Exhibit 10.29
-------------
EMPLOYMENT AGREEMENT
AGREEMENT, made as of February 23, 2001, by and between Adaptive
Broadband Corporation (the "Company"), a Delaware corporation, and Xxxxxx X.
Xxxxxxx ("Executive").
RECITALS
--------
The Company desires to retain the employment of Executive to serve as the
President and Chief Executive Officer of the Company. In order to induce
Executive to remain employed by the Company, the Company desires to provide
Executive with compensation and other benefits on the terms and conditions set
forth in this Agreement.
Executive is willing to accept such employment and perform services for
the Company, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
----------
1.1 The Company agrees to employ Executive as its President and Chief
Executive Officer. Executive shall report to the Board of Directors of the
Company (the "Board") and shall have the customary powers, responsibilities and
authorities of a President and Chief Executive Officer. Executive also agrees to
serve as a member of the Board.
1.2 Executive hereby agrees to devote substantially all of his full
working time and efforts to the performance of services, duties and
responsibilities in connection with his position as President and Chief
Executive Officer. Executive shall perform such duties and exercise such powers,
commensurate with his position, as the Board shall from time to time delegate to
him.
2. Term of Employment. Executive's term of employment under this
------------------
Agreement shall commence on the date of this Agreement, and Executive and the
Company agree and acknowledge that Executive's employment with the Company
constitutes "at-will" employment and that this Agreement may be terminated at
any time by a) the Company; provided, however, that any and all compensation and
benefits due the Executive as a result of such termination by the Company under
this Agreement, shall be then provided to the Executive by the Company or b)
Executive.
3. Compensation.
------------
3.1 The Company shall pay Executive a base salary ("Base Salary") at the
rate of $325,000 per annum for the fiscal year during which this Agreement is
adopted by the parties. Base Salary shall be adjusted at the discretion of the
Board but in no event shall Base Salary be reduced, and shall constitute "Base
Salary" hereunder. Base Salary shall be payable in accordance with the ordinary
payroll practice of the Company.
3.2 Annual Bonus. In addition to his Base Salary, the Company shall pay
------------
to Executive an annual cash bonus (the "Bonus") during the term of his
employment hereunder equal to a percentage of Executive's Base Salary (the
"Target Bonus"), provided, however, that with respect to the fiscal year 2001 of
the Company, Executive shall receive a Bonus equal to the sum of (a) $137,109
with respect to the first quarter of fiscal year 2001 (payable in the next
payroll after March 31, 2001), and (b) a target amount equal to seventy-five
percent (75%) of Base Salary, with the actual amount calculated in accordance
with the
terms of a specific incentive plan to be agreed upon by the Board and Executive,
with respect to the last three quarters of fiscal year 2001 (payable as soon as
practicable after the end of the fiscal year 2001). The Bonus for each
additional fiscal year of the Company will be based on performance targets as
may be established by the Board (or a committee thereof) pursuant to the
Company's annual incentive plan (payable as soon as practicable after the end of
each such additional fiscal year); provided, however, that Executive's Target
Bonus for each additional fiscal year of the Company will not be less than
seventy-five percent (75%) of Base Salary.
3.3 Compensation Plans and Programs. Executive shall be eligible to
-------------------------------
participate in any compensation plan or program maintained by the Company from
time to time in which other senior executives of the Company participate on
terms that are comparable to those applicable to such other senior executives.
4. Employee Benefits.
-----------------
4.1 Employee Benefit Programs, Plans and Practices. The Company shall
----------------------------------------------
provide Executive during the term of his employment hereunder with coverage
under all employee pension and welfare benefit programs, plans and practices
(commensurate with his position in the Company from time to time and to the
extent permitted under any employee benefit plan) in accordance with the terms
thereof, which the Company makes available to its senior executives.
4.2 Personal Time Off. Executive shall be entitled to paid personal
-----------------
time off in each calendar year, including sick leave, which shall be taken at
such times as are consistent with Executive's responsibilities hereunder.
