Exhibit 10.4
RETENTION INCENTIVE AGREEMENT
THIS RETENTION INCENTIVE AGREEMENT is being entered into as of August
20, 2001 by and between TRITON NETWORKS SYSTEMS, INC. (the "Company"), and Xxx
Xxxxx ("the "Employee").
BACKGROUND
The Board of Directors of the Company has determined that it is in the
best interests of the Company's shareholders to liquidate the Company's assets
and dissolve the Company at this time. In order to retain Employee during the
critical period through a Change of Control, the Company wishes provide to
Employee an incentive to encourage the Employee to obtain the maximum value for
the Company's shareholders and to remain with the Company during the critical
periods of such liquidation.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises contained
herein and Company continuing to employ the services of the Employee and the
Employee's continuing employment on an at-will basis, and other good and
valuable consideration exchanged, the receipt and sufficiency of which are
hereby acknowledged by the parties, it is agreed by the parties as follows:
1) Certain Definitions.
a) "Cause" as used in this Agreement shall mean: (i) illegal acts
(other than minor traffic violations or misdemeanors), including,
but not limited to, theft fraud or embezzlement; (ii) violation of
published written policies of the Company or violation of any
confidentiality or proprietary information agreement with the
Company, in each case deemed to be material to the Company; and
(iii) irresponsible unauthorized acts of a willful nature in the
performance of your duties, in each case deemed to be material to
the Company, or repeated failure to follow the reasonable
directions of the Board of Directors of the Company.
b) "Change of Control" as used in this Agreement shall mean: (i) any
liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, (ii) any transaction or series of related
transactions (including, without limitation, any reorganization,
merger or consolidation) which will result in the Company's
stockholders immediately prior to such transaction not holding (by
virtue of such shares or securities issued solely with respect
thereto) at least 50% of the voting power of the surviving or
continuing entity, or (iii) a sale of all or substantially all of
the assets of the Company, unless the Company's stockholders
immediately prior to such sale will, as a result of such sale, hold
(by virtue of securities issued as
consideration for the Company's sale) at least 50% of the voting
power of the purchasing entity.
c) "Continuous Employment" as used in this Agreement shall mean
service as a common law employee or as a member of the Board of
Directors and the absence of any interruption or termination of
such service with the Company or any parent or subsidiary which now
exists or hereafter is organized or acquired by the Company or any
Successor. Continuous Employment with the Company or its Successor
shall not be considered interrupted in the case of sick leave,
military leave, or any other leave of absence approved by the
Company or its Successor or in the case of transfers between
locations of the Company or between any parent or subsidiary, or
successor thereof.
d) "Per Share Price" as used in this Agreement shall mean (i) in the
event of the Company is dissolved, cash in an amount equal to (x)
the total value of the proceeds of the dissolution to be
distributed to shareholders of the Company (inclusive of all
amounts to be held back in accordance with applicable laws in
respect of any contingent or unmature liabilities of the Company),
divided by (y) the number of shares of the Company's capital stock
outstanding immediately prior to the initial distribution of the
proceeds of the dissolution to shareholders of the Company, or (ii)
in the event of any other Change of Control, cash in an amount
equal to (x) the total consideration to be paid to the Company's
shareholders upon closing of the transaction, [inclusive of any
consideration that is held back or subject to payment contingencies
in accordance with any earnout or indemnification terms], divided
by (y) the number of shares of the Company's capital stock
outstanding immediately prior to the closing of such transaction.
2) Bonus Payment Calculation. Prior to Change of Control, the Company and
any Successor shall be obligated to pay to the Employee a bonus in cash
in the amount set forth below (the "Bonus"):
a) In the event the Per Share Price (defined below) is greater than
$0.80 and less than or equal to $0.85, the Employee shall be paid
2.00% of the difference between $0.80 and the Per Share Price
multiplied by the number of shares of the Company's capital stock
outstanding immediately prior to the initial distribution to the
shareholders or closing of any other Change of Control transaction,
as applicable; and
b) In the event the Per Share Price is greater than $0.85 and less
than or equal to $0.90, the Employee Shall be paid the amount in
(a) plus 2.25% of the difference between $0.85 and the Per Share
Price multiplied by the number of shares of the Company's capital
stock outstanding immediately prior to the initial distribution to
the shareholders or closing of any other Change of Control
transaction, as applicable; and
c) In the event the Per Share Price is greater than $0.90, the
Employee Shall be paid the amount in (b) plus 3.00% of the
difference between $0.90 and the Per Share Price multiplied by the
number of shares of the Company's capital stock outstanding
immediately prior to the initial distribution to the shareholders
or closing of any other Change of Control transaction, as
applicable; and.
d) In the event that the Per Share Price not greater than $0.80 the
employee is not entitled to receive any bonus amount under this
agreement.
3) Confidentiality, Nondisclosure and Nondisparage. The terms of this
Agreement are highly confidential. Employee hereby agrees that this
Agreement and the terms set forth, other than what is disclosed in any
S.E.C. filing, shall be kept confidential and shall not be disclosed
to any third party, including any person, group, media or entity of
any kind whatsoever, other than in confidence to Employee's spouse,
attorney, and/or tax advisor, except pursuant to an agreement with
Company or its Successor or as may be required by law or court order
Employee shall not disparage or otherwise make any negative comments
or provide any negative information about Company or its Successor.
