Document:

exv10w27

 

EXHIBIT
10.27

June 12, 2006

 

Ms. Mercedes Johnson

SVP, Finance and CFO

Avago Technologies Limited

350 West Trimble Road

San Jose, California 95131

Re: Severance Benefits Agreement

Dear Mercedes,

     This letter constitutes the Severance Benefits Agreement (the “Agreement”) between you and
Avago Technologies Limited (the “Company”). Please confirm your acceptance of these terms by
returning a signed copy of this Agreement to me.

Severance Benefits

Termination without Cause, with Good Reason or Because of Death or Disability. If your employment
by the Company and its subsidiaries is terminated by the Company or its subsidiaries without Cause
(as defined below), or if you voluntarily terminate your employment for Good Reason (as defined
below), and if you provide the Company with a signed customary and reasonable general release of
all claims against the Company and its affiliates in a form acceptable to the Company, the Company
or one of its subsidiaries shall provide you with continuation of your base salary for a period of
six (6) months after your termination date at the rate in effect immediately prior to your
termination of employment, less applicable withholdings and payment of an amount equal to fifty
percent (50%) of the lesser of (a) your prior year’s bonus or (b) your prior year’s target bonus,
both payable in six (6) substantially equal installments pursuant to the Company or its
subsidiary’s normal and customary payroll procedures; provided, however, that for your first year
of employment, your prior year’s bonus and your prior year’s target bonus shall both be deemed to
be your first year’s target bonus; provided further, however, that to the extent required to comply
with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), if you are deemed
to be a “specified employee” for purposes of Section 409A(a)(2)(B) of the Code, you agree that the
installments due to you under this paragraph in connection with a termination of your employment
that would otherwise have been payable at any time during the six-month period immediately
following such termination of employment shall not be paid prior to, and shall instead be payable
in a lump sum as soon as practicable following, the expiration of such six-month period. The
Company or one of its subsidiaries shall also pay the group health, dental and vision plan
continuation coverage premiums for you and, if relevant, your covered dependents’ COBRA for the
lesser of (i) six (6) months from the date of your termination of employment, or (ii) the date upon
which you and your covered dependents are covered by similar plans of a new employer. In the event
of your death or disability, upon provision to the Company of a signed general release of all
claims against the Company and its affiliates in a form acceptable to the Company, you (or your
estate) will receive the severance benefits described in this paragraph.

Terminations in Connection with a Change in Control. If your employment by the Company and its
subsidiaries is terminated by the Company or its subsidiaries without Cause, or if you

 

 

voluntarily terminate your employment for Good Reason, or if you die or become disabled,
in each case within the three (3) month period immediately prior to or the twelve (12)
month period commencing on a Change in Control (as defined below), and if you provide the
Company with a signed customary and reasonable general release of all claims against the
Company and its affiliates in a form acceptable to the Company, then in lieu of the
severance benefits described in the preceding paragraph, the Company or one of its
subsidiaries shall provide you (or your estate) with continuation of your base salary for
a period of twelve (12) months after your termination date at the rate in effect
immediately prior to your termination of employment, less applicable withholdings, and
payment of an amount equal to the lesser of (a) your prior year’s bonus and (b) your prior
year’s target bonus, both payable in twelve (12) substantially equal installments pursuant
to the Company or such subsidiary’s normal and customary payroll procedures; provided,
however, that for your first year of employment, your prior year’s bonus and your prior
year’s target bonus shall both be deemed to be your first year’s target bonus; provided
further, however, that to the extent required to comply with Section 409A of the Code, if
you are deemed to be a “specified employee” for purposes of Section 409A(a)(2)(B) of the
Code, you agree that the installments due to you under this paragraph in connection with a
termination of your employment that would otherwise have been payable at any time during
the six-month period immediately following such termination of employment shall not be
paid prior to, and shall instead be payable in a lump sum as soon as practicable
following, the expiration of such six-month period. The Company or one of its subsidiaries
shall also pay the group health, dental and vision plan continuation coverage premiums for
you and, if relevant, your covered dependents’ COBRA for the lesser of (i) twelve (12)
months from the date of your termination of employment, or (ii) the date upon which you
and your covered dependents are covered by similar plans of a new employer. Finally, if
not otherwise provided for in the relevant plan or option agreement (in which case the
relevant plan or option agreement terms shall apply), your then outstanding options shall
immediately accelerate and become vested and exercisable for that number of shares subject
thereto with respect to which such options would have become vested and exercisable over
the succeeding twelve (12) month period based solely on the passage of time and your
performance of services (i.e., you will receive twelve (12) month accelerated vesting on
your time vesting options).

