PCTEL, INC. MARTIN H. SINGER EMPLOYMENT AGREEMENT
Exhibit 10.58
PCTEL, INC.
XXXXXX X. XXXXXX EMPLOYMENT AGREEMENT
This Agreement is entered into as of April 20, 2007, (the “Effective Date”) by and between
(the “Company”) and Xxxxxx X. Xxxxxx (“Executive”).
1. Duties and Scope of Employment. Executive will serve as the Company’s Chief
Executive Officer and Chairman of the Board of Directors. Executive will render such business and
professional services in the performance of his duties, consistent with Executive’s position
within the Company, as shall reasonably be assigned to him by the Company’s Board of Directors
(the “Board”). The period of Executive’s employment under this Agreement is referred to herein as
the “Employment Term.”
2. At-Will Employment. The parties agree that Executive’s employment with the
Company will be “at-will” employment and may be terminated at any time, with or without cause or
notice, by either the Company or Executive.
3. Compensation.
(a) Base Salary. During the Employment Term, the Company will pay Executive as
compensation for his services a base salary at an annualized rate (the “Base Salary”) determined by
the Board, or, if such authority is delegated, by the Compensation Committee of the Board (the
“Compensation Committee”). Executive’s annual Base Salary will be reviewed on an annual basis by
the Compensation Committee and the Board of Directors in accordance with the Compensation
Committee’s and the Board’s established procedures for reviewing salaries of the Company’s
executive officers.
(b) Bonus and Incentives. Executive shall be eligible to receive annual bonuses, long
term incentives and such other elements of compensation (whether in cash or equity) as determined
by and at the discretion of the Board or the Compensation Committee.
4. Employee Benefits. During the Employment Term, Executive will be entitled to
participate in the employee benefit plans currently and hereafter maintained by the Company of
general applicability to other senior executives of the Company, including, without limitation,
the Company’s group medical, dental, vision, disability, life insurance, and flexible-spending
medical account plans. The Company reserves the right to cancel or change the benefit plans and
programs it offers to its employees at any time.
5. Vacation. Executive will be entitled to paid vacation of four weeks per year plus
one additional day for each full year of employment (commencing October 1, 2001).
6. Expenses. The Company will reimburse Executive for reasonable travel,
entertainment or other expenses incurred by Executive in the furtherance of or in connection with
the performance of Executive’s duties hereunder, in accordance with the Company’s expense
reimbursement policy as in effect from time to time. In addition, the Company will reimburse
Executive for reasonable legal expenses as may be incurred by Executive from time to time in
connection with the legal review of this Agreement and any amendment to this Agreement.
7. Severance.
(a) Termination Following a Change of Control. If Executive’s employment is
terminated within twelve (12) months following a Change of Control, the severance and other
benefits to which Executive is entitled shall be governed by the Management Retention Agreement
then in effect between the Company and Executive (which includes the definition of Change of
Control).
(b) Involuntary Termination other than for Cause; Voluntary Termination for Good Reason
Apart From a 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, Executive’s employment with the
Company is terminated either (A) involuntarily by the Company for reasons other than Cause, or (B)
by Executive pursuant to a Voluntary Termination for Good Reason, and Executive signs and does not
revoke a standard mutual release of claims with the Company, then, subject to Section 10, Executive
shall be entitled to receive the following benefits from the Company:
(i) Salary and Bonus Continuation. Executive shall be entitled to receive continuing
payments of salary (less applicable withholding taxes) at the rate equal to Executive’s Base Salary
rate, as then in effect, for a period of twelve (12) months from the date of such termination in
accordance with the Company’s normal payroll policies. In addition, Executive shall be entitled to
receive one hundred percent (100%) of Executive’s maximum potential annual bonus (less applicable
withholding taxes) as in effect for the fiscal year in which Executive’s termination occurs,
payable in equal monthly installments over a period of twelve (12) months from the date of such
termination in accordance with the Company’s normal payroll practices. If the Company reasonably
determines that Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), will
result in the imposition of additional tax to an earlier payment of the severance payments, the
first six (6) months of the severance payments will accrue during the six (6)-month period
following the Executive’s termination and will become payable in a lump sum payment on the date
that is six (6) months and one (1) day following the date of the Executive’s termination of
employment. The remaining severance payments will be paid in accordance with the Company’s normal
payroll practices until all the severance payments have been made.
