EXHIBIT 10.5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of February 16,
2000 by and between Western Multiplex Corporation, a Delaware Company (the
"Company") and Xxxxx Xxxxx (the "Executive").
WHEREAS, the Company considers it essential to its best interests
and the best interests of its stockholders to xxxxxx the continued employment
of Executive by the Company during the term of this Agreement and Executive
is willing to accept and continue Executive's employment on the terms
hereinafter set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment; Executive Representation.
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a. Employment Term. Executive's term of employment under this
Agreement shall commence on the date hereof and, subject to the terms hereof,
Executive and the Company agree and acknowledge that Executive's employment
with the Company constitutes "at-will" employment and that this Agreement may
be terminated at any time by the Company or Executive; provided, however,
that any termination of employment by Executive (other than for death or
Permanent Disability) may only be made upon 90 days prior written notice to
the Company.
b. Executive Representation. Executive hereby represents to
the Company that the execution and delivery of this Agreement by Executive
and the Company and the performance by Executive of the Executive's duties
hereunder shall not constitute a breach of, or otherwise contravene, the
terms of any employment agreement or other agreement or policy to which
Executive is a party or otherwise bound.
2. Position.
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a. While employed hereunder, Executive shall serve as the
Company's Chief Financial Officer. In such position, Executive shall have
such duties and authority as shall be determined from time to time by the
Board of Directors of the Company (the "Board"). If requested, the Executive
shall also serve as a member of the Board of Directors of the Company
without additional compensation.
b. While employed hereunder, Executive will devote
Executive's full business time and best efforts to the performance of
Executive's duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would conflict
with the rendition of such services either directly or indirectly, without
the prior written consent of the Board; provided that nothing herein shall
preclude Executive from continuing to serve on the board of directors or
trustees of any business corporation or any charitable organization on which
he currently serves and which is identified on Exhibit A hereto or, subject
to the prior approval of the Board, from accepting appointment to any
additional directorships or trusteeships, provided in each case, and in the
aggregate, that such activities do not interfere with the performance of
Executive's duties hereunder or conflict with Section 8.
3. Base Salary. While employed hereunder, the Company shall pay
Executive a base salary (the "Base Salary") at the annual rate of $160,000
payable in regular installments in accordance with the Company's usual
payment practices. Executive shall be entitled to such increases in
Executive's Base Salary, if any, as may be determined from time to time in
the sole discretion of the Board.
4. Annual Bonus. With respect to each calendar year while
employed hereunder, Executive shall be eligible to earn an annual bonus award
(an "Annual Bonus") pursuant to an annual incentive plan to be established by
the Board.
5. Employee Benefits; Vacation; Business Expenses.
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a. Employee Benefits and Vacation. The Company shall
provide Executive during the term of his employment hereunder with coverage
under all employee pension and welfare benefit programs, plans and practices
in accordance with the terms thereof, which the Company generally makes
available to its senior executives. Executive shall also be entitled to
three (3) weeks of paid vacation in each calendar year, and such number of
days of sick leave in each calendar year as shall be established under the
Company's policies as in effect from time to time, in both cases which shall
be taken at such times as are consistent with Executive's responsibilities
hereunder.
b. Business Expenses. Executive is authorized to incur
reasonable expenses in carrying out his duties and responsibilities under
this Agreement, including, without limitation, expenses for travel and
similar items related to such duties and responsibilities. The Company will
reimburse Executive for all such expenses upon presentation by Executive from
time to time of appropriately itemized and approved (consistent with the
Company's policy) accounts of such expenditures.
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6. Special Equity Arrangements. Upon the occurrence of a Change
of Control, (a) the vesting of all of Executive's outstanding, unvested Time
Options (as defined in Executive's Time- and Performance-Based Non-Qualified
Stock Option Agreement) shall accelerate and become fully (100%) vested and
exercisable immediately prior to such Change in Control and (b) all transfer
restrictions on any shares of common stock of the Company acquired and held
by Executive shall lapse and Executive shall hold such shares free and clear
of all transfer restrictions (other than those which may be imposed by any
underwriters). For purposes hereof, a "Change of Control" shall have the
same meaning as such term is defined in the 1999 Western Multiplex
Corporation Stock Incentive Plan.
7. Termination. The Executive's employment hereunder may be
terminated by either party at any time and for any reason; provided that
Executive will be required to give the Company at least 90 days advance
written notice of any resignation of Executive's employment. Notwithstanding
any other provision of this Agreement, the provisions of this Section 7 shall
exclusively govern Executive's rights upon termination of employment with the
Company and its affiliates. Upon termination of Executive's employment for
any reason, Executive agrees to resign, as of the date of such termination,
from the Company's Board of Directors and the Board of Directors of any of
the Company's affiliates.
a. By the Company For Cause
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(i) The Executive's employment hereunder may be terminated by
the Company for Cause (as defined below) or upon 90 days prior written
notice, by Executive without Good Reason.
