EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (the 'Agreement') dated as of March 27, 2000by and between Western Multiplex Corporation, a Delaware corporation (the'Company') and Joseph J. Tavormina (the 'Executive'). WHEREAS, the Company considers it essential to its best interestsand the best interests of its stockholders to foster the continued employmentof Executive by the Company during the term of this Agreement and Executiveis willing to accept and continue Executive's employment on the termshereinafter set forth in this Agreement; NOW, THEREFORE, in consideration of the premises and mutualcovenants herein and for other good and valuable consideration, the partiesagree as follows: 1. Term of Employment; Executive Representation. -------------------------------------------- a. Employment Term. Executive's term of employment underthis Agreement shall commence on the date hereof and, subject to the termshereof, Executive and the Company agree and acknowledge that Executive'semployment with the Company constitutes 'at-will' employment and that thisAgreement may be terminated at any time by the Company or Executive, subjectto the provisions of Section 7 of this Agreement. b. Executive Representation. Executive hereby represents tothe Company that the execution and delivery of this Agreement by Executiveand the Company and the performance by Executive of the Executive's dutieshereunder shall not constitute a breach of, or otherwise contravene, theterms of any employment agreement or other agreement or policy to whichExecutive is a party or otherwise bound. 2. Position. -------- a. While employed hereunder, Executive shall serve as theCompany's Vice President of Access Products. In such position, Executiveshall have such duties and authority as shall be determined from time to timeby the Company. Executive shall report to the Company's President (or otherposition that is equivalent or more senior). b. While employed hereunder, Executive will devoteExecutive's full business time and best efforts to the performance ofExecutive's duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflictwith the rendition of such services either directly or indirectly, withoutthe prior written consent of the Company; provided that nothing herein shallpreclude Executive from continuing to serve on the board of directors ortrustees of any business corporation or any charitable organization on whichhe currently serves and which is identified on Exhibit A hereto or, subjectto the prior approval of the Company, from accepting appointment to anyadditional directorships or trusteeships, provided in each case, and in theaggregate, that such activities do not interfere with the performance ofExecutive's duties hereunder or conflict with Section 8. 3. Annual Compensation. ------------------- a. Base Salary. While employed hereunder, the Company shallpay Executive a base salary (the 'Base Salary') at the annual rate of$144,000, payable in regular installments in accordance with the Company'susual payment practices. The Company shall review Executive's Base Salary atleast annually, and Executive shall be entitled to such increases inExecutive's Base Salary, if any, as may be determined from time to time inthe sole discretion of the Company. b. Annual Bonus. With respect to each calendar year whileemployed hereunder, Executive shall be eligible to earn an annual bonus award(an 'Annual Bonus') pursuant to an annual incentive plan to be established bythe Company (the 'Bonus Plan'); provided, however, that the Executive'sminimum Annual Bonus opportunity shall be based on a minimum percentage ofBase Salary (the 'Minimum Target'), which shall not be less than such minimumpercentage of base salary that other similarly situated employees of theCompany may be eligible to earn pursuant to the Bonus Plan; and provided,further, that with respect to the Annual Bonus payable in respect of calendaryear 2000, Executive's Minimum Target shall not be less than 15% ofExecutive's Base Salary, and his Annual Bonus shall not be less than 22.5% ofExecutive's Base Salary. A copy of the Company's existing annual incentiveplan is attached as Exhibit B hereto. 4. Equity Arrangements. ------------------- a. Restricted Stock. The Company shall sell to Executive200,000 shares of the Company's Common Stock. The price per share shall be$0.50 and shall be paid by a promissory note provided by the Company (whichshall be at the minimum interest rate allowed by the Internal Revenue Serviceand the interest on promissory note shall accrue). The stock purchase shallbe subject to the terms of the Subscription and Employee Stockholder'sAgreement attached as Exhibit C hereto, the terms of which shall be -2- consistent with this Agreement and with such terms as may be provided toother similarly situated executives of the Company. b. Stock Option. The Company shall provide Executive withan option to purchase 200,000 shares of the Company's common stock. Theexercise price per share shall be $.50 and the vesting schedule (and allother terms) shall be as set forth in the Stock Option Agreement attached asExhibit D hereto, which terms shall be consistent with this Agreement. 5. Employee Benefits. The Company shall provide Executive duringthe term of his employment hereunder with coverage under all employee pensionand welfare benefit programs, plans and practices in accordance with theterms thereof, which the Company generally makes available to its seniorexecutives. Executive shall also be entitled to such number of paid vacation(which shall not be less than four weeks) and sick leave in each calendaryear as established under the Company's policies as in effect from time totime, which shall be taken at such times as are consistent with Executive'sresponsibilities hereunder. 