Document:

Exhibit 10.20

 

EXHIBIT 10.20

DivX, Inc. 

Summary of

2007 Cash Bonus Plan

General

	 	•	 	Each named executive officer of DivX, Inc. (the “Company”) is included in the
Company’s 2007 Cash Bonus Plan (the “Plan”).
	 
	 	•	 	The Plan provides for the payment of cash bonuses to the Company’s named executive
officers based upon the achievement by the Company of specific 2007 quarterly and annual
revenue and earnings before interest, taxes, depreciation and amortization (“EBITDA”)
milestones referred to under the Plan as “Bronze,” “Silver,” “Gold” or “Platinum.”
	 
	 	•	 	Amounts received by named executive officers under the Plan are separate from any
equity-based awards that the Compensation Committee will provide to such named executive
officers.
	 
	 	•	 	The Board of Directors may change or modify the Plan at any time.

Metrics

	 	•	 	If the Company achieves the Bronze level on a quarterly or annual basis, each of the
Company’s named executive officers will receive quarterly and/or annual bonuses in 2007
equal to up to an aggregate of 40% of base salary.
	 
	 	•	 	If the Company achieves the Silver level on a quarterly or annual basis, each of the
Company’s named executive officers will receive quarterly and/or annual bonuses in 2007
equal to up to an aggregate of 80% of base salary.
	 
	 	•	 	If the Company achieves the Gold level on a quarterly or annual basis, each of the
Company’s named executive officers will receive quarterly and/or annual bonuses in 2007
equal to up to an aggregate of 80% to 200% of base salary, depending on the exact amount
of revenue received and EBITDA obtained by the Company in 2007.
	 
	 	•	 	If the Company achieves the Platinum level for the year, each of the Company’s named
executive officers will receive the bonus such officer would be entitled to receive if the
Company had achieved the Gold level for the year, and will also be entitled to receive a
ratable portion of 10% of the amount by which the EBITDA obtained by the Company for the
year, less capital expenses in excess of the
budget previously approved by the Company’s Board of Directors, exceeds the top range of
the EBITDA milestone for the Gold level for the year.

 

 

Bonus Calculations and Payments

	 	•	 	Annual targets will be divided into seasonally forecast quarterly targets.
	 
	 	•	 	In order to get the full payout at any level (Gold, Silver, or Bronze), both annual
and quarterly targets must be achieved.
	 
	 	•	 	Payments will be paid in arrears for the prior performance period (whether annually
or quarterly) subsequent to the Audit Committee’s approval of financial results.
	 
	 	•	 	Each quarterly target, when and if attained, shall generate one-half of the total
eligible percentage calculation and payout, multiplied by one quarter. Thus, if all
quarterly targets are achieved, one-half of the total eligible percentage bonus shall
be paid on a quarterly basis. If a quarterly target is missed, the eligible bonus
payable for such quarter is not eligible for reclamation in future quarters.
	 
	 	•	 	The annual target(s), if achieved, will lead to the “other” half of the
percentage-calculated payout after the close of the year.Unassociated Document

    EXHIBIT
      10.1

     

    EMPLOYMENT
      AGREEMENT

     

    EMPLOYMENT
      AGREEMENT (this “Agreement”),
      effective as of May 15, 2007, by and between El Paso Electric Company, a
      Texas corporation (“Company”),
      and Ershel C. Redd, Jr. (“Executive”).

