Document:

exv10w1

 

EXHIBIT 10.1

SEVERANCE AGREEMENT

     This Severance Agreement (the “Agreement”) is made and entered into effective as of March 24,
2006, by and between Michael D. Yonker (the “Executive”) and Pixelworks, Inc., an Oregon
corporation (“Company”).

RECITALS

     A.     Executive has accepted Company’s offer of employment by signing the letter dated February
26, 2006 from Allen Alley to Executive, attached hereto as Exhibit A (the “Offer Letter”); and

     B.     Pursuant to the terms of the Offer Letter, this Agreement formalizes and replaces the
severance provisions summarized in the Offer Letter.

AGREEMENT

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which the parties
acknowledge, the parties agree as follows:

     1.     Termination by Company without Cause. In the event Company terminates Executive’s
employment without Cause, as that term is defined below, then upon Executive’s satisfaction of the
Release of Claims requirement stated in Paragraph 4 below, Company shall provide Executive with the
following severance benefits: (a) twelve (12) months of base salary and (b) in the event Executive
is eligible for and properly elects to continue his group health benefits through COBRA, the
Company shall pay Executive an amount equal to the premium cost to continue such benefits for
twelve (12) months. The severance benefits shall be payable in a lump sum on or before the first
regularly scheduled pay date following Executive’s satisfaction of the Release of Claims
requirement stated in Paragraph 4 below. All payments to Executive shall be reduced by such
amounts as are required to be withheld by law. Severance benefits shall not be owed if termination
of Executive’s employment with Company occurs due to Executive’s death, disability, Executive’s
resignation, or Company’s termination of Executive for Cause.

     2.     Cause Definition. “Cause” shall mean any one or more of the following: (i) a
material act of dishonesty, fraud, or misconduct by the Executive that is in connection with
Executive’s responsibilities as an Executive of the Company; (ii) Executive’s commission of acts
constituting a felony which the Board reasonably believes has had or will have a material
detrimental effect on the Company’s reputation or business; or (iii) repeated willful failure by
the Executive to perform Executive’s duties as an employee of the Company after there has been
delivered to the Executive a written demand for performance from the Company which describes the
basis for the Company’s belief that the Executive has not substantially performed Executive’s
duties and had a 30-day opportunity to cure, no cure having been made.

     3.     At-Will Employment. The Company and the Executive acknowledge that the Executive’s
employment is and shall continue to be at-will, as defined under applicable law. The severance
benefits in this Agreement shall be in lieu of the severance benefits in the Offer Letter and in
lieu of any other severance benefits or policies maintained by Company that may otherwise be
applicable to Executive.

     4.     Execution of Release As a condition of receiving the severance benefits, Executive
shall, on or before forty-five (45) days after Company delivers the release to Executive, enter
into and not revoke a general release of claims against the Company, its subsidiaries and
affiliates, satisfactory to Company. The release shall be substantially in the form attached
hereto as Exhibit B, with such modifications as Company determines to be reasonably necessary or
desirable to ensure effective release of all claims.

     5.     Notices. Notices and all other communications contemplated by this Agreement shall
be in writing and shall be deemed to have been duly given when personally delivered or when mailed
by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of
the Executive, mailed notices shall be addressed to Executive at the home address which Executive
most recently communicated to the Company in writing. In the case of the Company, mailed notices
shall be addressed to its corporate headquarters, and all notices shall be directed to the
attention of its Secretary.

 

 

     6.     Arbitration. Any dispute or controversy arising out of, relating to, or in
connection with this Agreement, or the interpretation, validity, construction, performance, breach,
or termination thereof, shall be settled by binding arbitration before a single arbitrator to be
held in Portland, Oregon, in accordance with the National Rules for the Resolution of Employment
Disputes then in effect of the American Arbitration Association (the “Rules”). The decision of the
arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may
be entered on the arbitrator’s decision in any court having jurisdiction. The arbitrator shall
apply Oregon law to the merits of any dispute or claim, without reference to conflicts of law
rules.

