Mr. Thomas
L. Cronan III
San Jose, CA 95120
This letter
agreement sets forth the terms of your employment with Harris
Stratex Networks, Inc. (the “Company”) as well as our
understanding with respect to any termination of that employment
relationship. This Agreement will become effective on your first
day of employment which is anticipated to be on or about
May 4, 2009.
1.
Position and Duties . You will be employed by the Company as
its Senior Vice-President, Chief Financial Officer, reporting to
the President and Chief Executive Officer. This position will be
based at our facility location in San Jose, California. You accept
employment with the Company on the terms and conditions set forth
in this Agreement, and you agree to devote your full business time,
energy and skill to your duties at the Company; provided, however,
that you may serve in a volunteer capacity with any civic,
educational or charitable organization so long as such service does
not materially interfere with your responsibilities and obligations
as Senior Vice President, Chief Financial Officer.
2. Term
of Employment . Your employment with the Company is for no
specified term, and may be terminated by you or the Company at any
time, with or without cause, subject to the provisions of
Paragraphs 4 and 5 below.
3.
Compensation . You will be compensated by the Company for
your services as follows:
(a)
Salary : You will be paid a monthly base salary of
$25,000.00 ($300,000 per year), less applicable withholding, in
accordance with the Company’s normal payroll procedures. In
conjunction with your annual performance review, which will occur
at or about the start of each fiscal year (currently July 1st),
your base salary will be reviewed by the Board, and may be subject
to adjustment based upon various factors including, but not limited
to, your performance and the Company’s profitability. Your
base salary will not be reduced except as part of a salary
reduction program that similarly affects all members of the
executive staff reporting to the Chief Executive Officer of the
Company, but will not be reduced prior to June 30, 2010 by
virtue of any such salary reduction program.
(b)
Annual Short-Term Incentive Plan : Subject to the approval
of the Board of Directors or its Compensation Committee (as
applicable, the “Board”) of such a plan for
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Mr. Thomas
L. Cronan III
Employment Agreement
Company
employees each year, starting in FY2010, you will be eligible to
participate in the Company’s Annual Incentive Plan with a
target annual bonus of 50% of your annual base salary. You will
also be entitled to participate in the Company’s FY 2009
Annual Incentive Plan on the same basis, prorated for the portion
of FY 2009 falling between your start date and the end of FY 2009.
The Annual Incentive Plan will be paid (if minimum targets are met)
in the calendar year in which the relevant fiscal year ends,
promptly after the completion of the fiscal year’s
audit.
(c)
Long-Term Incentive Program: Subject to Board approval each
year, you will be eligible to participate in a Long Term Incentive
Plan. Starting with FY 2009, you will be eligible to participate in
the Company’s Long-Term Incentive Program as defined by the
Board. The GAAP value of your initial award, as determined by the
Board at its reasonable discretion, will be $430,000. The expected
structure is (i) 50% of such value will be represented by
options with a 3-year vesting period (50%/25%/25%) and
(ii) 50% of such value will be represented by performance
shares subject to vesting based on achievement of company financial
performance criteria for the three-year period ending at the end of
FY 2011. The final structure is subject to determination by the
Board.
(d)
Signing Bonus . You will receive a one-time cash bonus of
$50,000, less applicable withholding, payable on the first payroll
date after your start date. You agree to repay this amount to the
Company if you resign from your employment with the Company (other
than for Good Reason as defined in Paragraph 5(d) below) prior to
six (6) months after your start date.
(e)
Benefits : You will have the right, on the same basis as
other executives of the Company, to participate in and to receive
benefits under any Company group medical, dental, life, disability
or other group insurance plans, as well as under the
Company’s business expense reimbursement, educational
assistance, holiday, and other benefit plans and policies. You will
also be eligible to participate in the Company’s 401(k)
plan.
(f)
Vacation : Once your employment begins, you will also accrue
paid vacation at the rate of three weeks per year. Maximum accrued
vacation will be in accordance with the Company’s vacation
policy.
4.
Voluntary Termination . In the event that you voluntarily
resign from your employment with the Company (other than for Good
Reason as defined below), or in the event that your employment
terminates as a result of your death, you will be entitled to no
compensation or benefits from the Company other than those earned
under Paragraph 3 through the date of your termination. (For
purposes of this Agreement, unless otherwise expressly provided, no
part of (i) the Annual Incentive Plan for the year in which your
termination occurs, (ii) no part of the performance shares for
the multi-year period in which your termination occurs and
(iii) no part of options or restricted shares that are not
vested as of your termination date will be deemed earned.) You
agree that if you voluntarily terminate your employment with the
Company for any reason, you will provide the Company with at least
10 business days’ written notice of your resignation. The
Company shall have the option, in its sole discretion, to make your
resignation effective at any time prior to the end of such notice
period, provided the Company pays you an amount equal to the base
salary you would have earned through the end of the notice
period.
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L. Cronan III
Employment Agreement
5. Other
Termination . Your employment may be terminated under the
circumstances set forth below.
