[LETTERHEAD OF ALPHA INDUSTRIES, INC. APPEARS HERE]
Exhibit (10)(f)
January 13, 1997
Xx. Xxxxxx X. Xxxxxxx
00 Xxxxxx Xxxx Xx.
Xxxxxxxxx XX 00000
Re: Severance Agreement
Dear Xxx:
This letter is to confirm the severance arrangements that we have agreed upon
with respect to your employment with Alpha Industries, Inc. (the "Company").
1. Change in Control
-----------------
1.1. If: (i) a Change in Control occurs while you are employed by the Company
as President and Chief Executive Officer, and (ii) your employment with
the Company is voluntarily or involuntarily terminated within two (2)
years after such Change in Control, then you will receive the benefits
specified Section 1.3 below.
1.2. A "Change in Control" shall be deemed to have occurred if the Continuing
Directors shall have ceased for any reason to constitute a majority of the
Board of Directors of the Company. For this purpose, a "Continuing
Director" shall include and be limited to any member of the Board of
Directors of the Company as of the date of this letter and any Director
nominated for election to the Board of Directors of the Company by at
least 75% of the then Continuing Directors.
1.3. In the event that your employment with the Company is terminated in the
manner described in Section 1.1 above (the date of such termination being
referred to as the "Control Termination Date"), (i) on the Control
Termination Date, the Company will pay to you a lump sum equal to two
times your annual compensation for the twelve (12) full month period prior
to the Change in Control, including all wages, salary, bonus and incentive
compensation, whether or not includable in gross income for federal income
tax purposes (the "Control Severance Payment"); and (ii) all Company stock
options then outstanding and
Xxxxxx X. Xxxxxxx
January 13, 1997
Page 2
held by you, whether or not by their terms then exercisable, shall,
subject to their other terms and conditions, become immediately
exercisable and remain exercisable for a period of ninety (90) days after
the Control Termination Date. Notwithstanding anything to the contrary
contained in this Agreement, in the event that the Control Severance
Payment, either alone or together with other payments which you have the
right to receive from the Company, would constitute a "parachute payment"
(as defined in Section 280G of the Internal Revenue Code of 1986 as
amended (the "Code")), then the Control Severance Payment shall be reduced
to the largest amount that will result in no portion of such payment being
subject to the excise tax imposed by Section 4999 of the Code. The
determination of any such reduction shall be made by the Board of
Directors of the Company, acting in good faith and in consultation with
the Company's accountants and counsel.
2. Termination Without Cause or for Good Reason
--------------------------------------------
2.1. If, while you are employed by the Company as President and Chief Executive
Officer, (i) your employment with the Company is involuntarily terminated
without Cause, or (ii) you terminate your employment with the Company for
Good Reason, then you will receive the benefits specified in Section 2.4
below. If your employment is terminated involuntarily by the Company for
Cause, you will not be entitled to receive the benefits specified in
Section 2.4 below.
2.2. "Cause" shall mean: (i) deliberate dishonesty significantly detrimental to
the best interests of the Company or any subsidiary or affiliate; (ii)
conduct on your part constituting an act of moral turpitude; (iii) willful
disloyalty to the Company or refusal or failure to obey the directions of
the Board of Directors; (iv) incompetent performance or substantial or
continuing inattention to or neglect of duties assigned to you.
2.3 "Good Reason" shall mean: (i) the assignment to you of any duties
inconsistent in any respect with your position as the President and Chief
Executive Officer of the Company; or (ii) any reduction in your base
salary or rate of compensation; or (iii) any requirement imposed on you by
the Company that you relocate outside the eastern Massachusetts area.
2.4 In the event that your employment with the Company is terminated in the
manner described in Section 2.1 above (the date of such termination being
referred to as
Xxxxxx X. Xxxxxxx
January 13, 1997
Page 3
the "Termination Date"), (i) beginning with the Termination Date, the
Company will pay to you a continuing stream of weekly salary payments for
two years at the highest rate that your base salary was paid to you at any
time during the one (1) year period immediately preceding the Termination
Date; and (ii) all Company stock options then outstanding and held by you,
whether or not by their terms then exercisable, shall, subject to their
other terms and conditions, become immediately exercisable and remain
exercisable for a period of ninety (90) days after the Termination Date.