6. Business Expenses. Executive is authorized to incurreasonable expenses in carrying out his duties and responsibilities underthis Agreement, including, without limitation, expenses for travel andsimilar items related to such duties and responsibilities. The Company willreimburse Executive for all such expenses upon presentation by Executive fromtime to time of appropriately itemized and approved (consistent with theCompany's policy) accounts of such expenditures. 7. Termination. The Executive's employment hereunder may beterminated by either party at any time and for any reason; provided thatExecutive will be required to give the Company at least 90 days advancewritten notice of Executive's resignation from employment with the Companyfor any reason (other than for death or Permanent Disability); provided,further, however, that Executive shall only be required to give the Companyat least 30 days' advance written notice of Executive's resignation fromemployment for Good Reason (but only as defined in Section 7(c)(ii)(x) and(y)) following the expiration of the 30-day cure period provided to theCompany pursuant to Section 7(c)(i) of this Agreement. Notwithstanding anyother provision of this Agreement, the provisions of this Section 7 shallexclusively govern Executive's rights upon termination of employment with theCompany and its affiliates. a. By the Company For Cause for Cause or Resignation By the Executive Without Good Reason. -------------------------------------------------------- (i) The Executive's employment hereunder may be terminated bythe Company for Cause (as defined below) or upon 90 days prior written -3- notice, by Executive without Good Reason. Notwithstanding the foregoing,none of the events described in clauses (i) or (v) of Section 7(a)(ii) shallconstitute Cause unless the Company shall have notified Executive in writingdescribing the events which constitute Cause and then only if Executive shallhave failed to cure such event within thirty (30) days after Executive'sreceipt of such written notice. (ii) For purposes of this Agreement, 'Cause' shall mean (i)the Executive's willful and continued failure to perform his or her dutieswith respect to the Company or its subsidiaries after demand by his or hersuperior for substantial performance is made or delivered, (ii) willfulmisconduct by the Executive involving material dishonesty or breach of trustin connection with the Executive's employment, (iii) conviction for anyfelony or misdemeanor involving moral turpitude, (iv) any material breachof the Executive's restrictive covenants as provided in Section 8 of thisAgreement, or (v) material violation of any written Company policy. (iii) If Executive's employment is terminated by the Companyfor Cause or by Executive without Good Reason, Executive shall be entitled toreceive: (A) the Base Salary through the date of termination; (B) any Annual Bonus earned but unpaid as of the date of termination. (C) reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive's termination; (D) such Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company; and (E) any accrued but unused vacation pay (the amounts described in clauses (A) through (E) hereof being referred to as the 'Accrued Rights'). Following such termination of Executive's employment by the Companyfor Cause, except as set forth in this Section 7(a), Executive shall have nofurther rights to any compensation or any other benefits under thisAgreement. b. Disability or Death. ------------------- (i) The Executive's employment hereunder shall terminate uponExecutive's death and if Executive becomes physically or mentally -4- incapacitated and is therefore unable for a period of six (6) consecutivemonths or for an aggregate of nine (9) months in any twenty-four (24)consecutive month period to perform Executive's duties (such incapacity ishereinafter referred to as 'Disability'). Any question as to the existenceof the Disability of Executive as to which Executive and the Company cannotagree shall be determined in writing by a qualified independent physicianmutually acceptable to Executive and the Company. If Executive and theCompany cannot agree as to a qualified independent physician, each shallappoint such a physician and those two physicians shall select a third whoshall make such determination in writing. The determination of Disabilitymade in writing to the Company and Executive shall be final and conclusivefor all purposes of the Agreement. (ii) Upon termination of Executive's employment hereunder foreither Disability or death, Executive or Executive's estate (as the case maybe) 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 3(b) hereof in respect of the year in which the date of Executive's termination of employment occurs, based upon the percentage of the calendar year that shall have elapsed through the date of Executive's termination, 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 orDisability, except as set forth in this Section 7(b), Executive shall have nofurther rights to any compensation or any other benefits under thisAgreement. c. By the Company Without Cause or Resignation by Executive for Good Reason. -------------------------------------------------------- (i) The Executive's employment hereunder may be terminated bythe Company without Cause or by Executive's resignation for Good Reason.Notwithstanding the foregoing, none of the events described in clauses (x)or (y) of Section 7(c)(ii) shall constitute Good Reason unless Executiveshall have