     

    WHEREAS,
      the Company desires to employ Executive as its President and Chief Executive
      Officer and serve as a member of its Board of Directors on the terms and
      conditions set forth herein; and

     

    WHEREAS,
      Executive is willing, on the terms and subject to the conditions provided in
      this Agreement, to undertake the responsibilities contemplated herein, to
      furnish services to Company as provided herein, and to be subject to certain
      employment restrictions and obligations;

     

    NOW,
      THEREFORE, in consideration of the premises and the covenants herein contained
      and other good, valuable, and binding consideration, the receipt and sufficiency
      of which is hereby acknowledged, the parties hereto agree as
      follows:

     

     

    ARTICLE
      1

    Employment

     

    Section
      1.01.
      Responsibilities And
      Authority. Company
      hereby employs Executive to serve as its President and Chief Executive Officer
      and serve as a member of its Board of Directors starting on or about
      May 15, 2007 (the date of Executive’s commencement of employment, the
“Start
      Date”).
      The
      duties of Executive shall be those duties which can reasonably be expected
      to be
      performed by a person with the title of President and Chief Executive Officer.
      Executive shall report directly to the Board of Directors of the Company (the
      “Board”)
      and
      shall perform such other duties as may be assigned to him and as are not
      inconsistent with his position. The Company will appoint Executive to the Board
      and shall use reasonable efforts to do so on or promptly following the Start
      Date.

     

    Section
      1.02.
      Acceptance Of Employment. Executive
      accepts employment by Company on the terms and conditions herein provided and
      agrees, subject to the terms of this Agreement, to devote substantially all
      of
      his business time to advance the business of the Company. Nothing contained
      in
      this Agreement shall be construed so as to prevent Executive from investing
      his
      personal assets in such a manner and otherwise engaging in business transactions
      that are not inconsistent with the interests of the Company and that will not
      require a substantial portion of Executive’s business time or otherwise
      interfere with the performance of his duties hereunder. Executive expressly
      represents and warrants to the Company that the Executive is not a party to
      any
      contract or agreement 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    and
      is not
      otherwise obligated in any way, and is not subject to any rules or regulations,
      whether governmentally imposed or otherwise, which will or may restrict in
      any
      way the Executive’s ability to fully perform the Executive’s duties and
      responsibilities under this Agreement.

     

    Section
      1.03.
      Agreement Term. The
      term
      of this Agreement shall be for an initial term of five years from the Start
      Date
      (such five-year period, the “Initial
      Term”
and,
      as
      the term of this Agreement may be extended or shortened as set forth herein,
      the
“Employment
      Term”).
      The
      Employment Term shall be extended automatically for three one-year periods
      (each, a “Renewal
      Term”)
      following the Initial Term unless either party has given 90 days prior written
      notice of termination of the Employment Term. Following such period, the parties
      may agree mutually in writing to extend the Employment Term.

     

    Section
      1.04.
      At-will
      Employment.
      Notwithstanding anything else herein, Executive’s employment with Company shall
      be at-will and may be terminated by either party at any time for any or no
      reason, including by the Company either with or without Cause. The foregoing
      shall not affect the Company’s obligation to pay severance benefits if required
      pursuant to Section 3.01 below. “Cause”
shall
      mean the willful and continued failure by the Executive to perform his duties,
      or the engaging by the Executive in illegal conduct or misconduct in connection
      with Executive’s employment that is injurious to the Company, in each case
      following written notice and a reasonable opportunity to cure the failure or
      cease any non-criminal misconduct.

     

     

    ARTICLE
      2

    Compensation
      And Incentives

     

    Section
      2.01.
      Base
      Compensation. During
      the
      Employment Term, Company shall pay Executive a base cash salary at the aggregate
      initial rate of $500,000 per annum. Thereafter, the base salary amount will
      be
      reviewed annually by the Board, which may, in its discretion, make appropriate
      annual merit increases. The compensation paid to Executive pursuant to this
      Section is hereinafter referred to as “Base
      Compensation.”
The
      Base Compensation shall be paid to Executive in accordance with the Company’s
      payroll policy as in effect from time to time.

