Exhibit 10.1
SEPARATION AGREEMENT AND RELEASE
     This Separation Agreement and Release (“Agreement”) is made by and between
Clyde R. Wallin (“Employee”) and Sipex Corporation (the “Company”) (collectively
referred to as the “Parties” or individually referred to as a “Party”).
     WHEREAS, Employee was employed by the Company;
     WHEREAS, Employee signed both the Company’s Code of Business Ethics and
Conduct (the “Confidentiality Agreement”) and Employment Agreement on April 6,
2004;
     WHEREAS, the Company and Employee have entered into a Stock Option
Agreement, dated December 20, 2004, September 6, 2005, January 17, 2006 and
December 4, 2006 granting Employee the option to purchase shares of the
Company’s common stock subject to the terms and conditions of the Company’s 1999
Stock Plan, 2002 Non-Statutory Stock Plan, 2005 Stand Alone Stock Option Grant
Agreement and the 2006 Stand Alone Stock Option Plan, respectively and the
individual Stock Option Agreement (collectively the “Stock Agreements”);
     WHEREAS, the Company and Employee entered into an Offer Letter dated
April 23, 2007 amending and updating Employee’s offer letter dated March 26,
2004 (collectively, the “Offer Letters”);
     WHEREAS, the Employee’s employment with the Company will terminate
immediately after the closing of the merger (the “Merger”) of the Company with a
wholly-owned subsidiary (the “Subsidiary”) of Exar Corporation (“Exar”) pursuant
to that certain Agreement and Plan of Merger between the Company, Exar and the
Subsidiary;
     WHEREAS, the Parties agree that termination of Employee’s employment
constitutes an Involuntary Termination as defined under the Offer Letters; and
     WHEREAS, the Parties wish to resolve any and all disputes, claims,
complaints, grievances, charges, actions, petitions, and demands that the
Employee may have against the Company and any of the Releasees as defined below,
including, but not limited to, any and all claims arising out of or in any way
related to Employee’s employment with or separation from the Company;
     NOW, THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee hereby agree as follows:
     1. Termination of Employment. As of the close of business on the date on
which the Merger will close, which is expected to be on August 24, 2007, and
following the time of such closing, Employee’s employment with the Company shall
terminate for all purposes (the “Termination Date”). This Agreement shall become
effective upon the later of the Effective Time of this Agreement (as set forth
below) or the Termination Date.
     2. Consideration.

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          a. Payment. The Company agrees to pay Employee a lump sum equivalent
to twelve (12) months of Employee’s base salary, for a total of Two Hundred
Twenty-Five Thousand Dollars ($225,000), less applicable withholding. This
payment will be made to Employee within ten (10) business days after the
Effective Date of this Agreement.
          b. Medical Coverage Benefits. In settlement of all benefits owed to
Employee under the Offer Letters regarding continuation of medical benefits
coverage following his Termination Date, the Company agrees to pay Employee a
lump sum amount of Thirty-Two Thousand One Hundred Fourty-Six Dollars and
Sixty-Four Cents ($32,146.64), less applicable withholding, within ten
(10) business days after the Effective Date of this Agreement.
          c. Other. The Company agrees that Employee may retain for his personal
use the cell phone provided to the Employee by the Company, with the account and
phone number to be transferred from the Company to Employee. In addition, the
Company agrees that Employee may retain the laptop computer provided to the
Employee by the Company, after the Company cleanses it of Company documents.
Employee agrees that he will be responsible for any applicable taxes that apply
in connection with the transfer of these assets.
     3. Stock. The Parties agree that for purposes of determining the number of
shares of the Company’s common stock that Employee is entitled to purchase from
the Company, pursuant to the exercise of outstanding options, Employee will be
considered to have fully vested in all of the outstanding options granted to him
by the Company. Employee acknowledges that as of the Termination Date, Employee
will have vested in and hold unexercised options (the “Options”) to purchase
114,200 shares and no more. The exercise of Employee’s vested options and shares
shall continue to be governed by the terms and conditions of the Company’s Stock
Agreements. Pursuant to the Offer Letters and the Merger Agreement, Employee’s
Options will be assumed by Exar and otherwise entitled to the treatment set
forth in Section 5.10 of the Merger Agreement, and will remain exercisable by
him until the earlier of the first anniversary of the Termination Date or the
applicable option expiration date in which to exercise any vested option shares.
     4. Benefits. Subject to the Company’s obligations under Section l.b. above,
Employee’s Company health insurance benefits shall cease on the last day of
August 2007. Employee’s participation in all benefits and incidents of
employment, including, but not limited to, vesting in stock options, and the
accrual of bonuses, vacation, and paid time off, shall cease as of the
Termination Date.
     5. Payment of Salary and Receipt of All Benefits. Employee acknowledges and
represents that as of the Effective Date, and other than the consideration set
forth in this Agreement, the Company has paid or provided all salary, wages,
bonuses, accrued vacation/paid time off, housing allowances, relocation costs,
interest, severance, outplacement costs, fees, reimbursable expenses,
commissions, stock, stock options, vesting, and any and all other benefits and
compensation due to Employee.
     6. Release of Claims. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company and its current and former officers, directors, employees, agents,
investors, attorneys, shareholders, administrators, affiliates, divisions, and
subsidiaries, and predecessor and successor corporations and assigns

