Document:

exv10w1

 

Exhibit 10.1

EDDIE BAUER HOLDINGS, INC.

STOCK ONLY STOCK APPRECIATION RIGHT AGREEMENT

     This Stock Only Stock Appreciation Right Agreement (this “Agreement”), is made and
entered into as of                      (the “Date of Grant”), by and between Eddie Bauer Holdings, Inc., a
Delaware corporation (the “Company”), and NAME (“Grantee”).

R E C I T A L S

     A. Capitalized terms used herein shall have the definitions as provided herein or in the 2007
Amendment and Restatement of the Eddie Bauer Holdings, Inc. 2005 Stock Incentive Plan.

AGREEMENT

     In consideration of the covenants and promises contained herein and other good and valuable
consideration, the sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1. Grant.

          (a) The Company hereby grants to Grantee                      stock only stock appreciation rights
(“SOSAR”) at an exercise price of $                     under and subject to the 2007 Amendment and
Restatement of the Eddie Bauer Holdings, Inc. 2005 Stock Incentive Plan (the “Plan”). The SOSAR is
the right to receive a number of shares of the Company’s Common Stock determined by taking the
difference between (x) the closing price of the Common Stock on the Date of Grant multiplied by the
number of SOSARs, and (y) the closing price of the Common Stock on the date of exercise, multiplied
by the number of SOSARs. The Grantee will receive a number of shares of the Common Stock equal to
the difference between the two amounts [(x) and (y) above], divided by the closing price of the
Common Stock on the date of exercise. This SOSAR is not intended to qualify as an “incentive stock
option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).

          (b) The Company shall, in accordance with the Plan, establish and maintain a stock account for
the Grantee, and such account shall be credited for the number of SOSARs granted to the Grantee.
The stock account shall be credited for any securities or other property (including regular cash
dividends) distributed by the Company in respect of its Common Stock. Any such property shall be
subject to the same vesting schedule as the SOSARs to which they relate.

          (c) Until the SOSARs awarded to the Grantee shall have vested and become payable as specified
in this Agreement, the SOSARs and any related securities, cash dividends or other property
nominally credited to a Stock account may not be sold, transferred, or otherwise disposed of and
may not be pledged or otherwise hypothecated.

     2. Exercise Period; Vesting. Unless expired as provided in Section 3 or terminated as
provided in Section 4 of this Agreement, this SOSAR may be exercised from time to time after the
Date of Grant set forth above to the extent the SOSAR has vested in accordance with the vesting
schedule set forth below. The shares of Common Stock (the “Shares”) issued upon exercise of the
SOSAR will be subject to the restrictions on transfer set forth in Section 9 below. Provided
Grantee continues to provide continuous services as an employee, director or consultant
(“Continuous Service”) to the Company or any affiliate, the SOSAR will become vested as follows:

	 	 	 	 	 
	 	 	Percentage of
	Vesting Date	 	Shares Vested
	1st Anniversary
	 	 	25	%
	2nd Anniversary
	 	 	50	%
	3rd Anniversary
	 	 	75	%
	4th Anniversary
	 	 	100	%

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A vested SOSAR may not be exercised for less than a full Share. If application of the vesting
percentage causes a fractional Share to otherwise become exercisable, such Share shall be rounded
down to the nearest whole Share for each year except for the last year in such vesting period, at
the end of which vesting period the SOSAR shall become exercisable for the full remainder of the
unexercised Shares subject to the SOSAR. Upon the occurrence of a Change in Control, upon
retirement on or after age 65 and in the event of death or Disability, the SOSAR shall become 100%
vested and exercisable. Except as otherwise provided in this Section, if the Grantee ceases
Continuous Service for any other reason, the unvested portion of the SOSAR shall be forfeited
immediately.

     3. Expiration. The SOSAR shall expire on                      (the “Expiration Date”) or earlier
as provided in Section 4 below. It is the responsibility of the Grantee to exercise his/her rights
under this Agreement prior to the expiration date.

     4. Termination of Continuous Service.

          (a) Termination for Cause. If the Grantee’s Continuous Service is terminated for
Cause, all outstanding SOSARs granted to such Grantee shall be forfeited and expire as of the
beginning of business on the date of such termination of Continuous Service. The Administrator, in
its absolute discretion, shall determine the effect of all matters and questions relating to
whether Grantee has been discharged for Cause.

          (b) Termination for Any Reason (other than For Cause) Including Retirement at or after Age
55 with at least 10 Years of Service  If Grantee’s Continuous Service is terminated for any
reason other than Cause, including Retirement at or after age 55 with at least 10 years of service,
the unvested portion of the SOSAR shall be forfeited and expire at the close of business on the
date of such termination. The SOSAR, to the extent (and only to the extent) that it would have
been exercisable by Grantee immediately prior to such termination of Continuous Service, may be
exercised by Grantee until the earlier of the Expiration Date or the date that is three months
following the termination of the Grantee’s Continuous Service and the SOSAR shall thereafter
terminate and cease to be exercisable.

          (c) Termination Because of Retirement on or after Age 65, Death or Disability. Upon
Retirement on or after age 65, death or Disability of the Grantee, the SOSAR shall become 100%
vested. If Grantee’s Continuous Service is terminated because of Retirement on or after age 65,
death or Disability of Grantee, the SOSAR, to the extent exercisable by Grantee on the date of
termination, may be exercised by Grantee (or Grantee’s legal representative) no later than 12
months after the date of termination, but in any event no later than the Expiration Date.