     

    Section
      2.02.
      Annual
      Bonus.
      During
      the Employment Term, Executive shall be eligible for an annual performance
      bonus
      under the terms of the Company’s bonus plans in place from to time. Executive’s
      target bonus opportunity will be 65% of Base Compensation, with actual bonus
      based on completion of performance goals determined by the Board or a committee
      of the Board. For fiscal 2007, Executive’s bonus opportunity will be based on
      the 2007 performance goals established by the Company’s compensation committee
      at its meeting on March 2, 2007, and any bonus will be prorated for the period
      from the Start Date through December 31, 2007.

     

     

    
      
        
        

      

      
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    Section
      2.03.
      Equity Awards. The
      Company will issue the equity awards set forth below to Executive pursuant
      to
      separate award agreements. Executive shall be eligible to receive other equity
      awards as determined by the Board or a committee of the Board in its sole
      discretion.

     

    (a)  Restricted
      Stock.
      The
      Company will issue to Executive shares of its Common Stock, no par value (the
      “Common
      Stock”),
      on or
      promptly following the Start Date, in an amount such that the intrinsic value
      on
      the grant date is approximately $650,000, the ownership of which shall vest
      in
      two equal annual installments on the first and second anniversaries of the
      Start
      Date, subject to Executive’s continued employment with Company on the applicable
      vesting date. 

     

    (b)  LTIP.
      Executive’s participation in the Company’s long-term incentive plan
      (“LTIP”)
      will
      begin with the performance period to end on December 31, 2009 with an intrinsic
      value (at target) on the grant date of approximately $651,000 (but subject
      to
      proration to account for the period from the Start Date to December 31, 2009
      being less than 3 full years). LTIP awards typically consist of restricted
      stock
      with a three-year cliff vesting (25%) and performance stock with a three-year
      performance cycle based on total shareholder return compared to a peer group
      of
      companies (75%). In future years, Executive will be eligible to receive LTIP
      awards as determined by the Board or a committee of the Board.

     

    Section
      2.04.
      Reimbursement Of Moving Costs. Executive
      will be reimbursed the full cost of moving his household goods and up to two
      automobiles to the El Paso area. Executive will be reimbursed for travel
      expenses for himself and his family at the time of the move and for reasonable
      house-hunting activities while making his decision on the purchase of a home
      in
      the El Paso area. Such house hunting trips shall not exceed 3 trips. Executive
      will be reimbursed for travel expenses for visits home, not to exceed 3 visits
      per month, until he relocates permanently in the El Paso area. Executive will
      receive appropriate temporary lodging in the El Paso area, not to exceed three
      months from his start date, until his relocation is complete. Executive will
      be
      reimbursed all reasonable costs to sell his present home in New Jersey and
      purchase a home in the El Paso area including closing costs, commissions and
      attorney’s fees. Executive will receive an additional reimbursement payment for
      the taxable items reimbursed pursuant to this Section.

     

    Section
      2.05.
      Retirement
      Plans.
      Executive will be a participant in the Company’s Retirement Income Plan for
      Employees (“RIP”)
      and
      Excess Benefit Plan (“EBP”
and,
      together with the RIP, the “Plans”).
      The
      Company agrees that if the Company terminates Executive’s employment, other than
      for Cause, following the Initial Term (including by exercising its right to
      decline to continue this Agreement in any of the Renewal Terms), any benefit
      election chosen under the terms of such Plans by Executive shall be computed
      as
      if the aggregate monthly amount (in the form of a straight life annuity payable
      over the lifetime of Executive only commencing on such date) of the Plan
      Retirement Benefit (as defined in the RIP) and the Excess Benefit (as defined
      in
      the EBP) is equal to the higher 

     

     

    
      
        
        

      

      
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    of
      (a) the Plan Retirement Benefit and Excess Benefit as determined under the
      terms of the Plans or (b) $100,000. Except as set forth in this Section,
      nothing in this Agreement shall affect Executive’s rights under the Plans. Any
      supplemental payment required by the Company under this Section shall be
      entirely unfunded and no provision shall at any time be made with respect to
      segregating assets of the Company for any such payment. Neither Executive nor
      his spouse or other beneficiary shall have any interest in any particular assets
      of the Company by reason of the right to receive any such payment and the
      Executive, his spouse or other beneficiary shall have only the rights of a
      general unsecured creditor of the Company with respect to such
      payments.