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(collectively, the “Releasees”). Employee, on his own behalf and on behalf of
his respective heirs, family members, executors, agents, and assigns, hereby
fully and forever releases the Releasees from, and agrees not to sue concerning,
or in any manner to institute, prosecute, or pursue, any claim, complaint,
charge, duty, obligation, or cause of action relating to any matters of any
kind, whether presently known or unknown, suspected or unsuspected, that
Employee may possess against any of the Releasees arising from any omissions,
acts, facts, or damages that have occurred up until and including the Effective
Date of this Agreement, including, without limitation:
          a. any and all claims relating to or arising from Employee’s
employment relationship with the Company and the termination of that
relationship;
          b. any and all claims relating to, or arising from, Employee’s right
to purchase, or actual purchase of shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary
duty, breach of duty under applicable state corporate law, and securities fraud
under any state or federal law;
          c. any and all claims for wrongful discharge of employment;
termination in violation of public policy; discrimination; harassment;
retaliation; breach of contract, both express and implied; breach of covenant of
good faith and fair dealing, both express and implied; promissory estoppel;
negligent or intentional infliction of emotional distress; fraud; negligent or
intentional misrepresentation; negligent or intentional interference with
contract or prospective economic advantage; unfair business practices;
defamation; libel; slander; negligence; personal injury; assault; battery;
invasion of privacy; false imprisonment; conversion; and disability benefits;
          d. any and all claims for violation of any federal, state, or
municipal statute, including, but not limited to, Title VII of the Civil Rights
Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the
Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor
Standards Act, except as prohibited by law; the Fair Credit Reporting Act; the
Age Discrimination in Employment Act of 1967; the Older Workers Benefit
Protection Act; the Employee Retirement Income Security Act of 1974; the Worker
Adjustment and Retraining Notification Act; the Family and Medical Leave Act,
except as prohibited by law; the Sarbanes- Oxley Act of 2002; the Uniformed
Services Employment and Reemployment Rights Act; the California Family Rights
Act; the California Labor Code, except as prohibited by law; the California
Workers’ Compensation Act, except as prohibited by law; and the California Fair
Employment and Housing Act;
          e. any and all claims for violation of the federal or any state
constitution;
          f. any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination;
          g. any claim for any loss, cost, damage, or expense arising out of any
dispute over the non-withholding or other tax treatment of any of the proceeds
received by Employee as a result of this Agreement; and
          h. any and all claims for attorneys’ fees and costs.

