Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Compensatory Arrangements of Certain Officers
Walicek Employment Agreement
On May 11, 2009, Pixelworks, Inc. (the "Company") entered into an amended and
restated employment agreement (the "Employment Agreement") with Mr. Bruce
Walicek, the Company's Chief Executive Officer, effective as of April 1, 2009.
Pursuant to the Employment Agreement, Mr. Walicek will continue to serve as the
Company's Chief Executive Officer and will receive an annual base salary of
$276,250, to be reviewed periodically by the Compensation Committee.
Additionally, Mr. Walicek will participate in the Company's 2009 Bonus Plan at a
target rate to be established by the Compensation Committee.
The Employment Agreement also provides for certain benefits in the event of
Mr. Walicek's Involuntary Termination, subject to his general release of claims.
An "Involuntary Termination" is defined as a termination by the Company without
"Cause" or by Mr. Walicek for a "Good Reason Event" (each as defined in the
Employment Agreement). A brief description of the material terms of the
Employment Agreement is provided below.
In the event of an Involuntary Termination, Mr. Walicek will be entitled to the
following benefits: (i) severance pay consisting of the higher of Mr. Walick's
annual base salary then in effect, or $325,000; (ii) severance pay consisting of
the higher of Mr. Walicek's actual bonus target for the then-current year or
$325,000; and (iii) payment by the Company of Mr. Walicek's COBRA health
insurance premiums for twelve months.
In addition, in the event of an Involuntary Termination of Mr. Walicek's
employment that occurs within 12 months of the earlier of a Change of Control or
the signing of a Change of Control Agreement that leads to a Change of Control
(each as defined in the Employment Agreement) within 12 months of the signing,
Mr. Walicek will receive acceleration of vesting of 50% of his options and
restricted stock units that are outstanding and unvested as of the employment
termination date.
Moore Change of Control Severance Agreement
On May 11, 2009, the Company entered into an amended and restated Change of
Control Severance Agreement (the "Severance Agreement"), with Mr. Steven Moore,
the Company's Chief Financial Officer. The Severance Agreement provides for
certain benefits in the event of Mr. Moore's Involuntary Termination, subject to
his general release of claims. An "Involuntary Termination" is defined as a
termination by the Company without "Cause" or by Mr. Moore for a "Good Reason
Event" (each as defined in the Severance Agreement). A brief description of the
material terms of the Severance Agreement is provided below.
In the event of an Involuntary Termination (other than at a time that is more
than twelve months but less than twenty-four months following a "Change of
Control" (as defined in the Severance Agreement)), Mr. Moore will be entitled to
the following benefits: (i) a lump sum cash payment equal to twelve months of
base salary and the then current year's target bonus in effect as of the date of
such Involuntary Termination or, if greater and such termination is within
12 months of a Change of Control, as in effect immediately prior to a Change of
Control; (ii) accelerated vesting of stock options granted by the Company to
Mr. Moore prior to the Involuntary Termination or Change of Control (as
applicable) that are then-outstanding and would have otherwise vested during the
twelve months following the termination; and (iii) the same level of
Company-paid health coverage and benefits at the levels in effect on the day
preceding the termination for Mr. Moore (and any eligible dependents) until the
earlier of when Mr. Moore (and any eligible dependents) is no longer eligible to
receive continuation coverage pursuant to COBRA, or twelve months from the date
of termination.
The Severance Agreement also provides that in the event of an Involuntary
Termination during the period between twelve and twenty-four months following a
Change of Control (the "Second Year"), Mr. Moore will be entitled to the
following benefits: (i) a lump sum cash payment equal to Mr. Moore's per month
base salary in effect at the time of termination, or if greater, at the time of
change in control, multiplied by the number of whole months remaining in the
Second Year after the termination occurs; (ii) a lump sum cash payment equal to
one-twelfth of the then current year's target bonus in effect at the time of
termination, or if greater, at the time of change in control, multiplied by the
number of whole months remaining in the Second Year after the termination
occurs; (iii)
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accelerated vesting of all outstanding stock options granted by the Company to
Mr. Moore prior to the Change of Control that would have otherwise vested during
the period after termination equal to the remaining number of whole months in
the Second Year; and (iv) the same level of Company-paid health coverage and
benefits at the levels in effect on the day preceding the termination for Mr.
Moore (and any eligible dependents) for the number of whole months remaining in
the Second Year.
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