EXHIBIT (e)(14)
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement ("Agreement") is made and entered into
as of May 15, 2001 between ________ ("Executive") and Vixel Corporation (the
"Company").
WHEREAS, the Company and Executive entered into an employment offer
letter dated ________, ______ (the "Employment Agreement"), a copy of which is
attached hereto as EXHIBIT A; and
WHEREAS, the Company and Executive desire to amend the Employment
Agreement to provide Executive with certain benefits in the event Executive's
employment is terminated without Cause or Executive resigns for Good Reason,
within twelve months after a Change in Control of the Company;
NOW, THEREFORE, in consideration of Executive's continued employment
with the Company, it is hereby agreed by and between the parties that the
Employment Agreement is amended by adding the following provisions, which shall
be effective immediately:
SEVERANCE
BENEFITS: In the event that, within twelve (12) months after a
Change in Control (as defined below), either (i)
Executive's employment is terminated without Cause (as
defined below) by the Company (including any successor to
the Company), or (ii) Executive voluntarily terminates
Executive's employment with the Company (including any
successor to the Company) for Good Reason (as defined
below), Executive shall receive the equivalent of ________
(#) months of Executive's Base Salary as in effect on the
effective date of the Change in Control or, if increased
thereafter, as of the employment termination date, subject
to standard payroll deductions and withholdings, (the
"Severance"). Should Executive timely elect and be
eligible for continued coverage under COBRA, the Company
shall reimburse Executive for premiums for COBRA
medical/dental coverage for ____ (#) months after
Executive's Company-provided group health insurance
benefits terminate (the "Coverage Continuation"). The
Company shall decide in its sole discretion whether the
Severance shall be paid in one lump sum or on the
Company's standard payroll cycle. As a precondition of
receiving the Severance and the Coverage Continuation,
Executive must first sign a general release of claims in
favor of the Company, which release shall be in a form
similar to that of EXHIBIT B. In case of any proposed
Change in Control, then as a condition of such Change in
Control, lawful and adequate provision shall be made
whereby Executive shall after the Change in Control have
the right to receive upon the terms and conditions
specified herein the Severance and Coverage Continuation.
1.
CHANGE IN CONTROL
DEFINED: For the purposes of this Agreement, a "Change in Control"
will mean any of the following: (i) a dissolution,
liquidation or sale of substantially all of the assets of
the Company, (ii) a merger or consolidation in which the
Company is not the surviving corporation, or (iii) a
reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue
of the merger into other property, whether in the form of
securities, cash or otherwise.
CAUSE DEFINED: For the purposes of this Agreement, the termination of
Executive's employment will be considered a termination
for "Cause" if Executive is terminated because of any one
or more of the following: (i) conviction of any felony or
any crime involving fraud, dishonesty or moral turpitude;
(ii) participation in a fraud or act of dishonesty against
the Company that results in material harm to the business
of the Company; or (iii) intentional, material violation
of any contract or agreement with the Company or any
statutory duty owed to the Company that is not corrected
within thirty (30) days after written notice thereof has
been provided.
GOOD REASON
DEFINED: For the purposes of this Agreement, the voluntary
termination by Executive of Executive's employment will be
considered resignation for "Good Reason" if one or more of
the following are undertaken by the Company without
Executive's express written consent: (i) the assignment to
Executive of any duties or responsibilities that results
in a material diminution in Executive's position or
function as in effect immediately prior to the effective
date of the Change in Control; provided, however, that a
mere change in Executive's reporting relationships will
not provide the basis for a voluntary termination with
Good Reason; (ii) a material reduction by the Company in
Executive's Base Salary, as in effect on the effective
date of the Change in Control or as increased thereafter;
(iii) any failure by the Company to continue in effect any
benefit plan or program, including incentive plans or
plans with respect to the receipt of securities of the
Company, in which Executive was participating immediately
prior to the effective date of the Change in Control
(hereinafter referred to as "Benefit Plans"), or the
taking of any action by the Company that would adversely
affect Executive's participation in or reduce Executive's
benefits under the Benefit Plans or deprive Executive of
any fringe benefit that Executive enjoyed immediately
prior to the effective date of the Change in Control;
provided, however, that Good Reason will not be deemed to
have occurred if the Company provides for Executive's
participation in benefit plans and programs that, taken as
a whole, are comparable to the Benefit Plans; (iv) a
relocation of the Executive's business office to a
location more than one hundred (100) miles from the
location at which Executive perform duties as of the
effective date of the Change in Control, except for
required travel by Executive on the
2.
