Exhibit 10.1

 

Separation Agreement

 

This Separation Agreement (“Agreement”) is made by and between Thinh Q. Tran, an
individual (the “Executive”) and Sigma Designs, Inc. (the “Company”)
(collectively the “Parties”), effective on the eighth calendar day after the
date this Agreement is signed by the Executive. The Executive must sign and
return this Agreement within twenty-one (21) days of January 26, 2018, the date
this Agreement is delivered to Executive, to be eligible for the severance
benefits described below.

 

Recital

 

The Parties entered into an Executive Severance Agreement, effective April 18,
2016 (“Severance Agreement”). The Executive’s employment has ended effective
January 26, 2018 (“Separation Date”). The Parties agree that the termination of
Executive’s employment shall be deemed an “Involuntary Termination” as defined
by paragraph 1(c) of the Severance Agreement and, as a result, Executive shall
be entitled to the benefits set forth in paragraph 3(a) of the Severance
Agreement, to be provided as set forth herein, subject to signing and non-
revocation of this Agreement.

 

The Executive acknowledges that the Executive has received final paychecks,
which included payment of all wages due and all accrued, unused vacation. The
Executive represents that he has been paid all amounts he was owed as salary,
commissions or other wages that were earned on or before the termination of his
employment and has received reimbursement of all reimbursable business expenses.

 

Agreement

 

Based upon the information stated in the above Recital and the statements,
promises and agreements contained below, the parties hereby agree as follows:

 

1.

Provided this Agreement has become effective, the Company will make the
following severance payments to the Executive:

 

 

a.

On the 60th day following the Separation Date, the Company will pay the
Executive a lump sum payment in the gross amount of Seven hundred twenty nine
thousand and two hundred dollars ($729,200). This payment will be subject to all
legally required payroll withholdings.

 

 

b.

If and to the extent that the Executive elects to continue health insurance
coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”),
then the Company will pay the Executive (or pay directly on the Executive’s
behalf) an amount equal to the estimated group health continuation coverage
premiums that would be charged for Executive and Executive’s eligible dependents
under COBRA, determined as of the Separation Date, for coverage over a period
equal to twelve (12) months from the Separation Date, less applicable
withholding, in a lump sum on the 60th day following the Separation Date (“COBRA
Payment”). The Executive is solely responsible for filing any necessary
paperwork for COBRA coverage and payment of all premiums.

 

 

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2.

The Parties agree that Executive holds the following equity awards, including
options to purchase shares of the Company’s Common Stock (each, an “Option” and
collectively, the “Options”) and restricted stock units (each, an “RSU” and
collectively, the “RSUs”):

 

Date of

Grant

 

Type of

Award

 

Number

of

Shares

Granted

   

Exercise

Price

Per

Share

   

Number of

Shares

Vested/Released

as of [date]

   

Number

of Shares

Unvested

as of

[date]

   

Number of

Shares to

be

Accelerated

 

2/11/2008

Option

    100,000     $ 41,58       100,000       0       0  

11/3/2008

Option

    87,500     $ 10.87       87,500       0       0  

2/6/2009

Option

    87,500     $ 11.09       87,500       0       0  

7/7/2016

RSU

    58,000       n/a       21,750       36,250       14,500  

7/7/2016

Option

    120,000     $ 6.48       45,000       75,000       30,000  

7/10/2015

RSU

    80,000       n/a       55,000       25,000       20,000  

 

 

 

a.

Except as provided in subparagraph (b) and paragraph 3 below, all of the Options
and RSUs that are unvested as of the Separation Date shall terminate on the
Separation Date.

 

 

b.

Notwithstanding subparagraph (a) above, and provided this Agreement has become
effective, the number of shares set forth under the column entitled “Number of
Shares to be Accelerated” in the table contained in subparagraph (a) above with
respect to such applicable Option or RSU shall immediately vest as of the
Separation Date subject to Executive’s compliance with the provisions of this
Agreement.

 

 

c.

Following the Separation Date, the Options which are vested, or which vest
pursuant to this Agreement, will remain exercisable in accordance with their
terms after termination of service, for the period of time specified in the
applicable stock option plan and agreement for exercisability following
termination of service; provided, however, that the Options will in no event
remain exercisable beyond their applicable expiration dates and will be subject
to earlier termination in accordance with the terms of the applicable stock
option plan and agreement; provided, further that the Options will remain
exercisable beyond their applicable expiration dates until the Change of Control
Expiration Date.

 

Except as set forth in this Agreement, the stock option agreements governing the
Options and the restricted stock unit agreements governing the RSUs will remain
in full force and effect, and the Executive agrees to remain bound by those
agreements.

 

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3.

