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Exhibit 10.24
FORM OF ADDENDUM TO EMPLOYMENT [LETTER][AGREEMENT]
This Addendum (the "Addendum") to the Employment [Letter][Agreement]
dated __________, _____ [LIST ALL EMPLOYMENT LETTERS/AGREEMENTS] (together, the
"Agreement") has been entered into as of the 18th day of October, 1999, between
DIGITAL LIGHTWAVE, INC., a Delaware corporation (the "Company"), and
________________ ("Executive") to provide for the continued employment of
Executive on the additional terms and conditions set forth herein.
WHEREAS, Executive has served as the _______________________ of the
Company since __________________ (the "Effective Date");
WHEREAS, Executive and the Company wish to add non-competition and
severance provisions to the Agreement; and
WHEREAS, the Company wishes to assure itself of the continued employment
efforts of Executive for the period provided in the Agreement, and Executive is
willing to continue to serve in the employ of the Company on a full-time basis
for said period upon the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, intending to be legally bound, the Company and Executive agree as
follows:
1. Definition of Terms. The capitalized terms used herein and in the
Agreement shall have the meanings set forth in this Addendum, the Agreement or
in Appendix A hereto. Capitalized terms defined in this Addendum and in the
Agreement shall have the meanings assigned thereto in this Addendum.
2. Severance Benefits.
(a) Severance Benefits Upon Termination of Employment. In the
event Executive's employment terminates for any reason
(including the expiration of Executive's term of employment
with the Company) except to the extent provided in Section
2(b) of this Addendum in connection with a Change of Control,
then Executive shall be entitled to receive severance
benefits as follows:
(i) Voluntary Resignation. If Executive's employment
terminates by reason of Executive's voluntary
resignation, then Executive shall not be entitled to
receive severance or other benefits.
(ii) Involuntary Termination Other Than For Cause. If
Executive's employment is terminated as a result of an
Involuntary Termination other than for Cause, then the
following severance benefits shall be paid or otherwise
provided to Executive: (A) the Company shall pay to
Executive in the form of a lump sum payment, in cash, a
severance payment equal to the lesser of (x) one and
one half (1.5) times Executive's annual base salary for
the year in which a severance payment is payable, or
(y) one (1) times Executive's Current
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Compensation; provided, however, that if an executive
bonus plan has not been approved by the Company's
Compensation Committee in the year in which the
severance payment is payable, the severance payment
shall be as set forth in Section 2(a)(ii)(x) of this
Addendum; (B) for the one (1) year period following the
date of Executive's termination of employment, the
Company shall at its sole cost and expense provide
Executive (and Executive's eligible dependents, if any)
with life, disability, accident and group health
insurance benefits substantially similar to those
benefits that Executive (and Executive's dependents)
were receiving immediately prior to Executive's
termination of employment; provided, however, that the
benefits otherwise receivable by Executive pursuant to
this Section 2(a)(ii)(B) of this Addendum shall be
reduced to the extent comparable benefits are
concurrently received by Executive (or Executive's
dependents) pursuant to a similar plan or program of
another employer, and any such other benefits actually
received by Executive (or Executive's dependents) must
be reported to the Company; and provided further,
however, that the health care coverage provided by the
Company pursuant to this Section 2(a)(ii)(B) of this
Addendum shall be in lieu of any other continued health
care coverage to which Executive or Executive's
dependents would otherwise, at Executive's own expense,
be entitled in accordance with the requirements of
Internal Revenue Code of 1986, as amended ("Code"),
Section 4980B ("COBRA"), by reason of Executive's
termination of employment; (C) all stock options,
warrants, rights and other Company stock-related awards
granted to Executive by the Company, to the extent
vested, shall remain exercisable for the lesser of the
one (1) year period and the maximum period permissible
under the accounting regulations governing business
combinations following the date of Executive's
termination of employment, in accordance with the
provisions of the agreement evidencing such option
without regard to any shortening of such period as a
result of any termination of employment; and (D) the
Company shall pay or reimburse Executive for any and
all reasonable expenses incurred by Executive for
outplacement services selected by Executive until the
earlier of (I) the first anniversary of the date of
termination of employment or (II) the date on which
Executive commences employment with another employer,
provided however that in no event shall such services
exceed 35% of Executive's annual base salary as in
effect on the date hereof.
(iii) Termination for Cause. If Executive's employment is
terminated for Cause, then Executive shall not be
entitled to receive any severance payments or other
severance benefits under this Section 2 of this
Addendum. Executive's benefits will be continued under
the Company's then existing benefit plans and policies
in accordance with such plans and policies in effect on
the date of termination.