     7.     Integration. This Agreement replaces the severance provisions of the Offer Letter.
Except as expressly stated in this paragraph, the Offer Letter remains in effect according to its
terms. This Agreement and the Offer Letter represent the entire agreement and understanding
between the parties as to the subject matter herein and supersede all prior or contemporaneous
agreements, whether written or oral.

     8.     Severability. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other provision hereof, that
can be given effect without the invalid or unenforceable provisions of the Agreement.

     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year first above written.

	 	 	 	 	 
	 	PIXELWORKS, INC.

 	 
	 	By:  	/s/ Allen H. Alley
 	 
	 	 	Allen H. Alley, Chief Executive Officer 	 
	 	 	 	 
	 
	 	EXECUTIVE

 	 
	 	/s/ Michael D. Yonker
 	 
	 	Michael D. Yonker, Chief Financial Officerexv10w23

 

Exhibit 10.23

AMENDMENT NO. 5

This Amendment No. 5 (the “Amendment”) to the U.S. Systems Integrator Agreement (the
“Agreement”) by and between Cisco Systems, Inc., (“Cisco”) a California corporation having
its principal place of business at 170 West Tasman Drive, San Jose, CA, 95134, and Internet
work Experts, Inc. (“Integrator”) a Texas corporation having its principal place of business
at 15960 Midway Road, Suite 101, Addison, Texas, 75001 is entered into as of the date last
written below (“the Effective Date”).

WHEREAS, Cisco and Integrator have previously entered into the Agreement dated November 13, 2001,
as amended; and

NOW
WHEREFORE, the parties agree to amend the Agreement as follows:

	1).	 	The term of the Agreement is extended until November 12, 2005.

If the Agreement shall have expired prior to the Amendment Effective Date, any orders
received and Products purchased between the date of expiration and the Amendment
Effective Date shall be in all respects deemed made under the
Agreement as in effect
prior to this Agreement.

	2).	 	Exhibit C-2, Cisco Brand Services Resale Exhibit shall be replaced in its entirety
with the attached Exhibit C-3
	 
	3).	 	All other terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the last date which is written below.

	 	 	 	 	 	 	 	 	 
	CISCO SYSTEMS, INC.	 	INTERNETWORK EXPERTS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	BY:

	 	/s/ Frank A. Calderon
 

	 	BY:
	 	/s/ Paul Klotz
 

	 	 
	(Authorized Signature)	 	(Authorized Signature)	 	 
	 
	 	 	 	 	 	 	 	 
	NAME:

	 	FRANK A. CALDERON
	 	NAME:
	 	PAUL KLOTZ	 	 
	 
	 	 	 	 	 	 	 	 
	TITLE:

	 	VP, WW SALES FINANCE
	 	TITLE:
	 	 Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	DATE:

	 	1/27/05
	 	DATE:
	 	1/21/05	 	 

			
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	 	2.1	 	BPRA. Integrator must complete the Business Partner Readiness Assessment prior to resale of any
Services hereunder.
	 
	 	2.2	 	Ordering Tools. Integrator agrees to use Cisco offered electronic ordering solutions (e.g. Ordering Tool
and Service Contract Center) for any new service orders or service renewal
orders. End-User name and site details are required to place any
orders.

	3.0 	CISCO RIGHTS AND OBLIGATIONS. For each End User to whom Integrator resells
Cisco Brand Services, Cisco will use commercially reasonable efforts to provide
Services directly to Integrator’s End User in accordance with the following.

	 	3.1	 	Cisco.com Access. Cisco will provide an appropriate level of partner
access to Cisco.com. This system
provides Integrator with technical and general information on Products.
	 
	 	3.2	 	Warranty. For the duration of the Cisco warranty period, Cisco will provide Bug Fixes and Hardware
replacement service to Integrator as follows:

	 	3.2.1	 	Bug Fixes.

	 	3.2.1.1	 	When required, Cisco will provide new Software to integrator to correct a problem, or
provide a network-bootable Software image, as determined by Cisco.
	 
	 	3.2.1.2	 	Distribution Rights. Cisco grants Integrator the right to distribute Bug Fixes to its End
Users provided the End User is currently licensed to use the Software.