          (d) Termination Under Change in Control. If the Grantee’s Continuous Service is
terminated as a result of a Change in Control, the SOSAR shall become 100% vested. The SOSAR, to
the extent (and only to the extent) that it would have been exercisable by Grantee immediately
prior to such termination of Continuous Service, may be exercised by Grantee until the earlier of
the Expiration Date or the date that is three months following the termination of the Grantee’s
Continuous Service and the SOSAR shall thereafter terminate and cease to be exercisable.

          (e) Extension of Termination Date. If the exercise of the SOSAR following the
termination of the Grantee’s Continuous Service (other than upon the Grantee’s Retirement on or
after age 65, death or Disability) would be prohibited at any time solely because the exercise of
the SOSAR or issuance of Shares of Common Stock would violate the registration requirements under
the Securities Act or any other state or federal securities law requirement, then the SOSARs shall
terminate on the earlier of (a) the Expiration Date, or (b) the expiration of a period after
termination of the Grantee’s Continuous Service that is three months after the end of the period
during which the exercise of the SOSAR would be in violation of such registration or other
securities law requirements.

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          (f) No Obligation to Employ. Nothing in the Plan or this Agreement shall confer on
Grantee any right to continue in the employ of, or other relationship with, the Company or any
affiliate, or limit in any way the right of the Company or any affiliate to terminate Grantee’s
employment or other relationship at any time, with or without Cause.

     5. Manner of Exercise.

          (a) Stock Only Stock Appreciation Right Exercise Notice and Representations. To
exercise this SOSAR, Grantee (or in the case of exercise after Grantee’s death or incapacity,
Grantee’s executor, administrator, heir or legatee, as the case may be) must deliver to the Company
an executed Stock Only Stock Appreciation Right Exercise Notice and Representations in the form
attached hereto as Exhibit A, or in such other form as may be approved by the Administrator
from time to time (the “Exercise Notice”), which shall include the following: (i) Grantee’s
election to exercise the SOSAR, (ii) the number of SOSARs exercised (iii) the date of grant of such
SOSARs; provided, however, if no date of grant is specified, the earliest granted, vested and
exercisable SOSAR will be subject to the Exercise Notice; (iv) the account information for book
entry of the Shares to Grantee’s account; and (v) any representations warranties and agreements
regarding Grantee’s investment intent and access to information as may be required by the Company
to comply with applicable securities laws. Grantee shall not exercise SOSARs during a blackout
period to the extent prohibited by the Company’s Insider Trading Policy. The Administrator shall
have three business days after the date of receipt of the Exercise Notice to complete the book
entry of the Shares. If someone other than Grantee exercises the SOSARs, then such person must
submit documentation reasonably acceptable to the Company verifying that such person has the legal
right to exercise the SOSAR.

          (b) Limitations on Exercise. The SOSAR may not be exercised unless such exercise is
in compliance with all applicable federal and state securities laws, as they are in effect on the
date of exercise. The SOSAR may not be exercised for less than one Share or for a fractional
Share. If a fractional Share would otherwise become exercisable, such Share shall be rounded down
to the nearest whole Share for each year except for the last year of the applicable vesting period,
at the end of which vesting period this SOSAR shall become exercisable for the full remainder of
the unexercised Shares subject to the SOSAR.

          (c) Payment. All payments made under this Agreement shall be in Shares of Common
Stock of the Company determined as provided in Section 1(a), above. The Administrator shall have
three business days after the date of receipt of the Exercise Notice to complete the book entry of
the Shares.

          (d) Tax Withholding. Prior to the payment of Shares upon exercise of the SOSAR,
Grantee must pay or provide for the payment of any applicable federal, state and local withholding
obligations of the Company. If the Administrator permits, Grantee also may provide for payment of
withholding taxes upon exercise of the SOSAR by one or more of the following means, or combination
thereof: (i) tendering a cash payment; (ii) (ii) tendering previously acquired shares of Common
Stock with a fair market value, as determined by the Administrator in a manner consistent with the
Plan, equal to or less than the minimum statutory amount of taxes required to be withheld by law,
or (iv) by requesting that the Company retain Shares from the Shares otherwise issuable to the
Grantee as a result of the exercise of this SOSAR, provided that no Shares are withheld with a fair
market value, as determined by the Administrator in a manner consistent with the Plan, exceeding
the minimum statutory amount of taxes required to be withheld by law (“Share Withholding”). In
such case, the Company shall issue the net number of Shares to the Grantee by deducting the Shares
retained from the Shares issuable upon exercise. Payment of the tax withholding by a Grantee who
is an officer, director or other “insider” subject to Section 16(b) of the Exchange Act by a tender
of Common Stock or in the form of Share Withholding is subject to pre-approval by the
Administrator, in its sole discretion, in a manner that complies with the specificity requirements
of Rule 16b-3 under the Exchange Act, including the name of the Grantee involved in the
transaction, the nature of the transaction, the number of shares to be acquired or disposed of by
the Grantee and the material terms of the SOSARs involved in the transaction.

          (e) Issuance of Shares. Provided that the Exercise Notice and circumstances are in
form and substance satisfactory to counsel for the Company, the Company shall issue the Shares
registered in the name of Grantee, Grantee’s authorized assignee, or Grantee’s legal
representative, and shall deliver by book entry or otherwise the certificates representing the
Shares with the appropriate legends affixed thereto.