     

    Section
      2.06.
      Other Benefits. Executive
      shall be entitled to participate in all benefits plans available from time
      to
      time to senior executives of the Company including but not limited to the Plans,
      monthly car allowance and five (5) weeks and three (3) days paid time
      off. In addition to the Company-provided one (1) times annual base salary
      life insurance, the Company will provide to Executive (at no cost to Executive)
      1.5 times his annual base salary in additional life insurance benefit coverage.
      In addition to participation in all Company-sponsored health and welfare benefit
      plans, Executive will be required to take a Company-paid physical exam on an
      annual basis. Executive will receive financial planning and tax preparation
      assistance in an amount not to exceed $15,000 annually.

     

    Section
      2.07.
      Indemnification. The
      Company shall provide Executive with the same indemnification and insurance
      protection provided by Company from time to time to all of its officers and
      directors.

     

     

    ARTICLE
      3

    Termination
      Of Employment

     

    Section
      3.01.
      Severance Benefits. 

     

    (a)  If,
      during
      the Employment Term, the Company terminates Executive’s employment other than
      for death, disability or Cause, Executive shall be entitled to the following,
      subject to Executive signing and letting become effective a separation and
      release agreement including the release in the form attached hereto as
      Exhibit A:

     

    (i)  a
      pro
      rated payment for the Severance Period of Executive’s then current Base
      Compensation plus target bonus for the year of termination;

     

    (ii)  if
      Executive elects COBRA coverage, continued Company-paid health benefits for
      the
      Severance Period (or until such earlier date as Executive is covered by another
      company’s health plan); provided
      that to
      the extent COBRA coverage is not available, the Company shall pay Executive
      an
      amount equal to the cost to the Company of such coverage that cannot be
      provided; and

     

     

    
      
        
        

      

      
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    (iii)  outplacement
      benefits and assistance for up to 12 months following termination of employment
      in an amount not to exceed $25,000 in the aggregate;

     

    (b)  The
      “Severance
      Period”
shall
      equal (x) during the Initial Term, the lesser of two years or the then remaining
      period of the Initial Term or (y) during any Renewal Term, the then remaining
      period of such Renewal Term.

     

    (c)  To
      the
      extent the payments provided for in this Section would be deemed to constitute
      non-qualified deferred compensation subject to Section 409A of the Internal
      Revenue Code of 1986, as amended (“Section
      409A”),
      no
      such payments shall be made until six months following termination of
      employment.

     

    Section
      3.02.
      Termination Upon Change Of Control. The
      foregoing provisions notwithstanding, the provisions of the Change of Control
      Severance Agreement between the Company and Executive (the “Change
      of Control Agreement”)
      shall
      govern any termination of Executive’s employment following a Change of Control
      (as defined in the Change of Control Agreement) of the Company, and the payments
      and benefits under the Change of Control Agreement shall be in lieu of any
      payments or benefits under this Agreement.

     

    Section
      3.03.
      No
      Duplication. Any
      benefits or payments due under this Article shall be reduced by any notice
      period or severance payments required by applicable federal, state or other
      law,
      including without limitation the WARN Act, and, except as expressly set forth
      herein, shall supersede any termination or severance benefits to which Executive
      may otherwise be entitled under any other agreement, plan or policy of the
      Company.

     

     

    ARTICLE
      4

    Arbitration
      And Mediation

     

    Section
      4.01.
      Mediation.
      Any
      dispute arising hereunder between Executive and Company (including any dispute
      over whether Company has properly terminated Executive for Cause) which cannot
      be resolved by them to their mutual satisfaction within a period of 14 days,
      unless mutually extended, shall first be submitted to mediation in El Paso,
      Texas, to a mediator selected pursuant to the rules of the American Arbitration
      Association (“AAA”).
      All
      costs of mediation incurred by Executive will be paid by the
      Company.

