Exhibit 10.3
AMENDED AND
RESTATED
EMPLOYMENT AND EXECUTIVE
SEVERANCE AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT
AND EXECUTIVE SEVERANCE AGREEMENT (this “Agreement”),
effective as of October 30, 2008, is entered into by and
between, THOMAS W. STEIPP (“Executive”) and
SYMMETRICOM, INC. (the “Company”).
RECITALS
WHEREAS, Executive is currently
employed by the Company as President and Chief Executive
Officer;
WHEREAS, the parties now desire to
supersede and replace the Employment and Executive Severance
Agreement dated September 14, 2007 (the “Prior
Agreement”), and any other agreement relating to
Executive’s employment with the Company or Executive’s
severance benefits in the event of his severance from employment
with the terms and provisions set forth herein;
WHEREAS, 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, and 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;
WHEREAS, 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 (as
defined below) of the Company;
WHEREAS, 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;
and
WHEREAS, the Board believes that it
is imperative to provide the Executive with retention/severance
benefits following a Change of Control which provides the Executive
with enhanced financial security and provides incentive and
encouragement to the Executive to remain with the Company
notwithstanding the possibility of a Change of Control.
AGREEMENT
The parties, intending to be legally
bound, agree as follows:
1.
EMPLOYMENT PERIOD
.
1.1
Basic Term
. The Company shall
employ Executive from the date of this Agreement through
December 31, 2008 (the “Term Date”), or such later
date through which this
Agreement may be extended under
Section 1.2, unless Executive is terminated sooner in
accordance with Section 4.
1.2
Renewal . Unless terminated sooner in accordance
with Section 4, this Agreement shall be renewed for an
additional one (1) year period on the Term Date and on each
anniversary thereof, unless one party gives to the other advance
written notice of nonrenewal at least 60 days prior to such
date. The Company may elect not to renew this Agreement only
for Cause, within the meaning of Section 12.1.
2.
POSITION AND
RESPONSIBILITIES.
2.1
Position . Executive accepts employment with the
Company as Chief Executive Officer and shall perform all services
appropriate to that position.
2.2
Outside Activity
. Except upon the prior
written consent of the Company, Executive, during his employment
with the Company, shall not engage, directly or indirectly, in any
other business, commercial, or professional activity (whether or
not pursued for pecuniary advantage) that is or may be competitive
with the Company, create a conflict of interest with the Company,
or otherwise interfere with the business of the Company or any of
its affiliates.
3.
COMPENSATION AND
BENEFITS.
3.1
Base Salary
. Executive’s base
salary shall be at the annual rate of $500,000 for fiscal 2009 (the
year ending June 30, 2009). At or near each fiscal year
thereafter, Executive’s annual base salary shall be increased
by an amount mutually determined by Executive and the Board or its
Compensation Committee.
3.2
Incentive Compensation
. Executive shall participate
in the Company’s Management Incentive Plan, the terms of
which shall be determined each fiscal year by the Board or the
Compensation Committee. For fiscal year 2009 Executive shall be
eligible to earn up to 75% of Executive’s Base Salary as
Incentive Compensation (“Target Bonus”). The
maximum Target Bonus may be adjusted from time to time by the
Compensation Committee in their sole discretion. The exact
amount of the Target Bonus awarded the Executive in any given year
shall be determined by the Compensation Committee in their sole
discretion.
3.3
Equity Compensation
. The parties acknowledge that
Executive has the same right to participate in the Company’s
current 2006 Incentive Award Plan and in future equity incentive
plans as other Company executives.
3.4
Relocation
Assistance. The
parties acknowledge that the Company provided Executive certain
assistance in relocating to the San Francisco Bay Area from
Atlanta, Georgia, including the extension of two loans, the
principal terms and conditions of which are as follows:
(a)
Interest-Bearing Loan .
In March 1998, the Company loaned Executive the principal
amount of $400,000, with an interest rate of 6.0% (the
“Interest-Bearing Loan”), and agreed to forgive such
principal and interest in four equal installments. The four
forgiveness installments were made on June 30, 1998, 1999,
2000 and 2001.
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(b)
Interest-Free Loan . In March 1998, the Company loaned
Executive the principal amount of $500,000, free of interest (the
“Interest-Free Loan”). This loan is intended to qualify
as a relocation loan under Section 7872 of the Internal
Revenue Code and has been fully repaid as of the effective date of
this Agreement.
3.5
Benefits . Executive shall receive the following
benefits.
(a)
eligibility to participate in the
SymmetriCom Executive Medical Plan;
(b)
long-term disability insurance
coverage;
(c)
life insurance coverage;
(d)
eligibility to participate in the
Company’s retirement and deferred compensation plans;
and
(e)
four weeks’ annual paid
vacation.
3.6
Business Equipment
. The Company shall furnish
Executive with such computers, software, peripheral equipment and
Internet access as Executive shall reasonably require for his
business and home offices, and shall pay the associated monthly
maintenance and access costs therefor. The Company also shall
furnish Executive with a cellular telephone, and shall pay the
monthly telephone bill therefor.
