EXHIBIT 10.26
PC-TEL, INC.
EMPLOYMENT AGREEMENT
This Agreement is entered into by and between PC-TEL, INC. (the
"Company") and Xxxx Xxxxxx (the "Employee") this November 12, 2001, effective as
of November 12, 2001 (the "Effective Date").
WHEREAS, the Company desires to induce Employee to become an employee of
the Company in the capacity of Chief Operating Officer of the Company/Chief
Financial Officer and the employee desires to accept such employment; and
WHEREAS the parties desire and agree to enter into an employment
relationship by means of this Agreement;
NOW THEREFORE, it is mutually covenanted and agreed by and among the
parties as follows:
1. Position and Duties. Employee shall be employed, as of the Effective
Date, as Chief Operating Officer/Chief Financial Officer, reporting to the
Chairman and Chief Executive Officer of PC-Tel, Inc., and assuming and
discharging such responsibilities as are commensurate with Employee's position.
Employee shall perform his duties faithfully and to the best of his ability and
shall devote his full business time and effort to the performance of his duties
hereunder.
2. At-Will Employment. The parties agree that Employee's employment with
the Company shall be "at-will" employment and may be terminated at any time with
or without cause or notice. No provision of this Agreement shall be construed as
conferring upon Employee a right to continue as an employee of the Company.
3. Representation of Employee. Employee represents and warrants that he
is not subject to any conditions, such as a covenant not to compete with a
former employer, that would in any way restrict either the Company's ability and
right to employ Employee or Employee's acceptance of such employment, or which
would result in the Company incurring additional costs for employing Employee.
4. Compensation.
(a) Base Salary. For all services to be rendered by Employee
pursuant to this Agreement, beginning as of the Effective Date, Employee shall
receive an annual base salary of $190,000, payable in installments in accordance
with the Company's normal payroll practices. Employee's annual base salary will
be reviewed from time to time in accordance with the Company's established
procedures for reviewing salaries of its executive officers.
(b) Bonus. Employee shall be entitled to receive an annual bonus
targeted to be $95,000.00; $55,000.00 of this bonus shall be paid prior to
December 30, 2001 and the remaining $40,000.00 shall be paid upon the completion
of the Company's attainment of objectives mutually agreed upon by Employee and
the Company and as set forth in Exhibit A to this Agreement. The Company shall
work with Employee to establish mutually agreed performance and corporate
attainment objectives and to complete Exhibit A not later than 90 days from
Employee's start date. For each complete fiscal year thereafter during the term
of this Agreement, Employee shall be eligible to receive an annual bonus that is
targeted to be up to 50% of Employee's annual base salary based upon Employee's
performance and the Company's attainment of certain objectives mutually agreed
upon by Employee and the Company. Employee must be employed by the Company on
the payment date of any payment period determined for the bonus payout to
receive such bonus. The determination of whether Employee has attained the
mutually agreed upon objectives, and the timing and amount, if any, of each such
annual bonus shall be determined by the Board in its sole discretion.
(c) Stock Option and Restricted Stock Grant.
Stock Option Grant. We will recommend to the Board of Directors of the
Company that at the next Board meeting, you be granted a stock option entitling
you to purchase up to 150,000 shares of the Company's Common Stock (the "Option
Shares"), at an exercise price per Option Share equal to the fair market value
per Option Share on the grant date (the "Option"). All of the options shall
initially be unvested. Each month from the grant date, 1/36th of the Option
Shares shall vest and become exercisable, provided Employee continues in the
employment of the Company on each such vesting date (so that as of the third
anniversary of the grant date all of the Option Shares shall be vested). The
Option shall be subject to the terms and conditions of the stock option
agreement evidencing the Option.
(i) Restricted Stock Grant. We will recommend to the Board
of Directors of the Company that Employee be granted 15,000 shares of the
Company's Common Stock (the "Restricted Shares"). Such shares shall initially be
unvested and subject to repurchase by the Company at a price of $0.01 per share.
