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Exhibit 12
CHANGE IN CONTROL AGREEMENT
AGREEMENT, made as of this 31st day of July, 2000, by and between
Microwave Power Devices, Inc., a Delaware corporation (the "Company") and
Xxxxxxx X. Xxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Company believes that the establishment and maintenance of
a sound and vital management of the Company is essential to the protection and
enhancement of the interests of the Company and its stockholders;
WHEREAS, the Company also recognizes that the possibility of a Change
in Control of the Company (as defined in Section 1 hereof), with the attendant
uncertainties and risks, might result in the departure or distraction of key
employees of the Company to the detriment of the Company; and
WHEREAS, the Company has determined that it is appropriate to take
steps to induce key employees to remain with the Company, and to reinforce and
encourage their continued attention and dedication, when faced with the
possibility of a Change in Control of the Company.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Change in Control Definition. A Change in Control shall mean the
occurrence of any of the following: (i) any person (as defined in Section
3(a)(9) of the Securities
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Exchange Act of 1934, as amended (the "Exchange Act") and as used in Sections
13(d) and 14(d) thereof), excluding the Company, any Affiliates (as hereinafter
defined) of the Company, or any employee benefit plan sponsored or maintained by
the Company or its Affiliates (including any trustee of any such plan acting in
his capacity as trustee), becoming the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of securities of the Company representing more
than fifty percent (50%) of the total combined voting power of the Company's
then outstanding securities; (ii) the merger, consolidation or other business
combination of the Company (a "Transaction"), other than a Transaction involving
only the Company's Affiliates or a Transaction immediately following which the
stockholders of the Company immediately prior to the Transaction continue to
have a majority of the voting power in the resulting entity; (iii) during any
period of three (3) consecutive years beginning on or after the date hereof, the
persons who were members of the Board of Directors of the Company (the "Board")
immediately before the beginning of such period (the "Incumbent Directors")
ceasing (for any reason other than death) to constitute at least a majority of
the Board or the board of directors of any successor to the Company, provided
that, any director who was not a director as of the date hereof shall be deemed
to be an Incumbent Director if such director was elected to the board of
directors by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors either
actually or by prior operation of the foregoing unless such election,
recommendation or approval occurs as a result of an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act or any successor provision) or other actual
or threatened solicitation of proxies or contests by or on behalf of a person
other than a member of the Board; or (iv) the approval by the stockholders of
the Company
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of any plan of complete liquidation of the Company or an agreement for the sale
of all or substantially all of the Company's assets, other than the sale of all
or substantially all of the assets of the Company to any of the Company's
Affiliates. Only one Change in Control may occur under this Agreement. For
purposes of this Agreement, the term "Affiliates" shall have the same meaning as
set forth under the definition of "affiliates" in Rule 405 of the Securities Act
of 1933, as amended.
2. Term. This Agreement shall commence on the date hereof and shall
expire on the earlier of (i) three (3) years from the date hereof, or (ii) the
date of the death of the Executive, or (iii) the termination of the Executive's
employment with the Company (for any reason) prior to a Change of Control.
3. Effect of a Change in Control. If a Change in Control occurs
simultaneous with or prior to the expiration of this Agreement pursuant to
Section 2 hereof and within six (6) months after a Change of Control the
Executive's employment with the Company is terminated either by the Executive
for Good Reason (as hereinafter defined) or by the Company without cause, the
Executive shall be entitled to the amounts and benefits provided under Section 4
hereof. For purposes of this Agreement, "Good Reason" shall mean the occurrence
of any of the following events without the Executive's express prior written
consent: (A) any diminution in the Executive's title or a diminution in
Executive's duties, functions, responsibilities or authority has occurred;
(B) a reduction in the Executive's annual base salary, annual potential bonus
relative to the prior year's potential bonus or eligibility for or participation
in benefit plans; (C) a relocation of the Executive's principal business
location to an area outside a forty (40) mile radius of the
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Executive's current principal business location or requirement to travel away
from his home or office significantly more often than was customary in the past;
(D) an elimination of all or substantially all of the Company's corporate
functions at the Company's current principal business location; or (E) a failure
of any successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) of the Company to assume in writing the obligations
hereunder.