notified the Company in writing describing the events whichconstitute Good Reason and then only if the Company shall have failed to cure -5- such event within thirty (30) days after the Company's receipt of suchwritten notice. (ii) For purposes of this Agreement, 'Good Reason' shallmean: (x) a reduction in the Executive's Base Salary (other than anyreduction that is proportionally the same as a general salary reductionaffecting at least the majority of salaried employees of the Company), (y) amaterial and adverse reduction in the Executive's duties andresponsibilities, (z) a transfer of the Executive's primary workplace by morethan fifty (50) miles from the current workplace, other than as approved byExecutive. The Company hereby acknowledges that Executive's currentworkplace shall be Petaluma, California. (iii) If Executive's employment is terminated by the Companywithout Cause (other than by reason of death or Disability) or if Executiveresigns for Good Reason, Executive 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 3(b) hereof in respect of the year in which the date of Executive's termination of employment occurs, based upon the percentage of the calendar year that shall have elapsed through the date of Executive's termination, payable when such Annual Bonus would have otherwise been payable had the Executive's employment not terminated; (C) subject to Executive's continued compliance with the provisions of Section 8, continued payment of the Base Salary and Annual Bonus until twelve (12) months after the date of such termination; provided, that the aggregate amount described in this clause (C) shall be reduced by the present value of any other cash severance or termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates; and (D) subject to Executive's continued compliance with the provisions of Section 8, continuation of such Employee Benefits (as described in Section 5 hereof), if any, as to which Executive may be entitled under the employee benefits plans of the Company until twelve (12) months after the date of such termination. Notwithstanding the foregoing, if Executive's resigns for GoodReason or Executive's employment is terminated by the Company without Causefollowing a reduction in Executive's Base Salary (other than any reductionthat is proportionally the same as a general salary reduction affecting atleast the majority of salaried employees of the Company), the Base Salary and -6- Annual Bonus for the purpose of Section 7(c)(iii) shall be based on the BaseSalary prior to such reduction. Following Executive's termination of employment by the Companywithout Cause (other than by reason of Executive's death or Disability) or byExecutive's resignation for Good Reason, except as set forth in this Section7(c), Executive shall have no further rights to any compensation or any otherbenefits under this Agreement. d. Notice of Termination. Any purported termination ofemployment by the Company or by Executive (other than due to Executive'sdeath) shall be communicated by written Notice of Termination to the otherparty hereto in accordance with Section 10(h) hereof. For purposes of thisAgreement, a 'Notice of Termination' shall mean a notice which shall indicatethe specific termination provision in this Agreement relied upon and shallset forth in reasonable detail the facts and circumstances claimed to providea 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 withthe Company, Executive shall not, without the prior written consent of theCompany, use, divulge, disclose or make accessible to any other person, firm,partnership, corporation or other entity any Confidential Information (ashereinafter defined) pertaining to the business of the Company or any of itssubsidiaries, except (i) while employed by the Company, in the business ofand for the benefit of the Company, or (ii) when required to do so by a courtof competent jurisdiction, by any governmental agency having supervisoryauthority over the business of the Company, or by any administrative body orlegislative body (including a committee thereof) with jurisdiction to orderExecutive to divulge, disclose or make accessible such information. Forpurposes 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 theCompany, its subsidiaries, Ripplewood Holdings L.L.C. or their respectiveaffiliates as in existence as of the date of Executive's termination ofemployment that, in any case, is not otherwise available to the public (otherthan by Executive's breach of the terms hereof). b. As Vice President of Access Products, Executive willacquire knowledge of Confidential Information and trade secrets. Executiveacknowledges that the Confidential Information and trade secrets which theCompany has provided and will provide to him could play a significant rolewere he to directly or indirectly be engaged in any business in Competitionwith the Company or its subsidiaries. During the period of his employmenthereunder and for one year thereafter, Executive agrees that, without the -7- prior written consent of the Company, (A) he will not, directly orindirectly, 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 anownership position of less than 5 percent in any company whose shares arepublicly traded), any business, which is in Competition (as hereinafterdefined) with the Business (as hereinafter defined) and (B) he shall not, onhis own behalf or on behalf of any person, firm or company, directly orindirectly, solicit for employment any person who has been employed by theCompany or its subsidiaries at any time during the 12 months immediatelypreceding such solicitation, in either case to the extent that Executivewould