Exhibit 10.27
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ADAPTIVE BROADBAND CORPORATION
RETENTION AGREEMENT
This Retention Agreement is entered into as of October 6, 2000 (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 and is a named executive officer of ADAP. ADAP and the
Employee desire to set forth the terms of the Employee's employment between the
date of the Agreement and the Employee's termination on February 10, 2003. The
Board of Directors (the "Board") believes that it is in the best interest of
ADAP and its stockholders for the Employee to continue in her position during a
search for a replacement and to remain available for support and assistance
following her transfer of CFO responsibilities to her successor. This Agreement
provides incentives to the Employee to participate in the transition and
provides guarantees to ADAP that the Employee will remain available to support
the transition.
The parties agree as follows:
1. Definitions. For purposes of this Agreement, the following terms will
have the meanings set forth below.
a. 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) ADAP sells, leases or exchanges all or substantially all of
its property and assets under Section 271 of the General Corporation Law of the
State of Delaware, 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.
b. "Continuing Directors" shall mean the directors of ADAP in office
on the date of this Agreement 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.
c. "Good Reason" includes any of the following:
1) 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;
2) a reduction in the Employee's benefits as in effect on the
date of a Change in Control;
3) 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
4) 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.
d. "Termination for Cause" is termination of the Employee's employment as
a result of (a) the Employee's willful gross misconduct with respect to ADAP; or
(b) the Employee's dishonesty towards, fraud upon, crime against or deliberate
or attempted injury or bad faith action with respect to ADAP; or (c) the
Employee's conviction for a felony (whether in connection with ADAP's affairs or
otherwise).
2. Obligations of the Employee. The Employee will continue to execute her
ADAP duties as Executive Vice President, Chief Financial Officer and a named
executive officer of ADAP until the earlier of (a) July 31, 2001 or (b) the date
on which she is relieved of any of these responsibilities by the CEO or the
Board or c) the date on which the Employee relieves herself of these
responsibilities for Good Reason following a Change in Control occurring prior
to July 31, 2001. Upon the termination of her responsibilities as Executive
Vice President, the Employee will provide ADAP with transition support services
at ADAP's request for up to 40 hours per calendar quarter, ending on February
10, 2003. During the term of this Agreement, the Employee will not accept
employment, board membership, consultancy or other similar relationship of any
nature or duration with a company deemed by ADAP to be a competitor.
3. Obligations of ADAP. During the term of this Agreement, ADAP will pay the
Employee (a) a base salary at a rate of $275,000 per year, paid weekly and (b) a
"perq pot" payment at the rate of $34,100 per year, paid weekly. Within thirty
days of the termination of the Employee's responsibilities as an Executive Vice
President, ADAP will pay her a pro-rata portion of her annual targeted Executive
Incentive Plan (RIP) bonus ($151,250) based on that portion of the RIP plan year
completed upon such termination plus all accrued Personal Time Off. Following
such termination of responsibilities and continuing through the remaining term
of this Agreement, the Employee shall receive additional payments at a rate of
$10,000 per quarter, paid weekly. Upon termination of the Employee's employment
on February 10, 2003, ADAP will pay the Employee a severance payment of
$159,861. All payments described in this section are subjected to applicable
withholding for benefits payments and taxes. Following termination of the
Employee's responsibilities as Executive Vice President and named executive
officer of the company, ADAP will require the Employee to work no more than 40
hours per calendar quarter. Notwithstanding this reduced work schedule, the
Employee will be eligible to participate in all ADAP employee benefits through
February 10, 2003, including but not limited to (a) resumption of Personal Time
Off accrual without limitation, (b) vesting of stock options, (c) Supplemental
Executive Deferred Compensation Plan participation and (d) continuation of
existing employee loans, as if her status was that of a regular full-time
employee.
4. Employment Status. Under this Agreement, ADAP shall retain the Employee as
an employee until February 10, 2003 unless there is a Termination for Cause.
5. Term. The term of this Agreement will expire on February 10, 2003, or upon
the death of the Employee.
6. 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. If there is a Change in Control, this arbitration provision no
longer applies.
2.
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 breach 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.
7. Prior Agreements. The Employee and ADAP acknowledge a prior severance
agreement dated March 1, 2000. The Employee and ADAP hereby agree to terminate
this prior severance agreement 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, Inc.
/s/ Xxxxxxxxx X. Xxxxxxxx /s/ Xxxxx Xxxxx
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Xxxxxxxxx X. Xxxxxxxx Xxxxx Xxxxx
Chairman and Chief Executive Officer Executive Vice President and Chief
Financial Officer
3.
AMENDMENT TO
ADAPTIVE BROADBAND CORPORATION
RETENTION AGREEMENT
THIS AMENDMENT is entered into as of November 12, 2000, by and between ADAPTIVE
BROADBAND CORPORATION, a Delaware corporation ("ADAP") and XXXXX XXXXX (the
"Employee") with respect to that certain RETENTION AGREEMENT (the "Agreement")
entered into as of October 6, 2000, between ADAP and the Employee.
ADAP and the Employee desire to extend the term of the Agreement in the event
that a Change in Control (as defined in the Agreement) occurs as a result of
ADAP's pending "Project President" while the Employee continues to serve as
Executive Vice President, Chief Financial Officer and prior to July 31, 2001.
Therefore, the parties agree to amend the Agreement by adding a new Section 8
thereto to read as follows:
8. Extension of Term. Notwithstanding anything to the contrary set forth
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herein, in the event that a Change in Control occurs as a result of
the transaction currently under consideration by ADAP, internally
referred to as "Project President," prior to the earlier of (a) July
31, 2001 or (b) the date on which the Employee is relieved of her
responsibilities as Executive Vice President, Chief Financial Officer
by the CEO or the Board, each occurrence of the date "February 10,
2003" in the RECITAL and in Sections 2, 3, 4 and 5 hereof shall be
replaced by "August 10, 2003". In such event, the Employee agrees to
continue as an employee of the Project President combined company
performing duties consistent with that of an Executive Vice President,
Chief Financial Officer until the earlier of (a) such time as the
combined company appoints a successor Chief Financial Officer and
thereafter through a to be agreed transition period thereafter, or (b)
such time as she is relieved of her position by the CEO or the Board
of the combined company, but in no event beyond July 31, 2001. The
Employee's obligation to continue in such a role beyond the Project
President Change in Control event shall terminate upon the occurrence
of any Good Reason listed in items 2, 3 and 4 of Section 1.c above.
Additionally, in the event of a Project President Change in Control,
that certain Promissory Note dated January 20, 1998, in the principal
amount of $500,000, in which the Employee is the Maker and ADAP's
predecessor is the Payee shall be amended by replacing each occurrence
of the date "December 16, 2002" in such Promissory Note with "August
10, 2003".
Except as expressly amended as set forth herein, the Agreement is ratified and
approved.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year first written above.
ADAPTIVE BROADBAND CORPORATION.
By /s/ Xxxxxxxx X. Xxxxxxxx /s/ Xxxxx Birsk
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Xxxxxxxx X. Xxxxxxxx XXXXX XXXXX
Chairman and Chief Executive Officer