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     6. Compliance with Laws and Regulations. The issuance of Common Stock upon exercise of the
SOSAR shall be subject to compliance by the Company and the Grantee with all applicable
requirements of securities laws, other applicable laws and regulations of any stock exchange or
interdealer quotation system on which the Common Stock may be listed at the time of such issuance
or transfer. The Grantee understands that the Company is under no obligation to register or
qualify the Common Stock with the Securities and Exchange Commission, any state securities
commission or any stock exchange to effect such compliance. Regardless of whether the shares of
Common Stock that may be issued pursuant to this Agreement have been registered under the
Securities Act or have been registered or qualified under the securities laws of any state, the
Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such
Common Stock (including the placement of appropriate legends on stock certificates or the
imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are
necessary or desirable in order to achieve compliance with the Securities Act, the securities laws
of any state or any other law. In connection with the grant or vesting of the SOSAR or the
issuance of Common Stock on exercise of such Grant, the Grantee will make or enter into such
written representations, warranties and agreements as the Administrator may reasonably request in
order to comply with applicable securities laws or with this Agreement.

     7. Nontransferability of Stock Only Stock Appreciation Right. Except as provided herein, this
SOSAR may not be transferred in any manner other than by will or by the laws of descent and
distribution and may be exercised during the lifetime of Grantee only by Grantee or in the event of
Grantee’s incapacity, by Grantee’s legal representative. The terms of the SOSAR shall be binding
upon the executors, administrators, successors and assigns of Grantee. This SOSAR may be
transferred by domestic relations order.

     8. Privileges of Stock Ownership. Grantee shall not have any of the rights of a Stockholder
with respect to any Shares until the Shares are issued to Grantee.

     9. Restrictions On Transfer.

          (a) Securities Law Restrictions. Regardless of whether the offering and sale of
Shares under the Plan have been registered under the Securities Act or have been registered or
qualified under the securities laws of any state, the Company at its discretion may impose
restrictions upon the sale, pledge or other transfer of Shares (including the placement of
appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in
the judgment of the Company, such restrictions are necessary or desirable in order to achieve
compliance with the Securities Act, the securities laws of any state or any other law.

          (b) Market Stand-Off. If an underwritten public offering by the Company of its equity
securities occurs pursuant to an effective registration statement filed under the Securities Act,
including a secondary public offering by the Company, the Grantee shall not sell, make any short
sale of, loan, hypothecate, pledge, grant any option for the repurchase of, transfer the economic
consequences of ownership or otherwise dispose or transfer for value or otherwise agree to engage
in any of the foregoing transactions with respect to any Shares without the prior written consent
of the Company or its underwriters, for such period of time from and after the effective date of
such registration statement as may be requested by the Company or such underwriters (the “Market
Stand-Off”). In order to enforce the Market Stand-Off, the Company may impose stop-transfer
instructions with respect to the Shares acquired under this Agreement until the end of the
applicable stand-off period. If there is any change in the number of outstanding shares of Common
Stock by reason of a stock split, reverse stock split, stock dividend, recapitalization,
combination, reclassification, dissolution or liquidation of the Company, any corporate separation
or division (including, but not limited to, a split-up, a split-off or a spin-off), a merger or
consolidation; a reverse merger or similar transaction, then any new, substituted or additional
securities which are by reason of such transaction distributed with respect to any Shares subject
to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be
subject to the Market Stand-Off.

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     10. Administration. The Compensation Committee of the Board or its duly authorized delegate
(the “Administrator”) shall have discretionary authority to administer and interpret the terms of
this Agreement. Any dispute regarding the interpretation of this Agreement shall be submitted by
Grantee or the Company to the Administrator for review. The resolution of such a dispute by the
Administrator shall be final and binding on the Company and Grantee and all other persons.

     11. Acceptance. Grantee hereby acknowledges receipt of a copy of this Agreement. Grantee has
read and understands the terms and provisions thereof, and accepts the SOSAR subject to all the
terms and conditions of this Agreement. Grantee acknowledges that there may be adverse tax
consequences upon exercise of the SOSAR or disposition of the Shares and that Grantee should
consult a tax advisor prior to such exercise or disposition.

     12. Section 409A Limitation. In the event the Administrator determines at any time that this
SOSAR has been granted with an exercise price less than Fair Market Value of the Shares subject to
the SOSAR on the date the SOSAR is granted (regardless of whether or not such exercise price is
intentionally or unintentionally priced at less than Fair Market Value, or is materially modified
at a time when the Fair Market Value exceeds the exercise price), or is otherwise determined to
constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code,
notwithstanding any provision of the Plan or this SOSAR Agreement to the contrary, the SOSAR shall
satisfy the additional conditions applicable to nonqualified deferred compensation under Section
409A of the Code, in accordance with Section 8 of the Plan. The specified exercise date and term
shall be the default date and term specified in Section 8 of the Plan. Notwithstanding the
foregoing, the Company shall have no liability to Grantee or any other person if an SOSAR is
determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of
the Code and the terms of such SOSAR do not satisfy the additional conditions applicable to
nonqualified deferred compensation under Section 409A of the Code and Section 8 of the Plan.

     13. No Right to Future Awards. This SOSAR grant is discretionary. This Agreement does not
confer on Grantee any right or entitlement to receive another SOSAR grant or any other equity-based
award at any time in the future or in respect of any future period.

     14. Representations and Warranties of Grantee. The Grantee represents and warrants to the Company
that:

          (a) Agreement to Terms. The Grantee has received a copy of this Agreement and has
read and understands the terms of this Agreement, and agrees to be bound by the terms and
conditions. The Grantee acknowledges that there may be adverse tax consequences upon the exercise
of the SOSAR or disposition of the shares and that the Grantee should consult a tax advisor prior
to such time.

          (b) Cooperation. The Grantee agrees to sign such additional documentation as may
reasonably be required from time to time by the Company.

          (c) Securities Representations. In addition, the Grantee hereby makes the
following additional representations:

               (i) The Grantee is acquiring the shares of Common Stock for his own account for investment
purposes only and not with a view towards distribution.

