exv10w1






Exhibit 10.1




SEPARATION AGREEMENT




     This Separation Agreement (“Agreement”) is made by and between Pixelworks, Inc. and Anthony
Simon (“Executive”) (collectively, “Parties”), effective as of the 11th day of February,
2009 (“Effective Date”). As used in this Agreement, “Pixelworks” refers to Pixelworks, Inc. and
all of its subsidiaries.



RECITALS




     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:




AGREEMENT





	1.	 	Employment Termination. Executive’s last day of employment shall be February 6, 2009
(“Termination Date”).
	 
	2.	 	Payments; End of Employment Matters.
	 
	2.1.	 	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.
	 
	2.2.	 	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.





SEPARATION AGREEMENT




 









 









	2.3.	 	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.
	 
	2.4.	 	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 Termination Date all
dollars, if any, voluntarily deducted under Pixelworks’ Employee Stock Purchase Plan.
	 
	2.5.	 	Executive understands that all benefits acquired through Pixelworks for Executive and his
family members, including health insurance, ceased on the Termination Date, subject to
Executive exercising his rights under COBRA or other applicable law to extend such benefits.
	 
	2.6.	 	Executive agrees that, other than the amounts contemplated by this Agreement, Pixelworks owes
Executive no further compensation that arises from or relates to Executive’s employment.
	 
	3.	 	Non-Solicitation.
	 
	3.1.	 	For one year after the Termination Date, Executive will not do any of the following:






	 	a.	 	Directly or indirectly solicit for hire or hire any “Pixelworks Employee” to
work for any organization that Executive directly or indirectly controls or any
organization that employs Executive as either an employee or a contractor. A
“Pixelworks Employee” is a person who is an employee of Pixelworks as of the
Termination Date or who was such an employee within the previous six (6) months.
	 
	 	b.	 	Use in any way or for any purpose, or disclose to any person or entity, any
Pixelworks “Confidential Information” (other than as expressly authorized in writing by
Pixelworks’ CEO). “Confidential Information” means all information that qualifies as a
trade secret under California or federal law, as well as all information covered by
Executive’s Confidentiality and Proprietary Rights Agreement, dated August 23, 2005.






	3.2.	 	Should Executive breach section 3.1, he forfeits all of the Bonus Payout, and must return to
Pixelworks any portion of the Bonus Payout already paid. Furthermore, Executive agrees that
the damages to Pixelworks for any breach of section 3.1(a) will be difficult to calculate, and
therefore agrees that in the event of such breach, Pixelworks will also be entitled to
liquidated damages in an amount equal to the total compensation paid by Pixelworks to the
employee in question for the twelve (12) months prior to the breach. The time period for
non-solicitation shall extend for an additional year from the date of breach.
	 
	4.	 	Return of Pixelworks Property. Executive agrees that on the Termination Date, he has
returned to Pixelworks all property and confidential materials belonging to Pixelworks,
including but not limited to keys, credit cards, telephone calling card, files, records,
mobile phones, computer, electronic equipments, computer access codes, computer hardware,
computer programs and software, instruction manuals, business plans, and all other property
and documents (whether originals, copies, or extracts), which Executive prepared or received
in connection with his employment at Pixelworks.
	 
	5.	 	No Admission of Liability. Executive agrees that nothing in this Agreement or any
payments made under it will be construed as an admission of liability by Pixelworks.
	 
	6.	 	Governing Law and Forum. The laws of the state of California, U.S.A., govern this
Agreement, including the Uniform Commercial Code as adopted in that state but excluding the
laws regarding choice of law. The parties shall resolve any dispute that arises from or
relates to this Agreement exclusively in the federal courts located within Santa Clara County,
except that either party may seek injunctive relief to protect its intellectual property and
confidentiality in any court of competent jurisdiction.





SEPARATION AGREEMENT




 









 






	7.	 	Successors and Assigns. This Agreement shall be binding upon Executive’s heirs,
executors, administrators and other legal representatives and may be assigned and enforced by
Pixelworks and its respective successors and assigns.
	 
	8.	 	Severability. The provisions of this Agreement are severable. If any provision of
this Agreement or its application is held invalid, the invalidity shall not affect other
obligations, provisions, or applications of this Agreement which can be given effect without
the invalid obligations, provisions, or applications.
	 
	9.	 	Waiver. The failure of any party to demand strict performance of any provision of
this Agreement shall not constitute a waiver of any provision, term, covenant, or condition of
this agreement or of the right to demand strict performance in the future.
	 
	10.	 	Section Headings. The section headings contained herein are for reference purposes
only and will not in any way affect the meaning or interpretation of this Agreement.
	 
	11.	 	Entire Agreement. This Agreement constitutes the entire agreement between the
Parties and supersedes all prior or contemporaneous oral or written understandings,
statements, representations or promises with respect to its subject matter.
	 
	12.	 	Voluntariness. Executive acknowledges that (i) he has been given sufficient time
to consider this Agreement, (ii) he has carefully read and understands this Agreement, (iii)
he has been advised to consult with an attorney prior to executing this Agreement, and (iv) he
has signed it voluntarily.




IN WITNESS WHEREOF the Parties have signed this Agreement as the 11th of February, 2009.




	 	 	 	 	 	 	 	 	 
	Anthony Simon	 	PIXELWORKS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	Sign:

	 	/s/ Anthony Simon	 	By:	 	/s/ Bruce Walicek	 	 
	 
	 	 
	 	 	 	 
	 	 
	Date:
	 	February 11, 2009	 	Title:	 	Chief Executive Officer	 	 
	 
	 	 
	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:
	 	February 11, 2009	 	 
	 
	 	 	 	 	 	 
	 	 





SEPARATION AGREEMENT