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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
EXHIBIT 10(p)
September 13, 1999
Xx. Xxxxxx X. Xxxxxxx
00 Xxxxxx Xxxx Xx.
Xxxxxxxxx XX 00000
Re: Severance Agreement
Dear Xxx:
This letter sets out the severance arrangements concerning your employment with
Alpha Industries, Inc. ("Alpha").
1. CHANGE IN CONTROL
1.1. If: (i) a Change in Control occurs while you are employed by Alpha as
President or Chief Executive Officer, and (ii) your employment with Alpha
is voluntarily or involuntarily terminated within two (2) years after the
Change in Control, then you will receive the benefits provided in Section
1.3 below.
1.2. A "Change in Control" will be deemed to have occurred if the Continuing
Directors cease for any reason to constitute a majority of the Board of
Directors of Alpha. For this purpose, a "Continuing Director" will include
and be limited to any member of the Board of Directors of Alpha as of the
date of this letter and any Director elected or nominated for election to
the Board of Directors of Alpha by at least 75% of the then Continuing
Directors.
1.3. On the date of any termination described in Section 1, (i) Alpha will pay
you a lump sum equal to two times your total annual compensation for the
twelve month period prior to the Change in Control, including all wages,
salary, bonus and incentive compensation, whether or not includable in
gross income for federal income tax purposes; and (ii) all of your Alpha
stock options will become immediately exercisable and remain exercisable
for a period of one year after the termination date, subject to their other
terms and conditions. If the payments under this paragraph, either alone or
together with other payments that you have the right to receive from Alpha,
would constitute a "parachute payment" (as defined in the Internal Revenue
Code), the payments under this paragraph will be reduced to the largest
amount that will result in no portion of such payment being subject to the
excise tax imposed by the Internal Revenue Code. The determination of any
such reduction will be made jointly by the Board of Directors of Alpha and
you, acting in good faith and in consultation with accountants and counsel.
2. TERMINATION WITHOUT CAUSE OR FOR GOOD REASON
2.1. If, while you are employed by Alpha as President or Chief Executive
Officer, (i) your employment with Alpha is involuntarily terminated without
Cause, or (ii) you terminate your employment with Alpha for Good Reason,
then you will receive the benefits specified in Section 2.4 below. If your
employment is terminated involuntarily by Alpha for Cause, you will not be
entitled to receive the benefits specified in Section 2.4 below.
2.2. "Cause" will mean: (i) deliberate dishonesty significantly detrimental to
the best interests of Alpha or any subsidiary or affiliate; (ii) conduct on
your part constituting an act of moral turpitude; (iii) willful disloyalty
to Alpha or refusal or failure to obey the directions of the Board of
Directors; (iv) incompetent performance or substantial or continuing
inattention to or neglect of duties assigned to you. Any determination of
Cause must be made by the full Board of Directors at a meeting duly called,
with you present and voting and, if you wish, with your legal counsel
present.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
2.3 "Good Reason" will mean: (i) the assignment to you of any duties
inconsistent in any respect with your position as the President or Chief
Executive Officer of Alpha; or (ii) any reduction in your base salary or
rate of compensation to which you do not agree; or (iii) any requirement
imposed on you by Alpha that you relocate your residence.
2.4 On the date of any termination described in Section 2.1, (i) Alpha will
begin to pay you a continuing stream of weekly salary payments for two
years at an annual rate equal to your total annual compensation for the
twelve month period prior to the termination, including all wages, salary,
bonus and incentive compensation, whether or not includable in gross income
for federal income tax; and (ii) all of your Alpha stock options, whether
or not by their terms then exercisable, will become immediately exercisable
and remain exercisable for a period of one year after the termination date,
subject to their other terms and conditions.
3. NON-COMPETITION
During the term of your employment with Alpha, and until the later of one
year thereafter and the end of any post-employment consulting arrangement
between you and Alpha (the "Noncompete Period"), you will not engage in any
employment, consulting or other activity that competes with the business of
Alpha or any of its subsidiaries or affiliates, whether directly or
indirectly, as an owner, partner, shareholder, director, consultant, agent,
employee or otherwise, or through any person. You agree that your direct or
indirect participation in the conduct of a competing business alone or with
any other person will materially impair the business and prospects of
Alpha. During the Noncompete Period, you will not (i) attempt to hire any
director, officer, employee or agent of Alpha, (ii) assist in such hiring
by any other person, (iii) encourage any person to terminate his or her
employment or business relationship with Alpha, (iv) encourage any customer
or supplier of Alpha to terminate its relationship with Alpha, or (v)
obtain, or assist in obtaining, any customer of Alpha. If any of the
restrictions in this section are adjudicated to be unenforceable for any
reason, the restrictions in this section will be reduced to the extent
necessary to make them enforceable and will be binding on you as so
reduced. Any provisions of this section not so reduced will remain in full
force and effect.
