EXHIBIT 10.12
[LOGO OF ADAPTIVE BROADBAND]
ADAPTIVE BROADBAND CORPORATION
SEVERANCE AGREEMENT
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THIS SEVERANCE AGREEMENT is entered into as of March 1, 2000 (the "Effective
Date"), between ADAPTIVE BROADBAND CORPORATION, a Delaware corporation ("ADAP")
and Xxxxxxx Xxxx (the "Employee").
RECITAL
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The Employee serves as ADAP's Vice president, General Counsel and Secretary.
ADAP and the Employee desire to set forth the terms of the Employee's severance
compensation if the Employee's employment is ended as a result of a Change in
Control. If a Change in Control occurs, the Employee and other key employees
may be more vulnerable to dismissal or other negative consequences without
regard to the quality of their past or prospective service. The Board of
Directors (the "Board") believes that it is in the best interest of ADAP and its
stockholders to ensure fair treatment to ADAP's key executives and to reduce any
adverse effects upon their performance that may be caused by the perceived risks
of a merger or acquisition.
The parties agree as follows:
1. Definitions. For purposes of this Agreement, the following terms will have
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the meanings set forth below.
1.1 A "Change in Control" will occur if (a) any Person (as defined in
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Section 2(a)(2) of the Securities Act of 1933, as amended) other
than ADAP, is or becomes the beneficial owner, directly or
indirectly (including by holding securities which are exercisable
for or convertible into shares of capital stock of ADAP), of 30 % or
more of the combined voting power of the outstanding shares of
capital stock of ADAP entitled to vote generally in the election of
directors ; or, (b) ADAP sells, leases or exchanges all or
substantially all of its property and assets under Section 271 of
the General Corporation Law of the State of Delaware, or, (c)
Continuing Directors cease to constitute at least a majority of the
Board: or, (d) a majority of the ADAP's Outside Directors determine
that a Change in Control has occurred.
1.2 "Continuing Directors" shall mean the directors of ADAP in office on
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January 1, 1999 and any successor to any such director whose
nomination or selection was approved by a majority of the directors
in office at the time of the director's nomination or selection and
who is not an "affiliate" or "associate" (as defined in Rule 12b-2
under the Securities Exchange Act of 1934, as amended) of any person
who is the beneficial owner, directly or indirectly (including by
holding securities which are exercisable for or convertible into
shares of capital stock of ADAP), of 10% or more of the combined
voting power of the outstanding shares of capital stock of ADAP
entitled to vote generally in the election of directors.
1.3 "Disability" means that the Employee has met the qualifications for
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ADAP's long-term disability benefit.
1.4 "Good Reason" includes any of the following:
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(a) the assignment to the Employee of duties inconsistent with, or
a substantial alteration in the nature or status of, the
Employee's responsibilities immediately before a Change in
Control;
(b) a reduction in the Employee's salary or other benefits as in
effect on the date of a Change in Control;
(c) the Employee's relocation to a work site requiring an increase
in one-way commute from Employee's residence of more than
thirty-five (35) miles; or
(d) a breach by ADAP of this Agreement if the breach has not been
cured within 30 days after written notice by the Employee to
ADAP setting forth with specificity the nature of the breach.
1.5 "Outside Director" is a member of ADAP's Board of Directors who is
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not, and who during the past six months was not, an employee or
officer of ADAP.
1.6 "Termination for Cause" is termination of the Employee's employment
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as a result of (a) the Employee's willful misconduct or the
Employee's dishonesty towards, fraud upon, crime against or
deliberate or attempted injury or bad faith action with respect to
ADAP; or (b) the Employee's conviction for a felony (whether in
connection with ADAP's affairs or otherwise).
1.7 "Termination Upon a Change in Control" is (a) termination by the
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Employee of Employee's employment for Good Reason within one year
after the occurrence of a Change in Control; or (b) declination by
the Employee of an offer of employment from ADAP, or ADAP's
successor, for Good Reason at the time of a Change in Control if the
Employee would not have been permitted to remain in Employee's
existing position following such declination; or (c) termination by
ADAP, or ADAP's successor, of the Employee's employment within one
year after the occurrence of a Change in Control other than a
Termination for Cause or a termination resulting from the Employee's
death or Disability.
2. Term. If no Change in Control has occurred, this Agreement will expire on
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December 31, 2001. If a Change in Control occurs prior to December 31, 2001,
this Agreement will continue in effect, and will not terminate, until either
the Employee has received the severance compensation provided for below or
has ceased to be eligible for such compensation by reason of there not
having been a Termination Upon a Change in Control.
3. Termination Upon a Change in Control. If a Termination Upon a Change in
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Control occurs, the Employee will immediately be paid all (a) accrued
salary, (b) bonus or sales commission compensation equal to the higher of
(i) the annual bonus or sales commission that would result from implementing
ADAP's operating plan as approved by the Board during the first quarter of
the fiscal year during which the Change in Control occurs, provided that the
criteria which determine the bonus or sales commission payout for such
fiscal year as of the most recently completed fiscal quarter are equal to or
exceeding those specified in the operating plan for such period, or (ii) the
annual bonus, sales commission or other equivalent incentive compensation
payment established for the Employee by ADAP's successor and based on the
operating plan of ADAP's successor at the beginning of the bonus's or sales
commission performance period during which Employee's termination occurs,
irrespective of the operating performance at the time of termination, (c)
vested deferred compensation plus the value of any unvested company matching
shares of ADAP phantom stock in the Supplemental Executive Deferred
Compensation Plan (other than pension plan or profit sharing plan benefits,
which will be paid in accordance with the applicable plan), unless the
Employee is eligible for a delayed payout as authorized by the plan, (d)
benefits then due under any plans of ADAP or ADAP's successor in which the
Employee is a participant, (e) accrued Personal Time Off pay or vacation pay
and (f) reimbursements for any appropriate business expenses incurred by the
Employee in connection with his duties, all to the date of termination
("Accrued Compensation").
