Exhibit 10.1
SECOND AMENDED AND
RESTATED
EXECUTIVE SEVERANCE BENEFITS
AGREEMENT
On
May , 2006,
(“ Executive ”) and SYMMETRICOM, INC.
(the “ Company ”) entered into an EXECUTIVE
SEVERANCE BENEFITS AGREEMENT , which was intended to provide
Executive with certain compensation and benefits upon the
occurrence of specific events and the parties amended and restated
such agreement on September 11, 2007 (as amended and restated,
the “ Prior Agreement ”). The Company and
Executive wish to amend and restate the Prior Agreement in its
entirety, effective as of this
day of
,
2008 (the “ Effective Date ”), pursuant to the
terms and conditions set forth in this SECOND AMENDED AND
RESTATED EXECUTIVE SEVERANCE BENEFITS AGREEMENT (the “
Agreement ”).
Certain capitalized terms used in
this Agreement are defined below, in Article 5.
The Company and Executive hereby
agree as follows:
ARTICLE 1
SCOPE OF AND CONSIDERATION FOR
THIS AGREEMENT
1.1
Position and Duties. Executive is currently employed by the Company
as
.
Executive reports directly to the Company’s Chief Executive
Officer.
1.2
Restrictions . During [his/her] employment by the
Company, Executive agrees to the best of [his/her] ability and
experience that [he/she] will at all times loyally and
conscientiously perform all of the duties and obligations required
of and from [him/her] as
.
During the term of [his/her] employment, Executive further agrees
that [he/she] will devote all of [his/her] business time and
attention to the business of the Company, the Company will be
entitled to all of the benefits and profits arising from or
incident to all such work, services and advice, Executive will not
render commercial or professional services of any nature to any
person or organization, whether or not for compensation, without
the prior written consent of the Board or its authorized designee,
and Executive will not directly or indirectly engage or participate
in any business that is competitive in any manner with the business
of the Company. Nothing in this Agreement will prevent
Executive from accepting speaking or presentation engagements in
exchange for honoraria or from service on boards of charitable
organizations or otherwise participating in civic, charitable or
fraternal organizations, or from owning no more than one percent
(1%) of the outstanding equity securities of a corporation whose
stock is listed on a national stock exchange.
1.3
Confidential Information and Invention Assignment
Agreement.
Executive acknowledges that [he/she] has previously executed and
delivered to an officer of the Company the Company’s
Confidentiality and Invention Assignment Agreement (the “
Confidentiality Agreement ”) and that the
Confidentiality Agreement remains in full force and
effect.
1.4
Confidentiality of Terms. Executive agrees to follow the
Company’s strict policy that except as mandated by applicable
law employees must not disclose, either directly or
indirectly, any information, including any of
the terms of this Agreement, regarding salary, bonuses, or stock
purchase or option allocations to any person, including other
employees of the Company; provided , however , that
Executive may discuss such terms with members of [his/her]
immediate family and any legal, tax or accounting specialists who
provide Executive with individual legal, tax or accounting advice,
and Executive may discuss such terms with other employees of the
Company on a need to know basis if required to carry out
Executive’s duties, or at the request of the Board or any
other superior officer of the Company.
1.5
Consideration. The
duties and obligations of the Company to Executive under this
Agreement shall be in consideration for Executive’s past
services to the Company, Executive’s continued employment
with the Company, and Executive’s execution of a release in
accordance with Section 3.1.
1.6
Prior Agreement. This Agreement shall supersede any other
agreement relating to severance benefits in the event of
Executive’s severance from employment, including the Prior
Agreement.
ARTICLE 2
SEVERANCE BENEFITS
2.1
Severance Benefits. A Covered Termination of
Executive’s employment prior to or more than twelve (12)
months following the effective date of a Change of Control entitles
Executive to receive the benefits set forth in this
Section 2.1.
(a)
Base Salary and Bonus. The Company shall pay to Executive an
amount (the “ Severance Amount ”) equal to the
sum of Base Salary plus the excess, if any, of
(i) Executive’s target annual bonus for the fiscal year
during which the Covered Termination occurs, with such bonus
determined assuming that all of the performance objectives for such
fiscal year have been attained, over (ii) any portion of
Executive’s annual bonus for the fiscal year in which the
Covered Termination occurs that has been paid to Executive prior to
the date of the Covered Termination, prorated by the Severance
Period. Such Severance Amount shall be paid over the
Severance Period commencing on the date of termination in
substantially equal installments in accordance with the
Company’s regular payroll practices and shall be subject to
all required tax withholding; provided, however, that any such
payments that would otherwise have been made before the first
normal payroll payment date falling on or after the First Payment
Date shall be made on the First Payment Date.