Gross-Up
Payment. Prior to the Company becoming listed on an established stock exchange or
national market system, Kohlberg Kravis & Roberts Co., L.P. and Silver Lake Partners, LLC
(the “Sponsors”) shall use commercially reasonable efforts to obtain shareholder approval
for any payments that would otherwise result in an excise tax liability under Section
4999 of the Code following your timely, written request therefor. In the event the
Company becomes listed on any established stock exchange or a national market system, the
Board shall negotiate in good faith with you regarding whether to amend this Agreement to
provide for a payment to offset any excise taxes imposed by Section 4999 of the Code.

Termination by the Company with Cause or Termination by You. If your employment by the
Company and its subsidiaries is terminated by the Company or its subsidiaries with Cause,
or if you voluntarily terminate your employment with the Company and its subsidiaries
(other than for Good Reason), you shall not be entitled to any severance pay, severance
benefits, or any compensation or benefits from the Company or its subsidiaries
whatsoever, other than as required under applicable law.

 

 

Definitions

Cause. For purposes of this Agreement, “Cause” shall mean (A) your willful refusal to
perform in any material respect your duties or responsibilities for the Company or its
affiliates or willful disregard in any material respect of any financial or other
budgetary limitations established in good faith by the Board or chief executive officer;
or (B) your material breach of any provision of this Agreement that is not cured upon ten
(10) days notice thereof; or (C) the engaging by you in conduct that causes material and
demonstrable injury, monetarily or otherwise, to the Company or any affiliates, including,
but not limited to, misappropriation or conversion of assets of the Company or any
affiliates (other than non-material assets); or (D) your engagement in an act of moral
turpitude or conviction of or entry of a plea of nolo contendere to a felony.

Change in Control. For purposes of this Agreement, “Change in Control” shall mean (i) the
sale of all or substantially all of the assets of the Company and its subsidiaries, taken
as a whole to a person who is not an affiliate of the Company or the Sponsors; (ii) a sale
by the Sponsors or any of their respective affiliates resulting in more than fifty percent
(50%) of the voting shares of the Company being held by a person or related group of
persons that does not include the Sponsors or any of their respective affiliates or (iii)
a merger or consolidation of the Company into another person which is not an affiliate of
the Company or the Sponsors, if and only if as a result of such merger or consolidation
the Sponsors lose the ability to elect a majority of the Board (or the resulting entity).

Good Reason. For purposes of this Agreement, the term “Good Reason” shall mean any of the
following: (A) a reduction in your base salary (other than as part of a broad salary
reduction program instituted because the Company or its affiliates is in financial
distress); (B) a substantial reduction in your duties and responsibilities; (C) the
elimination or reduction of your eligibility to participate in the Company or its
subsidiaries’ benefit programs that is inconsistent with the eligibility of executive
employees of the Company and its subsidiaries to participate therein; (D) the Company or
one of its subsidiaries informs you of its intention to transfer your primary workplace to
a location that is more than 50 miles from your workplace as set forth herein; (E) the
Company’s material breach of this Agreement that is not cured within sixty (60) days
written notice thereof; and (F) any serious chronic
mental or physical illness of a member of your family that requires you to terminate your
employment because of substantial interference with your duties at the Company and its
subsidiaries; provided, that at the Company’s request you shall provide the Company with a
written physician’s statement confirming the existence of such mental or physical illness.

Entire Agreement

This Agreement and the documents referenced herein (including, without limitation, the
equity-related documents) constitute the complete, final and exclusive embodiment of the
entire agreement between you and the Company and its subsidiaries with respect to
severance benefits payable to you upon your termination of employment with the Company and
its subsidiaries. This Agreement supersedes any other such promises, warranties,
representations, plans or agreements. This Agreement may not be amended or modified except
by a written instrument signed by you and an authorized representative of the Board or the
Company’s chief executive officer.

 

 

Governing Law

This Agreement will be governed by and construed in accordance with the laws of the
State of California without regard to the conflicts of law provisions thereof.

