Exhibit 10.21
CHANGE OF CONTROL AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT (the "Agreement") is entered into as of
_______________, 2001, by and between Network Equipment Technologies, Inc. (the
"Company"), and Xxxxxx Xxxxxx (the "Executive").
1. Definitions.
(a) Change in Control and Corporate Transaction. For all purposes under
this Agreement, "Change in Control" and "Corporate Transaction" will have the
same meaning as the defined term in the Company's 1993 Stock Option Plan.
(b) Good Reason. For all purposes under this Agreement, "Good Reason"
means that the Executive: (i) has incurred a material reduction or alteration in
his or her authority, status or responsibility; (ii) has incurred a material
reduction in his or her "base compensation"; or (iii) has been notified that his
or her principal place of work will be relocated by a distance of 50 miles or
more.
(c) Base Compensation. For purposes of this Agreement, "base compensation"
means annualized base salary as reflected in the Company's payroll records as of
the effective date of this Agreement and as may be subsequently adjusted upward
for increases.
(d) Cause. For all purposes under this Agreement, "Cause" means: (i) a
willful act by the Executive which constitutes misconduct or fraud and which has
a material adverse effect on the Company; or (ii) Conviction of a felony crime.
No act, or failure to act, by the Executive will be considered "willful" unless
committed without good faith and without a reasonable belief that the act or
omission was in the Company's best interest.
(e) Disability. For all purposes under this Agreement, "disability" will
have the same meaning as under the Company's Long-Term Disability Plan.
2. Incentive Programs. If a Change in Control or Corporate Transaction occurs
with respect to the Company, and within the first twelve (12) month period after
such occurance, the Executive either voluntarily resigns his or her employment
for Good Reason, or his or her employment is terminated by the Company for any
reason other than Cause or Disability, then the Executive shall become fully
vested in all awards heretofore or hereafter granted to him or her under all
stock option, stock appreciation rights, restricted stock, phantom stock or
similar plans or agreements of the Company regardless of any provisions in such
plans or agreements that do not provide for full vesting. (To the extent that
such plans or agreements provide for full vesting on the same or an earlier date
than this Agreement, such plans or agreements shall prevail.) In addition, all
vested awards will be exercisable for the full duration of their terms.
3. Successors.
(a) Company's Successors. The Company will require any successor (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, by an agreement in substance and form satisfactory to the
Executive, to assume this Agreement and to agree expressly to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform it in the absence of a succession. The Company's failure to
obtain such agreement prior to the effectiveness of a succession will constitute
Good Reason under Section 1(b) for the Executive to terminate his or her
employment. For all purposes under this Agreement, the term "Company" will
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 this Agreement by operation of law.
(b) Executive's Successors. This Agreement and all rights of the Executive
under this Agreement will inure to the benefit of, and be enforceable by, the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
4. Miscellaneous Provisions.
(a) Notice. Notices and all other communications contemplated by this
Agreement will be in writing and will 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 Executive, mailed
notices will be addressed to him or her at the home address which he or she 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.
(b) Waiver. No provision of this Agreement will be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Executive and by an authorized officer of the Company (other
than the Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
will be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
(c) Whole Agreement. No agreements, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof.
(d) No Setoff; Withholding Taxes. There will be no right of setoff or
counterclaim, with respect to any claim, debt or obligation, against payments to
the Executive under this Agreement. All payments made under this Agreement will
be subject to reduction to reflect taxes required to be withheld by law.
(e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement will be governed by the laws of the State of
California.
(f) Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement will not affect the validity or enforceability of
any other provision hereof, which will remain in full force and effect.
(g) Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, will be settled by arbitration in San
Francisco in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. Discovery will be permitted to the same extent as in a
proceeding under the Federal Rules of Civil Procedure, including (without
limitation) such discovery as is specifically authorized by section 1283.05 of
the California Code of Civil Procedure, without need of prior leave of the
arbitrator under section 1283.05(e) of such Code. Judgment on the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof. All
fees and expenses of the arbitrator and such Association and attorney fees will
be paid as determined by the arbitrator.
(h) No Assignment. The rights of any person to payments or benefits under
this Agreement will not be made subject to option or assignment, either by
voluntary or involuntary assignment or by operation of law, including (without
limitation) bankruptcy, garnishment, attachment or other creditor's process, and
any action in violation of this Subsection (h) will be void.
5. Effective Date and Term of Agreement. This Agreement is effective on the date
written above and will continue in effect until the Company gives one (1) years'
written notice of cancellation; provided, that, notwithstanding the delivery of
any such notice, this Agreement will continue in effect for a period of one (1)
year after a Change in Control or Corporate Transaction, if such transaction(s)
occurrs during the term of this Agreement. Except as provided in the next
paragraph, this Agreement will terminate if Executive or the Company terminates
Executive's employment prior to a Change in Control or Corporate Transaction.
This Agreement will also become effective in the event that the Company
terminates the Executive's employment for any reason other than Cause or
Disability or the Executive voluntarily resigns for Good Reason in connection
with an impending Change in Control or Corporate Transaction. The Company's
Board shall determine in good faith whether such a termination or resignation is
occurring in connection with an impending Change in Control or Corporate
Transaction. However, such a termination or resignation will in any event be
deemed to be in connection with an impending Change in Control or Corporate
Transaction if the termination or resignation (i) is required by the merger
agreement or other instrument relating to such Change in Control or Corporate
Transaction or (ii) is made at the express request of the other party to the
transaction constituting such Change in Control or Corporate Transaction. If
this paragraph applies, then this Agreement will become effective immediately
prior to the effective time of the Executive's termination or resignation.
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.
EXECUTIVE:
/s/ Xxxxxx Xxxxxx
NETWORK EQUIPMENT TECHNOLOGIES, INC.
By /s/ Xxxxxx X. X. Xxxxx
President and Chief Executive Officer