(a)
Termination by Disability . If, by reason of any physical or
mental incapacity, you have been or will be prevented from
performing your then-current duties under this Agreement for more
than three consecutive months, then, to the extent permitted by
law, the Company may terminate your employment without any advance
notice. Upon such termination, if you sign a general release of
known and unknown claims in a form satisfactory to the Company (a
“Release”), the Company will provide you with the
severance payments and benefits described in Paragraph 5(c).
Nothing in this paragraph shall affect your rights under any
applicable Company disability plan; provided, however, that your
severance payments will be offset by any disability income payments
received by you so that the total monthly severance and disability
income payments during your severance period shall not exceed your
then-current base salary.
(b)
Termination for Cause or Death : The Company may terminate
your employment at any time for cause (as described below). If your
employment is terminated by the Company for cause, or if your
employment terminates as a result of your death, you shall be
entitled to no compensation or benefits from the Company other than
those earned under Paragraph 3 through the date of your
termination. Provided, however, that if your employment terminates
as a result of your death, the Company will pay your estate the
prorated portion of any incentive bonus that you would have earned
during the incentive bonus period in which your employment
terminates; such prorated bonus will be paid at the time that such
incentive bonuses are paid to other Company employees.
For purposes of
this Agreement, a termination “for cause” occurs if you
are terminated for any of the following reasons: (i) theft,
dishonesty, misconduct or falsification of any employment or
Company records; (ii) improper disclosure of the
Company’s confidential or proprietary information;
(iii) any misconduct by you which has a material detrimental
effect on the Company’s reputation or business;
(iv) your refusal or inability to perform any reasonably
assigned duties (other than as a result of a disability) after
written notice from the Company to you of, and a reasonable
opportunity to cure, such failure or inability; or (v) your
conviction (including any plea of guilty or no contest) for any
criminal act that impairs your ability to perform your duties under
this Agreement.
(c)
Termination Without Cause : The Company may terminate your
employment without cause at any time. If your employment is
terminated by the Company without cause, and you sign a Release,
which must be valid and enforceable no later than March 15 of
the year following the year in which the termination occurs, and
you fully comply with your obligations under Paragraphs 7, 8, and
10, you will receive the following severance benefits:
(i) severance
payments at your final base salary rate for a period of twelve
(12) months following your termination; such payments will be
subject to applicable withholding and made monthly commencing as of
the effective date of your release;
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Mr. Thomas
L. Cronan III
Employment Agreement
(ii) payment
of the premiums necessary to continue your and your covered
dependents’ group health insurance under COBRA (or to
purchase other comparable health insurance coverage on an
individual basis if you are no longer eligible for COBRA coverage)
until the earlier of (x) twelve (12) months following
your termination date; or (y) the date you and your covered
dependents first became eligible to participate in another
employer’s group health insurance plans;
(iii) payment
of the prorated portion of any incentive bonus that you would have
earned, if any, during the incentive bonus period in which your
employment terminates (the pro-ration shall be equal to the
percentage of that bonus period that you are actually employed by
the Company) without taking into account any positive or negative
discretionary adjustment, and such prorated bonus will be paid to
you at the time that such incentive bonuses, if any, are paid to
continuing Company employees;
(iv) with
respect to any equity compensation subject to service-based vesting
granted to you by the Company, you will cease vesting upon your
termination date (except that if termination occurs prior to the
first anniversary of your start date, vesting shall be accelerated
to the extent, if any, vesting would have occurred had you
continued in service through the first anniversary of the grant
date of your initial award of service-based equity compensation);
however, you will be entitled to purchase any vested shares of
stock that are subject to service-based options until the earlier
of (x) twelve (12) months following your termination
date, or (y) the date on which the applicable option(s)
expire(s); except as set forth in this subparagraph, your
service-based vesting equity compensation awards will continue to
be subject to and governed by the Plan and the applicable award
agreements between you and the Company; and
(v) reasonable
outplacement assistance selected and paid for by the Company and
actually incurred and directly related to the termination of your
services for the Company.
You will not be
required to mitigate the severance payments and benefits described
in Paragraphs 5(c)(i) — (v) above by seeking employment
or otherwise, and there shall be no offset against amounts due you
on account of your subsequent employment (except as provided in
Paragraph 5(c)(ii) above and in Paragraph 10 below).
Except as expressly set forth in this Paragraph 5(c), your
Company equity compensation awards will continue to be subject to
and governed by the Company’s 2007 Stock Equity Plan (the
“Plan”) and the applicable award agreements between you
and the Company.
(d)
Resignation for Good Reason : If you resign from your
employment with the Company for Good Reason (as defined in this
paragraph), and you sign a Release, which must be valid and
enforceable no later than March 15 of the year following the
year in which the termination occurs, and you fully comply with
your obligations under Paragraphs 7, 8, and 10, you shall receive
the severance benefits described in Paragraph 5(c). For
purposes of this Paragraph, “Good Reason” means any of
the following conditions, which condition(s) remain in effect
60 days after written notice from you to the Chief Executive
Officer of said condition(s):
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Mr. Thomas
L. Cronan III
Employment Agreement
(i) a
reduction in your base salary, other than a reduction that is
similarly applicable to all members of the Company’s
executive staff;
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