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Employee agrees that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters
released.
     Notwithstanding the above, this release does not extend to any obligations
incurred under this Agreement. In addition, this release does not release claims
that cannot be released as a matter of law, including, but not limited to:
(1) Employee’s right to file a charge with or participate in a charge by the
Equal Employment Opportunity Commission or comparable state agency against the
Company (with the understanding that any such filing or participation does not
give Employee the right to recover any monetary damages against the Company;
Employee’s release of claims herein bars Employee from recovering such monetary
relief from the Company); (2) claims under Division 3, Article 2 of the
California Labor Code (which includes California Labor Code section 2802
regarding indemnity for necessary expenditures or losses by employee);
(3) claims prohibited from release as set forth in California Labor Code section
206.5 (specifically “any claim or right on account of wages due, or to become
due, or made as an advance on wages to be earned, unless payment of such wages
has been made”); (4) any claim for coverage of, or payment of benefits to,
Employee and his dependents with respect to claims arising during such period as
he or they have been covered by Company healthcare benefits plans;
(5) Employee’s vested rights, if any, in the Company’s 401 (k) plan; or (6) any
claim or right he has to seek indemnification with respect to any potential
liability alleged against him in connection with his role as an officer of the
Company in accordance with the Company’s bylaws, applicable law, any directors
and officers liability insurance policy maintained by the Company (including any
policy obtained at the time of or in connection with the Merger) and/or any
indemnification agreement between him and the Company in effect immediately
prior to the date of this Agreement.
     7. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges
that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and
release is knowing and voluntary. Employee agrees that this waiver and release
does not apply to any rights or claims that may arise under the ADEA after the
Effective Date of this Agreement. Employee acknowledges that the consideration
given for this waiver and release is in addition to anything of value to which
Employee was already entitled. Employee further acknowledges that he has been
advised by this writing that: (a) he should consult with an attorney prior to
executing this Agreement; (b) he has twenty-one (21) days within which to
consider this Agreement; (c) he has seven (7) days following his execution of
this Agreement to revoke this Agreement; (d) this Agreement shall not be
effective until after the revocation period has expired; and (e) nothing in this
Agreement prevents or precludes Employee from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA, nor
does it impose any condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law. In the event Employee signs this
Agreement and returns it to the Company in less than the 21-day period
identified above, Employee hereby acknowledges that he has freely and
voluntarily chosen to waive the time period allotted for considering this
Agreement.
     8. California Civil Code Section 1542. Employee acknowledges that he has
been advised to consult with legal counsel and is familiar with the provisions
of California Civil Code Section 1542, a statute that otherwise prohibits the
release of unknown claims, which provides as follows:
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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.
     Employee, being aware of said code section, agrees to expressly waive any
rights he may have thereunder, as well as under any other statute or common law
principles of similar effect.
     9. No Pending or Future Lawsuits. Employee represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any of the other Releasees. Employee
also represents that he does not intend to bring any claims on his own behalf or
on behalf of any other person or entity against the Company or any of the other
Releasees.
     10. Confidentiality. Except to the extent that this Agreement is required
to be publicly filed, or it or its terms become(s) public through no fault of
Employee, Employee agrees to maintain in complete confidence the existence of
this Agreement, the contents and terms of this Agreement, and the consideration
for this Agreement (hereinafter collectively referred to as “Separation
Information”). Except as required by law, Employee may disclose Separation
Information only to his immediate family members, the Court in any proceedings
to enforce the terms of this Agreement, Employee’s undersigned counsel, and
Employee’s accountant and any professional tax advisor to the extent that they
need to know the Separation Information in order to provide advice on tax
treatment or to prepare tax returns, and must prevent disclosure of any
Separation Information to all other third parties. Employee agrees that he will
not publicize, directly or indirectly, any Separation Information.
     11. Trade Secrets and Confidential Information/Company Property. Employee
reaffirms and agrees to observe and abide by the terms of the Confidentiality
Agreement, specifically including the provisions therein regarding nondisclosure
of the Company’s trade secrets and confidential and proprietary information, and
non-solicitation of Company employees. Employee’s signature below constitutes
his certification under penalty of perjury that he has returned all documents
and other items provided to Employee by the Company, developed or obtained by
Employee in connection with his employment with the Company, or otherwise
belonging to the Company.
     12. No Cooperation. Employee agrees not to act in any manner that might
damage the business of the Company. Employee further agrees that he will not
knowingly encourage, counsel, or assist any attorneys or their clients in the
presentation or prosecution of any disputes, differences, grievances, claims,
charges, or complaints by any third party against Company or any of its related
Releasees, unless under a subpoena or other court order to do so or as related
directly to the ADEA waiver in this Agreement. Employee agrees both to
immediately notify the Company upon receipt of any such subpoena or court order,
and to furnish, within three (3) business days of its receipt, a copy of such