Dispute Resolution

To ensure the timely and economical resolution of disputes that arise in connection with
your employment with the Company and its subsidiaries, you and the Company agree that any
and all disputes, claims, or causes of action arising from or relating to the enforcement,
breach, performance or interpretation of this Agreement, your employment, or the
termination of your employment, shall be resolved to the fullest extent permitted by law
by final, binding and confidential arbitration, by a single arbitrator, in Santa Clara
County, California, conducted by Judicial Arbitration and Mediation Services, Inc.
(“JAMS”) under the applicable JAMS employment rules. By agreeing to this arbitration
procedure, both you and the Company waive the right to resolve any such dispute through a
trial by jury or judge or administrative proceeding. The arbitrator shall: (a) have the
authority to compel adequate discovery for the resolution of the dispute and to award such
relief as would otherwise be permitted by law; and (b) issue a written arbitration
decision, to include the arbitrator’s essential findings and conclusions and a statement
of the award. The arbitrator shall be authorized to award any or all remedies that you or
the Company would be entitled to seek in a court of law. The Company shall pay all JAMS’
arbitration fees in excess of the amount of court fees that would be required if the
dispute were decided in a court of law. Nothing in this Agreement is intended to prevent
either you or the Company from obtaining injunctive relief in court to prevent irreparable
harm pending the conclusion of any such arbitration. Notwithstanding the foregoing, you
and the Company each have the right to resolve any issue or dispute over intellectual
property rights by Court action instead of arbitration.

If you choose to accept this Agreement under the terms described above, please return a
signed copy of this letter to my attention.

 

Sincerely,

 

/s/ Hock E. Tan

Hock E. Tan

President and Chief Executive Officer

Avago Technologies Limited

 

Agreed and accepted this 14 day of June, 2006

 

/s/ Mercedes Johnson

Mercedes Johnsonexv10w28

 

Exhibit
10.28

INDEMNITY AGREEMENT

     This
Agreement is made and entered into as of this                      day of                     , 20 ___
by and between Avago Technologies Limited, a public company limited by shares organized under the
laws of the Republic of Singapore (the “Company”), and                      (“Agent”).

Recitals

     Whereas, Agent performs a valuable service to the Company in his or her capacity as
                                                            ;

     Whereas, the members of the Company have adopted a Memorandum and Articles of
Association (the “Articles”) providing for the indemnification of the Company’s directors,
auditors, secretary and other officers, including persons serving at the Company’s request in such
capacities with other companies or enterprises, as authorized by the Singapore Companies Act, as
amended (the “Act”);

     Whereas, the Articles and the Act, by their non-exclusive nature, permit contracts
between the Company and its directors, auditors, secretary and other officers with respect to
indemnification of such persons; and

     Whereas, in order to induce Agent to continue to serve as                     , the Company has
determined and agreed to enter into this Agreement with Agent;

     Now, Therefore, in consideration of Agent’s continued service as                      after the
date hereof, the parties hereto agree as follows:

Agreement

     1. Services to the Company. Agent will serve, at the will of the Company or under
separate contract, if any such contract exists, as                      of the Company or as a director,
officer or other fiduciary of a Company affiliate (including any employee benefit plan of the
Company) faithfully and to the best of his or her ability so long as he or she is duly elected and
qualified in accordance with the provisions of the Articles or other applicable charter documents
of the Company or such affiliate; provided, however, that Agent may at any time and for any reason
resign from such position (subject to any contractual obligation Agent may have assumed apart from
this Agreement), and that the Company or any affiliate shall have no obligation under this
Agreement to continue Agent in any such position.

     2. Indemnity of Agent. Subject to, and to the maximum extent permitted by the
Articles, the Act or other applicable mandatory law, the Company hereby agrees to hold harmless and
indemnify Agent from and against all matters of whatsoever nature and howsoever arising by reason
of or in connection with Agent’s provision of services under clause 1 above.

     3. Additional Indemnity. In addition to and not in limitation of the
indemnification otherwise provided for herein, and subject only to the exclusions set forth in
Section 4 hereof, the Company hereby further agrees to hold harmless and indemnify Agent:

          (a) against any and all expenses (including attorneys’ fees), witness fees, damages,
judgments, fines and amounts paid in settlement and any other amounts that Agent becomes legally
obligated to pay because of any claim or claims made against or by him or her in connection with
any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
arbitrational,

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administrative or investigative (including an action by or in the right of the Company) to
which Agent is, was or at any time becomes a party, or is threatened to be made a party, by reason
of the fact that Agent is, was or at any time becomes a director, auditor, secretary, other officer
or agent of the Company, or is or was serving or at any time serves at the Company’s request as a
director, officer, employee or other agent of another company, partnership, joint venture, trust,
employee benefit plan or other enterprise; and

          (b) otherwise to the fullest extent as the Company may provide to Agent under
Section 151 of the Articles.

