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EXHIBIT 10.1.15.a
_________________, 1998
Mr./Ms.______________
Telxon Corporation
_____________________
_____________________
_____________________
Dear______________:
Telxon Corporation (the "Company") considers the maintenance of a sound
and vital management to be essential to protecting and enhancing the best
interests of the Company and its stockholders. As a publicly held corporation,
the Company recognizes the possibility that a change in its control may arise
and that the uncertainty and questions which it may raise among management may
result in the departure or distraction of management to the detriment of the
Company and its stockholders. Accordingly, in order to induce you to remain in
the employ of the Company and to secure for the Company and its stockholders the
benefits of your continued attention and dedication during the pendency of any
proposed or attempted "Change in Control" (as defined below), including your
assessment and advice to the Company's Board of Directors (the "Board") as to
whether any such proposal would be in the best interests of the Company and its
stockholders, the Board has determined to extend to you the severance benefits
set forth in this letter agreement (this "Agreement"), which supplements any
employment agreement now existing or hereafter entered into between you and the
Company (your "Employment Agreement", if any) and any rights or benefits to
which you may be entitled under any Plans (as defined below), in the event your
employment with the Company is terminated subsequent to a Change in Control.
1. TERMINATION FOLLOWING A CHANGE IN CONTROL.
If, within twenty-four (24) months after any Change in Control shall
have occurred, your employment by the Company shall be terminated (1) by the
Company other than for "Cause" or "Disability" or at normal retirement age or
(2) by you for "Good Reason" (as each of the foregoing capitalized terms is
defined below), then, by no later than the fifth (5th) day following the date of
termination (except as otherwise provided in this Agreement), you shall be
entitled, notwithstanding any contrary provisions of your Employment Agreement
or any Plan, to receive the following benefits:
(a) Salary paid through the date of termination at the rate in effect
immediately prior thereto, plus any benefits or awards (whether to be
provided in cash, stock or other right or property) which have been
earned or become payable, but which have not yet been paid to you,
pursuant to the terms of any compensation plan, such as a bonus,
incentive, stock option, restricted stock or stock appreciation right
plan, any benefit plan, such as a thrift, pension, retirement, 401(k),
profit-sharing, health, disability, accident or life insurance plan,
any vacation or relocation plan or policy or any other plan, program or
policy of the Company intended to benefit all, or any designated group
of, Company employees (each of the foregoing constituting a "Plan");
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(b) A lump sum severance payment equal to two (2) times your annual
salary as in effect immediately prior to the Change in Control, which
severance pay shall be in lieu of any severance pay which may be
payable to you under your Employment Agreement unless a greater amount
of severance pay would be payable to you thereunder, in which event you
shall be entitled to receive a lump sum cash payment of such greater
amount in lieu of the severance pay provided for in this Subparagraph
(b).
(c) Continued benefits (or if unavailable under the general terms and
provisions of the applicable Plan, their equivalent) for you and your
dependents, for a period terminating on the earliest of (a) two (2)
years after your employment termination, (b) the commencement date of
equivalent benefits from a new employer, or (c) your normal retirement
date (after which the terms of any retirement Plan shall govern), under
all insured and self-insured employee welfare benefit Plans in which
you were entitled to participate immediately prior to such termination
date, provided that you shall not be required to pay any amount greater
than the regular contribution made by you for such participation
immediately prior to such termination date.
Except as specifically provided in Subparagraph (c) immediately above, the
amount of any payment or benefits provided for in this Agreement shall not be
reduced, offset or subject to recovery by the Company by reason of by any
compensation earned by you as the result of your employment by another employer,
by retirement benefits, by any amount claimed to be owing by you to the Company
or otherwise.
2. "CHANGE IN CONTROL" DEFINED.
For purposes of this Agreement:
(a) A "Change in Control" is deemed to have occurred upon (i) any
Person is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934 (as amended, the "Exchange
Act")), directly or indirectly, of fifteen percent (15%) or more of the
combined voting power of the Company's Voting Securities, or (ii) the
holders of the Company's securities entitled to vote thereon approve,
or there otherwise occurs or is commenced, a sale, lease, exchange or
other disposition of all or substantially all the assets, or the
dissolution or liquidation, of the Company, or any merger,
consolidation or reorganization to which the Company is a party and as
the result of which the Company's stockholders prior to the transaction
do not own at least fifty percent (50%) of the voting power of the
surviving entity in the election of directors, or (iii) "Continuing
Directors" (as defined below) cease for any reason to constitute at
least a majority of the Board, or (iv) any other event occurs which is
of such a nature that would be required to be reported as a change in
control in response to Item 1(a) of the Current Report on Form 8-K, as
in effect on the date hereof pursuant to Section 13 or 15(d) of the
Exchange Act, or similar successor public filing; provided, however,
that any such event shall not be deemed to be a Change in Control if it
results in you, or a group of Persons which includes you, acquiring,
directly or indirectly, fifteen percent (15%) of more of the combined
voting power of the Company's Voting Securities;
(b) "Continuing Directors" means and includes the persons constituting
the Board as of the date of this Agreement as well as each person who
becomes a director of the Company subsequent to the date of this
Agreement whose election, or nomination for election by the Company's
stockholders, was approved by an affirmative vote of at least a
majority of the then Continuing Directors (either by a specific vote or
by approval of the proxy statement of the Company in which such person
is named as a nominee for director or of the inclusion of such person
in such
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proxy statement as such a nominee, in any such case without objection
by any member of such approving majority of the then Continuing
Directors to the nomination of such person or the naming of such person
as a director nominee), for so long as each such director shall remain
in office;
(c) "Person" means and includes any individual, corporation,
partnership, group, association or other "person", as such term is used
in Section 14(d) of the Exchange Act, but excluding the Company or any
employee benefit plan sponsored by the Company; and
(d) "Voting Securities" means the Company's Common Stock, par value
$0.01 per share, and any and all other then outstanding Company
securities ordinarily having the right to vote generally in the
election of the Company's directors.
