EXHIBIT 10.18
TIER II
PC-TEL, INC.
MANAGEMENT RETENTION AGREEMENT
This Management Retention Agreement (the "Agreement") is made and entered into
by and between ______________________ (the "Executive") and PC-TEL, INC. (the
"Company"), effective as of the latest date set forth by the signatures of the
parties hereto below (the "Effective Date").
RECITALS
A. It is expected that the Company from time to time may consider a
Change of Control (as defined below). The Board of Directors of the Company (the
"Board") recognizes that such consideration can be a distraction to the
Executive and can cause the Executive to consider alternative employment
opportunities. The Board has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have the continued
dedication and objectivity of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control of the Company.
B. The Board believes that it is in the best interests of the Company
and its stockholders to provide the Executive with an incentive to continue his
employment and to motivate the Executive to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.
C. The Board believes that it is imperative to provide the Executive
with severance benefits upon Executive's termination of employment following a
Change of Control which provides the Executive with enhanced financial security
and incentive and encouragement to remain with the Company notwithstanding the
possibility of a Change of Control.
D. Certain capitalized terms used in this Agreement are defined in
Section 5 below.
The parties hereto agree as follows:
1. Term of Agreement. This Agreement shall terminate upon the
date that all obligations of the parties hereto with respect to this Agreement
have been satisfied.
2. At-Will Employment. The Company and the Executive acknowledge
that the Executive's employment is and shall continue to be at-will, as defined
under applicable law, and may be terminated by either party at any time, with or
without cause or notice. If the Executive's employment terminates for any
reason, including (without limitation) any termination prior to a Change of
Control, the Executive shall not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this Agreement, or as may
otherwise be available in
accordance with the Company's established Executive plans or pursuant to other
written agreements with the Company.
3. Change of Control Severance Benefits.
(a) Involuntary Termination other than for Cause, Death or
Disability or Voluntary Termination for Good Reason Following A Change of
Control. If, within twelve (12) months following a Change of Control,
Executive's employment is terminated (i) involuntarily by the Company other than
for Cause, death or Disability or (ii) by the Executive pursuant to a Voluntary
Termination for Good Reason, then, subject to Executive entering into a standard
form of mutual release of claims with the Company, the Company shall provide
Executive with the following benefits upon such termination:
(i) Severance Payment. A lump-sum cash payment in
an amount equal to one hundred fifty percent (150%) of the Executive's Annual
Compensation;
(ii) Continued Executive Benefits. Company-paid
health, dental, vision, long-term disability and life insurance coverage at the
same level of coverage as was provided to such Executive immediately prior to
the Change of Control and at the same ratio of Company premium payment to
Executive premium payment as was in effect immediately prior to the Change of
Control (the "Company-Paid Coverage"). If such coverage included the Executive's
dependents immediately prior to the Change of Control, such dependents shall
also be covered at Company expense. Company-Paid Coverage shall continue until
the earlier of (A) one year from the date of termination, or (B) the date upon
which the Executive and his dependents become covered under another employer's
group health, dental, vision, long-term disability or life insurance plans that
provide Executive and his dependents with comparable benefits and levels of
coverage. For purposes of Title X of the Consolidated Budget Reconciliation Act
of 1985 ("COBRA"), the date of the "qualifying event" for Executive and his or
her dependents shall be the date upon which the Company-Paid Coverage commences,
and each month of Company-Paid Coverage provided hereunder shall offset a month
of continuation coverage otherwise due under COBRA.
(iii) Pro-Rated Bonus Payment. A lump-sum cash
payment equal to one hundred percent (100%) of the higher of (A) Executive's
Target Bonus as in effect for the fiscal year in which the Change of Control
occurs or (B) Executive's Target Bonus as in effect for the fiscal year in which
Executive's termination occurs, pro-rated by multiplying such bonus amount in
clause (A) or (B), as applicable, by a fraction, the numerator of which shall be
the number of days prior to Executive's termination during such fiscal year, and
the denominator of which shall be three-hundred and sixty-five.