               (ii) The Grantee understands that the shares of Common Stock to be issued under this Agreement
may not be registered under the Securities Act or under any state securities laws and therefore
Grantee may not be able to dispose of any of the Common Stock unless and until such shares are
subsequently registered under the Securities Act and applicable state securities laws or exemptions
from such registration are available.

               (iii) The Grantee understands that Rule 144 promulgated under the Securities Act may
indefinitely restrict transfer of the Common Stock so long as the Grantee remains an “affiliate” of
the Company or if “current public information” about the Company (as defined in Rule 144) is not
publicly available.

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          (d) Obligation To Sell. Notwithstanding anything herein to the contrary, if at any
time following Grantee’s acquisition of shares of Common Stock hereunder, stockholders of the
Company owning 51% or more of the shares of the Company (on a fully diluted basis) (the “Control
Sellers”) enter into an agreement (including any agreement in principal) to transfer all of their
shares to any person or group of persons who are not affiliated with the Control Sellers, such
Control Sellers may require each stockholder who is not a Control Seller (a “Non-Control Seller”)
to sell all of their shares to such person or group of persons at a price and on terms and
conditions the same as those on which such Control Sellers have agreed to sell their shares, other
than terms and conditions relating to the performance or non-performance of services. For the
purposes of the preceding sentence, an affiliate of a Control Seller is a person who controls,
which is controlled by, or which is under common control with, the Control Seller. Grantee agrees
to honor any obligations Grantee may have as a Non-Control Seller.

     15. Adjustment Upon Changes in Capitalization. If any change is made in the Common Stock
subject to the Grant, without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), then the number and class of shares relating to the SOSAR in effect
prior to such change shall be proportionately adjusted by the Administrator to reflect any increase
or decrease in the number of issued shares of Common Stock or change in the Fair Market Value of
such Common Stock resulting from such transaction; provided, however, that any fractional shares
resulting from the adjustment may be eliminated by a cash payment. The Administrator shall make
such adjustments in a manner that is intended to provide an appropriate adjustment that neither
increases nor decreases the value of such Award as in effect immediately prior to such corporate
change, and its determination shall be final, binding and conclusive. The conversion of any
securities of the Company that are by their terms convertible shall not be treated as a transaction
“without receipt of consideration” by the Company. The Administrator’s adjustment shall be
effective, final, binding and conclusive for all purposes of this Agreement.

     16. Miscellaneous Terms.

          (a) Notices. Any notice necessary under this Agreement shall be addressed to the
Company in care of its Manager of Compensation, with a copy to the Company’s General Counsel, at
the principal executive office of the Company at 10401 NE 8th Street, Suite 500, Bellevue, WA 98004
and to the Grantee at the address appearing in the records of the Company for the Grantee or to
either party at such other address as either party hereto may hereafter designate in writing to the
other. All notices shall be deemed to have been given or delivered upon: (a) personal delivery;
(b) five days after deposit in the United States mail by certified or registered mail (return
receipt requested); (c) two business day after deposit with any return receipt express courier
(prepaid); or (d) one business day after transmission by facsimile.

          (b) Headings. The headings of sections and subsections are included solely for
convenience of reference and shall not affect the meaning of the provisions of this Agreement.

          (c) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.

          (d) Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto with regard to the subject matter hereof. It supersedes all other agreements,
representations or understandings (whether oral or written and whether express or implied) that
relate to the subject matter hereof.

          (e) Interpretation. Any dispute regarding the interpretation of this Agreement shall
be submitted by Grantee or the Company to the Administrator for review. The resolution of such a
dispute by the Administrator shall be final and binding on the Company and Grantee.

          (f) Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement
shall be binding upon Grantee and Grantee’s heirs, executors, administrators, legal
representatives, successors and assigns.

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          (g) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect to such state’s conflict of law
principles. If any provision of this Agreement is determined by a court of law to be illegal or
unenforceable, then such provision will be enforced to the maximum extent possible and the other
provisions will remain fully effective and enforceable.

     17. Amendment. The terms of this Agreement may not be altered or amended in any manner that
would impair the rights of the Grantee hereunder except by a written instrument signed by the
Company and the Grantee. Notwithstanding the foregoing, if any provision of the Agreement
contravenes Section 409A of the Code, the Company may reform the Agreement or any provision hereof
to maintain to the maximum extent practicable the original intent of the provision without
violating the provisions of Section 409A.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized representative and Grantee has executed this Agreement, on the dates indicated opposite
their respective signatures, effective as of the Date of Grant.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	EDDIE BAUER HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

McNeil S. Fiske, Jr., Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	GRANTEE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	NAME, in his/ her individual capacity	 	 

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EXHIBIT A

FORM OF STOCK ONLY STOCK APPRECIATION RIGHT EXERCISE NOTICE AND REPRESENTATIONS

Date:                                                             

SOSAR EXERCISE NOTICE AND REPRESENTATIONS

Eddie Bauer Holdings, Inc.

10401 NE 8th Street

Bellevue, WA 98004

Attention: General Counsel

Ladies and Gentlemen:

     1. Stock Only Stock Appreciation Right. I was granted a Stock Only Stock Appreciation
Right (the “SOSAR”) to receive shares of the common stock (the “Shares”) of Eddie Bauer Holdings,
Inc., a Delaware corporation (the “Company”), pursuant to the terms of my individual Stock Only
Stock Appreciation Right Agreement (the “Stock Only Stock Appreciation Right Agreement”) as
follows:

          Date of SOSAR Grant:                                                     
        

          Number of SOSARs:                                                     
        

     2. Exercise of SOSAR. I hereby elect to exercise the following number of the above
identified SOSARs, all of which are vested in accordance with the Stock Only Stock Appreciation
Right Agreement, to receive shares:

	 	 	 	 	 
	Total Shares Received:
	 	 	 	 
	 

	 	 

	 	 

     3. Tax Withholding. I authorize payroll withholding and otherwise will make adequate
provision for the federal, state, local and foreign tax withholding obligations of the Company, if
any, in connection with the SOSAR.

