Exhibit 10.1
SEPARATION
AGREEMENT
This Separation Agreement (the
“ Agreement ”) is made effective as of
June 26, 2009, by and between Thomas W. Steipp (“
Executive ”) and Symmetricom, Inc., a Delaware
corporation (the “ Company ”).
RECITALS
A. Executive serves as the President
and Chief Executive Officer of the Company pursuant to an Amended
and Restated Employment and Executive Severance Agreement dated as
of October 30, 2008 (the “ Employment Agreement
”).
B. The parties anticipate that
Executive’s employment with the Company will terminate as of
the “Termination Date” (as defined below), and the
parties wish to enter into this Agreement to set forth the terms
and conditions related to Executive’s termination of
employment in order to assure a smooth and effective transition of
Executive’s duties to his successor and to wind-up their
employment relationship amicably.
AGREEMENT
NOW, THEREFORE, in consideration of
the mutual covenants and agreements hereinafter set forth, the
parties agree as follows:
1. Termination Date; Accrued
Obligations . Executive acknowledges that his status as an
employee and officer of the Company shall end on June 28, 2009
(the “ Termination Date ”) and the parties
intend that such termination will constitute a “separation
from service” within the meaning of Section 409A of the
Internal Revenue Code of 1986 (the “ Code ”) and
the Treasury regulations thereunder. Executive agrees that as of
the Termination Date, he shall also resign as a member of the Board
of Directors of the Company (as well as from any officer or
director positions he holds with respect to any of the
Company’s directly or indirectly owned subsidiaries). The
Company shall pay to Executive any unpaid base salary and accrued
but unpaid vacation along with any other payments required by
applicable law through the Termination Date in accordance with the
Company’s normal payroll practices.
2. Separation Payments and
Benefits . In connection with Executive’s termination of
employment, the Company shall provide Executive with the separation
benefits described below, subject to Executive’s compliance
with Section 4 and provided that Executive otherwise complies
with the applicable conditions of the Employment Agreement required
to receive the benefits described in Section 4.4 and
Section 8 thereof.
(a) Separation Payment .
Pursuant to Section 4.4(a) of the Employment Agreement, the
Company shall pay Executive a lump sum of $875,000 within thirty
(30) days following the Termination Date, which Executive
acknowledges is equal to the sum of (i) $500,000, which is
Executive’s annual base salary and (ii) $375,000, which
is equal to Executive’s Target Bonus (as defined in the
Employment Agreement) for the Company’s 2008 fiscal year
ended June 29, 2008.
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(b) Bonus for Fiscal Year
2009 . The Company shall pay Executive his Target Bonus for the
Company’s fiscal year ending June 28, 2009, subject to
the achievement of the applicable performance milestones and goals
established for such Target Bonus (the “ 2009 Bonus
”). This payment of the 2009 Bonus, if any, shall be paid in
a lump sum to Executive at the same time that other executives of
the Company receive bonus payments pursuant to the Company’s
Management Incentive Plan with respect to the Company’s
current fiscal year (but in any event no later than
September 30, 2009).
(c) Company-Paid Coverage .
Pursuant to the Employment Agreement, the Company shall provide
Executive with the Company-Paid Coverage (as defined in the
Employment Agreement) pursuant to the terms and conditions set
forth in Section 4.4(b) of the Employment
Agreement.
(d) Equity Awards. The
Company has previously granted Executive awards of restricted stock
which have not fully vested as of the date hereof and outstanding
stock options with respect to its common stock which have not been
fully exercised as of the date hereof, as shown on Exhibit A
attached hereto (the “ Equity Awards ”). Subject
to Executive’s continued service, the Equity Awards generally
vest in annual increments, and the parties agree that with respect
to each Equity Award which is not fully vested as of the
Termination Date, Executive shall receive, effective as of the
Termination Date, ratable monthly vesting credit for his employment
with the Company from the last annual vesting date for each such
Equity Award through the Termination Date, which vesting credit is
reflected in the summary of Equity Awards on Exhibit A
attached hereto. In addition, each stock option held by Executive
shown on Exhibit A attached hereto shall remain exercisable
until March 31, 2010 (or, if earlier, the expiration date on
which such award would have expired, without regard to
Executive’s termination of employment or service with the
Company). The monthly vesting credit and extension of the
exercisability of Equity Awards described in this Section 2(d)
shall be in lieu of the acceleration of vesting and exercisability
extension provisions set forth in the Employment
Agreement.
3. Full Payment; Termination of
Employment Agreement; Survival . Executive acknowledges that
the payment and arrangements herein shall constitute full and
complete satisfaction of any and all amounts properly due and owing
to Executive under this Agreement and the Employment
Agreement.
4. General Release . As a
material inducement for the Company to enter into this Agreement,
and in exchange for the performance of the Company’s
obligations under this Agreement provided for herein, Executive
shall execute the Release and Waiver of Claims attached hereto as
Exhibit B no later than twenty-one (21) days following
the Termination Date and shall not revoke such release within any
period permitted under applicable law.
5. Transition;
Non-Disparagement . The parties further agree that:
(a) Transition . During the
term between the date hereof and the Termination Date, Executive
will continue to receive his salary and other benefits currently
provided by the Company. Each of the Company and Executive shall
use their respective reasonable commercial efforts from the date
hereof through the Termination Date to cooperate with each other in
good faith to facilitate a smooth transition of Executive’s
duties to other employees of the Company as of the Termination
Date.
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(b) Non-Disparagement .
Executive agrees that he shall not disparage, defame or criticize
the Company, its directors, officers, agents, partners,
stockholders or employees in a non-constructive manner, either
publicly or privately. The Company agrees that it shall not
disparage, defame or criticize Executive, either publicly or
privately. Nothing in this Section shall have application to any
evidence or testimony as may be required by judicial or
administrative order or legal process.
(c) Return of Company
Property . On or before the Termination Date, Executive agrees
to turn over to the Company any and all property, tangible or
intangible, relating to its business, which he possesses or has in
his control, including any computers, cellular phones, PDAs or
similar business equipment.
6. Indemnification . The
Company shall indemnify and hold Executive harmless for any conduct
within the course and scope of his duties as an employee, director
or officer of the Company consistent with the Company’s
obligations under applicable law and the Company’s corporate
governance documents and related agreements.
7. Miscellaneous .
(a) Entire Agreement;
Non-Solicitation and Non-Disclosure . The Employment Agreement,
as modified hereby, and this Agreement is the entire agreement
between the parties with regard to the subject matter hereof.
Notwithstanding the foregoing, Executive acknowledges and agrees
that he shall continue to abide by the non-solicitation and
non-disclosure provisions set forth in Sections 6 and 7 of the
Employment Agreement.
(b) Taxes . Executive
understands and agrees that all payments under this Agreement will
be subject to appropriate tax withholding and other deductions, as
and to the extent required by law. With respect to any provisions
of this Agreement which provide for “nonqualified deferred
compensation” within the meaning of Section 409A of the
Code, this Agreement is intended to comply with the provisions of
Section 409A of the Code and the Regulations thereunder and
shall be so interpreted, construed and administered. In the event
that following the date hereof the Company or the Executive
reasonably determines that any compensation
