:00 p.m., Philadelphia time, on the
Effective Date. Employee acknowledges that his employment relationship with the
Company was permanently and irrevocably severed as of the Effective Date and
agrees that the Company and its affiliates have no obligation, contractual or
otherwise, to rehire, re-employ, recall or rehire him in the future.
(b) Employee further acknowledges and agrees that payments made or to
be made and benefits provided or to be provided hereunder are in lieu of any and
all compensation and benefits of any nature whatsoever due to Employee under the
terms of any agreement, arrangement or understanding (whether written or oral)
binding upon the Company and Employee.
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2. Severance Compensation. In full consideration of Employee's execution
of this Agreement and his agreement to be legally bound by its terms, the
Company has paid or agrees to pay Employee the following amounts, and has
provided or agrees to provide the following benefits to Employee:
(a) The Company has paid Employee, and Employee hereby acknowledges
receipt of the sum of $216,667 (minus all payroll deductions required by law or
authorized by Employee). In addition, Employee shall promptly receive payment
in respect of unused vacation days to which Employee is entitled.
(b) Employee acknowledges and agrees that he has not earned any bonus
under the Company's bonus plan in respect of the period ended June 30, 1996.
The Company agrees that Employee will be eligible to receive a bonus in respect
of the period ending September 30, 1996 to the same extent as would otherwise
have been the case had Employee remained an employee of the Company through such
date, but no representation of any nature is made by the Company as to whether a
bonus will be earned by Employee in respect of such period or the amount
thereof, and Employee acknowledges that all determinations in that regard shall
be made solely by the Compensation Committee of the board of directors of the
Company in its discretion and shall be final and binding upon Employee.
(c) Employee acknowledges that the period within which the Company must
make available the purchase of health insurance under the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA") will commence as of the Effective
Date. If and only to the extent permitted under the Company's health insurance
plans, the Company shall provide Employee until August 31, 1997 with health
insurance coverage of the nature (and subject to the same deductibles and cost-
sharing features) as may be provided by the Company to its senior executive
officers during such period. If the Company is unable to include Employee in
such health insurance plan during any portion of such period and Employee
instead purchases health insurance from the Company under COBRA, then the
Company will pay Employee during such portion of this period an amount equal to
160% of the cost of obtaining such insurance from the Company pursuant to
COBRA. Notwithstanding the foregoing, this section shall no longer be
applicable when Employee is employed by a new employer that provides health
insurance to its employees on a comparable cost-sharing basis to that provided
by the Company. Except as expressly stated above, Employee shall not be
entitled to any benefits provided to employees of the Company after the
Effective Date.
(d) Employee shall be reimbursed for the reasonable business expenses
incurred by him prior to the Effective Date in connection with the performance
of services as president and chief executive officer of the Company upon
presentation of an itemized account and written proof of such expenses in
accordance with the Company's policies.
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(e) The Company has previously granted Employee options to acquire a
total of 250,000 shares of the Company's common stock (the "Stock Options")
pursuant to the Company's 1992 Stock Option Plan, as amended (the "1992 Plan").
Notwithstanding Section 12.3 of the 1992 Plan, but subject in all respects to
(i) all of the other provisions of the 1992 Plan and the option agreements
pursuant to which the Stock Options were granted and (ii) compliance by Employee
after the Effective Date with the provisions of this Agreement, the Company and
the Employee agree that all of the Stock Options shall be fully vested and shall
be exercisable in full through the close of business, Philadelphia time, on
August 31, 1997. Employee acknowledges that, as a result of the foregoing, if
any of the Stock Options were intended to qualify as incentive stock options,
such Stock Options will no longer so qualify and will be treated as nonqualified
stock options.
(f) Employee alone, and not the Company, will be solely responsible for
payment of all federal, state and local taxes required to be paid by him in
respect of the payments to be made and benefits to be provided to him under this
Agreement, and Employee acknowledges that such payments and benefits may be
subject to tax withholding.
