Exh. 10.15
ADAPTIVE BROADBAND CORPORATION
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT is entered into as of July 2, 1999 (the "Effective
Date"), between ADAPTIVE BROADBAND CORPORATION, a Delaware corporation ("ADAP")
and Xxxxx Xxxxx (the "Employee").
RECITAL
The Employee serves as ADAP's Executive Vice President and Chief Financial
Officer. 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, acquisition or other major structural change.
The parties agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms will
have the meanings set forth below.
1.1 A "CHANGE IN CONTROL" will occur if (a) any Person (as defined
in 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) a Transaction
is consummated; 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 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 ADAP's long-term disability benefit.
1.4 "GOOD REASON" includes any of the following:
(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 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 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 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. The one-year period provided for herein shall
be six months in the event that a Change in Control arises out
of a Transaction defined in Section 1.8 (c) hereof.
1.8 "TRANSACTION" is (a) a consolidation or merger of ADAP if the
shareholders of ADAP immediately before the merger or
consolidation do not immediately after the merger or
consolidation own equity securities of the surviving or
acquiring corporation or a parent party possessing 50% or more
of the voting power of the surviving or acquiring corporation
or parent party; (b) a sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of
50% or more of the assets of ADAP; or (c) the sale or other
disposition of business units within any 12-month period that
contributed for that 12-month period more than 45% of ADAP's
revenues. The Transaction requirements defined in parts (b)
and (c) above shall specifically exclude the sale of the
Information Systems division and its associated assets, and
the designated percentage thresholds for assets and revenues
stated herein (50% and 45%, respectively) shall be calculated
without including this division's assets or revenues in the
base.
2. TERM. If no Change in Control has occurred, this Agreement will expire
on December 31, 2000. If a Change in Control occurs prior to December
31, 2000, 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
Control
occurs, the Employee will immediately be paid all (a) accrued salary,
(b) bonus compensation equal to the higher of (i) the annual EIP bonus
based on 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 EVA growth for such fiscal year as of the
most recently completed fiscal quarter is equal to that specified
in the operating plan for such period, or (ii) the annual bonus 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 performance period during
which Employee's termination occurs, (c) vested deferred compensation
(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, ADAP shall pay monthly severance compensation to the Employee
for a period ending 24 months after termination, or ending 12 months
after termination if the Termination Upon a Change in Control (i) is
initiated by the Employee as specified in Sections 1.7 (a) or 1.7 (b)
and (ii) is by reason of a Transaction defined in Section 1.8 (c), in
an aggregate amount determined by adding (a) the Employee's monthly
base salary at the time of termination and (b) 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, and (c) the
amount of $2400.00 in lieu of other employee benefits (including health
benefits) the Employee was receiving from ADAP at the time of the
Change in Control. If the Employee begins regular employment prior to
the expiration of the aforesaid 24 month period, or 12 month period if
the Termination Upon a Change in Control (i) is initiated by the
Employee as specified in Sections 1.7 (a) or 1.7 (b) and (ii) is by
reason of a Transaction defined in Section 1.8 (c), 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) the date which is
one-half the number of months past he beginning of severance
compensation provided for in this Section 4. Employee agrees to
promptly notify ADAP of any such regular employment and to reimburse
ADAP for any payments made by ADAP hereunder that cover any period
during which the Employee was a regular employee.
5. ACCELERATION OF OPTIONS. If a Termination Upon a Change in Control
occurs, 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 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
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.
a. SEVERABILITY. If a court or other body of competent
jurisdiction 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 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 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 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 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 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 AGREEMENTS. The Employee and ADAP (named "California Microwave,
Inc." prior to April 29, 1999) acknowledge an offer of employment
letter dated December 12, 1997, and a prior severance agreement dated
May 18, 1998. The Employee and ADAP hereby agree that the provisions of
the offer of employment letter which provide a severance benefit if the
Employee's employment is terminated without cause shall not be affected
by this Agreement, provided, however, that the Employee shall be
entitled only to the severance benefit either thereunder, or under this
Agreement, as designated in writing by the Employee no later than ten
(10) calendar days after termination. If no such designation is so
made, then only the severance benefit under this Agreement shall apply.
Regardless of which severance benefit applies, the provisions regarding
Excess Parachute Payment shall apply to the severance benefit, as set
forth in the last sentence of the ninth paragraph of the offer of
employment letter. The Employee and ADAP hereby terminate their prior
severance agreement dated May 18, 1998, 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 CORPORATION
/s/ Xxxxxxxxx X. Xxxxxxxx
-------------------------------- --------------------------------
Xxxxxxxxx X. Xxxxxxxx Xxxxx Xxxxx
Chairman and Chief Executive Officer Executive Vice President and Chief
Financial Officer