(ii) For purposes of this Agreement, "Cause" shall mean (i)
the Executive's willful and continued failure to perform his or her duties
with respect to the Company or its subsidiaries after demand by his or her
superior for substantial performance is made or delivered, (ii) willful
misconduct by the Executive involving dishonesty or breach of trust in
connection with the Executive's employment, (iii) indictment for any felony
or misdemeanor involving moral turpitude, (iv) any material breach of the
Executive's restrictive covenants as provided in Section 8 of this Agreement,
or (v) violation of any written Company policy.
(iii) If Executive's employment is terminated by the Company
for Cause or by Executive without Good Reason, Executive shall be entitled to
receive:
(A) the Base Salary through the date of termination;
(B) any Annual Bonus earned but unpaid as of the date of
termination for any previously completed calendar year;
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(C) reimbursement for any unreimbursed business expenses
properly incurred by Executive in accordance with Company policy
prior to the date of Executive's termination; and
(D) such Employee Benefits, if any, as to which Executive may
be entitled under the employee benefit plans of the Company (the
amounts described in clauses (A) through (D) hereof being referred
to as the "Accrued Rights").
Following such termination of Executive's employment by the Company
for Cause, except as set forth in this Section 7(a), Executive shall have no
further rights to any compensation or any other benefits under this
Agreement.
b. Disability or Death.
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(i) The Executive's employment hereunder shall terminate upon
Executive's death and if Executive becomes physically or mentally
incapacitated and is therefore unable for a period of six (6) consecutive
months or for an aggregate of nine (9) months in any twenty-four (24)
consecutive month period to perform Executive's duties (such incapacity is
hereinafter referred to as "Disability"). Any question as to the existence
of the Disability of Executive as to which Executive and the Company cannot
agree shall be determined in writing by a qualified independent physician
mutually acceptable to Executive and the Company. If Executive and the
Company cannot agree as to a qualified independent physician, each shall
appoint such a physician and those two physicians shall select a third who
shall make such determination in writing. The determination of Disability
made in writing to the Company and Executive shall be final and conclusive
for all purposes of the Agreement.
(ii) Upon termination of Executive's employment hereunder for
either Disability or death, Executive or Executive's estate (as the case may
be) shall be entitled to receive:
(A) the Accrued Rights; and
(B) a pro rata portion of any Annual Bonus that the Executive
would have been entitled to receive pursuant to Section 4 hereof in
such year based upon the percentage of the calendar year that shall
have elapsed through the date of Executive's termination of
employment, payable when such Annual Bonus would have otherwise
been payable had the Executive's employment not terminated.
Following Executives termination of employment due to death or
Disability, except as set forth in this Section 7(b), Executive shall have no
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further rights to any compensation or any other benefits under this
Agreement.
c. By the Company Without Cause or Resignation by Executive
for Good Reason.
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(i) The Executive's employment hereunder may be terminated by
the Company without Cause or by Executive's resignation for Good Reason.
(ii) For purposes of this Agreement, "Good Reason" shall
mean: (x) a reduction in the Executive's base salary (other than any general
salary reduction affecting at least the majority of salaried employees of the
Company), (y) a material and adverse reduction in the Executive's duties,
responsibilities and other requirements, inconsistent with Executive's
position with the Company and with Executive's prior duties, responsibilities
and other requirements or (z) a transfer of the Executive's primary workplace
by more than fifty (50) miles from the current workplace.
Notwithstanding the foregoing, none of the events described in clauses (x)
or (y) of this Section 7(c)(ii) shall constitute Good Reason unless Executive
shall have notified the Company in writing describing the events which
constitute Good Reason and then only if the Company shall have failed to cure
such event within thirty (30) days after the Company's receipt of such
written notice.
(iii) If Executive's employment is terminated by the Company
without Cause (other than by reason of death or Disability) or if Executive
resigns for Good Reason, Executive shall be entitled to receive:
(A) the Accrued Rights; and
(B) subject to Executive's continued compliance with the
provisions of Section 8, during the period from the date of the
Employee's termination until the date that is twelve (12) months
after the effective date of the termination (the "Severance
Period"), severance payments equal to (x) the Base Salary in effect
immediately prior to the date of termination, plus (y) an amount in
respect of Executive's annual target bonus for the year in which
the termination occurs, which amount shall, for purposes of this
Section 7(c)(iii), be deemed to be forty percent (40%) of the
Executive's Base Salary as in effect immediately prior to the date
of termination, which severance payments shall be paid during the
Severance Period in equal installments on the same schedule as the
Company's usual payroll payment practices; provided that the
aggregate amount described in this clause (B) shall be reduced by
the present value of any other cash severance or termination
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benefits payable to Executive under any other plans, programs or
arrangements of the Company or its affiliates; and
(C) the continuation of all health and life insurance
benefits through the end of the Severance Period, which benefits
shall be substantially identical to those to which Executive was
entitled to receive immediately prior to the Executive's
termination, or to those being offered to executive officers of the
Company (or its successor corporation, if applicable) if the
benefit programs of the Company are changed for its employees at
any time during the Severance Period.