If a Change of Control, as defined in paragraph 1(b) of the Severance Agreement,
occurs no later than July 25, 2018 with Silicon Laboratories Inc. (“Silicon
Labs”) or any affiliate of Silicon Labs pursuant to the terms of that certain
Agreement and Plan of Merger dated December 7, 2017 by and between the Company,
Silicon Labs and Seguin Merger Subsidiary, Inc., in addition to the severance
benefits set forth in paragraphs 1 and 2 above, Executive will receive the
following severance benefits:

 

 

 

a.

Within 60 days following the Change of Control, the Company will pay the
Executive a lump sum payment in the gross amount of Seven hundred twenty nine
thousand and two hundred dollars ($729,200). This payment will be subject to all
legally required payroll withholdings.

 

 

b.

If and to the extent that the Executive elects to continue health insurance
coverage under COBRA, then the Company will pay the Executive (or pay directly
on the Executive’s behalf) an amount equal to the estimated group health
continuation coverage premiums that would be charged for Executive and
Executive’s eligible dependents under COBRA, determined as of the date of the
Change of Control, for coverage over an additional period of twelve (12) months
following the Separation Date, less applicable withholding, in a lump sum within
sixty (60) days following the Change of Control. For the avoidance of doubt, the
aggregate amount of COBRA payments provided for by Section 1(b) and this Section
3(b) shall cover a period of twenty-four (24) months.

 

 

c.

All of the Options and RSUs that are unvested as of the Separation Date and were
not accelerated pursuant to paragraph 2(b) above shall immediately vest as of
the effective date of the Change of Control. Such unvested Options and RSUs
shall remain outstanding following the Separation Date for the sole purpose of
effectuating this provision, and shall be forfeited automatically in the event
the effective date of a Change of Control does not occur within 180 days
following the Separation Date. But for the acceleration provided pursuant to
paragraph 2(b) above, or upon a Change of Control within 180 days following the
Separation Date, the Executive acknowledges and agrees that such unvested
Options and RSUs shall not be subject to continued vesting following the
Separation Date, notwithstanding any continued service provided by the Executive
pursuant to this Agreement or otherwise.

 

4.

In exchange for the severance benefits set forth in paragraphs 1 and 2 above,
the Executive releases and forever discharges the Company and each of its
employees, officers, directors, shareholders, agents, predecessors and
successors in interest, parents, subsidiaries, attorneys, and assigns
(“Company-Affiliates”), from any and all claims, demands, obligations and/or
liabilities which arise out of or relate to any action by the Company or the
Company-Affiliates or omission to act by the Company or the Company-Affiliates
occurring on or before the date this Agreement is signed by the Executive (the
“Release”).

 

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5.

There are certain claims which, under state or federal statutes or regulations,
may not be released or may not be released except with the participation and
approval of a state or federal agency. For example, claims for indemnification
under the California Labor Code cannot be waived or released and claims related
to Workers’ Compensation benefits may not be waived without the express approval
of the agency that oversees administration of those laws. The Release is not
intended to cover and does not extend to these claims or other claims that, by
law, cannot be released in an agreement between an employer and an employee. The
Release does not extend to claims for unemployment or workers’ compensation
benefits or waive the Executive’s right to file an application for an award for
original information submitted pursuant to Section 21F of the Securities
Exchange Act of 1934.

 

6.

To the extent permitted by law, the Release includes, but is not limited to,
release of any and all claims arising out of the Executive’s employment with the
Company or Company-Affiliates and the termination of that employment. This
includes a release of any rights or claims the Executive may have under the Age
Discrimination in Employment in Employment Act, 29 U.S.C. §§621, et seq., (as
amended by the Older Workers’ Benefit Protection Act, 29 U.S.C. §626(f)) which
prohibits age discrimination in employment, Title VII of the Civil Rights Act of
1964, 42 U.S.C. §§2000, et seq., which prohibits discrimination in employment
based on race, color, national origin, religion, or sex, the Equal Pay Act,
which prohibits paying men and women unequal pay for equal work, the Americans
with Disabilities Act (42 U.S.C. §§12101, et seq.), which prohibits
discrimination against the disabled, the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C. §§1001, et seq., the Family Medical Leave Act (29 USC
§2601, et seq) which provides job security to employees due to certain absences
from work, the Fair Labor Standards Act, 29 U.S.C. §§201 et seq., (as amended),
the California Fair Employment and Housing Act (“FEHA”), Government Code
§§12940, et seq., the California Labor Code, the California Private Attorney
General Act, or any other federal, state or local laws or regulations relating
to terms and conditions of employment. The Release also includes any claims for
unpaid wages, wrongful discharge, breach of contract, fraud, misrepresentation,
intentional and negligent infliction of emotional distress, harassment, and any
claims that the Company or any Company-Affiliate has dealt with the Executive
unfairly or in bad faith. Nothing herein shall release or limit Executive’s
right to receive or retain any interest, payment or benefit arising as a result
of his employment that was earned or vested on or before the termination of the
employment relationship.

