Exhibit 10.40.1
SPECTRIAN COMPANY
CHANGE OF CONTROL SEVERANCE AGREEMENT
This Change of Control Severance Agreement (the "Agreement") is made and entered
into effective as of __________ (the "Effective Date"), by and between
__________ (the "Employee") and Spectrian Company, a Delaware Corporation (the
"Company"). Certain capitalized terms used in this Agreement are defined in
Section 1 below.
R E C I T A L S
A. It is expected that the Company from time to time will consider the
possibility of a Change of Control. The Board of Directors of the Company (the
"Board") recognizes that such consideration can be a distraction to the Employee
and can cause the Employee to consider alternative employment opportunities.
B. The Board believes that it is in the best interests of the Company and its
shareholders to provide the Employee with an incentive to continue employment
and to maximize the value of the Company upon a Change of Control for the
benefit of its shareholders.
C. In order to provide the Employee with enhanced financial security and
sufficient encouragement to remain with the Company notwithstanding the
possibility of a Change of Control, the Board believes that it is imperative to
provide the Employee with certain severance benefits upon the Employee's
termination of employment following a Change of Control.
AGREEMENT
In consideration of the mutual covenants herein contained and the continued
employment of Employee by the Company, the parties agree as follows:
1. Definition of Terms.
The following terms referred to in this Agreement shall have the following
meanings:
(a) Cause.
"Cause" shall mean (i) any act of personal dishonesty taken by the Employee in
connection with Employee's responsibilities as an employee which is intended to
result in substantial personal enrichment of the Employee, (ii) Employee's
conviction of a felony which the Board reasonably believes has had or will have
a material detrimental effect on the Company's reputation or business, (iii) a
willful act by the Employee which constitutes misconduct and is injurious to the
Company, and (iv) continued willful violations by the Employee of the Employee's
obligations to the Company after there has been delivered to the Employee a
written demand for performance from the Company which describes the basis for
the Company's belief that the Employee has not substantially performed
Employee's duties.
(b) Change of Control.
"Change of Control" shall mean the occurrence of any of the following events:
(i) the approval by shareholders of the Company of a
merger or consolidation of the Company with any other Company, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation;
(ii) any approval by the shareholders of the Company
of a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets;
(iii) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding voting securities; or
(iv) a change in the composition of the Board, as a
result of which fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (A) are directors of the
Company as of the date of this Agreement, or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of
those directors whose election or nomination was not in connection with any
transaction described in subsections (i), (ii) or (iii) or in connection with an
actual or threatened proxy contest relating to the election of directors of the
Company.
(c) Involuntary Termination.
"Involuntary Termination" shall mean (i) without the Employee's express written
consent, a significant reduction of the Employee's responsibilities relative to
the Employee's responsibilities in effect immediately prior to such reduction,
or the removal of the Employee from such responsibilities, unless the Employee
is provided with comparable responsibilities; however, this shall not include
changes with regard to the management reporting structure or job title (ii) a
reduction by the Company of the Employee's base salary as in effect immediately
prior to such reduction; (iii) a material reduction by the Company in the kind
or level of employee benefits to which the Employee is entitled immediately
prior to such reduction with the result that the Employee's overall benefits
package is significantly reduced; (iv) without the Employee's express written
consent, the relocation of the Employee to a facility or a location more than
thirty-five (35) miles from his current location; (v) any purported termination
of the Employee by the Company which is not effected for Cause or for which the
grounds relied upon are not valid; or (vi) the failure of the Company to obtain
the assumption of this Agreement by any successors contemplated in the
"Successors" clause below.
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2. Term of Agreement.
This Agreement shall terminate upon the date that all obligations of the parties
hereto under this Agreement have been satisfied.