subpoena or other court order. If approached by anyone for counsel or assistance
in the presentation or prosecution of any disputes, differences, grievances,
claims, charges, or complaints against any of the Company or its respective
Releasees, Employee shall state no more than that he cannot provide counsel or
assistance.
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     13. Breach. Employee acknowledges and agrees that any material breach of
this Agreement, unless such breach constitutes a legal action by Employee
challenging or seeking a determination in good faith of the validity of the
waiver herein under the ADEA, or of any provision of the Confidentiality
Agreement shall entitle the Company immediately to recover and/or cease
providing the consideration provided to Employee under this Agreement, except as
provided by law.
     14. No Admission of Liability. Employee understands and acknowledges that
this Agreement constitutes a compromise and settlement of any and all actual or
potential disputed claims by Employee. No action taken by the Company hereto,
either previously or in connection with this Agreement, shall be deemed or
construed to be (a) an admission of the truth or falsity of any actual or
potential claims or (b) an acknowledgment or admission by the Company of any
fault or liability whatsoever to Employee or to any third party.
     15. Costs. The Parties shall each bear their own costs, attorneys’ fees,
and other fees incurred in connection with the preparation of this Agreement.
     16. Arbitration. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF
THE TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN
RELEASED, SHALL BE SUBJECT TO ARBITRATION IN SANTA CLARA COUNTY, BEFORE JAMS,
PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”). THE
ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE
ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH
CALIFORNIA LAW, INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE
ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE
OR CLAIM, WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY
JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH CALIFORNIA LAW,
CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL BE
FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES
AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO
INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE
ARBITRATION AWARD. THE COMPANY WILL PAY FOR ANY ADMINISTRATIVE OR HEARING FEES
CHARGED BY THE ARBITRATOR OR JAMS EXCEPT THAT EMPLOYEE WILL PAY THE FIRST
$125.00 OF ANY FILING FEES ASSOCIATED WITH ANY ARBITRATION EMPLOYEE INITIATES.
EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES;
PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO
THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES HEREBY AGREE TO
WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY
A JUDGE OR JURY. NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT
EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY)
FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF
THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN
BY REFERENCE. SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS
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PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE
PARTIES AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.
     17. Tax Consequences. The Company makes no representations or warranties
with respect to the tax consequences of the payments and any other consideration
provided to Employee or made on his behalf under the terms of this Agreement.
Employee agrees and understands that he is responsible for payment, if any, of
local, state, and/or federal taxes on the payments and any other consideration
provided hereunder by the Company and any penalties or assessments thereon.
Employee further agrees to indemnify and hold the Company harmless from any
claims, demands, deficiencies, penalties, interest, assessments, executions,
judgments, or recoveries by any government agency against the Company for any
amounts claimed due on account of (a) Employee’s failure to pay or the Company’s
failure to withhold, or Employee’s delayed payment of, federal or state taxes,
or (b) damages sustained by the Company by reason of any such claims, including
attorneys’ fees and costs.
     18. Authority. The Company represents and warrants that the undersigned has
the authority to act on behalf of the Company and to bind the Company and all
who may claim through it to the terms and conditions of this Agreement. Employee
represents and warrants that he has the capacity to act on his own behalf and on
behalf of all who might claim through him to bind them to the terms and
conditions of this Agreement. Each Party warrants and represents that there are
no liens or claims of lien or assignments in law or equity or otherwise of or
against any of the claims or causes of action released herein.
     19. No Representations. Employee represents that he has had an opportunity
to consult with an attorney, and has carefully read and understands the scope
and effect of the provisions of this Agreement. Employee has not relied upon any
representations or statements made by the Company that are not specifically set
forth in this Agreement.
     20. Severability. In the event that any provision or any portion of any
provision hereof or any surviving agreement made a part hereof becomes or is
declared by a court of competent jurisdiction or arbitrator to be illegal,
unenforceable, or void, this Agreement shall continue in full force and effect
without said provision or portion of provision.
     21. Attorneys’ Fees. Except with regard to a legal action challenging or
seeking a determination in good faith of the validity of the waiver herein under
the ADEA, in the event that either Party brings an action to enforce or effect
its rights under this Agreement, the prevailing Party shall be entitled to
recover its costs and expenses, including the costs of mediation, arbitration,
litigation, court fees, and reasonable attorneys’ fees incurred in connection
with such an action.
     22. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning the subject matter of
this Agreement and Employee’s employment with and separation from the Company
and the events leading thereto and associated therewith, and supersedes and
replaces any and all prior agreements and understandings concerning the subject
matter of this Agreement and Employee’s relationship with the Company, with the
exception of the Confidentiality Agreement and the Stock Agreements.