5. Expenses. Executive is authorized to incur reasonable expenses in
--------
carrying out his duties and responsibilities under this Agreement, including,
without limitation, expenses for travel and similar items related to such duties
and responsibilities. The Company will reimburse Executive for all such expenses
upon presentation by Executive from time to time of appropriately itemized
(consistent with the Company's policy) accounts of such expenditures.
6. Termination of Employment
-------------------------
6.1 Termination by the Company Without Cause Or By Executive For Good
-----------------------------------------------------------------
Reason. (a) The Company may terminate Executive's employment at any time for
------
any reason. If Executive's employment is terminated by the Company without Cause
(as defined in Section 6.4(b) hereof) or by Executive for Good Reason (as
defined in Section 6.4(c) hereof), Executive shall receive such payments, if
any, under applicable plans or programs to which he is entitled pursuant to the
terms of such plans or programs. In addition, Executive shall be entitled to
receive the following:
(i) an amount equal to two (2) times the Executive's Base Salary at the
annual rate as of the date of the termination of Executive's employment (the
"Termination Date"), which amount shall not be less than $325,000 per annum
($650,000when multiplied two(2) times), payable over the two (2) year period
following the Termination Date in accordance with the normal payroll practices
of the Company;
(ii) a cash lump sum payment in respect of (x) accrued but unused
personal time off days (the "PTO Payment"), (y) compensation earned but not yet
paid (including any deferred Bonus payments) (the "Compensation Payment") and
(z) reasonable expenses incurred under Section 5 but not yet reimbursed (the
"Expense Payment");
(iii) an amount paid in lieu of continuation of employee benefits equal
to $553.85 per week, payable in accordance with the normal payroll practices of
the Company over the two (2) year salary continuation period in section
6.1(a)(i) above;
(iv) acceleration of the vesting of one hundred percent (100%) of the
unvested portion of
Executive's stock options;
(v) the right to exercise Executive's stock options for a period of two
years following the Termination Date; and
(vi) the Target Bonus in respect of the fiscal year in which his
termination occurs, prorated by a fraction, the numerator of which is the number
of days of the fiscal year until the Termination Date and the denominator of
which is 365, provided, however, that with respect to the fiscal year 2001 of
the Company, such Target Bonus shall be equal to the sum of $137,109, plus
$182,813 times the fraction, the numerator of which is the number of days from
April 1, 2001, until the Termination Date and the denominator of which is 274.
(b) The payments due to Executive pursuant to Section 6.1(a)(ii) above
PTO Payment, the Compensation Payment, and the Expense Payment shall be paid by
the Company to Executive within 10 days after the termination of Executive's
employment by check payable to the order of Executive or by wire transfer to an
account specified by Executive.
(c) The payments due to Executive pursuant to Sections 6.1(a)(i), (iii)
and (vi) above shall not be made, and the rights set forth in Sections
6.1(a)(iv) and (v) above shall not begin, unless and until the Company has
received from Executive an executed, effective General Release, dated on or
after the Termination Date, substantially as set forth in Exhibit A to this
Agreement. (Such General Release may be modified by the Company to reflect
certain state or local laws, statutes, codes or regulations which specifically
apply to Executive.)
6.2 Permanent Disability. If the Executive becomes totally and
--------------------
Permanently Disabled (as defined herein) for one hundred eighty (180)
consecutive days in any three hundred sixty-five (365) day period, the Company
or Executive may terminate Executive's employment by written notice thereof, and
Executive shall receive or commence receiving, as soon as practicable:
(a) amounts payable pursuant to the terms of a disability insurance
policy or similar arrangement, which the Company maintains during the term
hereof;
(b) the Target Bonus in respect of the fiscal year in which his
termination occurs, prorated by a fraction, the numerator of which is the number
of days of the fiscal year until termination and the denominator of which is
365, provided, however, that with respect to the fiscal year 2001 of the
Company, such Target Bonus shall be equal to the sum of $137,109, plus $182,813
times the fraction, the numerator of which is the number of days from April 1,
2001, until the Termination Date and the denominator of which is 274;
(c) the PTO Payment, the Compensation Payment. and the Expense Payment;
and
(d) such payments under applicable plans or programs to which he is
entitled pursuant to the terms of such plans or programs.