     4. Limitations on Indemnity. The Company will not provide indemnity pursuant to
Sections 3 and 5 hereof:

          (a) on account of any claim against Agent solely for an accounting of profits made
from the purchase or sale by Agent of securities of the Company pursuant to the provisions of
Section 16(b) of the United States Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any United States federal, state or local statutory law;

          (b) on account of Agent’s conduct that is established by a final judgment as
knowingly fraudulent or deliberately dishonest or that constituted willful misconduct;

          (c) in respect of any liability that cannot be indemnified by reason of section 172 of the
Act;

          (d) on account of Agent’s conduct that is established by a final judgment as constituting a
breach of Agent’s duty of loyalty to the Company or resulting in any personal profit or advantage
to which Agent was not legally entitled;

          (e) for which payment is actually made to Agent under a valid and collectible insurance policy
or under a valid and enforceable indemnity clause, article or agreement, except in respect of any
excess beyond payment under such insurance, clause, article or agreement;

          (f) if indemnification is not lawful (and, in this respect, both the Company and Agent have
been advised that the United States Securities and Exchange Commission believes that
indemnification for liabilities arising under the federal securities laws is against public policy
and is, therefore, unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication); or

          (g) in connection with any proceeding (or part thereof) initiated by Agent, or any proceeding
by Agent against the Company or its directors, officers, employees or other agents, unless (i) such
indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the
Board of Directors of the Company, (iii) such indemnification is provided by the Company, in its
sole discretion, pursuant to the powers vested in the Company under the Act, or (iv) the proceeding
is initiated pursuant to Section 9 hereof.

     5. Continuation of Indemnity. All agreements and obligations of the Company
contained herein shall continue during the period Agent is a director, officer, employee or other
agent of the Company (or is or was serving at the request of the Company as a director, officer,
employee or other agent of another company, partnership, joint venture, trust, employee benefit
plan or other enterprise) and shall continue thereafter so long as Agent shall be subject to any
possible claim or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, arbitrational, administrative or investigative, by reason of the fact that Agent was
serving in the capacity referred to herein.

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     6. Partial Indemnification. Subject to the exclusions in clause 4 hereof, Agent
shall be entitled under this Agreement to indemnification by the Company for a portion of the
expenses (including attorneys’ fees), witness fees, damages, judgments, fines and amounts paid in
settlement and any other amounts that Agent becomes legally obligated to pay in connection with any
action, suit or proceeding referred to in Section 3 hereof even if not entitled hereunder to
indemnification for the total amount thereof, and the Company shall indemnify Agent for the portion
thereof to which Agent is entitled.

     7. Notification and Defense of Claim. Not later than thirty (30) days after Agent’s
receipt of notice of the commencement of any action, suit or proceeding with respect to which Agent
may make a claim in respect thereof against the Company under this Agreement, Agent will notify the
Company of the commencement thereof; but any omission to so notify the Company will not relieve the
Company of any liability it may have to Agent under this Agreement except to the extent, and only
to the extent, it can be shown that Agent’s failure to timely notify directly caused damage to
Agent or the Company in such proceeding. Further, no such failure to notify shall relieve the
Company of any liability it may have to Agent otherwise than under this Agreement.

     With respect to any such action, suit or proceeding for which Agent provides notice to the
Company of the commencement thereof:

          (a) the Company will be entitled to participate therein at its own expense;

          (b) except as otherwise provided below, the Company may, at its option and jointly
with any other indemnifying party similarly notified and electing to assume such defense, assume
the defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Company
to Agent of its election to assume the defense thereof, the Company will not be liable to Agent
under this Agreement for any legal or other expenses subsequently incurred by Agent in connection
with the defense thereof, except for reasonable costs of investigation or otherwise as provided
below. Agent shall have the right to employ separate counsel in such action, suit or proceeding,
but the fees and expenses of such counsel incurred after notice from the Company of its assumption
of the defense thereof shall be at the expense of Agent unless (i) the Company authorizes Agent’s
employment of separate counsel, (ii) Agent reasonably concludes, and so notifies the Company, that
there is an actual conflict of interest between the Company and Agent in the conduct of the defense
of such action, or (iii) the Company shall not in fact have employed counsel to assume the defense
of such action, in each of which cases the fees and expenses of Agent’s separate counsel shall be
at the Company’s expense. The Company shall not be entitled to assume the defense of any action,
suit or proceeding brought by or on behalf of the Company or as to which Agent shall have made the
conclusion provided for in clause (ii) above; and