3. At-Will Employment.
The Company and the Employee acknowledge that the Employee's employment is and
shall continue to be at-will, as defined under applicable law. If the Employee's
employment terminates for any reason, the Employee shall not be entitled to any
payments, benefits, damages, awards or compensation other than as provided by
this Agreement, or as may otherwise be established under the Company's then
existing employee benefit plans or policies at the time of termination.
4. Change of Control and Severance Benefits.
(a) Termination Following A Change of Control.
(i) Severance and Benefits. If the Employee's
employment with the Company terminates as a result of an Involuntary Termination
at any time after a Change of Control, and provided that the Employee duly
executes a General Release of All Claims, in the form attached hereto as Exhibit
A or in another form provided by the Company, then:
(1) the Employee shall be entitled to
receive a sum equal to twelve (12) months of Employee's annualized base salary
(as in effect immediately prior to the Change of Control (less applicable tax
withholdings). Such severance shall be paid bi-weekly in accordance with the
Company's normal payroll practices unless the Employee elects to receive the
severance in one lump sum payment. Payment(s) will be made or will begin within
30 days from the effective date of the General Release of All Claims.
(2) the Employee shall be entitled to
receive a sum equal to Employee's annual target bonus in effect immediately
prior to the Change of Control (less applicable tax withholdings). Such amount
shall be paid biweekly in accordance with the Company's normal payroll practices
unless the Employee elects to receive the amount in one lump sum payment.
Payment(s) will be made or will begin within 30 days from the effective date of
the General Release of All Claims.
(3) for a period of twelve (12) months
following the Involuntary Termination, the Company shall continue to make
available to the Employee and Employee's spouse and dependents, at the same cost
to the Employee as was in effect prior to the Change of Control, all group
health, life and other similar insurance plans in which Employee or Employee's
dependents participate on the date of the Employee's termination, including the
Executive Benefits identified in the Employee's offer letter.
(ii) Option Acceleration. If the Employee's
employment with the Company terminates as a result of an Involuntary Termination
at any time after a Change of Control, and provided that the Employee duly
executes a General Release of All Claims, in the form attached hereto as Exhibit
A or in another form provided by the Company, then the vesting and
exercisability of each option granted to the Employee by the Company (the
"Options") shall be automatically
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accelerated in full and the Employee will have 90 days to exercise such options
pursuant to the terms of the applicable stock option agreements.
(b) Other Termination. If the Employee's employment with the
Company terminates other than as a result of an Involuntary Termination after a
Change of Control, then the Employee shall not be entitled to receive severance
or other benefits hereunder, but may be eligible for those benefits (if any) as
may then be established under the Company's then existing severance and benefits
plans and policies at the time of such termination.
5. Accrued Wages and Vacation; Expenses.
Without regard to the reason for, or the timing of, Employee's termination of
employment: (i) the Company shall pay the Employee any unpaid base salary due
for periods prior to the date of termination; (ii) the Company shall pay the
Employee all of the Employee's accrued and unused vacation through the date of
termination; and (iii) following submission of proper expense reports by the
Employee, the Company shall reimburse the Employee for all expenses reasonably
and necessarily incurred by the Employee in connection with the business of the
Company prior to the date of termination. These payments shall be made promptly
upon termination and within the period of time mandated by law.
6. Successors.
Company's Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and/or assets shall assume
the Company's obligations under this Agreement and agree expressly to perform
the Company's obligations under this Agreement in the same manner and to the
same extent as the Company would be required to perform such obligations in the
absence of a succession. For all purposes under this Agreement, the term
"Company" shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this
subsection (a) or which becomes bound by the terms of this Agreement by
operation of law.
Employee's Successors. Without the written consent of the Company, Employee
shall not assign or transfer this Agreement or any right or obligation under
this Agreement to any other person or entity. Notwithstanding the foregoing, 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.
7. Notices.
(a) General. 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 when mailed by U.S. registered or certified
mail, return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to him at the home address that 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.