(iv) Equity Compensation Accelerated Vesting. One
Hundred percent (100%) of the unvested portion of any stock option, restricted
stock or other Company equity compensation held by the Executive shall be
automatically accelerated in full so as to become completely vested.
(b) Voluntary Resignation. If the Executive's employment
terminates by reason of the Executive's voluntary resignation (and is not a
Voluntary Termination for Good
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Reason), then the Executive shall not be entitled to receive severance or other
benefits except for those (if any) as may then be established under the
Company's then existing severance and benefits plans or pursuant to other
written agreements with the Company.
(c) Disability; Death. If the Executive's employment with
the Company terminates as a result of the Executive's Disability, or if
Executive's employment is terminated due to the death of the Executive, then the
Executive shall not be entitled to receive severance or other benefits except
for those (if any) as may then be established under the Company's then existing
severance and benefits plans or pursuant to other written agreements with the
Company.
(d) Termination for Cause. If the Executive is terminated
for Cause, then the Executive shall not be entitled to receive severance or
other benefits.
(e) Termination Apart from Change of Control. In the event
the Executive's employment is terminated for any reason, either prior to the
occurrence of a Change of Control or after the twelve (12) month period
following a Change of Control, then the Executive shall be entitled to receive
severance and any other benefits only as may then be established under the
Company's then existing severance and benefits plans or pursuant to other
written agreements with the Company.
4. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:
(a) Annual Compensation. "Annual Compensation" shall mean
an amount equal to the Executive's Company annual base salary.
(b) Target Bonus. "Target Bonus" shall mean Executive's
annual bonus, assuming 100% "on target" satisfaction of any objective or
subjective performance milestones.
(c) Cause. "Cause" shall mean (i) an act of personal
dishonesty taken by the Executive in connection with his responsibilities as an
Executive and intended to result in substantial personal enrichment of the
Executive, (ii) Executive being convicted of a felony, (iii) a willful act by
the Executive which constitutes gross misconduct and which is injurious to the
Company, (iv) following delivery to the Executive of a written demand for
performance from the Company which describes the basis for the Company's
reasonable belief that the Executive has not substantially performed his duties,
continued violations by the Executive of the Executive's obligations to the
Company which are demonstrably willful and deliberate on the Executive's part.
(d) Change of Control. "Change of Control" means the
occurrence of any of the following events:
(i) Any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then outstanding
voting securities who is not already such as of the Effective Date of this
Agreement; or
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(ii) The consummation of the sale or disposition by
the Company of all or substantially all the Company's assets; or
(iii) The consummation of a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or its parent) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity or
its parent outstanding immediately after such merger or consolidation; or
(iv) A change in the composition of the Board
occurring within a two-year period, as a result of which fewer than a majority
of the directors are Incumbent Directors. "Incumbent Directors" shall mean
directors who either (A) are directors of the Company as of the date upon which
this Agreement was entered into, or (B) are elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of those
directors whose election or nomination was not in connection with any
transaction described in subsections (i), (ii), or (iii) above, or in connection
with an actual or threatened proxy contest relating to the election of directors
to the Company; or
(e) Disability. "Disability" shall mean that the Executive
has been unable to perform his Company duties as the result of his incapacity
due to physical or mental illness, and such inability, at least 26 weeks after
its commencement, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative (such Agreement as to acceptability not to be
unreasonably withheld). Termination resulting from Disability may only be
effected after at least 30 days' written notice by the Company of its intention
to terminate the Executive's employment. In the event that the Executive resumes
the performance of substantially all of his duties hereunder before the
termination of his employment becomes effective, the notice of intent to
terminate shall automatically be deemed to have been revoked.
