Exhibit 10.3
[DRAFT Section 16
Officers]
CHANGE OF CONTROL
AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT
(the “ Agreement ”) is made as of [insert
date] (the “ Effective Date ”) by and
between Microtune, Inc., a Delaware corporation (the “
Company ”), and [insert name] (“
Employee ”), and the foregoing parties hereby
agree as follows:
1. Revocation of Existing Change
of Control Agreements . All existing agreements or arrangements
between the Company and Employee that provide for or relate to the
payment of cash or other benefits in connection with a change of
control are hereby revoked and superseded by this
Agreement.
2. Employment .
(a) As of the Effective Date,
Employee, who has served as [insert title] of the Company since
[insert date], shall continue to serve in such capacity.
(b) In the event of a Change of
Control (as defined in Section 3(g) below) that results in the
termination of Employee, the Company shall pay Employee severance
benefits as set forth in Section 4 below.
(c) Notwithstanding anything
herein to the contrary, nothing in this Agreement shall change
Employee’s status as an at will employee prior to a Change of
Control.
3. Certain Definitions . For
the purposes of this Agreement, the following terms have the
meanings set forth below.
(a) “ Affiliate
” shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in
effect on the Effective Date.
(b) “ Associate
” means, with reference to any Person:
(i) any corporation, firm,
partnership, association, unincorporated organization or other
entity (other than the Company or a subsidiary of the Company) of
which such Person is an officer or general partner (or officer or
general partner of a general partner) or is, directly or
indirectly, the Beneficial Owner of 10% or more of any class of
equity securities,
(ii) any trust or other estate in
which such Person has a substantial beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary
capacity, and
(iii) any relative or spouse of such
Person, or any relative of such spouse, who has the same home as
such Person.
(c) “ Base
Compensation ” means the higher of Employee’s
rate of annual base salary, as in effect at any time during the
twelve-month period that ends on (i) the date of any Change of
Control or (ii) Employee’s Date of Termination.
Notwithstanding anything herein to the contrary, Base Compensation
does not include elements such as bonuses, reimbursement of
interest paid on guaranteed loans, auto allowances, or any income
from any form of equity based compensation, such as may result from
the exercise of stock options or stock appreciation
rights,
or the receipt of restricted stock
unit awards, restricted stock awards or the lapse of the
restrictions on such awards.
(d) “ Beneficial
Owner ” means (subject to the exception contained in
Section 3(d)(iv) below), with reference to any securities, any
Person if:
(i) such Person or any of such
Person’s Affiliates and Associates, directly or indirectly,
is the “beneficial owner” (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange
Act, as in effect on the Effective Date) of such securities or
otherwise has the right to vote or dispose of such securities,
including pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to “beneficially
own,” any security under this Section 3(d)(i) as a
result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or
understanding:
(1) arises solely from a revocable
proxy or consent given in response to a public (i.e., not including
a solicitation exempted by Rule 14a-2(b)(2) of the General Rules
and Regulations under the Exchange Act) proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and
(2) is not then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or
successor report);
(ii) such Person or any of such
Person’s Affiliates and Associates, directly or indirectly,
has the right or obligation to acquire such securities (whether
such right or obligation is exercisable or effective immediately or
only after the passage of time or the occurrence of an event)
pursuant to any agreement, arrangement or understanding (whether or
not in writing) or upon the exercise of conversion rights, exchange
rights, other rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of
or to “beneficially own”:
(1) securities tendered pursuant to
a tender or exchange offer made by such Person or any of such
Person’s Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or
(2) securities issuable upon
exercise of Exempt Rights; or
(iii) such Person or any of such
Person’s Affiliates or Associates:
(1) has any agreement, arrangement
or understanding (whether or not in writing) with any other Person
(or any Affiliate or Associate thereof) that beneficially owns such
securities for the purpose of acquiring, holding, voting (except as
set forth in the proviso contained in Section 3(d)(i)) or
disposing of such securities, or
(2) is a member of a group (as that
term is used in Rule 13d-5(b) of the General Rules and Regulations
under the Exchange Act) that includes any other Person that
beneficially owns such securities.
-2-
(iv) Notwithstanding anything herein
to the contrary, nothing in this Section 3(d) shall cause a
Person engaged in business as an underwriter of securities to be
the Beneficial Owner of, or to “beneficially own,” any
securities acquired through such Person’s participation in
good faith in a firm commitment underwriting until the expiration
of 40 days after the date of such acquisition. For purposes hereof,
“voting” a security shall include voting, granting a
proxy, consenting or making a request or demand relating to
corporate action (including, without limitation, a demand for a
stockholder list, to call a stockholder meeting or to inspect
corporate books and records) or otherwise giving an authorization
(within the meaning of Section 14(a) of the Exchange Act) in
respect of such security, and the terms “beneficially
own” and “beneficially owning” shall have
meanings that are correlative to the definition of the term
Beneficial Owner contained herein.
