Document:

exv10w21

 

			
	CONFIDENTIAL
	 	EXHIBIT 10.21

SEPARATION AGREEMENT AND RELEASE

     This Separation Agreement and Release (together with its attachments, the “Agreement”) is
made and entered into as of March 31, 2005 by and between Transmeta Corporation, a Delaware
corporation (together with its subsidiaries, successors and assigns, the “Company”), and Matthew R.
Perry (the “Executive”).

     WHEREAS, the Executive has been employed by the Company as its President and Chief Executive
Officer (“CEO”);

     WHEREAS, the Executive and the Company terminated that employment relationship, and the
Executive resigned as President and CEO of the Company and as a member of the Company’s Board of
Directors, effective March 31, 2005;

     WHEREAS, the Company believes that it is in the best interest of its shareholders to enter
into a comprehensive separation agreement and release with the Executive;

     WHEREAS, the Executive and the Company (the “Parties”) desire to settle fully and finally any
and all differences between them, and so have negotiated and agreed to a final settlement of their
respective rights, obligations and liabilities;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Executive and the Company hereby agree as follows:

     1. The Parties agree that as of March 31, 2005, the Executive’s employment relationship with
the Company is terminated. The Executive hereby resigns as President and Chief Executive Officer,
as a member of the Company’s Board of Directors, and each other office and position in the Company,
effective March 31, 2005.

     2. Severance Payment. The Company shall make to the Executive a final lump sum severance
payment of $445,000 in two installments, subject to the Executive’s continued compliance with the
terms and covenants set out in this Agreement, according to the following schedule: the first
installment of $300,000 shall be paid on or before April 15, 2005, and the second and final
installment of $145,000 shall be paid on the earlier of (a) the Monday following the Company’s next
annual meeting of stockholders or (b) June 30, 2005. The Executive acknowledges that such $445,000
sum represents a gross amount before all applicable federal, state and local withholding taxes that
are required to be deducted by the Company.

     3. Health Benefits. Pursuant to the provisions of COBRA, the Company will continue to pay
for the Executive’s present election of group health benefits for the Executive and his dependents until he finds employment providing comparable health benefits, or
through and including March 31, 2006, whichever occurs first.

 

 

CONFIDENTIAL

     4. Housing Benefits. The Company will continue to reimburse the Executive for all regular
payments under the Executive’s present residential lease agreement through the expiration of that
lease agreement on or about June 30, 2005, and, if necessary, at an equivalent rate thereafter
until he first finds other employment or through and including March 31, 2006, whichever occurs
first.

     5. Reimbursements. The Company shall promptly reimburse the Executive for any reasonable
business expenses properly incurred by the Executive through March 31, 2005 and duly submitted by
the Executive for reimbursement. By or before the Effective Date, the Company will pay to
Executive all expense reimbursements, accrued vacation, outstanding benefits, salary and any
similar payments, if any, owed by the Company to Executive as of the separation date of March 31,
2005.

     6. Stock Options. With respect to the stock options granted to the Executive by the Company,
the Parties acknowledge and agree to the following:

     a. The Parties acknowledge and agree that the Company has granted to Executive certain
options to purchase the Company’s common stock as follows: (1) an April 2002 grant to purchase up
to 2,000,000 shares of the Company’s common stock at an exercise price of $2.46 per share; (2) a
November 2002 grant to purchase up to 1,000,000 shares of the Company’s common stock at an exercise
price of $1.05 per share; (3) a May 2003 grant to purchase up to 1,000,000 shares of the Company’s
common stock at an exercise price of $1.57 per share; and (4) a May 2004 grant to purchase up to
200,000 shares of the Company’s common stock at an exercise price of $2.15 per share (the “Stock
Options”). The Parties acknowledge and agree that each of the Stock Options is governed by the
terms of their respective grants.

     b. The Executive acknowledges and agrees that the Company has not issued to him any option to
purchase common stock of the Company other than the stock options described above in subsection 6.a
of this Agreement, and that he has no other right, title or interest in or to any option or right
to acquire common stock of the Company.