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     4. Grantee Information.

My address is:

      

      

Account Information:

Bank or Broker’s Name: ______________________________________

Name of My Account: ________________________________________

My Account Number: ________________________________________

Routing Information: _________________________________________

Contact Name at bank or brokerage and contact information: __________

      

My Social Security Number is:

      

     5. Binding Effect. I agree that the Shares are being acquired in accordance with and
subject to the terms, provisions and conditions of the Stock Only Stock Appreciation Right
Agreement set forth therein, to all of which I hereby expressly assent. This Agreement shall inure
to the benefit of and be binding upon my heirs, executors, administrators, successors and assigns.

     6. Transfer. I understand and acknowledge that the Shares have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), and that consequently the
Shares must be held indefinitely unless they are subsequently registered under the Securities Act,
an exemption from such registration is available, or they are sold in accordance with Rule 144
under the Securities Act. I further understand and acknowledge that the Company is under no
obligation to register the Shares. I understand that the certificate or certificates evidencing
the Shares will be imprinted with legends which prohibit the transfer of the Shares unless they are
registered or such registration is not required in the opinion of legal counsel satisfactory to the
Company. I am aware that Rule 144 under the Securities Act, which permits limited public resale of
securities acquired in a nonpublic offering, is not currently available with respect to the Shares
and, in any event, is available only if certain conditions are satisfied. I understand that any
sale of the Shares that might be made in reliance upon Rule 144 may only be made in limited amounts
in accordance with the terms and conditions of such rule and that a copy of Rule 144 will be
delivered to me upon request.

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     I understand that I am purchasing the Shares pursuant to the terms of my Stock Only Stock
Appreciation Right Agreement, copies of which I have received and carefully read and understand.

	 	 	 	 	 
	 

	 	Very truly yours,	 	 
	 
	 	 	 	 
	 

	 	 

(Signature)
	 	 

[Acknowledgement on next page]

Receipt of the above is hereby acknowledged.

Eddie Bauer Holdings, Inc.

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 

	 	 

- 3 -exv10w1

 

Exhibit 10.1

PIXELWORKS, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

     This Agreement (the “Agreement”) is made and entered into effective as of March 31, 2008 (the
“Effective Date”), by and between Bruce Walicek (the “Executive”) and Pixelworks, Inc., an Oregon
corporation (the “Company”).

     Executive agreed to serve as Acting CEO of the Company from January 1, 2008. A change in
circumstances makes it appropriate to retain Executive as CEO on an ongoing basis, recognize his
term in office as that of CEO retroactive to January 1, 2008, and to establish an executive
employment agreement with him in connection with his initial employment as CEO.

AGREEMENT

     In consideration of the mutual covenants herein contained, the parties agree as follows:

     1. Employment. The Company employs Executive as Chief Executive Officer, retroactive
to January 1, 2008.

          (a) Compensation and Options. Company employs Executive at the base salary defined in
Exhibit A, with the bonus plan defined in Exhibit A, and with the option award defined in Exhibit
A.

          (b) At Will. Executive acknowledge that the Executive’s employment is and shall
continue to be at-will, as defined under applicable law. Company or Executive may terminate this
Agreement by notice pursuant to Section 3(b) hereof. If the Executive’s employment terminates for
any reason, the Executive shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be established under the
Company’s then existing employee benefit plans or policies at the time of termination, subject to
Section 14(b) hereof. 

          (c) Duties. Executive shall perform such officer level duties and have such officer
level authority and responsibility as is usual and customary for a Chief Executive Officer, plus
any additional officer level duties as may reasonably be assigned from time to time by the Board,
including but not limited to providing services as an officer and/or as a member of the boards of
directors to one or more of the Company’s subsidiaries or affiliates. Executive shall perform the
duties and carry out the responsibilities assigned to Executive, to the best of his ability, in a
trustworthy, businesslike and efficient manner for the purpose of advancing the business of the
Company and shall comply with the Company’s policies and procedures, as generally in effect from
time to time, in all material respects. Except as otherwise approved by

PAGE 1
— Employment Agreement

 

 

the Board in writing, Executive shall devote substantially all of his business time to the
performance of his duties under this Agreement.

     2. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:

          (a) Cause. “Cause” shall mean Executive engaged in any one or more of the following:
(i) a material act of dishonesty, fraud, misconduct , or willful violation of any material law,
ethical rule or fiduciary duty that is in connection with Executive’s responsibilities as an
Executive of the Company; (ii) acts constituting a felony or moral turpitude 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 to perform Executive’s duties as an employee of the
Company and the failure to effect such cure within 30 days after written notice of such violation
or breach is given to Executive; or (iv) the willful violation of any material Company policy or
procedure, or breach of any material provision of this Agreement or other agreement with the
Company, and if such violation or breach is susceptible of cure, the failure to effect such cure
within 30 days after written notice of such violation or breach is given to Executive.

          (b) Change of Control. “Change of Control” shall mean the occurrence of any of the
following events, if the occurrence takes place before the Transition End Date:

               (i) the approval by shareholders of the Company of a merger or consolidation of the Company
with any other corporation, or of a subsidiary of the Company with any other corporation, other
than a merger or consolidation which would result in effective voting control over the voting
securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity) more
than fifty percent (50%) of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger or consolidation;

               (ii) the approval by the shareholders of the Company of a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or substantially all of
the Company’s assets;

               (iii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company representing 50% or more of the
total voting power represented by the Company’s then outstanding voting securities; or

               (iv) a change in the composition of the Board, as a result of which fewer than a majority of
the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of those directors who are either
identified in (A) or identified as their successors elected under this clause (B).

