Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(c)
Change of Control and Severance Agreement
EffectiveJanuary 28, 2022 , the Board of Directors ofPixelworks, Inc. (the "Company") approved and the Company entered into a Change of Control and Severance Agreement (the "Severance Agreement") withHaley F. Aman , the Company's Chief Financial Officer. The Severance Agreement provides that in the event an "involuntary termination" occurs within six months prior to or within twenty-four months following a "change of control" (as such terms are defined in the Severance Agreement),Ms. Aman will be entitled to the following benefits: (i) a lump sum cash payment equal to twelve months of her base salary and the then-current year's target bonus as in effect as of the date of such involuntary termination or, if greater, as in effect immediately prior to the change of control; (ii) the same level of Company-paid health coverage and benefits in effect on the day preceding the termination ofMs. Aman until the earlier of when she (and any eligible dependents) is no longer eligible to receive continuation coverage pursuant to COBRA or twelve months from the date of termination; and (iii), unless the involuntary termination occurred between twelve and twenty-four months following a change in control, full accelerated vesting of all outstanding equity awards granted to her by the Company prior to the change of control. In the event of an involuntary termination between twelve and twenty-four months following a change in control,Ms. Aman's vesting acceleration benefit will be limited to twelve months. In the event of an involuntary termination that occurs within six months prior to a change of control, any acceleration of vesting of options and shares triggered by the change of control will occur immediately prior to the change of control andMs. Aman will have a minimum of six months following the change of control to exercise the options (or longer if a longer period would otherwise be applicable). In the event of an involuntary termination apart from a change of control,Ms. Aman would receive the same cash severance and health benefits described above, but will receive only twelve months accelerated vesting. For purposes of accelerated vesting, awards with annual vesting periods which straddle the acceleration period are treated as vesting in equal monthly amounts instead of annually. In the event of termination apart from a Change of Control, the benefits would be calculated as if the date of the change of control were the same as the date of the involuntary termination.
The foregoing acceleration terms will not apply to any equity subject to performance-based vesting.
In the event the severance benefits under the Severance Agreement would be treated as excess parachute payments subject to excise taxes, the benefits would either be reduced to a level that would not trigger the excise taxes or would be paid in full, whichever results inMs. Aman retaining a greater benefit on an after-tax basis.
A copy of the Severance Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description Change of Control and Severance Agreement by and betweenPixelworks, Inc. 10.1 andHaley F. Aman , datedJanuary 28, 2022 . 104 Cover Page Interactive Data File (embedded within
the Inline XBRL document).
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