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(b) Notice of Termination. Any termination by the Company for
Cause or by the Employee as a result of a voluntary resignation or an
Involuntary Termination shall be communicated by a notice of termination to the
other party hereto given in accordance with this Section. Such notice shall
indicate the specific termination provision in this Agreement relied upon, shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so indicated. The failure by the
Employee to include in the notice any fact or circumstance which contributes to
a showing of Involuntary Termination shall not waive any right of the Employee
hereunder or preclude the Employee from asserting such fact or circumstance in
enforcing his rights hereunder.
8. Arbitration.
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 Palo Alto, California, in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association (the "Rules") provided, however, that the arbitrator shall allow the
discovery authorized by California Code of Civil Procedure section 1280, et
seq., or any other discovery required by California law in arbitration
proceedings. Also, to the extent that any of the Rules or anything in this
Agreement conflicts with any arbitration procedures required by California law,
the arbitration procedures required by California law shall govern. The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's decision
in any court having jurisdiction.
The arbitrator(s) shall apply California law to the merits of any dispute or
claim, without reference to conflicts of law rules. 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.
Employee understands that nothing in this Section modifies Employee's at-will
employment status. Either Employee or the Company can terminate the employment
relationship at any time, with or without cause.
EMPLOYEE AND COMPANY HAVE READ AND UNDERSTAND THIS SECTION, WHICH DISCUSSES
ARBITRATION. EMPLOYEE AND COMPANY UNDERSTAND THAT ANY CLAIMS ARISING OUT OF,
RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION,
VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF MUST BE
SUBMITTED TO BINDING ARBITRATION TO THE EXTENT PERMITTED BY LAW, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JUDGE OR JURY
TRIAL (CIVIL ACTION) AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO
ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO,
THE FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF
EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF
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THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT
OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL
MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR
PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL
STATE OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION
IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR
LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR
CODE SECTION 201, et seq;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER
LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
9. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Employee may receive from any
other source.
(b) Waiver. No provision of this Agreement may be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Employee and by an authorized officer of the
Company (other than the 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.
(c) Integration. This Agreement and the stock option
agreements representing the Options represent the entire agreement and
understanding between the parties as to the subject matter herein and supersede
all prior or contemporaneous agreements, whether written or oral.
(d) Choice of Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the internal substantive
laws, but not the conflicts of law rules, of the State of California.
(e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(f) Employment Taxes. All payments made pursuant to this
Agreement shall be subject to withholding of applicable income and employment
taxes.
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(g) 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.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.
SPECTRIAN COMPANY
_________________________________ By: ________________________________
Employee Signature
Its: _______________________________
_________________________________
Date ____________________________________
Date
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Exhibit A
GENERAL RELEASE OF ALL CLAIMS
(to Change of Control Severance Agreement)
On behalf of myself, my heirs, executors, administrators and assigns, I hereby
make the following agreements and acknowledgements in exchange for the
severance, benefits and option acceleration to be received by me under the
Spectrian Company Change of Control Severance Agreement (the "CIC Agreement").
1. I agree that I fully and forever waive, release, acquit and discharge
Spectrian Company and any and all past, current and future parent, subsidiary
and affiliated companies, predecessors and successors thereto, as well as the
Company's officers, directors, agents, employees, affiliates, representatives,
shareholders and assigns (collectively the "Company"), from any and all claims,
actions, charges, complaints, grievances and causes of action of whatever
nature, whether now known or unknown, including but not limited to, all claims
arising from or relating to my recruitment and hiring by the Company, my
employment with the Company and the Involuntary Termination thereof, including
but not limited to: claims for bonuses, or for severance except pursuant to the
CIC Agreement; claims of breach of contract, breach of the covenant of good
faith and fair dealing, wrongful termination, violation of public policy, fraud,
intentional or negligent misrepresentation, defamation, personal injury,
infliction of emotional distress, and claims under Title VII of the 1964 Civil
Rights Act, the Equal Pay Act of 1963, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, the Civil Rights Act of 1866, the Employee
Retirement Income Security Act of 1974, the Worker Adjustment Retraining and
Notification Act, the Family Medical Leave Act, the California Government Code,
the California Labor Code, and any other local, state and federal laws and
regulations relating to employment, except any claim I may have for:
a. unemployment or any state disability insurance benefits
pursuant to the terms of applicable state law;
b. workers' compensation insurance benefits under the terms of
any worker's compensation insurance policy or fund of the Company.