Following Executive's termination of employment by the Company
without Cause (other than by reason of Executive's death or Disability) or by
Executive's resignation for Good Reason, except as set forth in this Section
7(c), Executive shall have no further rights to any compensation or any other
benefits under this Agreement.
d. Notice of Termination. Any purported termination of
employment by the Company or by Executive (other than due to Executive's
death) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 11(h) hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination of employment under the provision so indicated.
8. Nondisclosure of Confidential Information; Non-Competition.
(a) At any time during or after Executive's employment with the Company,
Executive shall not, without the prior written consent of the Company, use,
divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information (as hereinafter
defined) pertaining to the business of the Company or any of its
subsidiaries, except (i) while employed by the Company, in the business of
and for the benefit of the Company, or (ii) when required to do so by a court
of competent jurisdiction, by any governmental agency having supervisory
authority over the business of the Company, or by any administrative body or
legislative body (including a committee thereof) with jurisdiction to order
Executive to divulge, disclose or make accessible such information. For
purposes of this Section 8(a), "Confidential Information" shall mean non-
public information concerning the financial data, strategic business plans,
and other non-public, proprietary and confidential information of the
Company, its subsidiaries, Ripplewood Holdings L.L.C. or their respective
affiliates as in existence as of the date of Executive's termination of
employment that, in any case, is not otherwise available to the public (other
than by Executive's breach of the terms hereof).
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(b) As Chief Financial Officer, Executive will acquire knowledge
of Confidential Information and trade secrets. Executive acknowledges that
the Confidential Information and trade secrets which the Company has provided
and will provide to him could play a significant role were he to directly to
indirectly be engaged in any business in Competition with the Company or its
subsidiaries. During the period of his employment hereunder and for one year
thereafter, Executive agrees that, without the prior written consent of the
Company, (A) he will not, directly or indirectly, either as principal,
manager, agent, consultant, officer, stockholder, partner, investor, lender
or employee or in any other capacity, carry on, be engaged in or have any
financial interest in (other than an ownership position of less than 5
percent in any company whose shares are publicly traded), any business, which
is in Competition (as hereinafter defined) with the existing business of the
Company or its subsidiaries and (B) he shall not, on his own behalf or on
behalf of any person, firm or company, directly or indirectly, solicit or
otherwise actively recruit any person who has been employed by the Company or
its subsidiaries at any time during the 12 months immediately preceding such
solicitation or recruitment to the extent that Executive would use or
inevitably use Confidential Information or trade secrets or that would
otherwise constitute unfair competition.
(c) For purposes of this Section 8, a business shall be deemed to
be in Competition with the Company or its subsidiaries if it is engaged in or
has taken concrete steps toward engaging in the business of research and
development, designing, manufacturing, marketing, distributing, or servicing
or selling components as used in microwave radios, products and equipment,
whether in existence or in development, relating to microwave communications
(including unlicensed spread spectrum radio, licensed microwave radio,
wireless ethernet bridge, and fixed wireless (e.g., wireless local loop,
point-to-point, point-to-multipoint)), as carried on by the Company or its
affiliates as of the date of Executive's termination of employment, in all
cities, counties, states and countries in which the business of the Company
or its affiliates is then being conducted or its products are being sold.
(d) The results and proceeds of Executive's services hereunder,
including, without limitation, any works of authorship resulting from
Executive's services during Executive's employment with the Company and/or
any of the Company's affiliates and any works in progress, will be works-
made-for hire and the Company will be deemed the sole owner throughout the
universe of any and all rights of whatsoever nature therein, whether or not
now or hereafter known, existing, contemplated, recognized or developed, with
the right to use the same in perpetuity in any manner the Company determines
in its sole discretion without any further payment to Executive whatsoever.