	 	3.2.2	 	Hardware Support. Cisco will replace Product in accordance with the warranty terms set forth in
the published Product warranty provided with the original Product.

	 	3.3	 	Resale of Services. Cisco will make the Services listed in Attachment A, Services Availability, to this
Exhibit available to Integrator for resale to Integrator’s End Users. Services are subject to the availability
limitations specified in Attachment A.
	 
	 	3.4	 	Support Agreements. Support will be provided to End Users pursuant to a standard Cisco Support
Agreement between Cisco and End User. The Support Agreements to be used are
provided by Cisco.
Notwithstanding anything to the contrary, nothing in this Exhibit shall require
Cisco to execute a Support
Agreement with an End User. Prior to commencing Services for an End User, Cisco
must receive the
documents specified in Section 4.1.2 of this Exhibit whereupon Cisco will:

	 	3.4.1	 	Validate Product model and serial numbers.
	 
	 	3.4.2	 	Execute and return the Support Agreement and provide an
Equipment List (excluding charges)
and the Support Agreement number to the End User.
	 
	 	3.4.3	 	Provide a copy of the Equipment List (including charges) and Support Agreement number to
Integrator.

	4.0 	INTEGRATOR RIGHTS AND OBLIGATIONS.

	 	4.1	 	Resale of Services. Subject to the terms and conditions of
this Exhibit, Integrator is authorized on a non-exclusive basis to resell
Services to End Users, according to the following process:

	4.1.1 	Integrator resells the Services to an End User and providing the End User with
a copy of the standard Cisco Support Agreement for review and signature. Integrator
and End User may not make any modification(s) to the Support Agreement.

	 	4.1.2	 	Cisco requires the following documents from
Integrator prior to commencing Services to End Users:

			
	 
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Warranty shall commence upon shipment to the End User. Warranty service
consists of the following Software and Hardware replacement services:

	 	4.5.1.1	 	Integrator will distribute Bug Fixes to the End User during the
warranty period.
	 
	 	4.5.1.2	 	Integrator will meet the replacement obligations as set forth in the
then-current published
Product warranty applicable to the particular Product sold to the End
User.

	 	 	4.5.2 	 Returns Coordination. For Product returned to Cisco for
replacement under warranty, Integrator will comply with the
following:

	 	4.5.2.1	 	Coordinate the return of all failed parts, freight and insurance
prepaid, to the Cisco
designated location. For Product that has been advance replaced pursuant to the Product
warranty terms, integrator shall return falled/defective Product within ten (10) days of
receipt of the replacement Product; otherwise, Product will be invoiced to Integrator at the
then current list price.
	 
	 	4.5.2.2	 	Comply with the following RMA procedure:

	 	4.5.2.2.1	 	Ensure all Products are property packaged prior to being shipped, and
will include a written description of the failure and
specification of any changes or alterations made to the
Product. Product returned to Cisco will conform in
quantity and serial number to the RMA request.
	 
	 	4.5.2.2.2	 	Tag each Product returned with the RMA transaction number and
a brief description of the problem.

	 	4.6	 	Unsupported End User List. If Integrator elects not to support Product under
this Exhibit, Integrator shall refer End User information, including but not limited
to End User name, address and phone number to Cisco at the time of Product purchase
or renewal of support via any of the means described in section 1.4 above. If Product
becomes unsupported due to End User decision at some point subsequent to initial
deployment, Integrator shall refer End User information to Cisco within 90 days of
equipment becoming unsupported.

5.0 PRICE AND PAYMENT TERMS.

	 	  5.1	 	Discounts.

	 	5.1.1	 	Unit-Based Model. The price of Services to Integrator for a
period of twelve months from the Effective Date (“Unit-Based Measurement
Period”) shall be calculated by applying Cisco’s then-current service list
price less the applicable discount based on Integrator’s ability to have
attached Service to Product purchased (“Attach Rate”) over the previous twelve
(12) month period on a units-based method (“Unit-Based”) shown below.
	 