     7. Mutual Releases.

     a. Release by the Company. In consideration of the Executive entering into this Agreement,
the Company, on behalf of itself and its subsidiaries, successors and assigns (collectively, the
“Releasing Company Parties”), knowingly and voluntarily releases and discharges the Executive, and
each of the Executive’s heirs, family members, executors, administrators and attorneys, and any
successor or assign of any of the foregoing (collectively, the “Released Executive Parties”), from
any claim, charge, action or cause of action that any of the Releasing Company Parties may have
against any of the Released Executive Parties, whether known or unknown, from the beginning of time through the
Effective Date based upon any act, fact, omission, matter, cause or thing whatsoever, whether or
not related to or arising out of the Executive’s employment with the Company or the termination
thereof. Notwithstanding the foregoing, this release shall not extend to or discharge (i) the
Company’s right to enforce the terms and conditions of

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CONFIDENTIAL

this Agreement, or (ii) any rights or claims that might arise after the Effective Date, or (iii) the Company’s right to enforce the terms and
conditions of the Proprietary Rights Agreement, or (iv) the Company’s right to enforce the terms
and conditions of the Indemnity Agreement, its Certificate of Incorporation or its Bylaws, or (v)
the Company’s right to collect any applicable federal, state or local withholding taxes that are
required to be deducted by the Company for any reason, all of which rights and claims shall be
preserved. The Company represents and warrants that it currently knows of no basis for any claims
by it against any Released Executive Party, and that neither the Company nor anyone acting on its
behalf has filed any claim, action, suit, complaint or proceeding against any Released Executive
Party in any agency, court or other forum or tribunal.

     b. Release by the Executive. In consideration of the Company entering into this Agreement,
the Executive, on behalf of himself and his heirs, executors, administrators, successors and
assigns (collectively, the Releasing Executive Parties”), knowingly and voluntarily releases and
discharges the Company and its subsidiaries and affiliates, the respective current and former
officers, employees, attorneys, agents and directors of the Company and its subsidiaries and
affiliates, and any successor or assign of any of the foregoing (collectively, the “Released
Company Parties”), from any claim, charge, action or cause of action that any of the Releasing
Executive Parties may have against any of the Released Company Parties, whether known or unknown,
from the beginning of time through the Effective Date based upon any act, fact, omission, matter,
cause or thing whatsoever, whether or not related to or arising out of the Executive’s employment
with the Company or the termination thereof. Notwithstanding the foregoing, this release shall not
extend to or discharge any rights to or claims for indemnification or contribution, including
associated expenses and attorneys fees and the advancement of either of the foregoing, that
Executive currently has or may in the future have under any of the following: the Certificate of
Incorporation or By-Laws of the Company, under any applicable insurance policy, under that certain
Indemnity Agreement dated as of April 10, 2002 between Executive and the Company (the “Indemnity
Agreement”), or under any other provision or principle of law, or otherwise. In addition, this
release shall not extend to or discharge (i) the Executive’s right to enforce the terms and
conditions of this Agreement, or (ii) any rights or claims that might arise after the Effective
Date, or (iii) the Executive’s right to enforce the terms and conditions of the Indemnity Agreement
or the Company’s Certificate of Incorporation or its Bylaws, all of which rights and claims shall
be preserved. The Executive represents and warrants that he currently knows of no basis for any
claims by him against any Released Company Party, and that neither he nor anyone acting on his
behalf has filed any claim, action, suit, complaint or proceeding against any Released Company
Party in any agency, court or other forum or tribunal.

     c. The releases and discharges provided in subsections 6.a and 6.b above include, but are not
limited to, any rights or claims under United States federal, state or local law for wrongful or
abusive discharge, or for discrimination based upon race, color, ethnicity, sex, age, national
origin, religion, disability, sexual orientation, including rights or claims under the Age
Discrimination in Employment Act of 1967 (“ADEA”). The Executive and the Company each expressly
waives any right or benefit that otherwise would be

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CONFIDENTIAL

available to them, respectively, pursuant to section 1542 of the Civil Code of the State of California, which statute 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.”

     d. The Executive affirms that that he has been advised by the Company to consult with an
attorney of his choice concerning the terms and conditions set forth herein; that he has availed
himself of that right; that he has been given at least twenty-one (21) days within which to
consider this release and its consequences; that he has seven (7) days after the date of this
Agreement to revoke and cancel this Agreement by written notice to the Company; and that this
Agreement shall not become effective or enforceable until the eighth day following its execution
(the “Effective Date”).