(b)
Health Benefits .
Provided that Executive elects continued coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“ COBRA ”), the Company shall pay the premiums
of Executive’s group health insurance coverage and
Executive’s “Exec-U-Care” or similar secondary
health insurance coverage, including coverage for Executive’s
eligible dependents, until the earlier of the expiration of the
Severance Period or the applicable COBRA continuation period;
provided, however, that the Company shall pay premiums for
Executive’s eligible dependents only for coverage for which
those eligible dependents were enrolled immediately prior to the
Covered Termination; provided , further , that
Executive shall be solely responsible for all matters relating to
[his/her] continuation of coverage
2
pursuant to COBRA, including, without
limitation, the election of such coverage. For the balance of
the period that Executive is entitled to coverage under federal
COBRA law, if any, Executive shall be entitled to maintain such
coverage at Executive’s own expense.
2.2
Change of Control Severance Benefits. A Covered Termination of
Executive’s employment within twelve (12) months following
the effective date of a Change of Control entitles Executive to
receive the benefits set forth in this Section 2.2.
(a)
Base Salary. The
Company shall pay to Executive an amount equal to twelve (12)
months’ Base Salary. Such severance amount shall be
paid over a period of twelve (12) months commencing on the date of
termination in substantially equal installments in accordance with
the Company’s regular payroll practices and shall be subject
to all required tax withholding; provided, however, that any such
payments that would otherwise have been made before the first
normal payroll payment date falling on or after the First Payment
Date shall be made on the First Payment Date.
(b)
Bonus. The Company
shall pay to Executive an amount equal to the sum of (x) the
excess, if any, of (i) Executive’s target annual bonus
for the fiscal year during which the Covered Termination occurs,
with such bonus determined assuming that all of the performance
objectives for such fiscal year have been attained, over
(ii) any portion of Executive’s annual bonus for the
fiscal year in which the Covered Termination occurs that has been
paid to Executive prior to the date of the Covered Termination,
prorated by the portion of the fiscal year that the Executive was
employed by the Company and (y) Executive’s target
annual bonus for the fiscal year during which the Covered
Termination occurs, with such bonus determined assuming that all of
the performance objectives for such fiscal year have been attained
(i.e., Executive shall be entitled to receive a prorated target
bonus for the current year and an additional year’s target
bonus). Such severance amount shall be paid over a period of
twelve (12) months commencing on the date of termination in
substantially equal installments in accordance with the
Company’s regular payroll practices and shall be subject to
all required tax withholding; provided, however, that any such
payments that would otherwise have been made before the first
normal payroll payment date falling on or after the First Payment
Date shall be made on the First Payment Date.
(c)
Covered Termination Stock Award Acceleration.
In the event of a Covered
Termination of Executive’s employment within twelve (12)
months following the effective date of a Change of Control, the
vesting and/or exercisability of one hundred percent (100%) of
Executive’s outstanding Stock Awards shall be automatically
accelerated on the date of termination.
(d)
Health Benefits .
Provided that Executive elects continued coverage under federal
COBRA law, the Company shall pay the premiums of Executive’s
group health insurance coverage, including coverage for
Executive’s eligible dependents, until the earlier of the
expiration of the twelve (12) month period following the Covered
Termination or the applicable COBRA continuation period;
provided, however, that the Company shall pay premiums for
Executive’s eligible dependents only for coverage for which
those eligible dependents were enrolled immediately prior to the
Covered Termination; provided , further , that
Executive shall be solely responsible for all matters relating to
[his/her] continuation of coverage
3
pursuant to federal COBRA law, including,
without limitation, the election of such coverage. For the
balance of the period that Executive is entitled to coverage under
federal COBRA law, if any, Executive shall be entitled to maintain
such coverage at Executive’s own expense.
(e)
No Duplication of Benefits. The payments and benefits provided for in this
Section 2.2 shall only be payable in the event of a Covered
Termination of Executive’s employment within twelve (12)
months following the effective date of a Change of Control.
In the event of a Covered Termination of Executive’s
employment prior to or more than twelve (12) months following a
Change Control, then Executive shall receive the payments and
benefits described in Section 2.1 and shall not be eligible to
receive any of the payments and benefits described in this
Section 2.2.
2.3
Other Terminations . If Executive’s employment
is terminated by the Company for Cause, by Executive other than
pursuant to a Constructive Termination or as a result of
Executive’s death or disability, the Company shall not have
any other or further obligations to Executive under this Agreement
(including any financial obligations) except that Executive shall
be entitled to receive (a) Executive’s fully earned but
unpaid base salary, through the date of termination at the rate
then in effect, and (b) all other amounts or benefits to which
Executive is entitled under any compensation, retirement or benefit
plan or practice of the Company at the time of termination in
accordance with the terms of such plans or practices, including,
without limitation, any continuation of benefits required by
federal COBRA law or applicable law. The foregoing shall be
in addition to, and not in lieu of, any and all other rights and
remedies which may be available to the Company under the
circumstances, whether at law or in equity.