4.
TERMINATION OF
EMPLOYMENT.
4.1
By Death . Executive’s employment shall
terminate upon his death. In the event of such termination, the
Company shall: (a) pay to Executive’s estate each
month through the end of the second month following the month in
which Executive’s death occurred an amount equal to the
monthly salary to which Executive was entitled under
Section 3.1 at the time of his death; (b) promptly
transfer to Executive’s estate any accrued but unpaid
incentive compensation to which Executive may have been entitled
under Section 3.2; and (c) promptly reimburse
Executive’s estate for any outstanding reasonable business
expenses incurred by Executive prior to his death.
Thereafter, the Company’s obligations
hereunder shall terminate. This Section shall not affect
entitlement of Executive’s estate or beneficiaries to death
benefits under any benefit provided to Executive by the
Company.
4.2
By Disability
. This Agreement shall
terminate as of the end of the calendar month in which Executive:
(a) is and has been during each of the immediately preceding
five (5) or more consecutive whole calendar months unable to
perform his duties under this Agreement because of mental or
physical illness or injury; and (b) has been determined by the
insurer that issued the Company’s long-term disability policy
in effect pursuant to Section 3.5 to be eligible to commence
receiving long-term disability benefits (“Disability”).
In the event of such termination, the Company shall: (i) pay
Executive the salary to which he is entitled pursuant to
Section 3.1 through the date of termination;
(ii) promptly transfer to Executive’s estate any accrued
but unpaid incentive compensation to which Executive may have been
entitled under Section 3.2; and (iii) promptly reimburse
Executive for any outstanding reasonable business expenses incurred
by Executive prior to his termination. Thereafter, the
obligations of the
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Company shall terminate. This Section shall
not in any way diminish Executive’s right to receive
disability insurance proceeds.
4.3
By the Company for
Cause. The Company
may terminate Executive’s employment for Cause (as defined in
Section 12) without notice at any time after the written
warning and minimum cure period have been provided in accordance
with Section 12. In the event of such termination, the Company
shall: (a) pay Executive the salary to which he is entitled
pursuant to Section 3.1 through the date of termination;
(b) promptly transfer to Executive any accrued but unpaid
incentive compensation to which he is entitled pursuant to
Section 3.2; and (c) promptly pay any outstanding
reasonable business expenses incurred by Executive prior to such
termination. Thereafter, the obligations of the
Company shall terminate.
4.4
By the Company Other Than for
Cause (Including Non-Renewal) or By Executive for Good
Reason. Except as
expressly provided in Section 4.2 or 4.5, if Executive is
terminated by the Company other than for Cause (or death or
Disability), or if the Company fails to renew this Agreement other
than for Cause, or if Executive resigns from the Company for Good
Reason within 90 days following the event constituting Good Reason,
and such termination constitutes a Separation from Service, then
the Company shall:
(a)
within 30 days following such
termination, pay Executive a lump sum equal to the sum of
(i) Executive’s annual base salary as in effect as of
the date of such termination, and (ii) 100% of
Executive’s Target Bonus for the year prior to the year in
which the termination occurs; and
(b)
provide to Executive 100%
Company-paid health, dental, vision and life insurance coverage at
the same level of coverage as was provided to Executive immediately
prior to the date of termination (the “Company-Paid
Coverage”). If such coverage included the Executive’s
dependents immediately prior to the date of termination, such
dependents shall also be covered at the Company’s expense.
Company-Paid Coverage shall continue until the earlier of:
(i) the end of the 18th month following the month in which the
date of termination occurred, or (ii) the date that the
Executive and his dependents become covered under another
employer’s group health, dental, vision and 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 dependents shall be the date
upon which the Company-Paid Coverage terminates.
4.5
By Executive Other Than For Good
Reason . At any time
after the Term Date, Executive may terminate his employment, other
than for Good Reason, by providing the Company at least sixty (60)
days’ advance written notice. The Company shall have
the option, in its complete discretion, to make Executive’s
termination effective at any time prior to the end of such notice
period. Should Executive terminate his employment under this
provision, the Company shall pay Executive all salary and incentive
compensation earned through the last day actually worked, plus an
amount equal to the base salary Executive would have earned through
the balance of the above notice period, not to exceed 60 days.
Thereafter, except as set forth herein, all of the Company’s
obligations under this Agreement shall cease.
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4.6
By Change of
Control. Notwithstanding Sections 4.1 — 4.5, if
there is a Change of Control, payments to Executive upon
termination of employment shall be determined in accordance with
this Section 4.6.
(a)
Involuntary Termination other
than for Cause, Death or Disability or Voluntary Termination for
Good Reason Within 12 Months Following A Change of
Control .
If Executive’s employment with the Company terminates within
12 months following a Change of Control by virtue of (x) an
involuntary termination by the Company other than for Cause,
(y) Executive’s death or Disabi