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     23. No Oral Modification. This Agreement may only be amended in a writing
signed by Employee and the Company’s Chief Executive Officer.
     24. Governing Law. This Agreement shall be governed by the laws of the
State of California, without regard for choice-of-law provisions. Employee
consents to personal and exclusive jurisdiction and venue in the State of
California.
     25. Effective Date. Each Party has seven (7) days after that Party signs
this Agreement to revoke it. This Agreement will become effective on the eighth
(8th) day after Employee signed this Agreement, so long as it has been signed by
the Parties and has not been revoked by either Party before that date (the
“Effective Date”).
     26. Counterparts. This Agreement may be executed in counterparts and by
facsimile, and each counterpart and facsimile shall have the same force and
effect as an original and shall constitute an effective, binding agreement on
the part of each of the undersigned.
     27. Voluntary Execution of Agreement. Employee understands and agrees that
he executed this Agreement voluntarily, without any duress or undue influence on
the part or behalf of the Company or any third party, with the full intent of
releasing all of his claims against the Company and any of the other Releasees.
Employee acknowledges that:

  (a)   he has read this Agreement;     (b)   he has been represented in the
preparation, negotiation, and execution of this Agreement by legal counsel of
his own choice or has elected not to retain legal counsel;     (c)   he
understands the terms and consequences of this Agreement and of the releases it
contains; and     (d)   he is fully aware of the legal and binding effect of
this Agreement.

     29. Assignment. This Agreement will be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Employee upon
Employee’s death and (b) any successor of the Company, including without
limitation Exar. Any such successor of the Company will be deemed substituted
for the Company under the terms of this Agreement for all purposes. For this
purpose, “successor” means any person, firm, corporation or other business
entity which at any time, whether by purchase, merger or otherwise, directly or
indirectly acquires all or substantially all of the assets or business of the
Company. None of the rights of Employee to receive any form of compensation
payable pursuant to this Agreement may be assigned or transferred except by will
or the laws of descent and distribution. Any other attempted assignment,
transfer, conveyance or other disposition of Employee’s right to compensation or
other benefits will be null and void.
     IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.

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  CLYDE R. WALLIN, an individual    
 
       
Dated: 8/17/07
  /s/ Clyde R. Wallin    
 
       
 
  Clyde R. Wallin    
 
       
 
       
 
  SIPEX CORPORATION    

         
Dated: 8/17/07
By  /s/ Ralph Schmitt    
 
       
 
  Ralph Schmitt    
 
  Chief Executive Officer    

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