2. I understand and agree that if, hereafter, I discover facts different from or
in addition to those which I now know or believe to be true, that the waivers
and releases of this General Release shall be and remain effective in all
respects notwithstanding such different or additional facts or the discovery of
such facts. I agree that I fully and forever waive any and all rights and
benefits conferred upon me by the provisions of Section 1542 of the Civil Code
of the State of California (or other comparable provision of any applicable
state statutory or common law), which states as follows (parentheticals added):
A general release does not extend to claims which the creditor
[i.e., me] 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.e.,
the Company].
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3. I understand and agree that the severance, benefits, and options acceleration
provided under the CIC Agreement shall constitute the entire consideration
provided under this General Release and that I will not seek any further
compensation or benefits in connection with my employment or for any other
claims, damages, costs, or attorneys' fees in connection with the matters
encompassed in this General Release.
4. I agree that neither the fact nor any aspect of this General Release is
intended, or should be construed at any time, to be an admission of liability or
wrongdoing by either myself or by the Company.
5. I agree that I will not make any negative or disparaging statements or
comments, either as fact or as opinion, about the Company, including but not
limited to its employees, officers, directors, shareholders, vendors, products
or services, business, technologies, market position, performance and other
similar information concerning the Company.
6. I agree that if any provision, or portion of a provision, of this General
Release is, for any reason, held to be unenforceable, that such unenforceability
will not affect any other provision, or portion of a provision, and this General
Release shall be construed as if such unenforceable provision or portion had
never been contained herein.
7. I understand that this Agreement constitutes the entire agreement between the
Company and me on the subjects addressed herein, and no promises and
representations were made to me which do not appear in this Agreement. This
Agreement may not be modified or changed orally. I understand that no
modification of any of the terms or conditions of this Agreement shall be
effective unless made in writing and signed by the Company and me.
8. I understand that this Agreement supercedes and replaces all prior agreements
between the Company and me, whether express or implied, oral or written, except
that this Agreement (a) does not supercede the terms of any obligation which I
have to maintain confidentiality of and not misappropriate trade secrets, or
proprietary or confidential information of the Company; and (b) does not
supercede the terms of any obligation which I have pertaining to the assignment
of inventions to the Company.
9. I understand that I may review and consider, and discuss with an attorney of
my own choosing, and decide whether or not to sign this General Release. I
understand that through this General Release I am releasing the Company from any
and all claims I have or may have against the Company, including age
discrimination claims up through the Effective Date of this General Release.
10. I understand that if I choose to accept this General Release, I must date,
sign, and deliver it to the Company no later than the 21st calendar day
following my Involuntary Termination.
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11. I understand that after signing this Agreement, I have seven (7) days within
which to revoke the Agreement. In order to revoke this Agreement, I understand
that I must do so in writing and that I must deliver the written revocation so
that it is received in the Company's physical possession before the end of the
seven (7)-day revocation period. The written revocation must be delivered to the
Company at the following address:
CEO
Spectrian Company
000 Xxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
I further understand that I may not sign this General Release any earlier than
the effective date of my Involuntary Termination, and that the Effective Date of
this General Release will be the eighth day after I have signed it, provided
that I have delivered it to the Company and I have not revoked it during the
seven days after I signed it. I understand that I should return my signed
General Release as noted above.
SPECTRIAN COMPANY
Dated: __________________________ By: ________________________________
Its: _______________________________
_________________________________ ____________________________________
Dated Employee's Signature
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