(b) Severance Benefits Upon a Change of Control. If Executive's
employment terminates within twelve (12) months following the
Change of Control by reason of an Involuntary Termination
other than for Cause, then the following benefits shall be
paid or otherwise provided to Executive: (i) the Company
shall pay to Executive, in the form of a lump sum payment, in
cash, a severance payment equal to the lesser of (A) two (2)
times Executive's annual base salary for the year in which a
severance payment is payable, or (B) one and one-half (1.5)
times Executive's Current Compensation; provided, however,
that if an executive bonus plan has not been approved by the
Company's Compensation Committee in the year in which the
severance payment is payable, the severance payment shall be
as set forth in Section 2(b)(i)(A) of this Addendum; (ii) for
the one and one-half (1.5) year period following the date of
Executive's termination of employment, the Company shall at
its sole cost and expense provide
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Executive (and Executive's eligible dependents, if any) with
life, disability, accident and group health insurance
benefits substantially similar to those benefits that
Executive (and Executive's dependents) were receiving
immediately prior to Executive's termination of employment;
provided, however, that the benefits otherwise receivable by
Executive pursuant to this Section 2(b)(ii) of this Addendum
shall be reduced to the extent comparable benefits are
concurrently received by Executive (or Executive's
dependents) pursuant to a similar plan or program of another
employer, and any such other benefits actually received by
Executive (or Executive's dependents) must be reported to the
Company; and provided further, however, that the health care
coverage provided by the Company pursuant to this Section
2(b)(ii) of this Addendum shall be in lieu of any other
continued health care coverage to which Executive or
Executive's dependents would otherwise, at Executive's own
expense, be entitled in accordance with the requirements of
Internal Revenue Code of 1986, as amended ("Code"), Section
4980B ("COBRA"), by reason of Executive's termination of
employment; (iii) all stock options, warrants, rights and
other Company stock-related awards granted to Executive by
the Company, to the extent vested, shall remain exercisable
for the lesser of the one (1) year period and the maximum
period permissible under the accounting regulations governing
business combinations following the date of Executive's
termination of employment, in accordance with the provisions
of the agreement evidencing such option without regard to any
shortening of such period as a result of any termination of
employment; and (iv) the Company shall pay or reimburse
Executive for any and all reasonable expenses incurred by
Executive for outplacement services selected by Executive
until the earlier of (I) the first anniversary of the date of
termination of employment or (II) the date on which Executive
commences employment with another employer, provided however
that in no event shall such services exceed 35% of
Executive's annual base salary as in effect on the date
hereof.
(c) Benefit Reduction. Should any of Executive's severance
benefits under this Section 2 of this Addendum and under the
Agreement (including any lump sum severance payment and any
accelerated vesting of outstanding options or shares of
stock) be deemed to be parachute payments under Code Section
280G, then, first, the dollar amount of any severance payment
and, secondly, the accelerated vesting of any options or
shares of stock, will be reduced to the extent (and only to
the extent) necessary to provide Executive with the maximum
after-tax benefit available, after taking into account any
parachute excise tax which might otherwise be payable by
Executive under Code Section 4999 and any analogous State
income tax provision. Any determination made under this
Section 3(C) shall be made by the Company's independent
auditors.
3. Death and Disability. Upon the death or disability of Executive,
all of Executive's outstanding options shall vest in full. Such options shall
remain exercisable for the lesser of the one (1) year period and the maximum
period permissible under the accounting regulations governing business
combinations following the date of Executive's death or disability, in
accordance with the provisions of the agreement evidencing such options.
4. Noncompetition and Confidential Information.
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(a) Executive shall have executed the Company's standard Employee
Proprietary Information and Inventions Agreement and the
Employee Internal Confidentiality Agreement (together, the
"Confidentiality Agreement").
(b) In addition to the provisions of the Confidentiality
Agreement, which shall remain in full force and effect, for
the six (6) month period following the effective date of an
Involuntary Termination of Executive's employment with the
Company without Cause and for the one (1) year period
following the effective date of an Involuntary Termination
without Cause following a Change of Control, Executive will
not compete with the Company.
(c) Executive agrees that during any period when the provisions
of Section 4(b) above are in effect, Executive will not,
without the Company's express written consent, directly or
indirectly invest in any business which is competitive with
the Company (other than ownership of securities of publicly
held corporations of which Executive owns less than one
percent (1%) of any class of outstanding securities).
5. Consulting. Executive and the Company may, but are not required to,
enter into an agreement pursuant to which Executive will provide
consulting services to the Company after the date of Executive's
retirement or termination. Any consulting fees paid to Executive
will be in addition to any retirement or severance payments.
6. Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) or to all or substantially all of the
Company's business and/or assets shall assume the obligations under
this Agreement and shall 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. The terms of this Addendum and the Agreement and all of
Executive's rights hereunder shall inure to the benefit of, and be
enforceable by, Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees.
7. Notice. Notices and all other communications contemplated by the
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.
Mailed notices to Executive shall be addressed to Executive at the
home address from which Executive 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 notice
shall be directed to the attention of its Secretary.
8. Miscellaneous Provisions.
(a) No Duty to Mitigate. Executive shall not be required to
mitigate the amount of any payment contemplated by this
Addendum and the Agreement (whether by seeking new employment
or in any other manner), nor shall any such payment be
reduced by earnings that Executive may receive from any other
source, except as provided in this Agreement.
(b) Waiver. No provision of this Addendum or the Agreement shall
be modified, waived or discharged unless the modification,
waiver or discharge is agreed to in writing and
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signed by Executive and by an authorized officer or
representative of the Company (other than Executive) and
approved by the Company's Board of Directors. No waiver by
either party of any breach of, or of compliance with, any
condition or provision of this Addendum or the Agreement by
the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision
of 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
Addendum and the 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 Florida.
(e) Severability. If any term or provision of this Addendum or
the Agreement or the application thereof to any circumstance
shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective as
to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering
unenforceable the remaining terms and provisions of this
Addendum or the Agreement or the application of such terms
and provisions to circumstances other than those as to which
it is held invalid or unenforceable, and a suitable and
equitable term or provision shall be substituted therefor to
carry out, insofar as may be valid and enforceable, the
intent and purpose of the invalid or unenforceable term or
provision.
(f) Employment Taxes. All payments made pursuant to this Addendum
or the Agreement will be subject to withholding of applicable
income and employment taxes.
(g) Counterparts. This Addendum and the 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.
(h) Conflict. This Addendum shall not in any manner affect any
provisions or benefits under, or reduce any benefits provided
to Executive under, the Agreement; provided, however, that,
to the extent that the same benefits are provided to
Executive under this Addendum and the Agreement, Executive
shall receive the maximum amount of benefits provided under
this Addendum or the Agreement, whichever is greater.
(i) Cooperation and Assistance. Executive shall, during and after
termination of employment, upon reasonable notice, provide
such information and assistance as may reasonably be required
by the Company in connection with any litigation, potential
litigation, or governmental inquiries or investigations;
provided, however, that any such assistance provided after
termination of employment shall be provided for reasonable,
mutually agreed compensation.
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IN WITNESS WHEREOF, the parties hereto have executed this Addendum this
day and year first above written.
DIGITAL LIGHTWAVE, INC. EXECUTIVE:
By: By:
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APPENDIX A
DEFINITIONS
Cause. "Cause" shall mean (i) material breach of any terms or obligations
under this Addendum or the Agreement, (ii) conviction of a felony, or (iii)
gross negligence or willful misconduct where such gross negligence or willful
misconduct has resulted or is likely to result in material damage to the
Company. Cause shall be determined in accordance with this definition at the
sole discretion of the Company's Board of Directors.
Change of Control. "Change of Control" shall mean the occurrence of any
of the following events:
(i) if any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), other than Xx. Xxxxx X. Xxxx and/or his family and his
affiliates, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total combined
voting power of the Company's then outstanding securities; or
(ii) the stockholders of the Company approve the merger or
consolidation of the Company in which the Company is the acquired party,
or the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
Executive's Current Compensation. "Executive's Current Compensation"
shall mean (i) Executive's annual base salary for the year in which a severance
payment is payable, plus (ii) an amount equal to the target bonus payment in
any executive bonus plan approved by the Compensation Committee of Company's
Board of Directors for such year.
Involuntary Termination. "Involuntary Termination" shall mean termination
by the Company of Executive's employment for any reason other than for Cause,
and shall include:
(i) Executive's voluntary resignation following (A) the material breach
by the Company of one or more of its obligations under this Addendum or the
Agreement which are not otherwise corrected within ten (10) days following
Executive's written notice to the Company of such breach, or (B) the occurrence
of any of the following events without Executive's express prior written
consent: (I) a change in Executive's title or a change in Executive's position
with the Company which reduces Executive's level of responsibilities, (II) a
reduction in Executive's then current level of compensation (including base
salary, benefits and any non-discretionary and objective-standard incentive
payment or bonus award), (III) a relocation of Executive's place of employment
by more than fifty (50) miles from Executive's current place of employment, or
(IV) the assignment of additional material job responsibilities or a reduction
in job responsibilities inconsistent with Executive's position with the Company
as a public company and Executive's prior responsibilities; and
(ii) the failure by the Company to renew Executive's term of Employment.
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