3. GROUNDS FOR TERMINATION OF EMPLOYMENT.
(a) Termination of your employment based on "Disability" means
termination because of your absence from your duties with the Company on a full
time basis for one hundred eighty (180) consecutive days as a result of your
incapacity due to physical or mental illness, unless you return to the full-time
performance of your duties within thirty (30) days after the Company gives
written notice to you of its intent to terminate your employment due to such
absence, you shall have returned to the full-time performance of your duties.
(b) Termination of your employment for "Cause" means termination for
any action or inaction on your part which is adverse to the Company's interests,
including, without limitation, your dishonesty, grossly negligent misconduct,
willful misconduct, disloyalty, act of bad faith, neglect of duty or material
breach of your Employment Agreement or of any Company policy applicable to its
employees generally.
(c) Any of the following shall constitute "Good Reason" for the
termination of your employment:
(i) any change, without your prior written consent, in your status
(other than the fact that the Company may no longer be publicly
traded), positions or job responsibilities which you consider to be a
reduction in, or the assignment to you of any duties or
responsibilities which you consider to be inconsistent with, your
status, positions or responsibilities as in effect immediately prior to
the Change in Control (other than as the result of your death or the
termination of your employment by the Company for Cause, Disability or
at normal retirement age or by you other than for Good Reason);
(ii) a reduction by the Company, without your prior written consent, in
your base salary, or in the level of benefits provided to you and your
dependents under any Plan, as in effect immediately prior to the Change
in Control;
(iii) the Company's requiring you, without your express written
consent, to be based anywhere other than, or to relocate from, the
metropolitan area where your office is located immediately prior to the
Change in Control;
Your right to terminate your employment pursuant to this Subparagraph (c) shall
not be affected by your incapacity due to physical or mental illness. A
termination of employment by you shall be for Good Reason if one of the
occurrences specified in this Subparagraph (c) shall have occurred,
notwithstanding
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that you may have an offer of employment from another employer or any other
reason(s) for terminating your employment with the Company.
4. TAXES.
(a) All payments to be made to you under this Agreement will be subject
to required withholding of federal, state and local income and employment taxes.
(b) Notwithstanding anything in this Agreement to the contrary, if any
portion of any of the payments and benefits provided for in this Agreement,
together with any other payments and benefits which you have the right to
receive from the Company, its successors or any Person whose actions result in a
Change in Control, would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended, or any successor statutory
provision ("Parachute Payments"), the Company shall pay to you, within five (5)
days of your receipt of such payments and benefits, such additional amounts as
are necessary so that, after taking into account any tax imposed by said Section
4999 or any successor statutory provision on any such Parachute Payments and on
any payments made pursuant to this Subparagraph (b), you are in the same
after-tax position in which you would have been if said Section 4999 or any
successor statutory provision did not apply and no payments were made pursuant
to this Subparagraph (b).
5. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall be binding upon and inure to the benefit of
the Company and its successors and assigns. The Company will require any
"Successor" (as defined below), by agreement in form and substance satisfactory
to you, to assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform under this
Agreement if no such succession had taken place. Failure of the Company to
obtain such assumption and agreement within one (1) business day after any
Person becomes a Successor shall constitute Good Reason for termination by you
of your employment. For purposes of this Agreement: (i) "Successor" shall mean
any Person that, through one or a series of transaction(s), succeeds to, or has
or obtains the practical ability to control (either immediately or with the
passage of time), all or substantially all of the Company's business directly,
by merger, consolidation, purchase or lease of assets or otherwise, or
indirectly, by purchase of the Company's Voting Securities or otherwise; and
(ii) the "Company" shall mean the Company as hereinbefore defined and any
Successor which executes and delivers the agreement provided for in the first
sentence of this Subparagraph (a) or which by operation of law or otherwise
becomes bound by the terms of this Agreement.
(b) This Agreement shall be binding upon you and shall inure to the
benefit of and be enforceable by you and your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
(c) The Company expressly acknowledges and agrees that this Agreement
creates in you a contractual right to the payments and benefits provided
hereunder and expressly waives any right it may have to deny or otherwise seek
to avoid liability for any breach of its contractual obligations hereunder on
grounds of lack of consideration, accord and satisfaction or any other defense.
The Company shall pay all legal fees and related expenses you incur in
protecting, obtaining or enforcing any right or benefit provided by this
Agreement.
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(d) Prior to the occurrence of any Change in Control, this Agreement
(i) shall terminate immediately upon any termination of your employment and (ii)
provided that no offer or other proposal of a transaction or event which, if
consummated, would constitute a Change in Control has been publicly announced
and such offer or proposal has not then been terminated, rescinded or otherwise
abandoned, may be terminated by Board in the event you are re-assigned by the
Company to a position carrying duties and responsibilities of lesser stature
than the position in which you are serving as of the date hereof.
(e) This Agreement shall be interpreted, construed and enforced in all
respects in accordance with the laws of the State of Delaware.
If this letter correctly sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter.
Sincerely,
TELXON CORPORATION
By:
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Xxxxx X. Xxxxx
President and Chief Executive Officer
Agreed to as of the date first above written.
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[Key Employee]
Address of Employee:
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