Severance Policy for Principal Executive Officers - Synaptics Inc.
SYNAPTICS INCORPORATED (THE "COMPANY")
SEVERANCE POLICY FOR PRINCIPAL EXECUTIVE OFFICERS
Dated April 22, 2003
1. PURPOSE
The purpose of this Severance Policy is to provide a fair framework in
the event of the termination of employment of one or more key executive officers
(each an "Executive") of the Company.
2. COVERED PRINCIPAL EXECUTIVE OFFICERS
This Policy shall be applicable to the Chief Executive Officer and the
President. It shall also apply to each Executive Vice President, each Senior
Vice President, and each other executive officer, if any, as shall be designated
and notified in writing by the Company upon nomination by the Chief Executive
Officer and approval of the Board of Directors or the Compensation Committee of
the Board of Directors.
3. DEFINITIONS
(a) DISABILITY. Incapacity due to physical or mental illness or
injury that causes Executive to be absent from Executive's full-time duties for
six consecutive months or more.
(b) GOOD CAUSE. "Good Cause," as it applies to the determination
of the Company to terminate the employment of an Executive, shall mean any one
or more of the following: (A) Executive's willful, material, and irreparable
breach of his or her duties to the Company; (B) Executive's gross negligence in
the performance or intentional nonperformance (continuing for 30 days after
receipt of written notice of need to cure) of any of Executive's material duties
and responsibilities; (C) Executive's willful dishonesty, fraud, or misconduct
with respect to the business or affairs of the Company, which materially and
adversely affects the operations or reputation of the Company; (D) Executive's
indictment for, conviction of, or guilty plea to a felony crime involving
dishonesty or moral turpitude whether or not relating to the Company; or (E) a
confirmed positive illegal drug test result.
(c) GOOD REASON. "Good Reason," as it applies to the determination
by an Executive to terminate his or her employment shall mean the occurrence of
any of the following events without Executive's prior written approval: (1)
Executive is demoted by means of a reduction in authority or responsibilities or
Executive is required to render his or her primary employment services from a
location more than 50 miles from the Company's headquarters as of the time
Executive began his or her employment with the Company; (2) Executive's annual
base salary for a fiscal year is reduced to a level that is less than 90% of the
base salary paid to Executive during the prior fiscal year; or (3) a change is
made in Executive's bonus (including a reduction in any Targeted Bonus) to a
level that is less than 90% of the Targeted Bonus for Executive during the prior
fiscal year.
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4. RESULT OF TERMINATION
(a) DEATH. Upon Executive's death, the Company shall, for a period
of one year following such death in the case of the CEO and for a period of six
months in the case of any other principal executive officer covered by this
Policy, pay to the estate of Executive an amount equal to Executive's base
salary and Targeted Bonus for the fiscal year during which death occurs and
continue to pay all premiums for coverage for Executive's dependent family
members under all health, hospitalization, disability, dental, life, and other
insurance plans that the Company maintained at the time of Executive's death.
(b) DISABILITY. In the event Executive's employment is terminated
as a result of Executive's disability, Executive shall receive from the Company,
in a lump-sum payment due within ten days of the effective date of such
termination, an amount equal to Executive's base salary and Targeted Bonus for
the fiscal year during which such termination occurs in the case of the CEO and
an amount equal to fifty percent of Executive's base salary and Targeted Bonus
for the fiscal year during which such termination occurs in the case of any
other principal executive officer covered by this Policy. These disability
benefits are independent of any disability insurance benefits that Executive
receives.
(c) TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE OR BY EXECUTIVE
WITH GOOD REASON. The following provisions shall apply should the Company
terminate Executive's employment without Good Cause or should Executive
terminate Executive's employment with Good Reason:
(i) SALARY AND BONUS. The Company shall pay to
Executive for one year following the event that triggered termination in the
case of the CEO and six months following the event that triggered termination in
the case of any other principal executive officer covered by this Policy, on
such dates as would otherwise be paid by the Company, a pro rata amount based on
Executive's base salary and Targeted Bonus for the fiscal year during which such
termination occurs.
(ii) WELFARE BENEFIT PLANS. The Company will
continue, for one year following the event that triggered termination in the
case of the CEO and for six months following the event that triggered
termination in the case of each other principal executive officer covered by
this Policy, all benefits for Executive and Executive's family under all welfare
benefits plans, practices, policies, and programs provided by the Company and
its subsidiaries (including medical, prescription, dental, disability, employee
life, group life, accidental death, and travel accident insurance plans,
practices, policies, and programs) in effect for Executive and Executive's
family as of the date of the triggering event or use its best efforts to provide
comparable coverage at no cost to Executive by way of making the family medical
insurance provision payments contemplated by COBRA or otherwise.
(iii) STOCK OPTIONS. All unvested options held by
Executive as of the date of the triggering event shall continue to vest for a
period of one year after such triggering event in the case of the CEO and six
months after such triggering event in the case of any other principal executive
officer covered by this Policy. The above notwithstanding, this provision
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shall not alter (1) the exercise period of any vested options as of the
triggering event and (2) any specific accelerated vesting provisions included in
Executive's stock option grants.
(iv) ACCRUED BENEFITS. Executive shall be
entitled to receive all other accrued but unpaid benefits relating to vacations
and other executive perquisites through Executive's last day of employment,
except that Executive shall not continue to accrue vacation benefits or other
executive perquisites after the event that triggered the termination through the
termination date.
5. MINIMUM EMPLOYMENT TERM
This Severance Policy shall not be applicable to any executive
officer until that officer has completed a minimum of one full year employment
with the Company.