3. Return of Company Property. By August 31, 1996, Employee will return
to the Company all lists, records, documents, credit cards, building passes,
computers and other materials or property of any nature in his possession,
custody or control which are or were owned by the Company or any of its
subsidiaries or affiliates, and Employee will not retain or deliver to any other
persons or entities copies thereof or permit any copies thereof to be made by
any other person or entity.
4. General Release.
(a) In consideration of the foregoing, (including without limitation
the promises and payments as described in Section 2 above, which are in excess
of that to which Employee would have otherwise been entitled upon termination of
employment), Employee hereby knowingly, willingly and voluntarily remises,
waives, releases and forever discharges the Company and its subsidiaries and
affiliates, the directors, officers, employees, advisors and agents of the
Company and its subsidiaries and affiliates, and the heirs, executors,
administrators, successors and assigns of such parties (collectively referred to
as the "Releasees") of and from any and all manner of actions and causes of
action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements,
judgments, claims and demands whatsoever in law or equity which Employee, his
heirs, executors, administrators or assigns has, had or may hereafter have
against the Releasees or any of them from or by reason of any cause, matter or
thing whatsoever from the beginning of his employment with the Company to the
Effective Date, excepting only claims against the Company relating to its
obligations under this Agreement and including, without in any way limiting the
generality of the foregoing, any and all matters relating to his employment by
the Company and the termination thereof and execution of this Agreement, any and
all claims under any federal, state or local law, including the Pennsylvania
Human Relations Act, 43 P.S. (S)
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951 et seq. and the California Fair Employment and Housing Act, Title VII of the
Civil Rights Act of 1964, as amended, 42 U.S.C. (S) 2000e et seq., the Age
Discrimination in Employment Act, as amended, 29 U.S.C. (S) 621 et seq., the
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. (S) 1001
et seq., any common law claims and all claims for counsel fees and costs.
Employee covenants and agrees never to commence, aid in any way, prosecute or
permit to be commenced against the Releasees any action or other proceeding
based upon any matters which are the subject of or covered by the foregoing.
Nothing in this Section 4 shall affect or modify in any manner (i) the rights of
Employee and the obligations of the Company to indemnify Employee for acts or
matters occurring prior to the Effective Date, if and to the extent required
pursuant to Article 23 of the Company's By-Laws or the Pennsylvania Business
Corporation Law, in each case as in effect on or prior to the Effective Date,
and (ii) the rights, if any, of Employee under any directors and officers
insurance policy purchased by the Company and in effect in respect of periods on
or prior to the Effective Date.
(b) Employee represents that it is his intention in executing this
Agreement that it shall be effective as a bar to each and every claim, demand,
suit, action, cause of action, and debt which he may have against Releasees; and
in furtherance of this intention Employee HEREBY EXPRESSLY WAIVES AND ALL RIGHTS
AND BENEFITS CONFERRED UPON HIM BY THE PROVISIONS OF SECTION 1542 OF THE CIVIL
CODE OF CALIFORNIA WHICH PROVIDES AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Notwithstanding Section 1542 of the Civil Code of California, Employee expressly
consents that this Agreement shall be given full force and effect according to
each and all of its express terms and provisions, including as well those
relating to unknown and unspecified claims, demands, suits, actions, causes of
action and debts, if any, and those relating to any other claims, demands,
suits, actions, causes of action and debts hereinabove specified.
5. Developments.
(a) Employee agrees that all inventions, original works of authorship,
developments, concepts, improvements or trade secrets, whether or not patentable
or registrable under copyright or similar laws and whether or not related to or
useful in the business of the Company (collectively, the "Developments") which
Employee, either by himself or in conjunction with any other person or persons,
has at any time during the period of his employment by the Company prior to the
Effective Date conceived, developed or reduced to
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practice, or caused to be conceived, developed or reduced to practice, are or
shall become and remain the sole and exclusive property of the Company. Employee
hereby assigns, transfers and conveys, and agrees to so assign, transfer and
convey, all of his right, title and interest in and to any and all such
Developments, and agrees to disclose fully as soon as practicable, in writing,
all such Developments to the board of directors of the Company. At any time and
from time to time, upon the request and at the expense of the Company, Employee
will execute and deliver any and all instruments, documents and papers, give
evidence and do any and all other acts which, in the opinion of counsel for the
Company, are or may be necessary or desirable to document such transfer or to
enable the Company to file and prosecute applications for and to acquire,
maintain and enforce any and all patents, trademark registrations, copyrights,
mask work rights or other intellectual property rights of any nature under
United States or foreign law with respect to any such Developments or to obtain
any extension, validation, re-issue, continuance or renewal of any such rights.