(ii) Benefits. The Company will reimburse Executive for the cost of Executive’s
continued participation in the Company’s health, dental and vision plans at the same level of
coverage as was provided to Executive immediately prior to the termination of Executive’s
employment with the Company (“Company-Paid Coverage”). If such coverage included Executive’s
dependents immediately prior to Executive’s termination, such dependents shall also be covered at
the Company’s expense. Company-Paid Coverage shall continue until the earlier of (i) twelve (12)
months following the date of the termination of Executive’s employment (the “Benefits Termination
Date”), or (ii) the date upon which Executive or Executive’s dependents become covered under
another employer’s group health, dental and vision insurance benefit plans. If, after twelve (12)
months following the Benefits Termination Date, Executive has not become covered under another
employer’s group health, dental and vision insurance benefit plans, Executive may independently
obtain health, dental and vision insurance benefits comparable in the aggregate in
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scope and coverage to that provided by the Company to Executive immediately prior to the
Benefits Termination Date, and the Company shall reimburse Executive for the cost of the premiums
paid for such benefits until the earlier of (A) six (6) months following the termination of
Company-Paid Coverage, or (B) the date upon which Executive and Executive’s dependents become
covered under another employer’s group health, dental and vision insurance benefit plans.
(iii) Partial Accelerated Vesting. All equity awards then held by Executive with
restrictions that are time-based, subject to Executive’s continued service with the Company, shall
partially accelerate or if Executive is then holding unvested shares, the 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 Executive’s employment
with the Company had continued for an additional twelve (12) months following such termination
date. All equity awards then held by Executive with restrictions that are exclusively
performance-based shall immediately vest only as to those awards that are targeted for achievement
during the performance year in which the employment termination occurs (regardless of any actual
level of achievement subsequently determined); all other then unvested performance-based awards
shall be forfeited.
(iv) Executive Deferred Compensation Plan. Executive shall be entitled to receive all
amounts then owing to him under the Company’s Executive Deferred Compensation Plan based on the
plan provisions as in effect on the execution date of this Agreement.
(v) Terms. The benefits set forth in this Section 7(b), together with any other
benefits which Executive may be expressly entitled to receive resulting from Executive’s
involuntary termination of employment pursuant to any Company severance and benefit plans and
practices, or pursuant to other agreements with the Company, will be provided to Executive in
accordance with the terms of the related plans or agreements.
8. Sections 280G and 4999. The Company’s obligations to provide the
compensation, equity and other benefits as set forth in Section 7 above are expressly conditioned
upon Executive’s compliance with the covenants set forth in Section 13 below, and are not
contingent upon any event constituting a change of effective control or ownership of the Company
or in the ownership of a substantial portion of the assets of the Company. In the event that the
severance and other benefits provided for in this Agreement or otherwise payable to Executive (i)
constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for
this Section, would be subject to the excise tax imposed by Section 4999 of the code, then
Executive’s severance benefits under the Employment Agreement shall be payable either
| (i) | in full, or | ||
| (ii) | as to such lesser amount which would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code, |
whichever of the foregoing amounts, taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive, on an
after-tax basis, of the greatest amount of severance benefits under the Employment Agreement,
notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999
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of the Code. Unless the Company and Executive otherwise agree in writing, any determination
required under this Section shall be made in writing by the Company’s independent public
accountants (the “Accountants”), whose determination shall be conclusive and binding upon Executive
and the Company for all purposes. For purposes of making the calculations required by this
Section, the Accountants may make reasonable assumptions and approximations concerning applicable
taxes and may rely on reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and Executive shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to make a
determination under this Section. The Company shall bear all costs the Accountants may reasonably
incur in connection with any calculations contemplated by this Section.
9. Voluntary Termination; Termination for Cause. If Executive’s employment is
terminated by the Company for Cause, or by Executive for any reason, but other than pursuant to a
Voluntary Termination for Good Reason, then (A) all further vesting of any stock option,
restricted stock award or other Company equity compensation held by Executive will cease
immediately and all rights to receive further compensation by the Company to Executive hereunder
will terminate immediately (except as to amounts already earned), and (B) Executive will only be
eligible for severance benefits in accordance with the Company’s established policies as then in
effect.
10. Death and Disability. If Executive’s employment terminates as a result of death
or Disability, Executive (or his estate, as applicable) shall be entitled to receive the following
benefits from the Company:
(a) Salary. Executive will only be eligible for benefits in accordance with the
Company’s established policies then in effect.
(b) Bonuses. Executive shall receive the actual amount of the bonus paid for the
applicable performance period to which Executive would have been entitled, pro rated for
Executive’s length of service during the performance period up to the date of employment
termination. Such bonus shall be paid to Executive as soon as practicable following the completion
of the performance period and the determination of the amount of bonus to be paid.
(c) Equity Incentives. All unvested equity incentives, whether time-based or
performance-based, shall immediately accelerate and vest in full, and all repurchase restrictions
in favor of the Company shall immediately lapse. Performance-based incentives under this section
shall accelerate and vest as to the targeted number of incentives, where a range of incentives
above or below the target may be earned dependent on the achievement of different levels of
performance.
(d) Executive Deferred Compensation Plan. In the event of Executive’s death,
Executive shall be entitled to receive the death benefit payable under the Executive Deferred
Compensation Plan in an amount equal to the greater of (i) 75% or (ii) the then applicable
percentage established under such plan.