If, for any reason, any of such results and proceeds will not legally be a
work-for-hire and/or there are any rights which do not accrue to the Company
under the preceding sentence, then Executive hereby irrevocably assigns and
agrees to assign any and all of Executive's right, title and interest
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thereto, including, without limitation, any and all copyrights, patents,
trade secrets, trademarks and/or other rights of whatsoever nature therein,
whether or not now or hereafter known, existing, contemplated, recognized or
developed, to the Company, and the Company will have the right to use the
same in perpetuity throughout the universe in any manner the Company
determines without any further payment to Executive whatsoever. Executive
will, from time to time as may be requested by the Company, (i) during the
term of Executive's employment without further consideration, and (ii)
thereafter at Executive's then current hourly rate, do any and all things
which the Company may deem useful or desirable to establish or document the
Company's exclusive ownership of any and all rights in any such results and
proceeds, including, without limitation, the execution of appropriate
copyright and/or patent applications or assignments. To the extent Executive
has any rights in the results and proceeds of Executive's services that
cannot be assigned in the manner described above, Executive unconditionally
and irrevocably waives the enforcement of such rights. This subsection is
subject to and will not be deemed to limit, restrict, or constitute any
waiver by the Company of any rights of ownership to which the Company may be
entitled by operation of law by virtue of the Company being Executive's
employer. This Section does not apply to an invention that qualifies as a
nonassignable invention Section 2870 of the California Labor Code, which
applies to any invention for which no equipment, supplies, facilities or
Confidential Information was used, which does not (i) relate to the business
of the Company; (ii) relate to the Company's actual or demonstrable
anticipated research or development or (iii) result from any work performed
by Executive for the Company. This confirms that Executive has been notified
of his rights under Section 2870 of the California Labor Code.
(e) Executive and the Company agree that this covenant not to
compete is a reasonable covenant under the circumstances, and further agree
that if in the opinion of any court of competent jurisdiction such restraint
is not reasonable in any respect, such court shall have the right, power and
authority to excise or modify such provision or provisions of this covenant
as to the court shall appear not reasonable and to enforce the remainder of
the covenant as so amended. Executive agrees that any breach of the
covenants contained in this Section 8 would irreparably injure the Company.
Accordingly, Executive agrees that the Company may, in addition to pursuing
any other remedies it may have in law or in equity, cease making any payments
otherwise required by this Agreement and obtain an injunction against
Executive from any court having jurisdiction over the matter restraining any
further violation of this Agreement by Executive.
9. Specific Performance. Executive acknowledges and agrees that
the Company's remedies at law for a breach or threatened breach of any of the
provisions of Section 8 would be inadequate and, in recognition of this fact,
Executive agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Company, without posting any bond, shall
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be entitled to cease making any payments or providing any benefit otherwise
required by this Agreement and obtain equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.
10. Miscellaneous.
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a. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to conflicts of laws principles thereof.
b. Entire Agreement/Amendments. This Agreement contains the
entire understanding of the parties with respect to the employment of
Executive by the Company. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein. This
Agreement may not be altered, modified, or amended except by written
instrument signed by the parties hereto. This Agreement supercedes all prior
agreements and understandings (including verbal agreements) between Executive
and the Company and/or its affiliates regarding the terms and conditions of
Executive's employment with the Company and/or its affiliates.
c. No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be
considered a waiver of such party's rights or deprive such party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.
d. Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not be affected thereby.
e. Assignment. This Agreement shall not be assignable by
Executive. This Agreement may be assigned by the Company to a company which
is a successor in interest to substantially all of the business operations of
the Company. Such assignment shall become effective when the Company
notifies the Executive of such assignment or at such later date as may be
specified in such notice. Upon such assignment, the rights and obligations
of the Company hereunder shall become the rights and obligations of such
successor company, provided that any assignee expressly assumes the
obligations, rights and privileges of this Agreement.
f. Mitigation. Executive shall be required to mitigate the
amount of any payment provided for pursuant to this Agreement by seeking
other employment, taking into account the provisions of Section 8 of this
Agreement. Anything in this Agreement to the contrary notwithstanding, in
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the event that Executive provides services for pay to anyone other than the
Company or any of its affiliates from the date Executive's employment
hereunder is terminated until twelve months thereafter, the amounts paid to
Executive during such period pursuant to this Agreement shall be reduced by
the amounts of salary, bonus or other compensation earned by Executive during
such period as a result of Executive's performing such services (regardless
of when such earned amounts are actually paid to Executive).
g. Successors; Binding Agreement. 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 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. The terms of this
Agreement and all of Executive's rights hereunder shall be binding upon,
inure to the benefit of, and be enforceable by, Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributes,
devises and legatees, to the extent applicable.
h. Notice. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below Agreement, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be
effective only upon receipt.
If to the Company:
Western Multiplex Corporation
0000 Xxxxxxxx Xxx.
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
If to Executive:
To the most recent address of Executive set forth in the personnel
records of the Company.
i. Withholding Taxes. The Company may withhold from any
amounts payable under this Agreement such Federal, state and local taxes as
may be required to be withheld pursuant to any applicable law or regulation.
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j. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
WESTERN MULTIPLEX CORPORATION
By: /s/ Xxxx Xxxxxxxxx
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Name: Xxxx Xxxxxxxxx
Title: President
EXECUTIVE:
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Address of Executive:
0000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
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