You agree that Alpha's remedies at law for breach of any of the
restrictions in Section 3.1 above are inadequate and that any such breach
will cause irreparable harm to Alpha. You therefore agree that in addition
and as a supplement to such other rights and remedies as may exist in
Alpha's favor, Alpha may apply to any court having jurisdiction to enforce
the specific performance of the restrictions in Section 3.1, and may apply
for injunctive relief against any act which would violate those
restrictions.
4. POST-EMPLOYMENT CONSULTING
4.1 Alpha wishes to ensure that your continuing advice and support is available
after you retire, and you are agreeable to providing such advice and
support. Therefore, Alpha agrees: (i) to retain you, and you agree to act,
as a consultant for a term of two years from the date of your retirement,
at an annual consulting fee equal to your highest level of total
compensation for any twelve month period prior to your retirement,
including all wages, salary, bonus and cash incentive compensation, whether
or not includable in gross income for federal income tax purposes, and (ii)
that all of your Company stock options, whether or not by their terms then
exercisable, will become immediately exercisable and remain exercisable for
a period of 180 days after the later of the date of your retirement or the
date on which the consulting period expires, subject to their other terms
and conditions. Your duties under this consulting arrangement will be as
mutually agreed upon by you and Alpha.
4.2 The consulting arrangement set out in Section 4.1 above will be available
to you only if you give Alpha at least three (3) months written advance
notice of your intention to retire.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
5. PAYMENTS UNDER SECTIONS 2.4 AND 4.1
Payments provided for in Sections 2.4 and 4.1 of this letter will: (i) be
paid in equal periodic installments at such intervals as Alpha will
generally pay its officers, and (ii) be reduced by the amount of any
compensation that you receive from any person for services rendered during
the period in which you are receiving such payments.
6. VESTING OF STOCK OPTIONS
In addition to all other provisions of this agreement relating to the
vesting of your stock options, on October 1, 1999, all of your then
outstanding Company stock options, whether or not by their terms then
exercisable, will become immediately exercisable and remain exercisable so
long as you remain an employee or officer of Alpha and for a period of 180
days thereafter, subject to their other terms and conditions. All Company
stock options granted to you after the date of this agreement will be
subject to terms and conditions, including without limitation terms on
vesting, to be set by the Board of Directors, but will always be subject to
all other provisions of this agreement relating to the vesting of your
stock options.
7. CHANGE OF CIRCUMSTANCE
Alpha and you agree to review the appropriateness of your compensation
arrangements from time to time, particularly whenever there is a material
change in the nature of your duties or the time and energy that you need to
put into those duties.
8. DEATH OR DISABILITY
In the event of your death or disability at any time during your employment
by Alpha or any post-employment consulting period, the following terms
shall apply:
a. All of your then outstanding Company stock options, whether or not by
their terms then exercisable, will become immediately exercisable and
remain exercisable so long as you remain an employee or officer of
Alpha and for a period of one year thereafter, subject to their other
terms and conditions.
b. All amounts that would have been payable to you as post-employment
consulting fees will be paid to you or your estate (as applicable),
subject to the other terms and conditions of this agreement. The
notice provision of section 4.2 above will not apply in this case.
9. MISCELLANEOUS
This agreement contains the entire understanding of the parties concerning
its subject matter. This agreement may be modified only by a written
instrument executed by both parties. This agreement replaces and supersedes
all prior agreements relating to your employment or severance, including
without limitation the Severance Agreement dated January 13, 1997. This
agreement will be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts.
Please sign both copies of this letter and return one to Alpha.
Sincerely, ------------------------------
AGREED TO:
___________________________ _________________________
Xxxxxx Xxxxxxxx Xxxxxx X. Xxxxxxx
Chairman of the Board Date: ____________________
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