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EXHIBIT 10.7
CHANGE OF CONTROL AGREEMENT
This CHANGE OF CONTROL AGREEMENT (the "Agreement") is effective as of
November 3, 1999, by and between XXXXXXX X. XXXXXXXX (the "Employee") and
REPEATER TECHNOLOGIES, INC. (the "Company"). Certain capitalized terms used in
the Agreement are defined in Section 5 below.
WHEREAS, the Company has employed Employee as the Vice President, Finance
and Chief Financial Officer of the Company.
WHEREAS, the Company and Employee would like to provide for Employee in
case Employee's employment with the Company is terminated after a change of
ownership of the Company.
THEREFORE, in consideration of the mutual covenants herein contained, and
in consideration of the continuing employment of Employee by the Company, the
parties agree as follows:
1. AT-WILL EMPLOYMENT. The Company and Employee acknowledge that Employee's
employment is at will, as defined under applicable law. If Employee's employment
terminates for any reason, Employee shall not be entitled to any payments,
benefits, damages, awards or compensation other than as provided by this
Agreement.
2. TERM. This Agreement shall be effective as of the date first above written,
and shall terminate on the fifth anniversary of such date.
3. EMPLOYEE'S OPTIONS. After a Change of Control (as defined below), Employee's
Options (as defined below) will immediately vest in full.
4. SEVERANCE BENEFITS.
(a) VOLUNTARY RESIGNATION, DEATH, DISABILITY OR TERMINATION FOR JUST
CAUSE. If Employee's employment terminates by reason of Employee's voluntary
resignation (and is not an Involuntary Termination after a Change of Control (as
defined below), death, Disability (as defined below) or if Employee is
terminated for Just Cause (as defined below), then Employee shall not be
entitled to receive severance or other benefits except for those (if any) as may
then be established under the Company's then existing severance and benefits
plans and policies at the time of such termination.
(b) INVOLUNTARY TERMINATION. If, after a Change of Control, Employee's
employment is terminated as a result of Involuntary Termination other than for
Just Cause within one year of such Change of Control (as defined below) of the
Company, then (i) the Company must continue to pay Employee his Base
Compensation in effect immediately prior to the Termination Date for a
six-calendar month period from the Termination Date, (ii) the Company shall
continue to provide to Employee and Employee's family for a six-calendar-month
period from the Termination Date all Company provided insurance benefits in
effect immediately prior to the Termination Date and (iii) the Employee's
Options (as defined below) will become exercisable for a period of 270 days from
the Termination Date.
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5. DEFINITION OF TERMS. The following terms referred to in this Agreement shall
have the following meanings:
(a) BASE COMPENSATION. The annual compensation of Employee, which is
$155,000 as of the date of this Agreement, together with any increases in such
compensation that the Board of Directors may grant from time to time, is
referred to in this Agreement as "Base Compensation."
(b) CHANGE OF CONTROL. "Change of Control" means the occurrence of any of
the following events: (i) any "PERSON" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended), is or becomes the
"BENEFICIAL OWNER" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing more than 50% of the total
voting power represented by Company's then outstanding voting securities; or
(ii) the shareholders of Company approve a merger or consolidation of Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty percent (50%) of
the total voting power represented by the voting securities of Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the shareholders of Company approve a plan of complete liquidation of Company or
an agreement for the sale or disposition by Company of all or substantially all
of Company's assets.
(c) DISABILITY. "Disability" shall mean that Employee has been unable to
perform his duties under this Agreement 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) INVOLUNTARY TERMINATION. "Involuntary Termination" shall mean (i)
termination by the Company other than for Just Cause (as defined below); (ii)
without Employee's express written consent, the assignment to Employee of any
duties or the reduction of Employee's duties, either of which results in a
significant diminution in Employee's position or responsibilities with the
Company in effect immediately prior to such assignment, or the removal of
Employee from such position and responsibilities; (iii) a reduction by the
Company in the Base Compensation of Employee as in effect on the date hereof or
as the same may be increased from time to time, except for across-the-board
salary reductions similarly affecting all senior Employees of the Company; (iv)
a failure by the Company, without Employee's consent, to pay Employee any
portion of Employee's current compensation or to pay to Employee any portion of
an installment of deferred compensation under any deferred compensation program
of the Company, within seven days of the date such compensation is due; (v) a
material reduction by the Company in the kind or level of employee benefits to
which Employee is entitled immediately prior to such reduction with the result
that Employee's overall benefits package is significantly reduced; (vi)
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the failure by the Company, without Employee's consent, to continue in effect
any bonus plan to which Employee becomes entitled, or any compensation plan in
which Employee participates which is material to Employee's total compensation
unless an equitable arrangement has been made providing substantially equivalent
benefits on a basis not materially less favorable (both in terms of the amount
of benefits provided and the level of Employee's participation relative to other
participants); and (vii) the relocation of Employee to a facility or a location
more than 50 miles from Employee's then present location, or the requirement for
Employee to commute to a facility or location more than 50 miles from Employee's
present location, without Employee's express written consent.