     8. Cooperation. For the period that commences on the Effective Date and expires on March 31,
2006, the Executive hereby agrees to assist the Company, upon reasonable request by the Company,
and subject to reasonable accommodation of the Executive’s personal and business schedule, in
connection with any pending or future dispute, litigation, arbitration or similar proceeding or
investigation (“Dispute”) or any regulatory request or filing involving the Company, any of its
directors, or any of the directors of any of its subsidiaries, provided that such Dispute or
regulatory request or filing related to a matter of which he had knowledge or for which he was
responsible prior to March 31, 2005, and that such request for assistance is neither unduly
burdensome nor unreasonable. The Company shall promptly reimburse the Executive for, or promptly
advance to the Executive, all costs and expenses reasonably incurred by the Executive in connection
with rendering assistance to the Company in connection with any such Dispute or regulatory request
or filing, including without limitation reasonable fees and disbursements of separate counsel for
the Executive if the Executive reasonably determines that the matter is of a nature which indicates
that he should have separate representation. Such expenses shall be reimbursed or advanced
promptly after the Executive’s submission to the Company of statements in such reasonable detail as
the Company may require. Time devoted by the Executive to assisting the Company pursuant to this
Section 8, shall not be required to exceed 20 hours in any month.

     9. Publicity and Non-Disparagement.

     a. Unless and until the Company publicly discloses this Agreement, the Executive shall
neither discuss any aspect of the terms of this Agreement with, nor disclose all or any portion of
this Agreement to, any person or organization. Notwithstanding anything elsewhere to the contrary,
the Executive may in any event discuss this Agreement with, and disclose all or any portion of this Agreement to, his legal, tax
and financial advisors.

     b. The Executive agrees that he shall not intentionally make any public statement to third
parties, the public, the press or the media, or any administrative agency that is intended to
disparage the Company or to cause injury to the Company or any of its

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CONFIDENTIAL

officers, directors, or employees. The Company agrees that it shall use its reasonable best efforts to cause its officers,
directors and employees not knowingly to make any public statement to third parties, the public,
the press or the media, or any administrative agency intending to disparage the Executive.

     c. Notwithstanding the foregoing, nothing in this Section 9 shall prevent any person from:

     (i) responding publicly to incorrect, disparaging or derogatory public statements to
the extent reasonably necessary to correct or refute such public statements, provided, in
the case of the Executive, that, prior to making any such responses or statements, he has
informed the Company of their substance and tenor reasonably in advance and discussed his
intended course of action with it; or,

     (ii) disclosing this Agreement, or making any truthful statement, to the extent (x)
necessary to enforce this Agreement or (y) in response to a subpoena, legal process or as
required by law or by any court, arbitrator or administrative or legislative body
(including any committee thereof) with apparent jurisdiction to order such person to
disclose or make accessible such information.

     10. Confidentiality and Protection of Proprietary Information.

     a. The Executive hereby reaffirms his obligations pursuant to that certain Agreement
Regarding Proprietary Information & Inventions, effective as of April 10, 2002, between the
Executive and the Company (the “Proprietary Rights Agreement”), to which agreement the Executive
acknowledges that he is bound; provided, however, that the provisions of paragraph 11 of this
Agreement (“Non-Solicitation”) shall supersede the provisions of paragraph 10.b of the Proprietary
Rights Agreement.

     b. The Executive hereby agrees and covenants that he shall return or cause to be returned to
the General Counsel of the Company any and all property of the Company of any kind or description
whatsoever which on the Effective Date is in his possession or under his control (including, but
not limited to, any Confidential Information in written or other tangible form) and shall not
retain any copies, duplicates, reproductions or excerpts thereof, except as otherwise provided
hereunder. The Executive represents and warrants to the Company that he has returned to the
Company all property or data of Company of any type whatsoever, including but not limited to any
planning data, personnel data, historical or projected financial data, compensation data, computer
software and any and all documents in hardcopy or electronic format, that has been in Employee’s
possession or control. Anything to the contrary notwithstanding, nothing in this Section 10 shall
prevent the Executive from retaining papers and other materials of a personal nature, including
personal diaries and Rolodexes, information showing his compensation or relating to reimbursement
of expenses, information that he reasonably believes may be needed for tax purposes, and copies of
plans, programs and agreements relating to his employment with the Company.