	 	 	 	Determination of Unit-Based Attach Rate. Unit-Based Attach Rate is
established by calculating Integrator’s total number of Products covered by
Cisco brand services (per Attachment A) as a percentage of the total number
of Products purchased over the most recent period of twelve (12) full
calendar months.

	 	 	 	 	 
	Attach Rate
	 	Discount

	0% – 35%
	 	 	10	%
	36% – 55%
	 	 	15	%
	56% – 74%
	 	 	20	%
	75%+
	 	 	25	%

	 	5.1.2	 	Revenue-Based Model. The price of Services to Integrator for a period of
twelve months from expiration of the Unit-Based Measurement Period and for
subsequent twelve month period(s) (“Revenue-Based Measurement Period”) shall be
calculated by applying Cisco’s then-current

			
	 
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	 	5.3	 	All prices in the Equipment List(s) are exclusive of any taxes and duties
which, if applicable, shall be paid
by Integrator. Applicable taxes are billed as a separate item. In addition, the following items will be billed
to Integrator: time and material fees and Product list price of replaced Product not returned pursuant to
the terms of End User’s Support Agreement.
	 
	 	5.4	 	This Agreement may be terminated by Cisco and/or Cisco may suspend its performance immediately
upon Notice if (i) Integrator does not provide the Unsupported End User List pursuant to Section 4.3 within
thirty (30) days after the end of the previous quarter and after Notice from Cisco or (ii) Integrator fails to
pay for the Services when due and fails to make such payment within fifteen (15) days after Notice from
Cisco of such past due payment. Notwithstanding the above, Cisco shall have the right to seek payment
for Services directly from the End User in the event Integrator does not remit payment to Cisco pursuant to
the payment terms.
	 
	 	5.5	 	Integrator is free to determine its resale prices unilaterally. Integrator understands that neither Cisco, nor
any employee or representative of Cisco, may give any special treatment (favorable or unfavorable) to
Integrator as a result of Integrator’s selection of resale prices. No employee or representative of Cisco or
anyone else has any authority to specify what Integrator’s resale prices for the Services must be, or to
inhibit in any way, Integrator’s pricing discretion with respect to the Services.
	 
	 	5.6	 	Support for Other Product. Integrator may support Other Product under the following conditions:
Integrator provides Cisco (i) a request to support Other Product and (ii) a letter from the End User
including a request for Service from the Integrator and a list of the Product(s) and serial number(s) to be
supported.

6.0 GENERAL.

	 	6.1	 	Entitlement. Integrator acknowledges that an End User is entitled to receive support services only on
Product for which Integrator has paid the applicable license and support fees to Cisco. Integrator agrees
to assist Cisco with enforcement of End User entitlement as necessary.
	 
	 	6.2	 	Disclosure of Contract Information. Integrator acknowledges and agrees that in no event shall any of the
information contained in this Exhibit or Integrator’s Agreement number be disclosed to any third party.
	 
	 	6.3	 	Representations and Warranties. Integrator shall not make any representations or warranties on behalf of
Cisco, except as expressly authorized herein or as expressly authorized by Cisco in writing. Neither
Integrator nor Cisco will make any obligation to End Users on behalf of the other, nor commit the
resources of the other to End Users.
	 
	 	6.4	 	Independent Contractors. The relationship of Cisco and Integrator established by this Exhibit is that of
independent contractors, and nothing contained in this Exhibit shall be construed to (i) give either party the
power to direct and control the day-to-day activities of the other, (ii) constitute the parties as joint
venturers, co-owners or otherwise as participants in a joint or common undertaking, or (iii) allow Integrator
to create or assume any obligation on behalf of Cisco for any purpose whatsoever. All financial obligations
associated with Integrator’s business are the sole responsibility of Integrator. All sales end other
agreements between Integrator and its End Users are Integrator’s exclusive responsibility and shall have
no effect on Integrator’s obligations under this Agreement. Integrator shall be solely responsible for, and
shall indemnify and hold Cisco free and harmless from, any and all claims, damages or lawsuits (including
Cisco’s attorneys’ fees) arising out of the acts of Integrator, its employees or its agents.
	 