The Company will be responsible for the preparation of any such instruments,
documents and papers and for the prosecution of any such proceedings and will
reimburse Employee for all reasonable expenses incurred by him in compliance
with the provisions of this Section.
(b) Notwithstanding the foregoing, Employee and the Company acknowledge
that the provisions of (a) above do not apply to any "invention" which qualifies
fully under the provisions of California Labor Code Section 2870, a copy of
which has been provided to Employee. However, Employee represents that there
are no "inventions" that meet the criteria in California Labor Code Section 2870
included within the definition of Developments as set forth in (a) above.
6. Confidential Information.
(a) Employee recognizes and acknowledges that by reason of his
employment by and service with the Company he has had access to confidential
information of the Company and its subsidiaries and affiliates, including,
without limitation, information and knowledge pertaining to research activities,
products and services offered or being considered, mergers and other major
corporate transactions being considered, inventions, innovations, designs,
ideas, plans, trade secrets, proprietary information, manufacturing, packaging,
advertising, distribution and sales methods and systems, sales and profit
figures, customer and client lists, and relationships between the Company and
its subsidiaries and affiliates and employees, consultants, scientific
collaborators, dealers, distributors, wholesalers, customers, clients, suppliers
and others who have had or will have business dealings with the Company and its
subsidiaries and affiliates ("Confidential Information"). Employee acknowledges
that such Confidential Information is a valuable and unique asset and covenants
that he will not disclose any such Confidential Information to any person for
any reason whatsoever without the prior written authorization of the board of
directors of the Company, unless such information is in the public domain
through no fault of Employee or except as may be required by law. The Company
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will use its best efforts to identify to Employee promptly upon request whether
any specific information specified in Employee's request then constitutes
Confidential Information.
(b) Employee recognizes that the Company has received from third
parties their confidential or proprietary information subject to a duty on the
Company's part to maintain the confidentiality of such information and to use it
only for certain limited purposes. Employee shall hold all such confidential or
proprietary information in the strictest confidence and shall not disclose it to
any person or entity or use it except as consistent with the Company's
agreements with such third parties.
7. Non-Competition.
(a) Until February 2, 1997, Employee will not, unless acting with the
prior written consent of the board of directors of the Company, directly or
indirectly, own, manage, operate, join, control, finance or participate in the
ownership, management, operation, control or financing of, or be connected as an
officer, director, advisor, employee, partner, principal, agent, representative,
consultant or otherwise with or use or permit his name to be used in connection
with, any business or enterprise engaged in (i) the design, marketing, or sale
of (A) integrated circuits for audio/graphic control functions for personal
computers/workstations, or (B) integrated circuits for local area network
applications, or (ii) any other business in which the Company or any of its
subsidiaries or affiliates is engaged as of the Effective Date, or which the
Company by notice to the Employee given within 30 days after the Effective Date
advises him that it intends to pursue within the 6-month period following the
Effective Date (together, the "Business"). It is recognized by Employee that the
Business as engaged in by the Company is and will continue to be international
in scope, and that geographical limitations on this non-competition covenant
(and the non-solicitation covenant set forth in Section 8 below) are therefore
not appropriate.
(b) The foregoing restriction shall not be construed to prohibit the
ownership by Employee of not more than 5% of any class of securities of any
corporation which is engaged in the Business having a class of securities
registered pursuant to the Securities Exchange Act of 1934, as amended, provided
that such ownership represents a passive investment and that neither Employee
nor any group of persons including Employee in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees any
of its financial obligations, otherwise takes any part in its business other
than exercising his rights as a shareholder, or seeks to do any of the
foregoing. In addition, the foregoing restriction shall not be construed to
prohibit the employment of Employee by an entity engaged in the Business as long
as Employee does not, directly or indirectly, participate in the Business.