3. Non-Competition
---------------
3.1. During: (i) the term of your employment with the Company and for one (1)
year thereafter, and (ii) the actual term of your consulting arrangement
(the "Noncompete Period"), you will not, directly or indirectly, whether
as owner, partner, shareholder, director, consultant, agent, employee, or
otherwise, or through any person, engage in any employment, consulting or
other activity which competes with the business of the Company or any of
its subsidiaries or affiliates. You acknowledge and agree that your direct
or indirect participation in the conduct of such competing business alone
or with any person other than the Company will materially impair the
business and prospects of the Company. During the Noncompete Period, you
will not (i) attempt to hire any director, officer, employee or agent of
the Company, (ii) assist in hiring such hiring by any other person, (iii)
encourage any person to terminate his or her employment or business
relationship with the Company, (iv) encourage any customer or supplier of
the Company to terminate its relationship with the Company, or (v) obtain,
or assist in obtaining, for your own benefit (other than indirectly as an
employee of the Company) any customer of the Company. If any of the
restrictions provided for in this Section 3.1 are adjudicated to be
excessively broad as to scope, geographic area, time or otherwise, said
restriction shall be reduced to the extent necessary to make the
restriction reasonable and shall be binding on you as so reduced. Any
provisions of this Section 3.1 not so reduced shall remain in full force
an effect. It is understood that during the Noncompete Period, you will
make yourself available to the Company for consultation on behalf of the
Company, upon reasonable request and at a reasonable rate of compensation
and at reasonable times in light of any commitment you may have to a new
employer.
3.2. You understand and acknowledge that the Company's remedies at law for
breach of any of the restrictions in Section 3.1 above are inadequate and
that any such
Xxxxxx X. Xxxxxxx
January 13, 1997
Page 4
breach will cause irreparable harm to the Employer. You therefore agree
that in addition and as a supplement to such other rights and remedies as
may exist in the Company's favor, the Company may apply to any court
having jurisdiction to enforce the specific performance of the
restrictions in Section 3.1, and may apply for injunctive relief against
any act which would violate those restrictions.
4. Post-employment Consulting
--------------------------
4.1 The Company wishes to ensure that your continuing advice and support is
available after you cease to serve in your current capacity, and you are
agreeable to providing such advice and support. Therefore, subject to the
conditions set out in Section 4.2 below, the Company agrees: (i) to retain
you, and you agree to act, as a consultant for a term of two (2) years
from the date of your retirement, at an annual consulting fee equal to
your annual salary as of the date of your retirement, and (ii) that all
Company stock options then outstanding and held by you, whether or not by
their terms then exercisable, shall, subject to their other terms and
conditions, become immediately exercisable and remain exercisable for a
period of ninety (90) days after the effective date of your retirement
4.2 The consulting arrangement set out in Section 4.1 above will be available
to you only if: (i) you are still President and Chief Executive Officer of
the Company on September 30, 1999, and (ii) your retirement is effective
at any time between October 1, 1999 and September 30, 2000, and (iii) you
give the Company six (6) months written advance notice of your intention
to retire.
5. Payments Under Sections 2.4 and 4.1
-----------------------------------
Payments provided for in Sections 2.4 and 4.1 of this letter will:
(i) be made at the same rate as you were receiving on the date of
employment termination or retirement; (ii) be paid in equal periodic
installments at such intervals as the Company shall generally pay its
officers, and (iii) be reduced by the amount of any compensation that you
receive from any person for services rendered during the period in which
you are receiving such payments.
6. Miscellaneous
-------------
This agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof and may be modified only by a written
instrument duly
Xxxxxx X. Xxxxxxx
January 13, 1997
Page 5
executed by each party. This agreement replaces and supersedes all prior
agreements relating to your employment by the Company. This agreement
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
Please sign both copies of this letter and return one to the Company.
Sincerely,
/s/ Xxxxxx X. Xxxxxxxx
---------------------------
--------------------------------
Xxxxxx Xxxxxxxx AGREED TO:
Chairman of the Board
/s/ Xxxxxx X. Xxxxxxx
/s/ Xxxxxx Xxxxx ----------------------------
--------------------------- Xxxxxx X. Xxxxxxx
Xxxxxx Xxxxx
Chairman of the Compensation Committee Date: 17 JAN 1997
of the Board of Directors -----------------------
--------------------------------