 

7.

To the maximum extent permitted by law, the Release extends to all claims of
every nature and kind whatsoever, whether known or unknown, suspected or
unsuspected. The Executive expressly waives the provisions of Section 1542 of
the Civil Code which 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.

 

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8.

The Release does not waive any rights or claims that the Executive might have
arising after the date the Executive signs this Agreement. The Executive Release
does not waive any rights or claims that the Executive might have (i) under that
certain Indemnification Agreement by and between the Company and Executive dated
as of June 20, 2017, and (ii) under the Company’s Certificate of Incorporation,
as amended and bylaws with respect to indemnification.

 

9.

The Executive acknowledges that his employment with the Company ceased on or
before the date this Agreement is signed by Executive. Executive hereby agrees
to resign from all officer or director positions he has with the Company, its
subsidiaries, affiliates and/or investments. Executive further agrees that he
shall promptly execute such additional documents as are reasonably requested by
the Company to evidence and effectuate this paragraph 9.

 

10.

In exchange for the promises set forth in paragraph 3 above, for the 90 day
period following the Separation Date, Executive agrees that at the request of
the Company’s Board of Directors he will reasonably cooperate with the Company,
its subsidiaries and affiliates, at any level, and any of their officers,
directors, shareholders, or employees: (A) to sign any documents reasonably
required to be signed while he remains in the capacity of a director or officer
of a subsidiary or affiliate of the Company including but not limited to
documents confirming Executive’s resignation as a director or officer of the
Company, and/or its subsidiaries and/or affiliates, (B) concerning requests for
information about the business of the Company or its subsidiaries or affiliates
or his involvement and participation therein, (C) assist in transition and
succession matters by sharing his knowledge about Company; practices and
procedures as implemented or considered during the course of his employment; and
(D) provide continued assistance to the Company in its efforts to divest it Home
Connectivity Business and other similar matters.

 

11.

The Executive promises and states that the Executive has not given or sold any
claim discussed in this Agreement to anyone and that the Executive has not filed
a lawsuit, claim, or charge with any court or government agency asserting any
claims that are released by the Release. Without limiting the generality of the
foregoing, the Executive agrees that the Executive will not bring or participate
in any class action or collective action against the Company, which asserts, in
whole or in part, any claim(s), which arose prior to the date this Agreement, is
signed by the Executive, whether or not such claims are covered by the Release.

 

12.

The Executive promises and states that he has returned to the Company all
property belonging to the Company or authored by or concerning the Company
(other than the Executive’s personal copies of his payroll and benefits
records), including, but not limited to, keys and passes, credit cards, computer
hardware and software, papers, manuals, records, drawings, and documents.

 

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13.

In consideration of the severance payments made herein, The Executive agrees
that he is bound the terms of the Sigma Designs, Inc, At-Will Employment,
Confidential Information, Invention Assignment and Arbitration Agreement (“IP
Agreement”), which is attached here to as Exhibit A and incorporated herein in
its entirety. Notwithstanding anything else contained herein, nothing in this
Agreement is intended to or shall be construed to modify, impair or terminate
any obligation of the Executive pursuant to the IP Agreement that by the terms
of the IP Agreement continues after his separation from the Company’s
employment. Notwithstanding anything contained in this Agreement or the IP
Agreement, the Executive may disclose Confidential Information in confidence
directly or indirectly to federal, state, or local government officials,
including but not limited to the Department of Justice, the Securities and
Exchange Commission, the Congress, and any agency Inspector General, or to an
attorney, for the sole purpose of reporting or investigating a suspected
violation of law or regulation or making other disclosures that are protected
under the whistleblower provisions of state or federal laws or regulations.  
Nothing in this Agreement or the IP Agreement is intended to conflict with
Federal law protecting confidential disclosures of a trade secret to the
Government or in a court filing, 18 U.S.C. § 1833(b), or to create liability for
disclosures of Confidential Information that are expressly allowed by 18 U.S.C.
§ 1833(b). 

 

14.

Executive agrees not to 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 the Company and/or any
officer, director, employee, agent, representative, shareholder or attorney of
the Company, unless under a subpoena or other court order to do so.

 

15.

This Agreement recognizes the rights and responsibilities of the Equal
Employment Opportunity Commission (“EEOC”) and the California Department of Fair
Employment and Housing (“DFEH”) to enforce the statutes, which come under their
jurisdiction. This Agreement is not intended to prevent Executive from
initiating or participating in any investigation or proceeding conducted by the
EEOC or the DFEH; provided, however, that nothing in this section limits or
affects the finality or the scope of the Release. The Executive has waived and
released any claim the Executive may have for damages based on any alleged
discrimination and may not recover damages in any proceeding conducted by the
EEOC or the DFEH.