2.4
Mitigation. Except
as otherwise specifically provided herein, Executive shall not be
required to mitigate damages or the amount of any payment provided
under this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment provided for under this Agreement
be reduced by any compensation earned by Executive as a result of
employment by another employer or by any retirement benefits
received by Executive after the date of the Covered
Termination.
2.5
Exclusive Remedy.
Except as otherwise expressly required by law (e.g., COBRA) or as
specifically provided herein, all of Executive’s rights to
salary, severance, benefits, bonuses and other amounts hereunder
(if any) accruing after the termination of Executive’s
employment shall cease upon such termination. In the event of
a termination of Executive’s employment with the Company,
Executive’s sole remedy shall be to receive the payments and
benefits described in this Agreement.
ARTICLE 3
LIMITATIONS AND CONDITIONS ON
BENEFITS
3.1
Release Prior to Payment of Benefits. Upon the occurrence of a Covered
Termination of Executive’s employment, and prior to the
payment of any benefits under this Agreement on account of such
Covered Termination, Executive shall execute and not revoke a
release (the “ Release ”) in the form attached
hereto and incorporated herein as Exhibit A or Exhibit B,
as applicable. Executive shall execute and deliver such
Release to the Company no
4
later than fifty (50) days following the date of
the Covered Termination. Such Release shall specifically
relate to all of Executive’s rights and claims in existence
at the time of such execution and shall confirm Executive’s
obligations under the Confidentiality Agreement. It is
understood that, as specified in the applicable Release, Executive
has a certain number of calendar days to consider whether to
execute such Release, and Executive may revoke such Release within
seven (7) calendar days after execution. In the event
Executive does not execute such Release within the applicable
period, or if Executive revokes such Release within the subsequent
seven (7) day period, no benefits shall be payable under this
Agreement.
3.2
Termination of Benefits. Benefits under this Agreement shall
terminate immediately if the Executive, at any time, violates any
proprietary information or confidentiality obligation to the
Company, including, without limitation, the Confidentiality
Agreement.
3.3
Code Section 409A. Notwithstanding any provision to the contrary in
the Agreement, if the Executive is deemed by the Company at the
time of his Separation from Service to be a “specified
employee” for purposes of
Section 409A(a)(2)(B)(i) of the Code, to the extent
delayed commencement of any portion of the termination benefits to
which Executive is entitled under this Agreement is required in
order to avoid a prohibited distribution under
Section 409A(a)(2)(B)(i) of the Code, such portion of
Executive’s termination benefits shall not be provided to
Executive prior to the earlier of (a) the expiration of the
six-month period measured from the date of the Executive’s
Separation from Service with the Company or (b) the date of
Executive’s death. Upon the first business day
following the expiration of the applicable Code
Section 409A(a)(2)(B)(i) deferral period, all payments
deferred pursuant to this Section 3.3 shall be paid in a lump
sum to the Executive, and any remaining payments due under the
Agreement shall be paid as otherwise provided herein, with all such
payments to be subject to all required tax withholding. For
purposes of Section 409A of the Code (including, without
limitation, for purposes of Treasury Regulation
Section 1.409A-2(b)(2)(iii)), Executive’s right to
receive the installment payments payable pursuant to Article 2
(the “Installment Payments”) shall be treated as a
right to receive a series of separate payments and, accordingly,
each Installment Payment shall at all times be considered a
separate and distinct payment.
ARTICLE 4
PARACHUTE PAYMENTS
4.1
Parachute Payment Cut-Back. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
Payment under this Agreement would, when combined with all other
Payments Executive receives from the Company or any successor or
parent or subsidiary thereof, but for this Article 4, be
considered an “excess parachute payment” under
Section 280G of the Code, then such Payments shall be reduced
(with cash payments being reduced before Stock Award compensation)
as would result in no portion of the payments being considered
“excess parachute payments” under Section 280G of
the Code.
4.2
Determinations. All
determinations required to be made under this Article 4,
including whether and to what extent the Payments shall be reduced
and the assumptions to be utilized in arriving at such
determination, shall be made by the nationally recognized certified
public accounting firm used by the Company immediately prior to the
Change of Control or, if
5
such firm declines to serve, such other
nationally recognized certified public accounting firm as may be
designated by the Executive (the “ Accounting Firm
”). The Accounting Firm shall provide detailed
supporting calculations bo