Employee shall acquire a vested interest in, and the Company's repurchase right
shall accordingly lapse with respect to, 50% of the Restricted Shares on
December 31, 2002 and 50% of the Restricted Shares on December 31, 2003,
provided Employee continues in the employment of the Company on such vesting
date (so that as of December 31, 2003, all of the Restricted Shares shall be
vested.) The restricted stock grant shall be subject to the terms and conditions
of the restricted stock award agreement evidencing the restricted stock grant.
(ii) Acceleration Upon Certain Termination Following
Change of Control. The vesting of the Option Shares and the Restricted Shares
may be subject to acceleration in accordance with the terms and conditions set
forth in the Management Retention Agreement between the Company and Employee
(the "Management Retention Agreement").
5. Vacation. Employee shall be entitled to vacation benefits established
by the Company commensurate with Employee's status as the Chief Operating
Officer/Chief Financial Officer of the Company. The Company's vacation policy
may be revised from time to time.
6. Other Benefits. Employee shall be entitled to participate in the
executive and employee benefit plans and programs of the Company, if any, to the
extent that his position, tenure, salary, age, health and other qualifications
make him eligible to participate in such plans or programs, subject to the rules
and regulations applicable thereto. The Company reserves the right to cancel or
change the benefit plans and programs it offers to its employees at any time.
Executive and Employee Benefit Plans are outlined in Exhibit B.
7. Expenses. The Company shall reimburse Employee for reasonable travel,
entertainment or other expenses incurred by Employee in the furtherance of or in
connection with the performance of Employee's duties hereunder, in accordance
with the Company's expense reimbursement policy as in effect from time to time.
When employee is required to travel to the California facility, the Company's
expense policy shall be modified for Employee as set forth in Exhibit C attached
(Commuting Benefits). In addition, the Employee shall be entitled to receive a
$750.00 per month car allowance, or its equivalent, which shall be separate from
any car expenses incurred in Exhibit C.
8. Taxes. In the event that reimbursement to Employee of travel,
entertainment, other expenses, or Commuting Benefits are subject to State and
Federal taxes, the Company shall "gross up" the reimbursement to cover the
additional tax liability. In addition, Should any of employee's income from all
sources become subject to California State income tax, the Company shall "gross
up" the difference in State and Federal tax liability from what it would have
been had employee been taxed solely as an Illinois resident on that income.
9. Severance. Severance.
(a) Termination Following a Change of Control. If Employee's
employment is terminated within twelve (12) months following a Change of
Control, the severance and other benefits to which Employee is entitled, if any,
shall be governed by the Management Retention Agreement (which includes the
definition of Change of Control).
(b) Termination by Company Without Cause and Apart From Change of
Control. If, either prior to the occurrence of a Change of Control or after the
twelve (12) month period following a Change of Control, Employee's employment is
terminated (i) involuntarily by the Company for reasons other than Cause, death
or Disability or (ii) by Employee pursuant to a Voluntary Termination for Good
Reason, then Employee shall be entitled to receive the following benefits from
the Company:
(i) Salary Continuation. Employee shall receive
continuation of Employee's then current Base Salary for a period of 12 months
following Employee's termination of employment by the Company for reasons other
than Cause. All such severance payments shall be paid in accordance with the
Company's normal payroll practices. Such continuation of Employee's Base Salary
shall be in lieu of any and all other benefits which Employee is entitled to
receive on the date of Employee's termination of employment pursuant to any
Company severance and benefit plans and practices or pursuant to other
agreements with the Company. Employee shall not be entitled to pro-rated payment
of an annual bonus.
