Exhibit 10.6
SPECTRALINK
CORPORATION
CHANGE OF CONTROL SEVERANCE
AGREEMENT
This Change of Control Severance
Agreement (the “Agreement”) is made and entered into by
and between
(the “Employee”) and SpectraLink Corporation, a
Delaware corporation (the “Company”), effective as of
(the
“Effective Date”).
RECITALS
A.
It is expected that the Company from
time to time will consider the possibility of an acquisition by
another company or other change of control. The Board of
Directors of the Company (the “Board”) recognizes that
such consideration can be a distraction to the Employee and can
cause the Employee 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 Employee, notwithstanding the possibility, threat or occurrence
of a Change of Control (as defined herein) of the
Company.
B.
The Board believes that it is in the
best interests of the Company and its stockholders to provide the
Employee with an incentive to continue his or her employment and to
motivate the Employee 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
important to provide the Employee with certain severance benefits
upon the Employee’s termination of employment following a
Change of Control. These benefits will provide the Employee
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
the Agreement are defined in Section 5 below.
AGREEMENT
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, the parties hereto agree as
follows:
1.
Term of Agreement
. This Agreement shall
terminate upon the date that all of the obligations of the parties
hereto with respect to this Agreement have been
satisfied.
2.
At-Will Employment
. The Company and the Employee
acknowledge that the Employee’s employment is and shall
continue to be at-will, as defined under applicable law, except as
may otherwise be specifically provided under the terms of any
written formal employment agreement between the Company and the
Employee (an “Employment Agreement”). If the
Employee’s employment terminates for any reason, including
(without limitation) any termination prior to a Change of Control,
the Employee shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this
Agreement or under his or her Employment Agreement, if
applicable.
3.
Severance
Benefits.
(a)
Involuntary Termination Other
than for Cause or Voluntary Termination for Good Reason Following a
Change of Control .
If within twelve (12) months following a Change of Control
(i) the Employee terminates his or her employment with the
Company (or any parent or subsidiary of the Company) for
“Good Reason” (as defined herein) or (ii) the
Company (or any parent or subsidiary of the Company) terminates the
Employee’s employment for other than “Cause” (as
defined herein):
(i)
Severance Payment
. The Employee shall be
entitled to receive a lump-sum severance payment (less applicable
withholding taxes) equal to:
•
One (1) times the sum of
the Employee’s annual base salary (as in effect immediately
prior to (A) the Change of Control, or (B) the
Employee’s termination, whichever is greater),
plus
•
100% of the Employee’s target
annual incentive compensation (including any applicable quarterly
incentives assuming 100% of achievement) for the year in which the
date of termination occurs for the fiscal year in which the Change
of Control or the Employee’s termination occurs, whichever is
greater, plus
•
The Employee’s annual base
salary through the date of termination, plus
•
Any prior year’s annual
(including any applicable quarterly) incentive payments awarded to
the employee and to the extent not previously paid, any target
incentive payment for such prior year, and
•
Payment for any accrued vacation or
personal time off.
(ii)
Options; Restricted
Stock . All of the
Employee’s then outstanding options to purchase shares of the
Company’s Common Stock (the “Options”) shall
immediately vest and became exercisable. Additionally, all of
the shares of the Company’s Common Stock then held by the
Employee subject to a Company repurchase right (the
“Restricted Stock”), if any, shall immediately vest and
the Company’s right of repurchase with respect to such shares
of Restricted Stock shall lapse. The Options shall remain
exercisable following the termination for the greater of
(a) the period prescribed in the respective option agreements
or (b) three (3) years.
(iii)
Continued Employee Benefits . Company-paid health, dental
and vision insurance coverage at the same level of coverage as was
provided to such Employee immediately prior to the Change of
Control and at the same ratio of Company premium payment to
Employee premium payment as was in effect immediately prior to the
Change of Control (the “Company-Paid Coverage”).
If such coverage included the Employee’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 (i) twelve (12)
months from the date of termination, or (ii) the date
upon which the Employee and his dependents become covered under
another employer’s group health, dental or vision insurance
plans that provide Employee 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 Employee and his or her dependents shall be the
date upon which the Employee terminates employment. Any Company
match contributions to the Employee’s 401(k) shall be vested
upon termination.
Timing of Severance Payments
. The severance payment to
which Employee is entitled shall be paid by the Company to Employee
in a lump sum cash payment in full not later than ten
(10) calendar days after the date of the termination of
Employee’s employment as provided in Section 3(a);
provided, however, that, if required pursuant to Section 409A
of the Internal Revenue Code of 1986, as amended (the
“Code”) as determined in good faith by the Company,
such payments will be made six (6) months after the date of
the Employee’s termination of employment. If the
Employee should die before all amounts have been paid, such unpaid
amounts shall be paid in a lump-sum payment (less any withholding
taxes) to the Employee’s designated beneficiary, if living,
or otherwise to the personal representative of the Employee’s
estate
(c)
Disability
. “Disability”
shall mean that the Employee has been unable to perform his or her
Company duties as the result of his incapacity due to physical or
mental illness, and such inability, at least twenty-six (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 Employee or the Employee’s legal representative (such
Agreement as to acceptability not to be unreasonably
withheld). Termination resulting from Disability may only be
effected after at least thirty (30) days’ written notice by
the Company of its intention to terminate the Employee’s
employment. In the event that the Employee resumes the
performance of substantially all of his or her duties hereunder
before the termination of his or her employment becomes effective,
the notice of intent to terminate shall automatically be deemed to
have been revoked.
(d)
Voluntary Resignation;
Termination for Cause . If the Employee’s employment with
the Company terminates (i) voluntarily by the Employee other
than for Good Reason or Disability or (ii) for Cause by the
Company, then the Employee 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 and practices or pursuant to other written
agreements with the Company.
(e)
Termination Apart from Change of
Control . In the
event the Employee’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 Employee shall be entitled to receive severance and any other
benefits only as may then be established under the Company’s
existing written severance and benefits plans and practices or
pursuant to other written agreements with the Company.
(f)
Noncumulation of
Benefits . The
Employee may not cumulate cash severance payments, stock option
vesting and exercisability and restricted stock vesting under this
Agreement, any other written agreement with the Company and/or
another plan or policy of the Company. If the Employee has
any other binding written agreement with the Company which provides
th