PAGE 2
— Employment Agreement

 

 

          (c) Good Reason Event. A “Good Reason Event” shall be any of the following: (i)
without the Executive’s express written consent, a material diminution of the Executive’s duties,
authority or responsibilities; (ii) without the Executive’s express written consent, a reduction by
the Company of the Executive’s base salary; (iii) without the Executive’s express written consent,
the imposition of a requirement that Executive’s primary place of employment be at a facility or a
location more than fifty (50) miles from the Executive’s current work location, provided that such
requirement to relocate materially increases the Executive’s commute; or (iv) the failure of the
Company to obtain the assumption of this Agreement by any successors contemplated in Section 7
below.

          (d) Involuntary Termination. “Involuntary Termination” shall mean (i) any termination
of the Executive’s employment by the Company which is not effected for valid Cause; or (ii) any
termination by the Executive for Good Reason.

          (e) Termination Date. “Termination Date” shall mean the effective date of any notice
of termination delivered by one party to the other hereunder.

     3. Term and Termination of Agreement.

          (a) Term. Mr. Walicek’s term in office, and measurement of any seniority-dependent
benefits the Company may from time to time make available, shall be understood to measure from
January 1, 2008. This Agreement shall continue until terminated by either party as provided under
this section 3.

          (b) Notice of Termination; Effective Date.

               (i) By Company. Company may terminate Executive’s employment without Cause on 30
days’ notice or, at its election, may pay Executive in lieu of any required notice. Company may
terminate Executive’s employment immediately for Cause. If the Company claims Cause, the Company’s
notice shall set forth the basis for the “Cause.”

               (ii) By Executive With Good Reason. Executive may terminate his employment for Good
Reason by providing written Notice of Good Reason Termination within thirty days after the initial
existence of the Good Reason Event. His Notice of Good Reason Termination must (x) identify the
Good Reason Event and the date of its initial existence; (y) invite the Company to remedy the Good
Reason Event, and (z) state the Executive’s intention to terminate his employment for Good Reason
as of a Termination Date no more than ten days following the expiration of the Company’s cure
period described in the next sentence. Before a Termination for Good Reason shall be effective,
the Company shall have a period of thirty days from the date it receives Executive’s Notice of Good
Reason Termination to remedy the conditions claimed to give rise to a Good Reason Event. If the
Company fails to remedy the conditions claimed to give rise to a Good Reason Event by the end of
the thirty day cure period. Executive’s Termination for Good Reason will be effective on the
Termination Date stated in the Notice of Good Reason Termination..

               (iii) By Executive, Other than for Good Reason. Executive may voluntarily terminate
Executive’s employment without Good Reason upon notice of termination

PAGE 3
— Employment Agreement

 

 

to Company, which notice identifies the Termination Date. A voluntary termination will be
effective on the identified Termination Date.

     4. Termination Benefits on Involuntary Termination. On the Termination Date, provided
Executive’s employment has ended as a result of an Involuntary Termination and subject to the
condition that the Executive signs the release of claims pursuant to Section 8 hereof, and subject
to the expiration of any waiver or revocation period applicable to the release of claims without
waiver or revocation of the release of claims, Executive shall be entitled to the following
Involuntary Termination benefits:

          (a) Option Acceleration if on Change of Control. For purposes of this paragraph,
“vested” means with respect to a stock option, that it has become exercisable, and with respect to
Restricted Stock Units granted subject to a right of repurchase in the Company or its successor,
that the right of repurchase has lapsed. If the Termination Date is within a Control Change
Window, then half of all Restricted Stock Units or Options that otherwise would not be vested as of
the Termination Date, and which were purchased by or granted to Executive prior to the Change of
Control, will vest immediately prior to the later of the Change of Control or the Termination Date.
The particular half will be the half that, in the ordinary course absent any termination of
Executive’s employment, would first have become vested. A “Control Change Window” is defined as the
period between (x) the earlier of: (i) a Change of Control itself or (ii) the signing of a
definitive agreement for a Change of Control that leads to the Change of Control contemplated in
that agreement within twelve months, and (y) twelve (12) months after the Change of Control. If
the vesting happens under this paragraph as of a Change of Control that occurs after the
Termination Date, then (i) Executive shall have three months days from the Change of Control to
exercise newly-vested options, and (ii) if Restricted Stock Units have already been repurchased
that, under this paragraph, would vest, Executive shall have the right, during that same three
month window, to buy back the Restricted Stock Units that would have vested, at the same price the
Company purchased them from Executive.

          (b) Severance Pay. Company will pay (12) months of base salary, a pro rated portion
of target bonus (pro rated according to the portion of the then-current year that has already
passed), and any bonus earned with respect to the prior year that has not yet then been paid, in a
lump sum on or before the first regularly scheduled pay date following the termination date and
Executive’s satisfaction of the Release of Claims requirement stated in Section 8 below. All
payments to Executive shall be reduced by such amounts as are required to be withheld by law.

          (c) COBRA Benefits. Provided Executive is eligible and properly elects coverage,
Company will pay all COBRA premiums to extend Executive’s group health insurance coverage for
twelve months following the Termination Date.

     5. Accrued Wages and Vacation, Expenses always payable. Without regard to the reason
for, or the timing of, Executive’s termination of employment: (i) the Company shall pay the
Executive any unpaid base salary due for periods prior to the Termination Date; (ii) the Company
shall pay the Executive all of the Executive’s accrued and unused vacation through the Termination
Date; and (iii) following submission of proper expense reports by the Executive, the Company shall
reimburse the Executive for all expenses reasonably and necessarily incurred by

PAGE 4
— Employment Agreement

 

 

the Executive in connection with the business of the Company prior to the Termination Date.
These payments shall be made promptly following termination and within the period of time mandated
by law.