use or inevitably use Confidential Information or trade secrets or thatwould otherwise constitute unfair competition. c. For purposes of this Section 8, a business shall bedeemed to be in Competition with the Business if it is primarily engaged inor has taken concrete steps toward engaging in the business of research anddevelopment, designing, manufacturing, marketing, distributing, or servicingor selling components as used in microwave radios, products and equipment,whether in existence or in development, relating to microwave communications(including unlicenced 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 itsaffiliates as of the date of Executive's termination of employment, in allcities, counties, states and countries in which the business of the Companyor its affiliates is then being conducted or its products are being sold. d. The results and proceeds of Executive's serviceshereunder, including, without limitation, any works of authorship resultingfrom Executive's services during Executive's employment with the Companyand/or any of the Company's affiliates and any works in progress, will beworks-made-for hire and the Company will be deemed the sole owner throughoutthe universe of any and all rights of whatsoever nature therein, whether ornot now or hereafter known, existing, contemplated, recognized or developed,with the right to use the same in perpetuity in any manner the Companydetermines in its sole discretion without any further payment to Executivewhatsoever. If, for any reason, any of such results and proceeds will notlegally be a work-for-hire and/or there are any rights which do not accrue tothe Company under the preceding sentence, then Executive hereby irrevocablyassigns and agrees to assign any and all of Executive's right, title andinterest thereto, including, without limitation, any and all copyrights,patents, trade secrets, trademarks and/or other rights of whatsoever naturetherein, whether or not now or hereafter known, existing, contemplated,recognized or developed, to the Company, and the Company will have the rightto use the same in perpetuity throughout the universe in any manner theCompany determines without any further payment to Executive whatsoever.Executive will, from time to time as may be requested by the Company, (i) -8- during the term of Executive's employment without further consideration, and(ii) thereafter at Executive's then current hourly rate, do any and allthings which the Company may deem useful or desirable to establish ordocument the Company's exclusive ownership of any and all rights in any suchresults and proceeds, including, without limitation, the execution ofappropriate copyright and/or patent applications or assignments. To theextent Executive has any rights in the results and proceeds of Executive'sservices that cannot be assigned in the manner described above, Executiveunconditionally and irrevocably waives the enforcement of such rights. Thissubsection is subject to and will not be deemed to limit, restrict, orconstitute any waiver by the Company of any rights of ownership to which theCompany may be entitled by operation of law by virtue of the Company beingExecutive's employer. This Section does not apply to an invention thatqualifies as a nonassignable invention under Section 2870 of the CaliforniaLabor Code, which applies to any invention for which no equipment, supplies,facilities or Confidential Information was used, which does not (i) relate tothe business of the Company; (ii) relate to the Company's actual ordemonstrable anticipated research or development or (iii) result from anywork performed by Executive for the Company. This confirms that Executivehas been notified of his rights under Section 2870 of the California LaborCode. e. Executive and the Company agree that this covenant not tocompete is a reasonable covenant under the circumstances, and further agreethat if in the opinion of any court of competent jurisdiction such restraintis not reasonable in any respect, such court shall have the right, power andauthority to excise or modify such provision or provisions of this covenantas to the court shall appear not reasonable and to enforce the remainder ofthe covenant as so amended. Executive agrees that any breach of thecovenants contained in this Section 8 would irreparably injure the Company.Accordingly, Executive agrees that the Company may, in addition to pursuingany other remedies it may have in law or in equity, cease making any paymentsotherwise required by this Agreement and obtain an injunction againstExecutive from any court having jurisdiction over the matter restraining anyfurther violation of this Agreement by Executive. f. Executive agrees to sign the Company's standardEmployment, Confidential Information and Invention Agreement, which isattached as Exhibit E; provided that this Agreement shall control over anycontrary or inconsistent terms in Exhibit E. 9. Specific Performance. Executive acknowledges and agrees thatthe Company's remedies at law for a breach or threatened breach of any of theprovisions 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, inaddition to any remedies at law, the Company, without posting any bond, shallbe entitled to cease making any payments or providing any benefit otherwise -9- required by this Agreement and obtain equitable relief in the form ofspecific performance, temporary restraining order, temporary or permanentinjunction or any other equitable remedy which may then be available. 