     

    Section
      4.02.
      Arbitration. If
      such
      mediation shall not result in an agreed settlement between the parties, the
      dispute will be promptly submitted to binding arbitration (conducted in El
      Paso,
      Texas, by a panel of three arbitrators) in accordance with the rules of the
      AAA
      then in effect. The results of such arbitration shall be binding and conclusive
      upon the parties hereto, and judgment on the award may be entered at the

     

     

    
      
        
        

      

      
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    instance
      of either party in any court of competent jurisdiction. The dispute resolution
      procedure set forth in this Section may be initiated by either party upon five
      business days prior written notice to the other and after failure to resolve
      the
      dispute after the expiration of the 14-day time period referred to in the
      preceding Section.

     

    Section
      4.03.
      Proceedings. Unless
      otherwise expressly agreed in writing by the parties to the arbitration
      proceedings:

     

    (a)  The
      arbitration proceedings shall be conducted in accordance with the Commercial
      Arbitration Rules of the American Arbitration Association, as amended from
      time
      to time;

     

    (b)  Any
      procedural issues not determined under the arbitral rules selected pursuant
      to
      item (a) above shall be determined by the law of the place of arbitration,
      other
      than those laws which would refer the matter to another
      jurisdiction;

     

    (c)  The
      losing
      party in any such dispute will pay all of the winning party’s costs, including
      any arbitrator or administrative fees and reasonable attorneys’
fees.

     

    (d)  The
      decision of the arbitrators shall be reduced to writing; final and binding
      without the right of appeal; the sole and exclusive remedy regarding any claims,
      counterclaims, issues or accounting presented to the arbitrators; made and
      promptly paid in United States dollars free of any deduction or offset; and
      any
      costs or fees incident to enforcing the award shall, to the maximum extent
      permitted by law, be charged against the party resisting such
      enforcement.

     

    Section
      4.04.
      Acknowledgement Of Parties. Each
      party
      acknowledges that he or she or it has voluntarily and knowingly entered into
      an
      agreement to arbitration under this Section by executing this
      Agreement.

     

     

    ARTICLE
      5

    Miscellaneous

     

    Section
      5.01.
      Notices.
      Any
      notice, demand or request to be given hereunder to either party hereto shall
      be
      deemed given and effective only if in writing and either (1) delivered
      personally to Executive or (in case of a notice to Company) to the Chairman
      of
      the Board of the Company with a copy to the General Counsel, or (2) sent by
      certified or registered mail, postage prepaid, to the addresses set forth on
      the
      signature page hereof or to such other address as either party may hereafter
      specify to the other by notice similarly served.

     

    Section
      5.02.
      Governing Law. This
      Agreement shall be construed and enforced in accordance with the laws of the
      State of Texas.

     

     

    
      
        
        

      

      
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    Section
      5.03.
      Modification. No
      modification or waiver of any provision hereof shall be made unless it be in
      writing and signed by both of the parties hereto.

     

    Section
      5.04.
      Scope Of Agreement. This
      Agreement constitutes the whole of the agreement between the parties on the
      subject matter, superseding all prior oral and written conversations,
      negotiations, understandings, and agreements in effect as of the date of this
      Agreement.