8. No Solicitation. Employee will not, either directly or indirectly, (i)
until February 2, 1997, call on or solicit any person, firm, corporation or
other entity who or which, at the Effective Date or at any time during the one-
year period prior to the Effective Date, was a
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customer of the Company or any of its subsidiaries or affiliates with respect to
the activities prohibited by Section 7 hereof or (ii) until August 2, 1997,
solicit the employment of any person who was employed by the Company or any of
its subsidiaries or affiliates on a full or part-time basis at the Effective
Date, unless prior to any such solicitation of employment such person (A) was
involuntarily discharged by the Company or such subsidiary or affiliate or (B)
voluntarily terminated his or her relationship with the Company or such
subsidiary or affiliate.
9. Equitable Relief.
(a) Employee acknowledges that the restrictions contained in Sections
5, 6, 7 and 8 hereof are reasonable and necessary to protect the legitimate
interests of the Company and its subsidiaries and affiliates, that the Company
would not have entered into this Agreement in the absence of such restrictions,
and that any violation of any provision of those Sections will result in
irreparable injury to the Company, its subsidiaries and affiliates. Employee
represents that his experience and capabilities are such that the restrictions
contained in Sections 7 and 8 hereof will not prevent Employee from obtaining
employment or otherwise earning a living at the same general level of economic
benefit as he has previously enjoyed immediately prior to the Effective Date.
(b) Employee agrees that the Company shall be entitled to preliminary
and permanent injunctive relief, without the necessity of proving actual
damages, as well as to an equitable accounting of all earnings, profits and
other benefits arising from any violation of Sections 5, 6, 7 or 8 hereof, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled. In the event that any of the provisions of
Sections 5, 6, 7 or 8 hereof should ever be adjudicated to exceed the time,
geographic, product or service, or other limitations permitted by applicable law
in any jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, geographic, product or service, or other
limitations permitted by applicable law.
(c) Employee irrevocably and unconditionally (i) agrees that any suit,
action or other legal proceeding arising out of this Agreement, including
without limitation, any action commenced by the Company for preliminary and
permanent injunctive relief and other equitable relief, may be brought in any
court of competent jurisdiction in the Commonwealth of Pennsylvania or any other
court of competent jurisdiction, provided that any suit, action or other legal
proceeding brought against the Company shall be brought and adjudicated in the
United States District Court for the Eastern District of Pennsylvania, or, if
such court will not accept jurisdiction, in any court of competent civil
jurisdiction sitting in Montgomery County, Pennsylvania, (ii) consents to the
non-exclusive jurisdiction of any such court in any such suit, action or
proceeding, and (iii) waives any objection which Employee may have to the laying
of venue of any such suit, action or proceeding in any such court. Employee
also irrevocably and unconditionally consents to the service of any process,
pleading, notices or other papers in any manner permitted by the notice
provisions of Section 12 hereof.
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(d) Employee agrees that he will provide, and that the Company may
similarly provide, a copy of Sections 5, 6, 7 and 8 of this Agreement to any
business or enterprise (i) which he may directly or indirectly own, manage,
advise, operate, finance, join, control or participate in the ownership,
management, operation, financing, or control of or (ii) with which he may be
connected with as an officer, director, advisor, employee, partner, principal,
agent, representative, consultant or otherwise, or in connection with which he
may use or permit his name to be used; provided, however, that this provision
shall not apply in respect of Sections 7 and 8 of this Agreement after
expiration of the time periods set forth therein.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
11. Litigation Expenses. In the event of a lawsuit by either party to
enforce the provisions of this Agreement, the prevailing party shall be entitled
to recover reasonable costs, expenses and attorney's fees from the other party.
12. Notices. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):
If to the Company, to:
Integrated Circuit Systems, Inc.