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CONFIDENTIAL

     c. Notwithstanding the foregoing, the provisions of this Section 10 shall not apply (i) to
any disclosure or use of Confidential Information in connection with providing services or
assistance pursuant to Section 8, (ii) to any disclosure that may be required by law or by any
court, arbitrator, or administrative or legislative body with apparent jurisdiction to order the
Executive to disclose or provide any such Confidential Information, (iii) to any disclosure of
Confidential Information reasonably required to enforce the terms of this Agreement, or (iv) to any
Confidential Information that becomes generally known to the public other than as a result of any
violation of this Agreement by the Executive.

     11. Non-Solicitation. For the one-year period that commenced on March 31, 2005, the
Executive shall not, directly or indirectly, without the prior written consent of the Company,
knowingly solicit, induce, or attempt to induce, either for himself or on behalf of any company or
business organization in which he serves as an officer, employee, partner, director, or consultant,
any employee or consultant of the Company to terminate his, her or its employment or consulting
relationship with the Company, whether for employment or to consult with a third party or
otherwise. Anything to the contrary notwithstanding, the Company agrees that this Section 11 does
not prohibit the Executive from (i) responding in any manner to an unsolicited request from any
present or former employee of the Company for advice or information on employment matters, or (ii)
responding to an unsolicited request for an employment reference for any present or former employee
of the Company, by providing a reference setting out his personal views about such present or
former employee.

     12. Indemnification. Notwithstanding anything in this Agreement to the contrary, the Company
and Executive agree that the Indemnity Agreement, and the parties’ respective obligations
thereunder, shall remain in full force and effect.

     13. Notice. Any notice, request, or other communication given in connection with this
Agreement shall be in writing and shall be deemed to have been given (i) when delivered personally
to the recipient or (ii) provided that a written acknowledgement of receipt is obtained, three days
after being sent by prepaid certified or registered mail, or two days after being sent by a
nationally recognized overnight courier, to the address specified below for the recipient (or to
such other address as the recipient shall have specified by ten days’ advance written notice given
in accordance with this Section 14). Such communication should be addressed to the Executive at
his principal residence and to the Company at its corporate headquarters to the attention of the
General Counsel.

     14. Entire Agreement. Except as expressly set forth herein, this Agreement contains the
entire agreement between the parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations, and undertakings, whether written or oral,
between the parties with respect thereto. This Agreement may be modified only by a written
document signed by the Executive and a duly authorized officer of the Company. Any waiver by any
person of any provision of this Agreement shall be effective only if in writing and signed by the
person against

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CONFIDENTIAL

whom enforcement of the waiver is sought. For any waiver or modification to be
effective, it must specifically refer to this Agreement and to the terms or provisions being
modified or waived. No waiver of any provision of this Agreement shall be effective as to any
other provision of this Agreement except to the extent specifically provided in an effective
written waiver.

     15. Severability. In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining provisions or portions of
this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.

     16. Governing Law. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of California.

     17. Headings. The headings of the Sections contained in this Agreement are for convenience
only and shall not be deemed to control or affect the meaning or construction of any provision of
this Agreement.

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CONFIDENTIAL

     18. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one and the same
instrument. Signatures delivered by facsimile shall be effective for all purposes.

     IN WITNESS WHEREOF, the Parties have executed this Agreement.

PLEASE READ CAREFULLY. THIS SEPARATION AGREEMENT AND RELEASE INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.

	 	 	 	 	 
	 	 	THE EXECUTIVE: Matthew R. Perry
	 
	 	 	 	 
	 	 	Executed this
2nd day
of April, 2005.
	 
	 	 	 	 
	 	 	               /s/ Matthew R. Perry
	 	 	 
	 	 	               Matthew R. Perry
	 
	 	 	 	 
	 	 	THE COMPANY: Transmeta Corporation
	 
	 	 	 	 
	 	 	Executed this
2nd day
of April, 2005.
	 
	 	 	 	 
	 	 	Transmeta Corporation
	 
	 	 	 	 
	

	 	By:
	 	          /s/ John O’Hara Horsley
	

	 	 	 	 
	

	 	 	 	          John O’Hara Horsley
	

	 	 	 	          Vice President, General Counsel & Secretary

	 	 	 	 	 
	 

	 	Address:
	 	3990 Freedom Circle
	

	 	 	 	Santa Clara, California 95054
	

	 	 	 	Telephone: 408-919-3000

8exv10w1

 

EXHIBIT 10.1

LOAN MODIFICATION AGREEMENT

This Loan Modification Agreement is entered into May 20, 2005, effective as of May 7, 2005, by
and between SILICON VALLEY BANK (“Bank”), whose address is 3003 Tasman Drive, Santa Clara,
California 95054 with a loan production office at 4410 Arapahoe Avenue, Suite 200, Boulder, CO
80303 and ADVANCED ENERGY INDUSTRIES, INC. (“Borrower”), whose address is 1625 Sharp Point Drive,
Fort Collins, CO 80525.