For purposes of this Section 6.2, "Permanent Disability" shall be defined as
(i) Executive's inability, by reason of physical or mental illness or other
cause, to substantially perform Executive' s duties, responsibility or
obligations hereunder or (ii) disability as that term is defined in any
disability insurance policy of the Company in effect at the time in question.
6.3 Death. In the event of Executive's death during the term of his
------
employment hereunder, Executive's estate or designated beneficiaries shall
receive or commence receiving, as soon as practicable:
(a) the Target Bonus in respect of the fiscal year in which his death
occurs, prorated by a fraction, the numerator of which is the number of days of
the fiscal year until his death and the denominator of which is 365, provided,
however, that with respect to the fiscal year 2001 of the Company, such Target
Bonus shall be equal to the sum of $137,109, plus $182,813 times the fraction,
the numerator of which is the number of days from April 1, 2001, until the
termination Date and the denominator of which is 274;
(b) any death benefits provided under the employee benefit programs,
plans and practices referred to in Section 4.1 hereof, in accordance with their
terms;
(c) the PTO Payment, the Compensation Payment, and the Expense Payment;
and
(d) such payments under applicable plans or programs to which
Executive's estate or designated beneficiaries are entitled pursuant to the
terms of such plans or programs.
6.4 Termination By the Company for Cause Or By Executive Without Good
-----------------------------------------------------------------
Reason. (a) The Company shall have the right to terminate the employment of
------
Executive for Cause, as hereinafter defined. In the event that Executive's
employment is terminated by the Company at any time for Cause or by Executive
without Good Reason (other than as a result of the Executive's Permanent
Disability, Death or for Good Reason, as defined herein), notwithstanding any
other provision in this Agreement, the Executive shall be entitled to the
Compensation Payment, the PTO Payment, and the Expense Payment, and shall not be
entitled to any further compensation or benefits hereunder including, without
limitation, the payment of any Bonus in respect of all or any portion of the
fiscal year in which such termination occurs.
(b) As used herein, the term "Cause" shall be limited to (i) willful
misconduct by Executive in connection with his employment which results in a
demonstrable material injury to the Company, or (ii) the Executive's conviction
of, or plea of nolo contendere to, a felony involving moral turpitude.
---- -----------
Termination of the Executive for Cause shall be made by delivery to the
Executive of a written notice, after 30 days prior written notice to the
Executive specifying the basis for such termination and the particulars thereof
and a reasonable opportunity for the Executive to cure or otherwise, finding
that in the reasonable judgment of the Board, the conduct or event set forth in
any of clauses (i) or (ii) above has occurred and that such occurrence warrants
the Executive's termination. Notwithstanding the foregoing, in no event shall
the Company initiate a termination for Cause in the event that the Executive has
provided the Company with written notice of his termination of employment for
Good Reason.
(c) As used herein, the term "Good Reason" shall be limited to the
following:
(i) any adverse diminution in the Executive's duties or
responsibilities with the Company as defined in paragraph 1.1 above;
(ii) any reduction in the Executive's Base Salary, Target Bonus or
benefit, personal time off or other compensation plans, programs or practices;
(iii) any requirement that Executive be based at a location more than
thirty-five (35) miles from the location at which the Executive was based as of
the date of this Agreement (or a substantial increase in the amount of travel
Executive is required to do because of a relocation of the executive offices);
(iv) any adverse change in Executive's reporting obligations, which
includes any change that results in Executive ceasing to report directly to the
Board;
(v) any failure by the Company to obtain from any successor to the
Company an agreement reasonably satisfactory to the Executive to assume and
perform this Agreement, as contemplated by Section 10 hereof;
(vi) any removal of Executive from the Board;
(vii) any breach by the Company of a material term of this Agreement.