4. Payments upon a Change in Control. If pursuant to Section 3 above,
the Executive is entitled to amounts and benefits under this Section 4, the
Company shall pay or provide, as the case may be, the following items:
(a) immediately following his termination of employment with the
Company, the Company shall continue to pay to the Executive for a period of one
year the Executive's then current annual salary plus the Executive's then
current annual targeted bonus pursuant to the terms of that certain Executive
Incentive Bonus Plan of the Company attached hereto as Exhibit A (as such plan
may be modified from time to time). Such payments shall be made to Executive by
the Company in equal weekly installments.
(b) within five (5) business days (or at such earlier time as required
by applicable law) following his termination of employment with the Company, the
Company shall pay to the Executive in a lump sum: (i) any earned but unpaid base
salary, (ii) any earned but unpaid bonus, (iii) accrued but unused vacation time
as of the date of termination, and (iv) incurred but unreimbursed business
expenses for the period prior to termination.
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(c) for a period of twelve (12) months commencing on the date of the
Change of Control, subject to the Executive's continued copayment of premiums
which shall not exceed the level of copayments prior to such Change of Control,
the Company shall continue to pay the premiums to provide health benefits and
coverage for the Executive and his dependents under the Company's health plans
in effect prior to such Change of Control which cover senior executives. The
Company's obligation to pay premiums hereunder shall cease upon the Executive's
employment with any employer (other than due to self-employment) following a
Change of Control. Upon the expiration of such twelve (12) month period, the
Company shall offer COBRA continuation health coverage to the Executive and his
dependents in accordance with applicable law.
5. No Duty to Mitigate/Set-off; Severance. If pursuant to Section 4
hereof the Executive is entitled to payments, the Executive will not be required
to seek other employment or to attempt in any way to reduce any amounts payable
to the Executive by the Company pursuant to this Agreement. Further, the amounts
and benefits provided for in this Agreement shall not be reduced by any
compensation earned by the Executive or benefits provided to the Executive as
the result of employment by another employer or otherwise. Notwithstanding
anything herein to the contrary, if pursuant to Section 4 hereof the Executive
is entitled to payment, all of such payments shall be in lieu of any other
severance payments to which Executive may be entitled pursuant to any severance
plan of the Company or otherwise.
6. Successors; Binding Agreement. In addition to any obligations
imposed by law upon any successor to the Company, the Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the
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business and/or assets of the Company to expressly assume and agree in writing
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive shall die while any amount would still
be payable to the Executive hereunder if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the executors, personal representatives or
administrators of the Executive's estate. This Agreement is personal to the
Executive and neither this Agreement or any rights hereunder may be assigned by
the Executive.
7. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. This Agreement
constitutes the entire Agreement between the parties hereto pertaining to the
subject matter hereof. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. All references
to any law shall be deemed also to refer to any successor provisions to such
laws. This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of
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which together will constitute one and the same instrument. If any provisions of
this Agreement shall be declared to be invalid or unenforceable, in whole or in
part, such invalidity or unenforceability shall not affect the remaining
provisions hereof which shall remain in full force and effect.
8. Notices. All notices under this Agreement shall be given in writing
and shall be either delivered personally or sent by certified or registered
mail, return receipt requested, addressed to the other party at the appropriate
address first set forth above, or to such other address as such party shall
designate by written notice as aforesaid. Notices shall be deemed given when
received or two (2) days after mailing, whichever is earlier.
9. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive, equity or other plan or program provided by the Company and
for which the Executive may qualify and the payments hereunder shall be in
addition to, not in lieu of, any payments under any such plan or program of the
Company. Amounts that are vested benefits or which the Executive is otherwise
entitled to receive under any plan or program of the Company, at or subsequent
to the date of termination shall be payable in accordance with such plan or
program, except as otherwise specifically provided herein.
10. Not an Agreement of Employment. This is not an agreement assuring
employment and, subject to any other agreement between the Executive and the
Company, the Company reserves the right to terminate the Executive's employment
at any time with or without cause.
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11. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without reference to
rules relating to conflicts of law.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
MICROWAVE POWER DEVICES, INC.
By: /s/ X. Xxxxx
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Name: X. Xxxxx
Title: CEO
/s/ Xxxxxxx X. Xxxxxx
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Executive
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