1. DESCRIPTION OF EXISTING AGREEMENT. Among other Obligations, which may be owing by
Borrower to Bank, Borrower is or may become indebted to Bank pursuant to, among other documents, a
Loan and Security Agreement dated May 10, 2002, as it may be amended from time to time (the “Loan
Agreement”). The Loan Agreement provides for, among other things, a Committed Revolving Line in
the original principal amount of Twenty-Five Million and No/100 Dollars ($25,000,000.00). Defined
terms used but not otherwise defined herein shall have the same meanings as set forth in the Loan
Agreement.

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as the “Obligations.”

2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as
described in the Loan Agreement.

Hereinafter, the above-described security documents, together with all other documents securing
repayment of the Obligations shall be referred to as the “Security Documents”. Hereinafter, the
Security Documents, together with all other documents evidencing or securing the Obligations shall
be referred to as the “Existing Loan Documents”.

3. DESCRIPTION OF CHANGE IN TERMS. Bank hereby agrees to modify the Loan Agreement as
follows:

      Section 13.1 entitled “Definitions” is hereby amended to change the definition of “Revolving
Maturity Date” to read:

“Revolving Maturity Date” is July 7, 2005.

4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to
reflect the changes described above.

5. PAYMENT OF LOAN FEE AND EXPENSES. Borrower shall pay to Bank a fee in the amount of Four
Hundred Twenty and No/100 Dollars ($420.00) (the “Loan Fee”) plus all of Bank’s reasonable
out-of-pocket expenses in connection with this Loan Modification Agreement.

6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing below) agrees
that, as of the date hereof, it has no defenses against the obligations to pay any amounts under
the Obligations.

7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing below) understands
and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s
representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and effect. Bank’s agreement to modifications to the
existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to
make any future modifications to the Obligations. Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents, unless the party is
expressly released by Bank in writing. Unless expressly released herein, no

 

 

maker, endorser, or guarantor will be released by virtue of this Loan
Modification Agreement. The terms of this paragraph apply not only to this Loan Modification
Agreement, but also to all subsequent loan modification agreements.

8. CONDITIONS. The effectiveness of this Loan Modification Agreement is conditioned upon
receipt by Bank of the Loan Fee and a fully executed counterpart hereof.

      This Loan Modification Agreement is executed as of the date first written above.

	 	 	 	 	 	 	 
	BORROWER:
	 	BANK:
	 
	 	 	 	 	 	 
	ADVANCED ENERGY INDUSTRIES, INC.
	 	SILICON VALLEY BANK
	 
	 	 	 	 	 	 
	By:

	 	/s/ Michael El-Hillow
	 	By:
	 	/s/ Mike Devery
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	Michael El-Hillow
	 	Name:
	 	Mike Devery
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	Executive V.P. and CFO
	 	Title:
	 	SVP
	

	 	 
	 	 	 	 

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SILICON VALLEY BANK

PRO FORMA INVOICE FOR LOAN CHARGES

	 	 	 	 	 	 	 
	BORROWER:

	 	Advanced Energy Industries, Inc.	 	 	 	 
	 
	 	 	 	 	 	 
	LOAN OFFICER:

	 	Mike Devery	 	 	 	 
	 
	 	 	 	 	 	 
	DATE:

	 	May ___, 2005	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	Documentation Fee
	 	 	___.00	 
	 
	 	 	 	 	 	 
	

	 	Loan Fee
	 	 	420.00	 
	 
	 	 	 	 	 	 
	

	 	TOTAL FEE DUE
	 	$	___.00	 

Please indicate the method of payment:

	 	{  }	A check for the total amount is attached.
	 
	 	{  }	Debit DDA # ________for the total amount.
	 
	 	{  }	Loan proceeds

Borrower                                        (Date)

Silicon Valley Bank                        (Date)

Account Officer’s Signature

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