(ii) Benefits. Employee shall receive one hundred percent
(100%) of Company-paid health, dental and vision insurance benefits at the same
level of coverage as was provided to Employee immediately prior to Employee's
termination of employment by the Company for reasons other than Cause
("Company-Paid Coverage"). If such coverage included Employee's dependents
immediately prior to Employee's termination, such dependents shall also be
covered at the Company's expense. Company-Paid Coverage shall continue until the
earlier of (i) 12 months following the date of Employee's termination by the
Company for reasons other than Cause (the "Termination Date"), or (ii) the date
upon which Employee or Employee's dependents become covered under another
employer's group health, dental and vision insurance benefit plans. If, after 18
months following the Termination Date, Employee has not become covered under
another employer's group health, dental and vision insurance benefit plans,
Employee may independently obtain health, dental and vision insurance benefits
comparable in the aggregate in scope and coverage to that provided by the
Company to Employee immediately prior to the Termination Date, and the Company
shall reimburse Employee for the cost of the premiums paid for such benefits
until the earlier of (i) 6 months following the termination of Company-Paid
Coverage, or (ii) the date upon which Employee or Employee's dependents become
covered under another employer's group health, dental and vision insurance
benefit plans. For purposes of Title X of the Consolidated Budget Reconciliation
Act of 1985 ("COBRA"), the date of the qualifying event for Employee and his or
her dependents shall be the Termination Date.
(iii) Partial Accelerated Vesting. All equity awards from
the Company then held by Employee shall partially accelerate, or if Employee is
then holding unvested shares, Company's right to repurchase the then-unvested
shares under each such equity award shall partially lapse, with respect to the
number of shares under each such award that would have become vested or been
released from such repurchase right under each respective equity award if
Employee's employment with the Company had continued for an additional 12 months
following Employee's effective termination date for reasons other than for
Cause.
(c) Other Termination. If Employee's employment is terminated by
the Company for Cause, or by Employee for any reason, including death or
Disability but other than pursuant to a Voluntary Termination for Good Reason,
then Employee shall not be entitled to receive severance or other benefits
pursuant to this Section, but may be eligible for those benefits (if any) as may
then be established under the Company's severance and benefit plans and policies
existing at the time of such termination.
10. Confidential Information. Employee agrees to maintain the
confidentiality of all confidential and proprietary information of the Company
and is delivering simultaneously with his execution of this Agreement an
executed confidentiality agreement substantially in the form attached hereto as
Exhibit B.
11. Definitions.
(a) Base Salary. "Base Salary" shall mean Employee's annual
Company salary at the rate in effect immediately preceding Employee's date of
termination with the Company.
(b) Cause. "Cause" shall mean (i) an act of personal dishonesty
taken by Employee in connection with his responsibilities as an employee and
intended to result in substantial personal enrichment of Employee, (ii) Employee
being convicted of a felony, (iii) a willful act by Employee which constitutes
gross misconduct and which is injurious to the Company, or (iv) following
delivery to Employee of a written demand for performance from the Company which
describes the basis for the Company's reasonable belief that Employee has not
substantially performed his duties, continued violations by Employee of
Employee's obligations to the Company which are demonstrably willful and
deliberate on Employee's part.
(c) Voluntary Termination for Good Reason. "Voluntary Termination
for Good Reason" shall mean Employee voluntarily resigns after the occurrence of
any of the following (i) without Employee's express written consent, a material
reduction of Employee's duties, title, authority or responsibilities, relative
to Employee's duties, title, authority or responsibilities as in effect
immediately prior to such reduction, or the assignment to Employee of such
reduced duties, title, authority or responsibilities; provided, however, that a
reduction in duties, title, authority or responsibilities solely by virtue of
the Company being acquired and made part of a larger entity shall not by itself
constitute grounds for a "Voluntary Termination for Good Reason;" (ii) without
Employee's express written consent, a material reduction, without good business
reasons, of the facilities and perquisites (including office space and location)
available to Employee immediately prior to such reduction; (iii) a reduction by
the Company in the base salary of Employee as in effect immediately prior to
such reduction; (iv) a material reduction by the Company in the aggregate level
of employee benefits, including bonuses, to which Employee was entitled
immediately prior to such reduction with the result that Employee's aggregate
benefits package is materially reduced (other than a reduction that generally
applies to Company employees); or (v) any act or set of facts or circumstances
which would, under California case law or statute constitute a constructive
termination of Employee.