Repayment of any existing company loans shall be extended if necessary to
delay repayment until the beginning of regular employment during the period
of severance compensation provided for in Section 4. The Employee will also
be entitled to the severance compensation described in Section 4.
4. Severance Compensation. If a Termination Upon a Change in Control occurs,
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ADAP or ADAP's successor shall pay weekly severance compensation to the
Employee for a period ending 104 weeks after termination in an aggregate
amount determined by adding (a) the Employee's weekly base salary at the
time of termination and (b) the amount of $553.85 paid in lieu of other
employee benefits (including health benefits) which the Employee was
receiving from ADAP and (c) an amount equal to the monthly `Perk Pot'
benefit to which the Employee was entitled as an officer of ADAP at the time
of the Change in Control. If the Employee begins regular employment prior to
the expiration of the aforesaid 104 week period, then the severance
compensation provided for in this Section 4 shall end as of the later of (i)
the date of such regular employment or (ii) 52 weeks after the Termination
Upon a Change in Control. Employee agrees to promptly notify in writing the
payer of such severance compensation if any such regular employment is
accepted by the Employee during this period and to reimburse the payer for
any payments made hereunder that cover any period beyond the 52 week minimum
during which the Employee was a regular employee.
5. Acceleration of Options. If a Termination Upon a Change in Control occurs,
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all stock options held by the Employee immediately before the termination
will become fully vested and the stock options will be exercisable for the
periods specified with respect to termination of employment in the plans
covering the options.
6. Other Benefits. Neither this Agreement nor the severance compensation that
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it provides for will reduce any amounts otherwise payable, or in any way
diminish the Employee's rights as an employee of ADAP, whether existing now
or hereafter, under any benefit, incentive, retirement, stock option, stock
bonus or stock purchase plan or under any employment agreement or other plan
or arrangement, provided, however, that the rights granted to the Employee
and the obligations assumed by ADAP under this Agreement will be in lieu of,
and not in addition to, any severance or other termination payments to which
the Employee may be entitled under any employment agreement or other plan or
arrangement that the Employee may now or hereafter have with ADAP.
7. Employment Status. This Agreement does not constitute a contract of
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employment. It does not impose on ADAP any obligation to retain the
Employee as an employee, to change the status of the Employee's employment
or to change ADAP's policies regarding termination of employment.
8. Miscellaneous.
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a. Severability. If a court or other body of competent jurisdiction
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determines that any provision of this Agreement is invalid or
unenforceable, that provision will be adjusted rather than voided, if
possible, so that it is enforceable to the maximum extent possible, and
all other provisions of the Agreement will be deemed valid and
enforceable to the fullest extent possible.
b. Withholding. Compensation and benefits to the Employee under this
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Agreement will be reduced by all federal, state, local and other
withholdings or similar taxes as required by applicable law.
c. Arbitration. The parties will submit all controversies, claims and
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matters of difference in any way related to this Agreement, its
performance or breach, to arbitration in San Francisco, California,
according to the rules and practices of the American Arbitration
Association from time to time in effect. Any awards in such arbitration
shall be final and binding on all parties. The arbitrators shall
allocate the costs of the arbitration in such manner as they deem
equitable. The arbitrators may require the reimbursement of all or a
portion of the reasonable legal fees incurred by the prevailing party
in the arbitration proceeding and any legal proceedings which are taken
to enforce the arbitral award.
d. Entire Agreement: Modifications. (i) This Agreement is the entire
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agreement between the parties with respect to the matters covered
hereby, and may be amended, modified, superseded or canceled, or its
terms waived, only by a written instrument executed by each party or,
in the case of a waiver, by the party waiving compliance. (ii) Failure
of a party at any time to require performance of any provision of this
Agreement will not affect the right at a later time to enforce the
same. (iii) No waiver of a breach of this Agreement, whether by conduct
or otherwise, in any one or more instances will be construed as a
further or continuing waiver of the breach or of any other term of this
Agreement. (iv) This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the parties hereto.
e. Applicable Law. This Agreement will be construed under and governed by
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the laws of the State of California without regard or reference to the
rules of conflicts of law that would require the application of the
laws of any other jurisdiction.
9. Prior Severance Agreement. The Employee and ADAP acknowledge their
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prior severance agreement dated July 2, 1999. The Employee and ADAP
hereby terminate such prior severance agreement as of the day
immediately prior to the Effective Date of this Agreement, and neither
the Employee nor ADAP shall have any rights or obligations thereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
ADAPTIVE BROADBAND, INC.
/s/ Xxxxxxxxx X. Xxxxxxxx
______________________________________ _________________________________________________
Xxxxxxxxx X. Xxxxxxxx Xxxxxxx Xxxx
Chairman and Chief Executive Officer Vice President, General Counsel and
Secretary