     

    Section
      5.05.
      Successors and Assigns. This
      Agreement shall not be assignable by the Company (other than to an affiliate
      of
      the Company or to any successor or assign of the Company) without the written
      consent of Executive. The Company will require any successor to all or
      substantially all of the business and/or assets of the Company to expressly
      assume and agree to perform the obligations under this Agreement in the same
      manner and to the same extent that the Company would be required to perform
      it
      if no such succession had taken place. This Agreement shall inure to the benefit
      of and be enforceable by Executive’s personal or legal representatives,
      executors, administrators, successors, heirs, distributees, devisees, and
      legatees. If Executive should die or become disabled while any amount is owed
      but unpaid to Executive hereunder, all such amounts, unless otherwise provided
      herein, shall be paid to Executive’s devisee, legatee, legal guardian or other
      designee, or if there is no such designee, to Executive’s estate. Executive’s
      rights hereunder shall not otherwise be assignable

     

    Section
      5.06.
      Tax
      Payments, Withholdings And Reporting. Executive
      recognizes that the payments and benefits provided under this Agreement may
      result in taxable income to him which Company and its affiliates will report
      to
      the appropriate taxing authorities. Company shall have the right to deduct
      from
      any payment made under this Agreement any federal, state, local or foreign
      income, employment or other taxes it determines are required by law to be
      withheld with respect to such payments or benefits provided thereunder or to
      require payment from Executive which he agrees to pay upon demand, for the
      purpose of satisfying any such withholding requirement.

     

    Section
      5.07.
      Separate Counsel. Executive
      acknowledges that he has been advised by Company that before he signs this
      Agreement he should consult with an attorney.

     

    Section
      5.08.
      Severability. In
      the
      event any provision of the Agreement shall be held illegal or invalid for any
      reason, the illegality or invalidity shall not affect the remaining parts of
      the
      Agreement, and the Agreement shall be construed and enforced as if the illegal
      or invalid provision had not been included.

     

    Section
      5.09.
      Counterparts. This
      Agreement may be signed in several counterparts, each of which shall be an
      original, with the same effect as if the signatures thereto and hereto were
      on
      the same instrument.

     

    
      
        
        

      

      
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    IN
      WITNESS
      WHEREOF, the parties have executed this Agreement effective as of the date
      set
      forth above.

     

    

    EL
      PASO
      ELECTRIC COMPANY

    

    

    By:
      /s/
      Michael K. Parks______________

    Name: Michael
      K.
      Parks

    Title: Vice
      Chairman

    

    

    EXECUTIVE

    

    

    /s/
      Ershel C. Redd, Jr.________________

    Ershel
      C.
      Redd, Jr.

    

    

    
      
        
        

      

      
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    Exhibit
      A

    Form
      of Release and Waiver

     

    Executive
      agrees to and does fully and completely release, discharge and waive any and
      all
      claims, complaints, causes of action, demands of whatever kind or nature which
      Executive has or may have against the Company, its subsidiaries, affiliates,
      predecessors, and successors and all of their respective directors, officers,
      and employees by reason of any event, matter, cause, or thing that has occurred
      prior to the date hereof (hereinafter “Executive
      Claims”).
      Executive agrees that this release and waiver specifically covers, but is not
      limited to, any and all Executive Claims which Executive has or may have against
      the Company relating in any way to compensation, or to any other terms,
      conditions, or circumstances of Executive’s employment with the Company, and to
      the cessation of such employment, based on statutory or common law claims for
      employment discrimination, including claims under Title VII, the Age
      Discrimination in Employment Act, Americans with Disabilities Act, and any
      and
      all discrimination or retaliation claims under state or federal law, wrongful
      discharge, breach of contract, defamation, intentional infliction of emotional
      distress, breach of fiduciary duty, or any other theory whether legal or
      equitable; provided, however, that this release shall not affect Executive’s
      rights under or with respect to any retirement plan which is subject to ERISA
      and is qualified under Section 401 (a) of the Code. 

     

    Executive
      acknowledges that he has twenty-one (21) days to review and consider this
      release and waiver. Executive has also been advised verbally and by this writing
      of his right to consult with an attorney prior to executing this release and
      waiver. Executive is further aware that if he signs this release and waiver,
      he
      may revoke it for a period of seven (7) days following the day he signs it,
      and this release and waiver shall not be effective or enforceable until the
      revocation period has expired.

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