EXHIBIT 10.12
SEVERANCE AND CHANGE IN CONTROL
AGREEMENT
Craig Barratt
Address on File
Dear Craig:
This Severance and Change in Control
Agreement (this “Agreement”) amends the employment
letter agreement dated April 9, 2003 (the “Prior
Agreement”), by and between Atheros Communications, Inc. (the
“Company”) and you. This Agreement supersedes any
provisions in the Prior Agreement relating to severance payments
and benefits, including payments and benefits upon termination in
the event of a change in control of the Company.
Severance.
If (i) the Company terminates
your employment other than for Cause (as defined below) or you
terminate your employment for Good Reason (as defined below), in
each case prior to a Change of Control (as defined below) or more
than 12 months following a Change of Control, or (ii) your
employment is terminated at any time due to death or your total and
permanent disability (as determined by the Company’s long
term disability policy), and provided in each such case (except in
the event of death) that you sign and do not revoke within the time
period specified by the Company a standard release of claims in a
form mutually acceptable to the Company and you, then you will
receive the following: (a) a lump sum severance payment within
30 days following your termination equal to 12 months of your base
salary at the highest rate in effect during your employment with
the Company; (b) your stock options and restricted stock units
that would have vested during the 12-month period immediately
following your termination of employment shall become fully vested
(provided that any such restricted stock units that are subject to
performance-based vesting shall only vest if the performance period
ends within such twelve-month period, and only to the extent
justified by the satisfaction of the performance goals prescribed
for such awards); (c) the period in which your vested stock
options may be exercised will be extended to the earlier of two
years following your termination date or the original expiration of
the option grant; and (d) if you properly elect to continue
the Company’s group health plan coverage under COBRA, the
continuation of your health coverage for you and your enrolled
dependents at no cost to you for 12 months following the effective
date of termination. You will be able to continue your health
benefits beyond 12 months at your own expense as allowed under the
Company’s health plans.
Change In Control:
In the event of a Change of Control
(as defined below), if your employment is terminated without Cause
(as defined below) or you terminate your employment for Good Reason
(as defined below), in either case within 12 months following the
Change of Control, and provided that you sign and do not revoke
within the time period specified by the Company (or its successor)
a standard release of claims in a form mutually acceptable to the
Company (or its successor) and you, then you shall receive the
following: (a) a lump sum severance payment within 30 days
following your termination equal to 18 months of your base salary
at the highest rate in effect during your employment with the
Company; (b) if you properly elect to continue the
Company’s group health plan coverage under COBRA,
continuation by the Company (or its successor) of your health
coverage for you and your enrolled dependents at no cost to you for
18 months following the effective date of termination (you will be
able to continue your health benefits beyond 18 months at your own
expense if allowed under the Company’s health plans);
(c) if not
already paid to you at the time of termination,
your earned cash incentive bonus under the Company’s bonus
plan in effect for the calendar year immediately prior to the
termination, as determined by the Board of Directors, payable at
the time of termination or the time at which the Board of Directors
has determined the amount of the bonus, whichever is later;
(d) your baseline target annual cash incentive bonus under the
Company’s bonus plan in effect during the calendar year of
the termination, pro rated for the portion of the then current
calendar year prior to the date of termination, payable within 30
days after the date of your termination; (e) all of your
unvested stock options and restricted stock units granted by the
Company to you prior to the Change of Control and that have been
assumed or substituted by the acquiring company, shall become fully
vested as of the date of termination; and (f) the period in
which vested stock options may be exercised will be extended to the
earlier of two years following your termination date or the
original expiration date of the option grant.
“Change of Control”
means: (a) any merger, acquisition or similar transaction or
series of related transactions in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the jurisdiction in which the Company is
incorporated, (b) the sale, transfer or other disposition of
all or substantially all of the assets of the Company, or
(c) any reverse merger or acquisition in which the Company is
the surviving entity but in which more than fifty percent
(50%) of the Company’s outstanding voting stock is
transferred to holders different from those who held the stock
immediately prior to such merger.
“Cause” means
(