7. Mitigation of Damages: Excise Tax Gross-Up. (a) Executive shall not
------------------------------------------
be required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise after the termination of
his employment hereunder.
(b) Golden Parachute Excise Tax Gross-Up. In the event that the
------------------------------------
severance and other benefits provided for in this Agreement or otherwise payable
to the Executive constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") and will be
subject to the excise tax imposed by Section 4999 of the Code, then the
Executive shall receive (i) a payment from the Company sufficient to pay such
excise tax, and (ii) an additional payment from the Company sufficient to pay
the excise tax and federal and state income taxes arising from the payments made
by the Company to
Executive pursuant to this sentence. Unless the Company and the Executive
otherwise agree in writing, the determination of Executive's excise tax
liability and the amount required to be paid under this Section shall be made in
writing by the accountants. In the event that the excise tax incurred by
Executive is determined by the Internal Revenue Service to be greater or lesser
than the amount so determined by the accountants, the Company and Executive
agree to promptly make such additional payment, including interest and any tax
penalties, to the other party as the accountants reasonably determine is
appropriate to ensure that the net economic effect to Executive under this
Section, on an after-tax basis, is as if the Code Section 4999 excise tax did
not apply to Executive. 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 interpretations of the Code for
which there is a "substantial authority" tax reporting position. 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. As used
in this Section, "the accountants" shall mean the Company's independent
accountants who audit the Company's financial statements, working together with
the Executive's accountants.
8. Notices. All notices or communications hereunder shall be in writing,
--------
addressed as follows:
To the Company:
Adaptive Broadband Corporation
0000 Xxxxxxxx Xxx.
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Board of Directors
To Executive:
Xxxxxx X. Xxxxxxx
At the most recent address listed in the personnel files of
the Company.
Any such notice or communication shall be delivered by hand, by telecopy (with
machine confirmation) or by courier or sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other address
as such party may designate in a notice duly delivered as described above), and
the third business day after the actual date of mailing shall constitute the
time at which notice was given.
9. Separabilitv: Legal Fees. If any provision of this Agreement shall
------------------------
be declared to be invalid or unenforceable. in whole or in part, such invalidity
or unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. In the event of any dispute with respect to
this Agreement, the prevailing party shall be entitled to reasonable attorneys'
fees and other costs and expenses incurred in resolving such dispute.
10. Assignment. This contract shall be binding upon and inure to the
----------
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights or
obligations hereunder shall be assignable or otherwise subject to hypothecation
by Executive (except by will or by operation of the laws of intestate
succession) or by the Company, except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or businesses of the Company, and the
Company shall require such successor to expressly agree to assume the
obligations of the Company hereunder.
11. Amendment. This Agreement may only be amended by written agreement of
---------
the parties hereto.
12. Beneficiaries: References. Executive shall be entitled to select (and
-------------------------
change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death, and may change such election, in either case by giving the
Company written notice thereof. In the event of Executive's death or a judicial1
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative. Any reference to the masculine gender in this Agreement
shall include, where appropriate, the feminine.
13. Survivorship. The respective rights and obligations of the parties
------------
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions of any
other section of this Agreement.
14. Governing Law. This Agreement shall be construed, interpreted and
-------------
governed in accordance with the laws of the State of California without
reference to rules relating to conflicts of law, for purposes of jurisdiction
and venue, the Company hereby consents to jurisdiction and venue in any suit,
action or proceeding with respect to this Agreement in any court of competent
jurisdiction in the state in which Executive resides at the commencement of such
suit, action or proceeding and waives any objection, challenge or dispute as to
such jurisdiction or venue being proper.