Nor shall Employee say anything unflattering or derogatory about
Company's or its Successor's management, business practices, products
or services, or about any individual associated with Company or its
Successor (including directors or officers). The only exception to
this Section is that this Agreement may be used as evidence in a
subsequent proceeding in which any of the parties allege a breach of
the Agreement.
4) Company's and Successor's Obligations. Prior to or simultaneous with
any Change of Control, the Company shall cause the surviving
corporation or any successor-in-interest pursuant to the terms of the
Change of Control or any assignee (referred to as "Successor") to
assume all of Company's obligations under this Agreement (including,
but not limited to, financial obligations) in the same manner and to
the same extent that the Company would be required to perform. If
required by the nature of the transaction, Successor will agree, in
writing (either in a separate writing or as part of the acquisition
documents), to perform under this Agreement. Failure of the Company to
cause such assumption and performance by the Successor shall be a
breach of this Section 4 and will entitle the Employee to the remedies
set out in Section 5 below. Once a Change of Control occurs resulting
in a Successor, then any reference in this Agreement to the Company
shall apply to Successor as if Successor had originally entered into
this Agreement.
5) Employee's Remedies Upon Breach of Section 4 by Company. In the event
the Company does not cause an assumption and performance by Successor
pursuant to Section 4, then within 30 days from the Close of the
Change of Control, Employee shall be free to terminate Employee's
employment with Successor and the Company shall pay Employee any
Bonus payments payable to Employee in accordance with Section 2 as if
the termination were a termination of the Employee without Cause by
Company or its Successor.
6) Attorney's Fees. In the event the Company or its Successor fails to
perform, fails to make any payments due or is otherwise in breach of
this Agreement and as a result the Employee retains counsel in order
to enforce this Agreement, the Company or its Successor shall pay all
fees and costs incurred by Employee's counsel in enforcing the terms
of this Agreement.
7) Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter herein. Any and all
understandings with respect to the subject matter herein, not
contained herein, whether written or oral, are hereby either waived or
superseded and are of no force and effect. This Agreement may be
modified only by written agreement executed by all parties to which
the modification will apply. This Agreement is in addition to and does
not supersede or amend any Confidentiality or Proprietary Information
Agreement, Stock Option Agreement, or any written agreement with
regard to severance payments to be paid to Employee between the
Company and Employee. In the event of any conflict between the
provisions of this Agreement, and any of the Confidentiality or
Proprietary Information Agreement, Stock Option Agreement, or any
written agreement with regard to severance payments to be paid to
Employee, this Agreement will govern.
8) Applicable Law, Binding Effect, Successors and Assigns and Venue.
This Agreement shall be governed, construed and regulated under and by
the laws of the State of Florida, and shall inure to the benefit of,
and be binding upon and enforceable by, the parties hereto and their
heirs and personal representatives, and as to Company and its
Successor, which includes any assigns. Jurisdiction and venue for
enforcement and prosecution of this Agreement or any of its terms lies
exclusively in the federal and state courts located in Orange County,
Florida. In the event of a Change of Control resulting in a Successor,
then all rights, duties and obligations of Company will become that of
Successor.
9) Consent to Assignment. Employee may not assign this Agreement.
Employee agrees, however, that this Agreement is intended to apply to
either Company or Successor. Thus, Company may assign this Agreement,
without a separate writing, and all the covenants and restrictions
contained herein, to a Successor. Employee does hereby consent to and
ratify any such assignment and agrees to continue to be bound to this
Agreement, whether or not Employee decides to become or to remain
employed by Successor, and further agrees that this Agreement will
continue in full force and effect unless terminated by such Successor.
10) Invalid Provision. The invalidity or unenforceability of a particular
provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provisions were omitted.
11) Notices. Any and all notices required or permitted to be given under
this Agreement will be sufficient if furnished in writing, and
personally delivered or sent by certified mail, postage prepaid, to
Employee's last known residence, or to Company's principal office in
Orlando, Florida, whichever the case may be, or to such address as
either party may
have furnished to the other in writing in accordance herewith. Any
notice sent by certified mail as aforesaid shall be deemed to have
delivered on the third business day following the date of mailing.
12) Waiver. The failure of the Company, at any time, to require
performance of Employee of any provision hereof, or to resort to its
remedy at law, in equity, or otherwise, shall in no way affect the
right of the Company to require such full performance or to resort to
such remedy at any time thereafter, nor shall the waiver by the
Company of a breach of any provision hereof be taken or held to be a
waiver of any subsequent breach of such provision unless expressly
stated in writing by the Company. No waiver of any of the provisions
hereof shall be effective unless in writing and signed by the party to
be charged with such waiver.
13) Interpretation; Headings; Gender and Number. This Agreement shall
not be construed more strictly against one party than against the
other merely by virtue of the fact that it may have been prepared by
one of the parties. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning
hereof. Unless the context otherwise requires, references in this
Agreement to any gender shall be construed to include all other
genders, references in the singular shall be construed to include the
plural, and references in the plural shall be construed to include the
singular.
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WITNESS the execution hereof by the parties intending to be legally
bound as of the day and year first above-written.
Triton Network Systems, Inc.
By: /s/ H. W. Speaks, Jr.
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Name: H.W. Speaks, Jr.
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Title: Board Member
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Employee
Signature: /s/ Xxx Xxxxx
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Name: Xxx Xxxxx