2435 Boulevard of the Generals
P.O. Box 968
Valley Forge, Pennsylvania 19482
Attention: Chairman
With a required copy to:
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103-6993
Attention: David R. King, Esquire
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If to Employee, to:
David W. Sear, Ph.D.
14810 Clara Street
Los Gatos, CA 95030
With a required copy to:
J. Michael Bewley, Esq.
Suite 1425
2 North Second Street
San Jose, CA 95113-1304
or to such other names or addresses as the Company or Employee, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
13. Contents of Agreement; Amendment and Assignment.
(a) This Agreement supersedes all prior agreements and sets forth the
entire understanding among the parties hereto with respect to the subject matter
hereof, except that this Agreement shall not supersede and shall be in addition
to any agreements between Employee and the Company with respect to
confidentiality or other intellectual property rights. This Agreement may not
be changed, modified, extended or terminated except upon written amendment
executed by Employee and approved by the board of directors of the Company and
executed on behalf of the Company by a duly authorized officer. Without
limitation of the foregoing, Employee and the Company acknowledge that the
effect of this provision is that no oral modifications of any nature whatsoever
to this Agreement shall be permitted.
(b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto.
14. Severability. If any provision of this Agreement or the application
thereof to any person or circumstance is held invalid or unenforceable in any
jurisdiction, the remainder of this Agreement, and the application of such
provision to such person or circumstance in any other jurisdiction or to other
persons or circumstances in any jurisdiction, shall not be affected thereby.
15. Remedies Cumulative; No Waiver. No remedy conferred upon the Company
by this Agreement is intended to be exclusive of any other remedy, and each and
every
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such remedy shall be cumulative and shall be in addition to any other remedy
given hereunder or now or hereafter existing at law or in equity. No delay or
omission by the Company in exercising any right, remedy or power hereunder or
existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by the Company from time to time
and as often as may be deemed expedient or necessary by the Company in its sole
discretion.
16. Miscellaneous. All section headings are for convenience only. This
Agreement may be executed in counterparts, each of which is an original. It
shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.
17. Consultation with Legal Counsel, Etc. EMPLOYEE REPRESENTS AND
ACKNOWLEDGES THAT (i) HE HAS BEEN ADVISED BY THE COMPANY TO CONSULT HIS OWN
LEGAL COUNSEL WITH RESPECT TO THE AGREEMENT, (ii) HE HAS HAD FULL OPPORTUNITY,
PRIOR TO EXECUTION OF THIS AGREEMENT, TO REVIEW THOROUGHLY THIS AGREEMENT WITH
HIS COUNSEL, AND THAT HE HAS DONE SO, (iii) HE HAS READ AND FULLY UNDERSTANDS
THE TERMS AND PROVISIONS OF THIS AGREEMENT AND (iv) HE IS KNOWINGLY AND
VOLUNTARILY EXECUTING THIS AGREEMENT. Employee agrees to indemnify the Company
and hold it harmless at all times after the date hereof against and in respect
of any damages, liabilities, costs or expenses of any nature incurred by the
Company by reason of any failure or breach by Employee of Employee's
representations, acknowledgments, covenants or agreements contained in this
Agreement. Employee acknowledges that no promise or inducement for this
Agreement has been made excepts as set forth herein and that this Agreement is
executed without Employee's reliance upon any statement or representation by or
on behalf of the Company.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
INTEGRATED CIRCUIT SYSTEMS, INC.
By: /s/ Henry I. Boreen
-----------------------------
Name: Henry I. Boreen
Title: Chairman
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EMPLOYEE
/s/ David W. Sear
--------------------------
David W. Sear, Ph.D.
11
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘10-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 8/31/97 | | 2 | | 3 | | | None on these Dates |
| | 8/2/97 | | 7 |
| | 2/2/97 | | 6 |
| | 9/30/96 | | 2 |
| Filed on: | | 9/26/96 |
| | 8/31/96 | | 3 |
| | 6/30/96 | | 2 |
| For Period End: | | 6/29/96 |
| List all Filings |
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