(e) JUST CAUSE. "Just Cause" shall mean (i) the willful and continued
failure of the Employee to substantially perform his duties with the Company
other than any such failure resulting from his incapacity due to death or
physical or mental illness after a written demand for substantial performance is
delivered to the Employee by the Board of Directors of the Company, which demand
specifically identifies the manner in which the Board of Directors believes that
the Employee has not substantially performed his duties; or (ii) the willful
engaging by the Employee in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise. For purposes of this Section
5(e), no act or failure to act by the Employee shall be deemed "willful" unless
done, or omitted to be done, by the Employee not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Company. Notwithstanding the foregoing, Employee shall not be deemed to have
been terminated for Just Cause unless and until there shall have been delivered
to Employee a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the members of the Board of Directors of the Company at
a meeting called and held for such purpose (after reasonable notice to Employee
and an opportunity for him, together with his counsel, to be heard before the
Board of Directors) finding in the good faith opinion of the Board of Directors
that Employee was guilty of conduct set forth in this Section 5(e) and
specifying the particulars thereof in detail.
(f) OPTIONS. "Options" shall mean options to purchase 180,000 shares of
Common Stock of the Company granted to Employee on November 10, 1999 under the
Company's 1990 Stock Option Plan and the related Stock Option Agreement as well
as any additional options granted to Employee by the Company or any successor
interest to the Company at any time after the date of this Agreement and shall
include any options assumed or substituted by a third party in connection with a
Change of Control of the Company.
(g) TERMINATION DATE. "Termination Date" shall mean (i) if this Agreement
is terminated by the Company for Disability, thirty (30) days after notice of
termination is given to Employee (provided that Employee shall not have returned
to the performance of Employee's duties on a full-time basis during such thirty
(30) day period); (ii) if Employee's employment is terminated by the Company for
any other reason, the date on which a notice of termination is given, unless
otherwise specified in such notice; or (iii) if the Agreement is terminated by
Employee, the date on which Employee delivers the notice of termination to the
Company.
6. LIMITATION ON PAYMENTS. In the event that any benefits or payments received
or to be received by Employee pursuant to this Agreement would (i) constitute a
"parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the
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"Code"), or any similar or successor provision to 280G; and (ii) but for this
Section 6, be subject to the excise tax imposed by Section 4999 of the Code or
any similar or successor provision to Section 4999 (the "Excise Tax"), then such
payments and benefits (the "Parachute Payments") shall be reduced to the largest
amount which the Employee, in his sole discretion, determines would not result
in any portion of the Parachute Payments being subject to the Excise Tax. The
determination of any required reduction pursuant to this Section 6 (including
the determination as to which specific Parachute Payments shall be reduced)
shall be made by the Employee, and such determination shall be conclusive and
binding upon the Company for all purposes. The Company waives all claims and
rights against the Employee with respect thereto. The Company shall reduce a
Parachute Payment in accordance with Section 6 only upon written notice by
Employee indicating the amount of such reduction, if any.
7. SUCCESSORS.
(a) COMPANY'S SUCCESSORS. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company's business, equity
securities and/or assets shall assume the obligations under this Agreement and
agree expressly to perform the obligations under this Agreement in the same
manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this
Agreement, the term "Company" shall include any successor to the Company's
business, equity securities and/or assets which executes and delivers the
assumption agreement described in this subsection (a) or which becomes bound by
the terms of this Agreement by operation of law.
(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.
8. NOTICE.
(a) GENERAL. 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 when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. 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.
(b) NOTICE OF TERMINATION. Any termination by the Company for Disability
or Just Cause, or by Employee as a result of a voluntary resignation or an
Involuntary Termination shall be communicated by a notice of termination to the
other party hereto given in accordance with this Section 8. Such notice shall
indicate the specific termination provision in this Agreement relied upon, shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so indicated, and shall specify the
termination date.
9. ARBITRATION AND EQUITABLE RELIEF. The Company and Employee agree that any
dispute or controversy arising out of or relating to any interpretation,
construction, performance or
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breach of this Agreement shall be settled by arbitration to be held in Santa
Xxxxx County, California, in accordance with the commercial arbitration rules
then in effect of the American Arbitration Association. 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
of competent jurisdiction.
10. MISCELLANEOUS PROVISIONS.
(a) NO DUTY TO MITIGATE. Employee shall not be required to mitigate the
amount of any payment contemplated by this Agreement (whether by seeking new
employment or in any other manner), nor shall any such payment be reduced by any
earnings that Employee may receive from any other source.
(b) 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 an authorized officer 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.
(c) WHOLE AGREEMENT. No agreements, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof.
(d) CHOICE OF LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.
(e) SEVERABILITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
(f) EMPLOYMENT TAXES. All payments made pursuant to this Agreement
will be subject to withholding of applicable taxes.
(g) 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 officer, as of the day and year
first above written.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Title: President and CEO
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxxx
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XXXXXXX X. XXXXXXXX
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