(e) “ Board
” means the Board of Directors of the Company.
(f) “ Cause
” means the occurrence of any of the following events:
(i) Employee is determined by a court of law or pursuant to
arbitration to have committed a willful act of embezzlement, fraud
or dishonesty which resulted in material loss, material damage or
material injury to the Company; (ii) Employee is convicted of,
or pleads nolo contendere to, a felony; or (iii) the
failure of Employee, as reasonably determined by the Board (or the
board of directors of the Company’s successor, the Acquiring
Entity or the parent corporation resulting from a Business
Combination, if applicable) in good faith after consulting with
outside counsel to resolve or otherwise cure any substantial
violations of his or her employment duties within thirty
(30) days after the provision of a written communication from
the Company to Employee that specifically sets forth the factual
basis supporting the Company’s belief that Employee has not
substantially performed his or her duties. However, Employee shall
not be deemed to have been terminated for Cause pursuant to 3(f)(i)
and (iii) without (A) reasonable notice to Employee
setting forth the reasons for the Company’s intention to
terminate for cause, (B) an opportunity for Employee, together
with his or her counsel, if any, to be heard before the Board (or
the board of directors of the Company’s successor, the
Acquiring Entity or the parent corporation resulting from a
Business Combination, if applicable), and (C) the concurrence
of outside counsel selected by the Board (or the board of directors
of the Company’s successor, the Acquiring Entity or the
parent corporation resulting from a Business Combination, if
applicable) that one or more of the events set forth in
Section 3(f)(i) or (iii) have occurred.
(g) “ Change of
Control ” shall mean:
(i) The acquisition by any Person of
beneficial ownership of Outstanding Company Voting Securities
(including any such acquisition of beneficial ownership deemed to
have occurred pursuant to Rule 13d-5 under the Exchange Act) if,
immediately thereafter, such Person is the beneficial owner of 35%
or more of either (a) the then Outstanding Company Common
Stock or (b) the then Outstanding Company Voting Securities,
unless such acquisition is made (A) directly from the Company
in a transaction approved by a majority of the members of the
Board, (B) by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (C) by a parent corporation
resulting from a Business Combination if, following such Business
Combination, the conditions specified in clauses (a), (b) and
(c) of subsection (ii) of this Section 3(g) are
satisfied;
(ii) Approval by the stockholders of
the Company of a Business Combination (or if there is no such
approval by stockholders, consummation of such
-3-
Business Combination) unless,
immediately following such Business Combination, (a) more than
50% of, respectively, the then outstanding shares of common stock
of the parent corporation resulting from such Business Combination
and the total combined voting power of the then outstanding voting
securities of such parent corporation entitled to vote generally in
the election of directors will be (or is) then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination in substantially the same proportions as their
ownership immediately prior to such Business Combination,
(b) no Person (other than any employee benefit plan (or
related trust) of the Company or any parent corporation resulting
from such Business Combination) beneficially owns, directly or
indirectly, 20% or more, respectively, of the then outstanding
shares of common stock of the parent corporation resulting from
such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors and (c) at least a
majority of the members of the board of directors of the parent
corporation resulting from such Business Combination were members
of the Board at the time of the execution of the initial agreement
providing for, or action of the Board authorizing, such Business
Combination; or
(iii) Approval by the stockholders
of the Company of (a) a complete liquidation or dissolution of
the Company or (b) a Major Asset Disposition (or if there is
no such approval by stockholders, consummation of such Major Asset
Disposition) unless, immediately following such Major Asset
Disposition, (A) all or substantially all of the individuals
and entities that were beneficial owners of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities
immediately prior to such Major Asset Disposition beneficially own
immediately after the transaction, directly or indirectly, more
than 50% of, respectively, the then outstanding shares of common
stock, the combined voting power of the then outstanding voting
securities, and the total value of all the then outstanding stock
of the Company (if it continues to exist) and of the Acquiring
Entity, in substantially the same proportions as their ownership
immediately prior to such Major Asset Disposition of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be; (B) no Person, other than any
employee benefit plan (or related trust) of the Company or such
entity, beneficially owns, directly or indirectly, 20% or more of,
respectively, the then Outstanding shares of Common Stock and the
combined voting power of the Outstanding Voting Securities of the
Company (if it continues to exist) or of the Acquiring Entity and
(C) at least a majority of the members of the board of
directors (or comparable governing body) of the Company (if it
continues to exist) or of the Acquiring Entity were members of the
Board at the time of the execution of the initial agreement
providing for, or action of the Board authorizing, such Major Asset
Disposition.
For purposes of the foregoing
definition:
(1) the term “ Acquiring
Entity ” means the entity that acquires the largest
portion of the assets sold or otherwise disposed of in a Major
Asset Disposition (or the entity, if any, that owns a majority of
the outstanding voting stock of such acquiring entity entitled to
vote generally in the election of directors or members of a
comparable governing body);
-4-
(2) the term “ Business
Combination ” means (x) a merger or
consolidation