12. Arbitration.
(a) Employee agrees that any dispute or controversy arising out
of, relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof, shall be
settled by binding arbitration to be held in the county of Santa Clara,
California in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
"Rules"). The Company and Employee shall each select one arbitrator, and the two
arbitrators shall select a third arbitrator, each of which arbitrators shall be
independent. The arbitrators may grant injunctions or other relief in such
dispute or controversy. The decision of the arbitrators shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrators' decision in any court having jurisdiction.
(b) The arbitrators shall apply California law to the merits of
any dispute or claim, without reference to rules of conflicts of law. Employee
hereby consents to the personal jurisdiction.
of the state and federal courts located in California for any action or
proceeding arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.
(c) Without breach of this arbitration agreement and without
abridgement of the powers of the arbitrators, the parties may apply to any court
of competent jurisdiction for a temporary restraining order, preliminary
injunction, or other interim or conservatory relief, as necessary.
(d) EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH
DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL AND
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, DISCRIMINATION
CLAIMS.
13. Right to Advice of Counsel. Employee acknowledges that he has had
the right to consult with counsel and is fully aware of his rights and
obligations under this Agreement.
14. Successors.
(a) Company's Successors. For all purposes under this Agreement,
the term "Company," as applicable, shall include any successor to the Company's
business and/or assets or which becomes bound by the terms of this Agreement by
operation of law.
(b) Employee's Successors. The terms of this Agreement and all
rights of Employee hereunder shall inure to the benefit of, and be enforceable
by, Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
15. Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or one day following mailing overnight courier service. In
the case of Employee, mailed notices shall be addressed to him at the home
address which he most recently communicated to the Company in writing. In the
case of the Company, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
Secretary.
16. Miscellaneous Provisions.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws, but not the choice
of law rules, of the state of California.
(b) Severability. The invalidity or unenforceability of any
provision of this Agreement, or any terms hereof, shall not affect the validity
or enforceability of any other provision or term of this Agreement.
(c) Integration. This Agreement together with the Management
Retention Agreement and the stock option agreement and restricted stock grant
agreement contemplated in Section 5 above, and the confidentiality agreement
contemplated in Section 9 above represents the entire agreement and
understanding between the parties as to the subject matter herein and supersedes
all prior or contemporaneous agreements whether written or oral. No waiver,
alteration, or modification of any of the provisions of this Agreement shall be
binding unless in writing and signed by duly authorized representatives of the
parties hereto.
(d) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by Employee and by two authorized officers of the Company
(other than Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
(e) Taxes. All payments made pursuant to this Agreement shall be
subject to withholding of applicable income and employment taxes.
(f) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officers, as of the day and year
first above written.
PC-TEL, INC.
By: /s/ Xxxxxxx Xxxxxx
Title: Vice President, Human Resources
EMPLOYEE:
/s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
EXHIBIT A
PERFORMANCE MILESTONES
MILESTONES ANTICIPATED DATE AMOUNT
---------- ---------------- ------
XXX
XXX
XXX
XXX
TBD
EXHIBIT B
EXECUTIVE & EMPLOYEE BENEFIT PLAN
2001 BENEFITS OVERVIEW
MEDICAL:
PCTEL provides the following medical plan options for its employees and their
eligible dependents:
BLUE CROSS OF CALIFORNIA: PPO
**IN NETWORK PROVIDER COVERAGE SUMMARY:
- Physicians of your choice and BX contracted physicians, all
geographic areas
- Employee monthly co-payment for PPO medical plan ranges from
$7.50/mo. to $24.00/mo.
