EXHIBIT 10.24
PC-TEL, INC.
EMPLOYMENT AGREEMENT
This Agreement is entered into by and between PC-TEL, INC. (the
"Company") and XXXXXX XXXXXX (the "Employee") this 17th day of October, 2001,
effective as of October 17, 2001 (the "Effective Date").
WHEREAS, the Company desires to induce Employee to become an employee of
the Company in the capacity of Chief Executive Officer and Chairman of the Board
of Directors of the Company (the "Board"), and 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 Executive Officer and Chairman of the Board of the Company,
reporting to the Board, 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. Termination of Consulting Agreements. Effective October 31, 2001, the
consulting agreements between the Company and Employee dated as of February 15,
2001 and April 29, 2001 shall be terminated in their entirety; provided,
however, that the option grant to purchase 100,000 shares of the Common Stock of
the Company described in the consulting agreement dated February 15, 2001 (and
the corresponding stock option agreement providing for such option grant) shall
remain in full force and effect.
5. 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 not less than $350,000, 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. For fiscal years 2001 and 2002, Employee shall be
entitled to receive an annual target bonus (based on the Company's fiscal year)
based upon Employee's performance and the Company's attainment of objectives
mutually agreed upon by Employee and the Company and as set forth in Exhibit A
to this Agreement. 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 100% 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.
(i) Stock Option Grant. Effective as of October 23, 2001,
the Company has granted Employee an option to purchase up to 200,000 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 Option Shares 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 monthly 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.
(ii) Restricted Stock Grant. Effective as of October 23,
2001, the Company has granted Employee 75,000 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 $0.001 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.
(iii) 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, dated
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as of October __, 2001, between the Company and Employee (the "Management
Retention Agreement").
6. Vacation. Employee shall be entitled to vacation benefits established
by the Company commensurate with Employee's status as the Chief Executive
Officer and Chairman of the Board of the Company. The Company's vacation policy
may be revised from time to time.
7. Other Benefits. Employee shall be entitled to participate in the
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.
8. 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.
In addition, Employee shall be entitled to a $5,000.00 allowance for legal fees
incurred in connection with this Agreement.
9. 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.
10. 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
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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 at the Company's
expense 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) 18 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
(including but not limited to the Option Shares and the Restricted Shares) 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.
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.
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(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) Disability. "Disability" shall mean that Employee 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 26 weeks after its
commencement, is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to Employee or Employee's legal
representative (such Agreement as to acceptability not to be unreasonably
withheld). Termination resulting from Disability may only be effected after at
least 30 days' written notice by the Company of its intention to terminate
Employee's employment. In the event that Employee 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.
(d) 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
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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) The non-prevailing party to any arbitration under this
Section 12 shall pay its own expenses, the fees of each arbitrator, the
administrative costs of the arbitration, and the expenses, including without
limitation, reasonable attorneys' fees and costs, incurred by the other party to
the arbitration. In any arbitration hereunder in which any claim or the amount
thereof is at issue, the Company shall be deemed to be the non-prevailing party
in the event that the arbitrators award the Company the sum of one-half (1/2) or
less of the disputed amount plus any amounts not in dispute; otherwise Employee
shall be deemed to be the non-prevailing party.
(e) 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.
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(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: Xxxxxxx X. Xxxxxxxxx
Title: Director
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx Xxxxxx
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EXHIBIT A
ANNUAL TARGET BONUS MILESTONES
For fiscal years 2001 and 2002, Employee shall be entitled to receive an
annual target bonus based upon Employee's performance and the Company's
attainment of objectives mutually agreed upon by Employee and the Company as
follows:
FISCAL YEAR TARGET AMOUNT DATE PAYABLE MILESTONES
----------- ------------- ------------ ----------
2001 $125,000.00 12/31/01 - Initiate Restructuring Plan; and
- Present 2002 Operating Plan
2002 $225,000.00 12/31/02 - Company performance measures for fiscal
year 2002 as determined by the
Compensation Committee of the Board,
based on the Company's 2002 Operating Plan
EXHIBIT B
COMPANY'S FORM OF CONFIDENTIAL INFORMATION AGREEMENT
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