(f) Voluntary Termination for Good Reason. "Voluntary
Termination for Good Reason" shall mean the Executive voluntarily resigns after
the occurrence of any of the following (i) without the Executive's express
written consent, a material reduction of the Executive's duties, title,
authority or responsibilities, relative to the Executive's duties, title,
authority or responsibilities as in effect immediately prior to such reduction,
or the assignment to Executive of such reduced duties, title, authority or
responsibilities; provided, however, that a reduction in duties, title,
authority or responsibilities solely by virtue of the Company being acquired and
made part of a larger entity (as, for example, when the Senior Vice-President of
a business unit of the Company remains as such following a Change of Control)
shall not by itself constitute grounds for a "Voluntary Termination for Good
Reason;" (ii) without the Executive's express written consent, a material
reduction, without good business reasons, of the facilities and perquisites
(including office space and location) available to the Executive immediately
prior to such reduction; (iii) a reduction by the Company in the base salary of
the Executive as in effect immediately prior to such reduction; (iv) a material
reduction by the Company in the aggregate level of Executive benefits, including
bonuses, to which the Executive was entitled immediately prior to such reduction
with the result that
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the Executive's aggregate benefits package is materially reduced (other than a
reduction that generally applies to Company Executives); (v) the relocation of
the Executive to a facility or a location more than thirty-five (35) miles from
the Executive's then present location, without the Executive's express written
consent; (vi) the failure of the Company to obtain the assumption of this
agreement by any successors contemplated in Section 6(a) below; or (vii) any act
or set of facts or circumstances which would, under California case law or
statute constitute a constructive termination of the Executive.
5. Non-Solicitation. In consideration for the severance benefits
Executive is to receive herein, if any, Executive agrees that he or she will
not, at any time during the one year following his or her termination date,
directly or indirectly solicit any individuals to leave the Company's (or any of
its subsidiaries') employ for any reason or interfere in any other manner with
the employment relationships at the time existing between the Company (or any of
its subsidiaries) and its current or prospective Executives.
6. Successors.
(a) Company's Successors. Any successor to the Company
(whether direct or indirect and whether by purchase, 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. For all purposes under this Agreement, the term
"Company" shall include any such successor to the Company's business and/or
assets which executes and delivers the assumption agreement described in this
Section 6(a) or which becomes bound by the terms of this Agreement by operation
of law.
(b) Executive's Successors. The terms of this Agreement
and all rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees
7. Notice.
(a) General. Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or one day following mailing via
Federal Express or similar overnight courier service. In the case of the
Executive, mailed notices shall be addressed to him at the home address which he
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 notices shall be directed to the attention of its Secretary.
(b) Notice of Termination. Any termination by the Company
for Cause or by the Executive pursuant to a Voluntary Termination for Good
Reason shall be communicated by a notice of termination to the other party
hereto given in accordance with Section 7(a) of this Agreement. Such notice
shall indicate the specific termination provision in this Agreement relied
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upon, shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under the provision so indicated, and shall
specify the termination date (which shall be not more than 30 days after the
giving of such notice). The failure by the Executive to include in the notice
any fact or circumstance which contributes to a showing of Voluntary Termination
for Good Reason shall not waive any right of the Executive hereunder or preclude
the Executive from asserting such fact or circumstance in enforcing his rights
hereunder.
8. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Executive shall not be
required to mitigate the value of any benefits contemplated by this Agreement,
nor shall any such benefits be reduced by any earnings or benefits that the
Executive may receive from any other source.
(b) Waiver. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Executive and by two authorized officers
of the Company (other than the Executive). No waiver by either party of any
breach of, or of compliance with, any condition or provision of this Agreement
by the other party shall be considered a waiver of any other condition or
provision or of the same condition or provision at 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 Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement
represents the entire understanding of the parties hereto with respect to the
subject matter hereof and supersedes all prior arrangements and understandings
regarding same.
(d) Choice of Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of California.
(e) Severability. The invalidity or unenforceability of
any provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(f) Counterparts. This 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.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
set forth below.
PC-TEL, INC.
By:
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Title:
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Date:
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By:
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Title:
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Date:
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EXECUTIVE
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Date:
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