 

16.

Executive agrees to refrain from any disparagement, defamation, libel or slander
of the Company or Company-affiliates or tortious interference with the contracts
and relationships of the Company; provided, however, statements which are made
in good faith in response to any question, inquiry or request for information
required by legal process shall not violate this paragraph. The Company agrees
that its officer and directors will refrain from any disparagement, defamation,
libel or slander of the Executive; provided, however, statements which are made
in good faith in response to any question, inquiry or request for information
required by legal process shall not violate this paragraph. Nothing herein shall
prevent the Company from instituting or asserting any legal claim or cause of
action against Executive in any arbitration, agency or court proceeding.

 

17.

This Agreement is to be governed by California law.

 

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18.

Payments and benefits provided under this Agreement are taxable under the laws
of the United States and the State of California and will be subject to all
required withholdings and court ordered wage assignments and/or garnishments.

 

19.

If any portion of this Agreement is found to be unenforceable, then both the
Executive and the Company desire that all other portions that can be separated
from it or appropriately limited in scope shall remain fully valid and
enforceable.

 

20.

Except as prohibited by law, any legal dispute between the Executive and the
Company (or between the Executive and any Company-Affiliates, each of whom is
hereby designated a third party beneficiary of this agreement regarding
arbitration) arising out of the Executive’s employment or termination of
employment or this Agreement (a “Dispute”) will be resolved through binding
arbitration in Santa Clara County, California under the Federal Arbitration Act
in accordance with the procedures set forth in paragraph 12 (including
subparagraphs A through E) of the IP Agreement, attached hereto and incorporated
herein.

 

21.

This Agreement is intended by the parties to be their final agreement. The
statements, promises and agreements in this Agreement may not be contradicted by
any prior understandings, agreements, promises or statements including but not
limited to the Severance Agreement except as expressly incorporated herein. The
Executive states and promises that in signing this Agreement he has not relied
on any statements or promises made by the Company, other than the promises
contained in this Agreement. Any changes to this Agreement must be in writing
and signed by both Parties.

 

22.

If the Executive breaks any of the promises or agreements made in this
Agreement, or if any of the representations or statements made by the Executive
in this Agreement are discovered to be untrue, the Company may stop providing
the severance benefits described in Paragraphs 1, 2 and 3 and the Executive will
return to the Company all severance payments which have been made up to that
date, except for $100; provided, however, any breach of the agreements set forth
in paragraphs 10, 12 and 13 herein must be material and the Company will provide
Executive with written notice of any breach including a summary of the basis of
such claimed breach and Executive will be provided 30 days to cure such breach,
if such cure is possible. All of the other terms of this Agreement will remain
in full force and effect.

 

23.

If either party files any arbitration, lawsuit, claim, or charge based on, or in
any way related to, the Executive’s employment with the Company, any claim that
the Executive has released in the Release or the promises and agreements
contained in this Agreement, the party that wins the lawsuit or arbitration or
prevails on the claim or charge will be entitled to recover from the other party
all costs it incurs in connection with the dispute, including reasonable
attorneys’ fees.

 

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24.

Paragraphs 22 and 23 shall not apply if the Executive asserts a claim under the
Age Discrimination in Employment in Employment Act, 29 U.S.C. §§621, et seq.,
(as amended by the Older Workers’ Benefit Protection Act, 29 U.S.C. §626(f)),
even though such claim is barred by the Release given by the Executive in this
Agreement. This Paragraph does not limit the completeness or finality of
Release. It only limits the Company’s remedies in the event that the Executive
asserts certain claims barred by the Release.

 

25.

In signing this Agreement, the Executive intends to bind himself and his heirs,
administrators, executors, personal representatives and assigns.

 

26.

The Executive is advised to consult with an attorney before signing this
Agreement. The Executive understands that the choice of whether or not to sign
this Agreement is the Executive’s decision. The Executive acknowledges that the
Executive has been given at least twenty-one (21) days to consider this
Agreement before signing it.

 

27.

The Executive may revoke this Agreement within seven (7) days of signing it.
Revocation can be made by sending a written notice of revocation to the Company.
For such revocation to be effective, notice must be received no later than
5:00 p.m. on the seventh calendar day after the Executive signs this Agreement.
If the Executive revokes this Agreement, it shall not become effective or
enforceable and the Executive will not receive the severance package described
in this Agreement.

 

In order to bind the parties to this Agreement, the parties, or their duly
authorized representatives have signed their names below.

 

Company

 

Executive

 

 

 

 

 

 

                    By

/s/ J. Michael Dodson

 

/s/ Thinh Tran

 

  J. Michael Dodson          

 

 

Date Signed By Executive 

Jan 26, 2018          

 

 

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