10. Miscellaneous. ------------- a. Governing Law. This Agreement shall be governed by andconstrued in accordance with the laws of the State of New York, withoutregard to conflicts of laws principles thereof. b. Entire Agreement/Amendments. This Agreement contains theentire understanding of the parties with respect to the employment ofExecutive by the Company. There are no restrictions, agreements, promises,warranties, covenants or undertakings between the parties with respect to thesubject matter herein other than those expressly set forth herein. ThisAgreement may not be altered, modified, or amended except by writteninstrument signed by the parties hereto. This Agreement supercedes all prioragreements and understandings (including verbal agreements) between Executiveand the Company and/or its affiliates regarding the terms and conditions ofExecutive's employment with the Company and/or its affiliates c. No Waiver. The failure of a party to insist upon strictadherence to any term of this Agreement on any occasion shall not beconsidered a waiver of such party's rights or deprive such party of the rightthereafter to insist upon strict adherence to that term or any other term ofthis Agreement. d. Severability. In the event that any one or more of theprovisions of this Agreement shall be or become invalid, illegal orunenforceable in any respect, the validity, legality and enforceability ofthe remaining provisions of this Agreement shall not be affected thereby. e. Assignment. This Agreement shall not be assignable byExecutive. This Agreement may be assigned by the Company to a company whichis a successor in interest to substantially all of the business operations ofthe Company. Such assignment shall become effective when the Companynotifies the Executive of such assignment or at such later date as may bespecified in such notice. Upon such assignment, the rights and obligationsof the Company hereunder shall become the rights and obligations of suchsuccessor company, provided that any assignee expressly assumes theobligations, rights and privileges of this Agreement. f. Mitigation. Executive shall be required to mitigate theamount of any payment provided for pursuant to this Agreement by seekingother employment (which is acceptable to Executive, in his good faithdetermination), taking into account the provisions of Section 8 of this -10- Agreement. Anything in this Agreement to the contrary notwithstanding, inthe event that Executive provides services for pay to anyone other than theCompany or any of its affiliates from the date Executive's employmenthereunder is terminated until twelve months thereafter, the amounts paid toExecutive during such period pursuant to Section 7(c)(iii)(C) to thisAgreement shall be reduced by the amounts of salary, bonus or othercompensation earned by Executive during such period as a result ofExecutive's performing such services (regardless of when such earned amountsare actually paid to Executive). g. Successors; Binding Agreement. This Agreement shallinure to the benefit of and be binding upon personal or legalrepresentatives, executors, administrators, successors, heirs, distributes,devises and legatees. h. Notice. For the purpose of this Agreement, notices andall other communications provided for in the Agreement shall be in writingand shall be deemed to have been duly given when delivered or mailed byUnited States registered mail, return receipt requested, postage prepaid,addressed to the respective addresses set forth below Agreement, or to suchother address as either party may have furnished to the other in writing inaccordance herewith, except that notice of change of address shall beeffective only upon receipt. If to the Company: Western Multiplex Corporation 1196 Borregas Ave. Sunnyvale, California 94089 Attention: Amir Zoufonoun 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 anyamounts payable under this Agreement such Federal, state and local taxes asmay be required to be withheld pursuant to any applicable law or regulation. j. Counterparts. This Agreement may be signed incounterparts, each of which shall be an original, with the same effect as ifthe signatures thereto and hereto were upon the same instrument. k. Arbitration/Attorney's Fees. Any dispute between theparties regarding this Agreement shall be resolved by a single arbitrator, -11- who is qualified to practice law in California, in accordance with theemployment dispute resolution rules of the America Arbitration Associationthen in effect. The arbitrator shall have the authority to grant any reliefavailable under applicable law. The arbitrator's decision shall be final andbinding on the parties and shall be the exclusive remedy for all suchdisputes, except that either party may bring an action in court to compelarbitration under this Agreement, to enforce an arbitration award in anycourt having competent jurisdiction, and to obtain temporary injunctiverelief pending final judgment based on the arbitrator's award. Thearbitration shall take place in Sonoma County, California unless otherwiseagreed by the parties. In any legal action, arbitration or other proceedingbetween the parties, the prevailing party shall be entitled to recoverreasonable attorneys' fees and costs. -12- IN WITNESS WHEREOF, the parties hereto have duly executed thisAgreement as of the day and year first above written. WESTERN MULTIPLEX CORPORATION By: /s/Amir Zoufonoun --------------------------- Name: Amir Zoufonoun Title: President EXECUTIVE: /s/ Joseph Tavormina -------------------------- Joseph Tavormina 4709 Devonshire Place ------------------------ Santa Rosa, CA 95405 ---------------------------- Address of Executive -13-
Employment Agreement - Western Multiplex Corp. and Joseph J. Tavormina
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