	 	6.5	 	Indemnification. Integrator hereby indemnifies and holds Cisco harmless from any claim, loss, damage or
expense, including reasonable court costs and attorney’s fees, resulting from any
claim made by End User against Cisco hereunder under claim of a third party beneficiary or otherwise. This
shall not limit Cisco’s obligations, subject to the terms and conditions of this Agreement, to provide the
Services described herein.

			
	 
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APPENDIX
A 
CISCO PROBLEM PRIORITIZATION AND ESCALATION GUIDELINE

To ensure that all problems are reported in a standard format, Cisco has established the following
problem priority definitions. These definitions will assist Cisco in allocating the appropriate
resources to resolve problems. Integrator must assign a priority to all problems submitted to
Cisco.

PROBLEM PRIORITY DEFINITIONS:

	 	 	Priority 1:  	 An existing network is down or there is a critical impact to the End User’s
business operation. Cisco,
Integrator and End User will commit full-time resources to resolve the situation.
	 
	 	 	Priority 2:   	 Operation of an existing network is severely degraded, or significant aspects
of the End User’s
business operation are being negatively impacted by unacceptable network
performance. Cisco,
Integrator and End User will commit full-time resources during Standard Business
Hours to resolve
the situation.
	 
	 	 	Priority 3:  	 Operational performance of the network is impaired while most business
operations remain functional.
Cisco, Integrator and End User are willing to commit resources during Standard
Business Hours to
restore service to satisfactory levels.
	 
	 	 	Priority 4:  	 Information or assistance is required on Cisco product capabilities,
installation, or configuration.
There is clearly little or no impact to the End User’s business operation. Cisco,
Integrator and End
User are willing to provide resources during Standard Business Hours to provide
information or assistance as requested.

Cisco encourages Integrator to reference this guide when Integrator-initiated escalation is
required. If Integrator does not
feel that adequate forward progress or the quality of Cisco service is satisfactory, Cisco
encourages Integrator to escalate
the problem ownership to the appropriate level of Cisco management by asking for the TAC Duty
Manager.

CISCO ESCALATION GUIDELINE:

	 	 	 	 	 	 	 	 	 
	Elapsed	 	Priority 1	 	Priority 2	 	Priority 3	 	Priority 4
	Time	 	 	 	 	 	 	 	 
	 
	 	Customer
	 	 	 	 	 	 
	1-Hour
	 	Engineering Manager	 	 	 	 	 	 
	 
	 	Technical Support
	 	Customer
	 	 	 	 
	4-Hour
	 	Director	 	Engineering Manager	 	 	 	 
	 
	 	Vice President
	 	Technical Support
	 	 	 	 
	24-Hour
	 	Customer Advocacy	 	Director	 	 	 	 
	 
	 	President (CEO)	 	Vice President
	 	 	 	 
	48-Hour
	 	 	 	Customer Advocacy	 	 	 	 
	 
	 	 	 	 	 	Customer Engineering
	 	 
	72-Hour
	 	 	 	 	 	Manager	 	 
	 
	 	 	 	President (CEO)	 	Technical Support
	 	Customer

	 
	 	 	 	 	 	Director	 	Engineering

	96-Hour
	 	 	 	 	 	 	 	Manager

	 	 	 
	Note:

	 	Priority 1 problem escalation times are measured in calendar hours 24 hours per day,
7 days per week. Priority 2, 3 and 4 escalation times correspond with Standard Business
Hours.
	 
	 

	 	The Cisco Manager to which the problem is escalated will take ownership of the problem
and provide the Integrator with updates. Cisco recommends that Integrator-initiated
escalation begin at the Customer Engineering Manager level and proceed upward using the
escalation guideline shown above for reference. This will allow those most closely
associated with the support resources to correct any service problems quickly.

	 	 	 	 	 
	ACCESSING TAC:
	 	 	 	 
	North America, South America:

	 	+1-800-553-2447 (within the
United States)

+1-408-526-7209
	 	 
	Europe, Middle East, Africa:

	 	+32-2-778-4242	 	 
	Asia Pacific:

	 	+1-800-805-227 (within Australia)

+61-2-9935-4107	 	 

	 		
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