11. Section 409A. Notwithstanding the provisions set forth in this Agreement, the
Board of Directors or the Compensation Committee may in its sole discretion at any time amend the
timing of payments or benefits set forth under Section 7 for the benefit of Executive, to the
extent such
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amended timing can be effected in compliance with Section 409A of the Code and any temporary,
proposed or final Treasury Regulations and guidance promulgated thereunder.
12. Definitions.
(a) Cause. “Cause” shall mean:
(i) An act of personal dishonesty taken by Executive in connection with his responsibilities
as an employee and intended to result in substantial personal enrichment of Executive;
(ii) Executive being convicted of, or a plea of nolo contendere to, a felony;
(iii) A willful act by Executive which constitutes gross misconduct and which is injurious to
the Company; or
(iv) Following delivery to Executive of a written demand for performance from the Company
which describes the basis for the Company’s reasonable belief that Executive has not substantially
performed his duties, continued violations by Executive of Executive’s obligations to the Company
which are demonstrably willful and deliberate on Executive’s part and affords Executive a
reasonable opportunity to cure within a reasonable period of time.
(b) Disability. “Disability” shall mean that:
(i) Executive has been unable to perform his Company duties as the result of his incapacity
due to physical or mental illness, and such inability, at least twenty-six (26) consecutive weeks
after its commencement, is determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to Executive or Executive’s legal representative (such
agreement as to acceptability not to be unreasonably withheld); and
(ii) Executive is disabled pursuant to the terms of the Company’s long-term disability
insurance covering Executive as then in effect. Termination resulting from Disability may only be
effected after at least thirty (30) days’ written notice by the Company of its intention to
terminate Executive’s employment. In the event that Executive resumes the performance of
substantially all of his duties hereunder before the termination of his employment becomes
effective, the notice of intent to terminate shall automatically be deemed to have been revoked.
(c) Voluntary Termination for Good Reason. “Voluntary Termination for Good Reason”
shall mean Executive voluntarily resigns after the occurrence of any of the following:
(i) Without Executive’s express written consent, a material reduction of Executive’s duties,
title, authority or responsibilities, relative to Executive’s duties, title, authority or
responsibilities as in effect immediately prior to such reduction, or the assignment to Executive
of such reduced duties, title, authority or responsibilities; provided, however,
that a “Voluntary Termination for Good Reason” shall not be deemed to have occurred in connection
with a reduction of duties, title, authority or responsibilities resulting solely from (A) a Change
of Control, or (B) any change in Executive’s position as Chairman of the Board as a result of any
legislation, statute, rule or regulation (including rule or regulation of Nasdaq) that would
require, or encourage for purposes
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of prudent corporate governance, the separation of the roles of the Chairman and the Chief
Executive Officer, or any stockholder proposal to similar effect approved by a majority of the
stockholders;
(ii) Without Executive’s express written consent, a material reduction, without good business
reasons, of the facilities and perquisites (including office space and location) available to
Executive immediately prior to such reduction;
(iii) A reduction by the Company in the Base Salary of Executive 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 Executive was entitled immediately prior to such reduction with the
result that Executive’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 Illinois case law or statute,
constitute a constructive termination of Executive.
13. Conditional Nature of Severance Payments.
(a) Noncompete. Executive acknowledges that the nature of the Company’s business is
such that if Executive were to become employed by, or substantially involved in, the business of a
competitor of the Company during the twelve (12) months following the termination of Executive’s
employment (the “Restricted Period”) with the Company for any reason (whether during the Employment
Term or subsequent to the end of such period), it would be very difficult for Executive not to rely
on or use the Company’s trade secrets and confidential information. Thus, Executive agrees and
acknowledges that his right to receive the severance payments set forth in Section 7 (to the extent
Executive is otherwise entitled to such payments) shall be conditioned upon Executive not directly
or indirectly engaging in (whether as an employee, consultant, agent, proprietor, principal,
partner, stockholder, corporate officer, director or otherwise), nor having any ownership interest
in or participating in the financing, operation, management or control of, any person, firm,
corporation or business that competes in the markets for the Restricted Business (as defined below)
during the Restricted Period; provided, however, that nothing in this Section 13(a)
shall prevent Executive from owning as a passive investment less than one percent (1%) of the
outstanding shares of the capital stock of a publicly-held company if (A) such shares are actively
traded on the New York Stock Exchange or the Nasdaq Global Market and (B) Executive is not
otherwise associated with such company or any of its affiliates. The “Restricted Business” for
purposes of this Agreement is one which is engaged in the design, development, manufacture,
production, marketing, sale, licensing or servicing of any products, or the provision of any
services, that are the same as or substantially similar to those of the Company during the
Restricted Period. Upon any breach of this section, all severance payments and benefits pursuant
to this Agreement shall immediately cease.