     6. Limitation on Payments. In the event that the severance and other benefits
provided for in this Agreement or otherwise payable to the Executive (i) constitute “parachute
payments” within the meaning of Section 280G of the United States Internal Revenue Code (the
“Code”), and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), then Executive’s benefits under this Agreement shall be either

          (a) delivered in full, or

          (b) delivered as to such lesser extent which would result in no portion of such benefits being
subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and
local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis,
of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may
be taxable under Section 4999 of the Code.

     Any determination required under this section shall be made in writing by the Company’s
independent public accountants (the “Accountants”), whose determination shall be conclusive and
binding upon the Executive and the Company for all purposes. For purposes of making the
calculations required by this section, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company and the Executive
shall furnish to the Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations contemplated by this section.

     7. Successors.

          (a) Company’s Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets shall assume the Company’s obligations
under this Agreement and agree expressly to perform the Company’s obligations under this Agreement
in the same manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this Agreement, the term
“Company” shall include any successor to the Company’s business and/or assets which executes and
delivers the assumption agreement described in this subsection (a) or which becomes bound by the
terms of this Agreement by operation of law.

          (b) Executive’s Successors. Without the written consent of the Company, Executive may
not assign or transfer this Agreement or any right or obligation under this Agreement to any other
person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of
Executive hereunder shall inure to the benefit of, and be enforceable

PAGE 5
— Employment Agreement

 

 

by, Executive’s personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.

     8. Execution of Release Agreement upon Termination. As a condition of receiving the
benefits under Section 4 of this Agreement, the Executive shall within twenty five days after the
Executive’s Termination Date, , execute and not revoke a general release of claims against the
Company in form satisfactory to the Company. 

     9. Litigation/Audit Cooperation. Following the termination of Executive’s employment
for any reason, Executive shall reasonably cooperate with the Company or any of its subsidiaries or
affiliates (the “Company Group”) in connection with (a) any internal or governmental investigation
or administrative, regulatory, arbitral or judicial proceeding involving any member of the Company
Group with respect to matters relating to Executive’s employment with or service as a member of the
board of directors of any member of the Company Group other than a third party proceeding in which
Executive is a named party and Executive and the Company (or the applicable member(s) of the
Company Group) have not entered into a mutually acceptable joint defense agreement (collectively,
“Litigation”) or (b) for a two year period following the Termination Date, any audit of the
financial statements of any member of the Company Group with respect to the period of time when
Executive was employed by any member of the Company Group (“Audit”). Executive acknowledges that
such cooperation may include, but shall not be limited to, Executive making himself available to
the Company or any other member of the Company Group (or their respective attorneys or auditors)
upon reasonable notice for: (i) interviews, factual investigations, and providing declarations or
affidavits that provide truthful information in connection with any Litigation or Audit; (ii)
appearing at the request of the Company or any member of the Company Group to give testimony
without requiring service of a subpoena or other legal process; (iii) volunteering to the Company
or any member of the Company Group pertinent information related to any Litigation or Audit; (iv)
providing information and legal representations to the auditors of the Company or any member or any
member of the Company Group, in a form and within a timeframe requested by the Board, with respect
to the Company’s or any member of the Company Group’s opening balance sheet valuation of
intangibles and financial statements for the period in which Executive was employed by the Company
or any member of the Company Group; and (v) turning over to the Company or any member of the
Company Group any documents relevant to any Litigation or Audit that are or may come into
Executive’s possession. The Company shall reimburse Executive for reasonable travel expenses
incurred in connection with providing the services under this Section 9, including lodging and
meals, upon Executive’s submission of receipts. The Company shall also compensate Executive for
each hour that Executive provides cooperation in connection with this Section 9 at an hourly rate
equal to Executive’s base salary as of the Termination Date divided by 2080. Executive shall
submit invoices for any month in which Executive performs services pursuant to this Section 9 that
details the amount of time and a description of the services rendered for each separate day that
Executive performed such services. The Company shall reimburse Executive for such services
rendered within fifteen (15) days of receiving an invoice from Executive.

     10. 409A Savings Clause. If Executive is a “specified employee” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended by the rules and regulations issued
thereunder by the Department of Treasury and the Internal Revenue Service (“409A”) as

PAGE 6
— Employment Agreement

 

 

of the date of the Executive’s “separation from service” within the meaning of Section 409A,
Executive shall not be entitled to any payment or benefit pursuant to Section 4 until the earlier
of (i) the date which is six (6) months after his separation from service for any reason other than
death, or (ii) the date of Executive’s death. The provisions of this Section 10 shall only apply
if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to
Section 409A. Any amounts otherwise payable to Executive upon or in the six (6) month period
following the Executive’s separation from service that are not so paid by reason of this Section 10
shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days)
after the date that is six (6) months after Executive’s separation from service (or, if earlier, as
soon as practicable, and in all events within thirty (30) days, after the date of Executive’s
death). To the extent that any benefits pursuant to Section 4 or reimbursements pursuant to
Section 5 are taxable to the Executive, any reimbursement payment due to the Executive pursuant to
any such provision shall be paid to the Executive on or before the last day of the Executive’s
taxable year following the taxable year in which the related expense was incurred. The benefits
and reimbursements pursuant to Section 4 are not subject to liquidation or exchange for another
benefit and the amount of such benefits and reimbursements that the Executive receives in one
taxable year shall not affect the amount of such benefits or reimbursements that the Executive
receives in any other taxable year.

