Exhibit 10.6
RETENTION INCENTIVE AGREEMENT
THIS RETENTION INCENTIVE AGREEMENT is being entered into as of August
20, 2001 by and between TRITON NETWORK SYSTEMS, INC. (the "Company"), and Xxxx
Xxxxxxxx (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 fifty percent (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 fifty percent (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 (w)
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 (x) 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
(y) 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 earn out or
indemnification terms], divided by (z) 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
1.20% 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 1.35% 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 1.80% 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 Non-Disparage. 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 thirty (30) calendar 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 un-enforceability 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
(3rd) business day following the date of mailing.
Expiration Date, will be promptly removed from Office Premises or Storage
Premises, as applicable, by Landlord and disposed of as mutually agreed upon by
Landlord and Tenant. Tenant will, throughout the term of the license granted
herein, carry and maintain, at its sole cost and expense, commercial general
liability insurance on an occurrence form covering claims from bodily injury
(including death) and property damage with minimum limits of $2,000,000 per
occurrence and $2,000,000 general aggregate. Such insurance shall be taken out
with an insurer licensed to do business in Florida and otherwise acceptable to
Landlord, shall name Landlord as an additional insured, and shall provide for 30
days prior written notice to Landlord before any modification or termination of
said insurance. A certificate of insurance on Accord Form 25-S shall be
delivered to Landlord on or before the Effective Date. Tenant indemnifies and
agrees to hold harmless Landlord from and against any and all liability for any
loss, injury or damage (including, without limitation, reasonable attorney's
fees) arising out of the license granted herein. The insurance that Tenant is
required to carry hereunder will include coverage of the foregoing contractual
indemnity. Tenant shall not assign the license granted herein to any other
person or entity.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement as
of the date first above written.
Witnesses: FLAGLER DEVELOPMENT COMPANY
/s/ XX Xxxxxx By: /s/ G. Xxxx Xxxxx
----------------------------- -------------------------------------
Name: Xxxxx X. Xxxxxx G. Xxxx Xxxxx
------------------------ President
Date: 9/04 , 2001
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/s/ Xxxxxxx X. Xxxxxx [CORPORATE SEAL]
-----------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------
TRITON NETWORK SYSTEMS, INC.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxx Xxxxx
----------------------------- -------------------------------------
Name: Xxxxxxx X. Xxxxxx Xxx Xxxxx
------------------------ Chief Executive Officer
Date: 8/24/01 , 2001
---------------------
/s/ Xxxxx X. Xxxx
----------------------------- [CORPORATE SEAL]
Name: Xxxxx X. Xxxx
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