(b) Non-Solicitation. During the twelve (12) months following the termination of
Executive’s employment with the Company for any reason (whether during or after the Employment
Term), Executive agrees and acknowledges that Executive’s right to receive the severance payments
set forth in Section 7 (to the extent Executive is otherwise entitled to such payments) shall be
conditioned upon Executive not either directly or indirectly soliciting, inducing, attempting to
hire,
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recruiting, encouraging, taking away, hiring any employee of the Company or causing an
employee to leave his or her employment either for Executive or for any other entity or person.
14. Assignment. This Agreement will inure to the benefit of the heirs, executors and
legal representatives of Executive upon Executive’s death and will be binding upon and inure to
the benefit of any successor of the Company. Any such successor of the Company will be deemed
substituted for the Company under the terms of this Agreement for all purposes. For this purpose,
“successor” means any person, firm, corporation or other business entity which at any time,
whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all
of the assets or business of the Company. None of the rights of Executive to receive any form of
compensation payable pursuant to this Agreement may be assigned or transferred except by will or
the laws of descent and distribution. Any other attempted assignment, transfer, conveyance or
other disposition of Executive’s right to compensation or other benefits will be null and void.
15. Notices. All notices, requests, demands and other communications called for
hereunder shall be in writing and shall be deemed given (i) on the date of delivery if delivered
personally, (ii) one (1) day after being sent by a well established commercial overnight service,
or (iii) four (4) days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:
If to the Company:
PCTEL, Inc.
0000 Xxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
0000 Xxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
If to Executive:
Xxxxxx X. Xxxxxx
at the last residential address known by the Company.
at the last residential address known by the Company.
16. Severability. In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue
in full force and effect without said provision.
17. Arbitration and Equitable Relief.
(a) Arbitration. Except as provided in Section 17(b) below, Executive agrees that any
dispute or controversy arising out of, relating to, or concerning Executive’s employment with the
Company or the termination of Executive’s employment with the Company, or any interpretation,
construction, performance or breach of this Agreement, shall be settled by arbitration to be held
in Xxxx County, Illinois, in accordance with the National Rules for Resolution of Employment
Disputes then in effect of the American Arbitration Association, except as provided in Section
17(b) below. 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
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arbitration. Judgment may be entered on the arbitrator’s decision in any court having
jurisdiction. The Company and Executive shall each pay one-half of the costs and expenses of such
arbitration, and each party shall separately pay its counsel fees and expenses.
This arbitration clause constitutes a waiver of Executive’s and the Company’s right to a jury
trial and relates to the resolution of all disputes relating to all aspects of the
employer/employee relationship, except as provided in Section 17(b) below, 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 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, and the
Fair Labor Standards Act;
(iii) Any and all claims arising out of any other laws and regulations relating to employment
or employment discrimination.
(b) Equitable Remedies. Executive agrees that it would be impossible or inadequate to
measure and calculate the Company’s damages from any breach of the covenants set forth in Section
13. Accordingly, Executive agrees that if Executive breaches such covenants, the Company will have
available, in addition to any other right or remedy available, the right to obtain an injunction
from a court of competent jurisdiction restraining such breach or threatened breach and to specific
performance of any such provision of this Agreement. Executive further agrees that no bond or
other security shall be required in obtaining such equitable relief, and Executive hereby consents
to the issuance of such injunction and to the ordering of specific performance.
(c) Administrative Relief. Executive understands that this Agreement does not
prohibit Executive from pursuing an administrative claim with a local, state or federal
administrative body, such as the Illinois Department of Human Rights, the Equal Employment
Opportunity Commission or the Workers’ Compensation Commission. This Agreement does, however,
preclude Executive from pursuing court action regarding any such claim (other than workers’
compensation claims).
18. Integration. This Agreement 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, including any consulting or independent contractor agreements.
No waiver, alteration, or modification of any of the provisions of this Agreement will be binding
unless in writing and signed by duly authorized representatives of the parties hereto.
19. Tax Withholding. All payments made pursuant to this Agreement will be subject to
withholding of applicable taxes.
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20. Governing Law. This Agreement will be governed by the laws of the State of
Illinois (with the exception of its conflict of laws provisions), and all actions to enforce its
terms will be venued exclusively in Xxxx County, Illinois.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by their duly authorized officers, as of the day and year first above written.
PCTEL, INC. |
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/s/ Xxxxxxx X. Xxxxxxxxx
|
Date: | April 20, 2007 | |||
By: Xxxxxxx X. Xxxxxxxxx |
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Title: Chair of the Compensation Committee |
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EXECUTIVE: |
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/s/ Xxxxxx X. Xxxxxx
|
Date: | April 7, 2007 | |||
Xxxxxx X. Xxxxxx |
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