     11. 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.

     12. Arbitration.

          (a) 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 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 arbitrator may grant injunctions or other relief in
such dispute or controversy. 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.

          (b) The arbitrator(s) shall apply Oregon law to the merits of any dispute or claim, without
reference to conflicts of law rules. The arbitration proceedings shall be governed by federal
arbitration law and by the Rules, without reference to state arbitration law. Executive hereby
consents to the personal jurisdiction of the state and federal courts located in Oregon for any
action or proceeding arising from or relating to this Agreement or relating to any arbitration in
which the parties are participants.

PAGE 7
— Employment Agreement

 

 

          (c) Executive understands that nothing in this Section modifies Executive’s at-will employment
status. Either Executive or the Company can terminate the employment relationship at any time,
with or without Cause.

          (d) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE
UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS
AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO BINDING ARBITRATION, CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE
RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:

               (i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS
AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED;
NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL
MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC
ADVANTAGE; AND DEFAMATION.

               (ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL CONSTITUTION OR
STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS
ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT
OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND THE
CALIFORNIA LABOR CODE (except for claims for underlying workers’ compensation benefits); and

               (iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT
OR EMPLOYMENT DISCRIMINATION.

     13. Proprietary Information and Inventions Assignment Agreement. Executive shall
execute and comply with the terms of the Company’s standard Proprietary Information and Inventions
Assignment Agreement.

     14. Miscellaneous Provisions.

          (a) Effect of Any Statutory Benefits. If any severance benefits are required to be
paid to the Executive upon termination of employment with the Company as a result of any
requirement of law or any governmental entity in any applicable jurisdiction, the aggregate amount
payable pursuant to Section 4 hereof shall be reduced by such amount.

          (b) Effect of Standard Company Policy. To the extent that any severance benefits are
required to be paid to the Executive upon termination of employment with the

PAGE 8
— Employment Agreement

 

 

Company as a result of any standard Company policy, Executive shall be entitled to the greater
of benefits available under such policy or under this Agreement, but not both.

          (c) Effect of Standing Severance Agreement. To the extent that any cash severance
benefits are provided for the Executive under any agreement between Executive and the Company,
those benefits will be paid in addition to the retention benefits payable hereunder.

          (d) No Duty to Mitigate. The Executive shall not be required to mitigate the amount
of any payment contemplated by this Agreement, nor shall any such payment be reduced by any
earnings that the Executive may receive from any other source.

          (e) Waiver. No provision of this Agreement may be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Executive
and by an authorized officer of the Company (other than the Executive). No waiver by either party
of any breach of, or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the same condition or
provision at another time.

          (f) Integration. This Agreement and any agreements referenced herein represent the
entire agreement and understanding between the parties as to the subject matter herein and
collectively supersede all prior or contemporaneous agreements, whether written or oral, with
respect to the same subject matter, provided that, for clarification purposes, this Agreement shall
not affect any agreements between the Company and Executive regarding intellectual property matters
or confidential information of the Company.

          (g) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules,
of the State of Oregon.

          (h) 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,
which shall remain in full force and effect.

          (i) Employment Taxes. All payments made pursuant to this Agreement shall be subject
to withholding of applicable income and employment taxes.

          (j) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but both of which together will constitute one and the same instrument.

     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.	 	 	 	Executive
	 
	 	 	 	 	 	 
	By:

	 	/s/ Allen Alley
	 	 	 	/s/ Bruce Walicek
	 

	 	 
	 	 	 	 
	 

	 	Allen Alley, Chair
	 	 	 	Bruce Walicek

PAGE 9
— Employment Agreement

 

 

EXHIBIT A

Executive: Bruce Walicek

	 	 	 
	Base Salary:

	 	$325,000 annually, payable on standard
payroll schedules from March 31, 2008 on.
	 
	 	 
	2008 Bonus Plan:

	 	Target bonus: 100% of salary. 

Bonus cap: 125% of salary. 

The amount of the bonus paid, if any,
shall be determined by the Board in its
discretion based on the criteria and
performance objectives set forth in the
company’s annual executive bonus plan.
The 2008 bonus shall be payable no later
than March 15, 2009.
	 
	 	 
	Initial Stock Option Award

	 	Executive will have a total option
package in connection with his initial
employment of 600,000 shares (including
the options for 95,000 share originally
awarded), to vest according to the
Company’s standard new hire vesting
schedule as applicable to executives,
based on the initial employment date (and
for vesting purposes, as if awarded on)
January 1, 2008, and subject to the
following additional modifications:
	 
	 	 
	 

	 	1) The vesting for the original 95,000
options granted will not change from the
original award made effective January 2,
2008, and this agreement does not change
the terms of that award; the vesting of
those options will be credited against
the standard new hire schedule otherwise
applicable for the first year of vesting.
	 
	 	 
	 

	 	2) Pricing for the additional 505,000
options to be awarded to reach the
intended 600,000 here required, will be
determined under the terms of the plan
for awards made as of the time and date
of the compensation committee action
approving this Agreement. The additional
options will otherwise be subject to the
standard terms and conditions of options
issued under the Company’s applicable
plans. All share references are subject
to customary adjustments for stock splits
and other events as provided in the
applicable plan under which the options
are granted.

	 	 	 	 	 	 	 
	Pixelworks, Inc.	 	 	 	Executive
	 
	 	 	 	 	 	 
	By:

	 	/s/ Allen Alley
	 	 	 	/s/ Bruce Walicek
	 

	 	 
	 	 	 	 
	 

	 	Allen Alley, Chair
	 	 	 	Bruce Walicek

PAGE 10
— Employment Agreement

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