15. Effect of Prior Agreements. This Agreement contains the entire
--------------------------
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes in all respects any prior or other agreement or
understanding between the Company or any affiliate of the Company and Executive
with respect to the subject matter hereof, including without limitation that
certain Severance Agreement dated March 1, 2000.
16. Withholding. The Company shall be entitled to withhold from payment
-----------
any amount of withholding required by law.
17. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which will be deemed an original.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ADAPTIVE BROADBAND CORPORATION
By /s/ Xxxxxx X. Xxxxxx
------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board of Directors
EXECUTIVE:
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
Exhibit A
GENERAL RELEASE
I hereby release, acquit and forever discharge Adaptive Broadband Corporation
(the "Company"), and its officers, directors, agents, servants, employees,
attorneys, shareholders, successors, assigns and affiliates, of and from any and
all claims, liabilities, demands, causes of action, costs, expenses, attorneys'
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of or in any way related to agreements, events,
acts or conduct at any time prior to and including the date I sign this General
Release, including but not limited to: any and all such claims and demands
directly or indirectly arising out of or in any way connected with my employment
with the Company or the conclusion of that employment, claims or demands related
to salary, bonuses, commissions, incentive payments, stock, stock options, or
any ownership or equity interests in the Company, vacation pay, personal time
off, fringe benefits, expense reimbursements, sabbatical benefits, severance
benefits, or any other form of compensation; claims pursuant to any federal, any
state or any local law, statute, common law or cause of action including, but
not limited to, the federal Civil Rights Act of 1964, as amended; attorney's
fees under Title VII of the federal Civil Rights Act of 1964, as amended, or any
other statute, agreement or source of law; the federal Americans with
Disabilities Act of 1990; the Family and Medical Leave Act; the federal Age
Discrimination and Employment Act of 1967, as amended and as set forth below;
the Employee Retirement Income Security Act; the Equal Pay Act; California Fair
Employment and Housing Act; California Labor Code; tort law; contract law; or
the law of wrongful discharge, discrimination, harassment, fraud,
misrepresentation, defamation, libel, emotional distress, and breach of the
implied covenant of good faith and fair dealing. I represent that I have no
lawsuits, claims or actions pending in my name, or on behalf of any other person
or entity, against the Company or any other person or entity subject to the
release granted in this paragraph. I agree that in the event I bring a claim
covered by this release in which I seek damages against Adaptive Broadband
Corporation or in the event I seek to recover against Adaptive Broadband
Corporation in any claim brought by a governmental agency on my behalf, this
General release shall serve as a complete defense to such claims. However,
nothing in this General Release releases, acquits or discharges any entity from
any obligation to me for payments or other consideration set forth specifically
in my Employment Agreement with the Company.
ADEA Waiver and Release. I acknowledge that I am knowingly and voluntarily
waiving and releasing any rights I may have under the ADEA, as amended. I also
acknowledge that the consideration given for the waiver and release in the
preceding paragraph hereof is in addition to anything of value to which I was
already entitled. I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (a) my waiver and release do not apply
to any rights or claims that may arise after the execution date of this General
Release; (b) I have been advised hereby that I have the right to consult with an
attorney prior to executing this General Release; (c) I have forty-five (45)
days to consider this General release (although I may choose to voluntarily
execute this General Release earlier); (d) I have seven (7) days following the
execution of this General Release to revoke the General Release; and (e) this
General Release will not be effective until the date upon which the revocation
period has expired, which will be the eighth day after this General Release is
executed by me.
Acknowledgment of Release. I UNDERSTAND THAT THIS GENERAL RELEASE INCLUDES
A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. I acknowledge that I have read and
understand Section 1542 of the California Civil Code which reads as follows: "A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor." I
hereby expressly waive and relinquish all rights and benefits under that section
and any law of any jurisdiction of similar effect with respect to my release of
any unknown or unsuspected claims I may have against the Company, its
affiliates, and the entities and persons specified above.
Executive
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Date: Febraury 23, 2001