          (c) the Company shall not be liable to indemnify Agent under this Agreement for any
amounts paid in settlement of any action or claim effected without its written consent, which shall
not be unreasonably withheld. The Company shall be permitted to settle any action in its
discretion, except that it shall not settle any action or claim in any manner which would impose
any penalty or limitation on Agent without Agent’s written consent, which may be given or withheld
in Agent’s sole discretion.

          (d) nothing in this section 7 shall entitle Agent to any indemnification,
reimbursement or payment other than in accordance with section 172 of the Act and applicable
mandatory law.

     8. Enforcement. Any right to indemnification or advances granted by this Agreement
to Agent shall be enforceable by or on behalf of Agent in any court of competent jurisdiction if
(i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request therefor. Agent, in such
enforcement action, if successful in whole or

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in part, shall be entitled to be paid also the expense of prosecuting his or her claim. It
shall be a defense to any action for which a claim for indemnification is made under Section 3 or 5
hereof that Agent is not entitled to indemnification because of the limitations set forth in
Section 4 hereof. Neither the failure of the Company (including its Board of Directors or its
members) to have made a determination prior to the commencement of such enforcement action that
indemnification of Agent is proper in the circumstances, nor an actual determination by the Company
(including its Board of Directors or its members) that such indemnification is improper shall be a
defense to the action or create a presumption that Agent is not entitled to indemnification under
this Agreement or otherwise.

     9. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of Agent, who shall
execute all documents required and shall do all acts that may be necessary to secure such rights
and to enable the Company effectively to bring suit to enforce such rights.

     10. Non-Exclusivity of Rights. The rights conferred on Agent by this Agreement
shall not be exclusive of any other right which Agent may have or hereafter acquire under any
statute, provision of the Company’s Memorandum and Articles of Association, agreement, vote of
members or directors, or otherwise, both as to action in his official capacity and as to action in
another capacity while holding office.

     11. Survival of Rights.

          (a) The rights conferred on Agent by this Agreement shall continue after Agent has
ceased to be a director, officer, employee or other agent of the Company or to serve at the request
of the Company as a director, officer, employee or other agent of another company, partnership,
joint venture, trust, employee benefit plan or other enterprise, and shall inure to the benefit of
Agent’s heirs, executors and administrators.

          (b) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets
of the Company, expressly to assume and agree to perform this Agreement in the same manner and to
the same extent the Company would be required to perform if no such succession had taken place.

     12. Separability. Each of the provisions of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision hereof shall be held to
be invalid for any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof. Furthermore, if this Agreement shall be invalidated
in its entirety on any ground, then the Company shall nevertheless indemnify Agent to the fullest
extent provided by the Articles, the Act or any other applicable law.

     13. Governing Law. This Agreement shall be interpreted and enforced in accordance
with the laws of the Republic of Singapore.

     14. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by both parties hereto.

     15. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute but one and the same Agreement. Only one such counterpart need be
produced to evidence the existence of this Agreement.

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     16. Headings. The headings of the sections of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction hereof.

     17. Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given (i) upon delivery if delivered by
hand to the party to whom such communication was directed or (ii) upon the third business day after
the date on which such communication was mailed if mailed by certified or registered mail with
postage prepaid:

          (a) If to Agent, at the address indicated on the signature page hereof.

          (b) If to the Company, to:

Avago Technologies Limited

c/o Avago Technologies U.S. Inc.

350 West Trimble Road

Building 90

San Jose, CA 95131

Attention: SVP and General Counsel

or

No. 1 Yishun Avenue 7

Singapore 768923

or to such other address as the Company may have furnished to Agent.

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     In Witness Whereof, the parties hereto have executed this Agreement on and as of the
day and year first above written.

	 	 	 	 	 	 	 
	 	 	Avago Technologies Limited	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Agent	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

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