- $10.00 for regular scheduled office visits
- Calendar year deductibles are $250/member and $750/family
- Prescription plan is comprehensive
- Out of pocket maximum per calendar year is $2000/member and
lifetime benefit is $5000,000/member
- All other services are generally covered at 100% with some
nominal co-payments
**OUT-OF-NETWORK PROVIDER COVERAGE SUMMARY:
- Physicians of your choice and BX contracted physicians, all
geographic areas
- Employee monthly co-payment for PPO medical plan ranges from
$2.50/mo. to $8.00/mo.
- Most services are covered at 70% after deductibles
- Calendar year deductibles are $250/member and $750/family
- Prescription plan is comprehensive
- Out of pocket calendar year maximum is $4000/member and lifetime
benefit is $5000,000/member
BLUE CROSS OF CALIFORNIA: HMO
- Contracted physicians, all geographic areas
- Employee monthly co-payment for HMO medical plan ranges from
$2.50/mo. to $8.00/mo.
- $5.00 for regular office visits
- No calendar year deductibles
- Prescription plan is comprehensive
- Out of pocket calendar years maximum is $1,500/member and no
lifetime maximum
KAISER:
- Employee monthly co-payment for Xxxxxx medical plan ranges from
$2.50/mo. to $8.00/mo.
- $10.00 for regular office visits
- No calendar year deductibles
- Out of pocket calendar year maximum is $1500/member and lifetime
maximum is unlimited
DENTAL:
PCTEL dental benefit plan is as follows:
CANADA LIFE DENTAL: PDO
- Annual maximum benefit is $2000
- Calendar year deductible is $50 for individuals and $150 for
families.
- After deductibles have been met the following coverage shall
apply: Preventative dental care is covered at 100%, general at
100%, and major at 50%
VISION:
- A complete vision coverage plan is offered by PCTEL through
the Vision Service Plan for employees and their dependents,
including VSP network plan and out-of-network plans.
LIFE INSURANCE:
- Coverage is equal to two times your annual base salary, up to
$100,000 of coverage
SHORT TERM DISABILITY INSURANCE:
- PCTEL STD insurance covers 67% of an employee's salary, up to
$1,500.00 per week. There is a 7 day elimination period and a
maximum benefit duration of 90 days. After 90 days, Long-term
Disability insurance begins.
LONG TERM DISABILITY INSURANCE:
- PCTEL LTD insurance covers 67% of an employee's salary, up to
$6,500 per month. There is a 90-day elimination period. The
first 90 days of disability insurance are paid by Short-term
Disability insurance.
EMPLOYEE STOCK PURCHASE PLAN:
- Allows employees to purchase PCTEL stock at a 15% discount from
market value.
HOLIDAYS:
- PCTEL provides 10 holidays per year:
- New Year's Day Thanksgiving Day
- President's Day The day after Thanksgiving
- Memorial Day Christmas Eve
- Independence Day Christmas Day
- Labor Day The day after Christmas
PAID TIME OFF:
- PCTEL provides the following Paid Time Off Plan:
- Length of Employment: Yearly PTO:
- 0-1 years 15 days
- For each additional year of employment, one day of PTO is added,
to a maximum of 25 days PTO annually.
401K SAVINGS PLAN:
- PCTEL provides its employees with a 401(k) retirement and
savings plan. Employees may contribute up to 15% of income on a
pre-tax basis. The maximum annual contribution, established by
the Internal Revenue Service, is currently $10,500.00 for 2001.
000 XXXXXXXXX XXXX:
- PCTEL provides its employees with a 125 Cafeteria Plan (AKA
Flexible Spending Account) based upon pre-tax employee
contributions. This plan provides a pre-tax savings account for
eligible dependent care and healthcare costs.
EDUCATIONAL ASSISTANCE:
- PCTEL understands the importance of continuing education and
will assist employees in their pursuit of formal studies. Formal
accredited college and university courses are covered, including
tuition, books, labs and registration fees.
EXHIBIT C
COMMUTING BENEFITS