Company's business to an extent substantially consistent
with Executive's business travel obligations prior to the
effective date of the Change in Control; or (v) a material
breach by the Company of any provision of any material
agreement between Executive and the Company concerning the
terms and conditions of Executive's employment.
BASE SALARY
DEFINED: For purposes of this Agreement, "Base Salary" means base
salary to be paid to Executive (including all amounts
elected to be deferred that would otherwise have been
paid, under any cash or deferred arrangement established
by the Company), including guaranteed bonuses and
guaranteed commissions, but excluding other remuneration
paid directly to Executive, such as profit sharing, the
cost of employee benefits paid for by the Company,
education or tuition reimbursements, imputed income
arising under any Company group insurance or benefits
program, traveling expenses, business and moving expense
reimbursements, income received in connection with stock
options, contributions made by the Company under any
employee benefit plan, and similar items of compensation.
PARACHUTE
PAYMENTS: If any payment or benefit the Executive would receive in
connection with a Change in Control (the "Payment") would
(i) constitute a "parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), and (ii) but for this sentence, be
subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then such Payment shall be equal
to the Reduced Amount. The "Reduced Amount" shall be
either (x) the largest portion of the Payment that would
result in no portion of the Payment being subject to the
Excise Tax or (y) the largest portion, up to and including
the total, of the Payment, whichever amount, after taking
into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax (all
computed at the highest applicable marginal rate), results
in the Executive's receipt, on an after-tax basis, of the
greater amount of the Payment notwithstanding that all or
some portion of the Payment may be subject to the Excise
Tax. If a reduction in payments or benefits constituting
"parachute payments" is necessary so that the Payment
equals the Reduced Amount, reduction shall occur in the
following order unless the Executive elects in writing a
different order (provided, however, that such election
shall be subject to Company approval if made on or after
the date on which the event that triggers the Payment
occurs): reduction of cash payments; cancellation of
accelerated vesting of stock awards; reduction of employee
benefits. In the event that acceleration of vesting of
stock award compensation is to be reduced, such
acceleration of vesting shall be cancelled in the reverse
order of the date of grant of the Executive's stock awards
unless the Executive elects in writing a different order
for cancellation.
3.
The accounting firm engaged by the Company for general
audit purposes as of the day prior to the effective date
of the Change in Control shall perform the foregoing
calculations. If the accounting firm so engaged by the
Company is serving as accountant or auditor for the
individual, entity or group effecting the Change in
Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required
hereunder. The Company shall bear all expenses with
respect to the determinations by such accounting firm
required to be made hereunder.
The accounting firm engaged to make the determinations
hereunder shall provide its calculations, together with
detailed supporting documentation, to the Company and the
Executive within fifteen (15) calendar days after the date
on which the Executive's right to a Payment is triggered
(if requested at that time by the Company or the
Executive) or such other time as requested by the Company
or the Executive. If the accounting firm determines that
no Excise Tax is payable with respect to a Payment, either
before or after the application of the Reduced Amount, it
shall furnish the Company and the Executive with an
opinion reasonably acceptable to Executive that no Excise
Tax will be imposed with respect to such Payment. Any good
faith determinations of the accounting firm made hereunder
shall be final, binding and conclusive upon the Company
and the Executive.
AT WILL
EMPLOYMENT: Nothing in this letter alters Executive's at-will
employment status. Either Executive or the Company may
terminate Executive's employment relationship at any time
for any reasons whatsoever, with or without cause or
advance notice.
ENTIRE AGREEMENT: This letter constitutes the complete, final and exclusive
embodiment of the entire agreement between Executive and
the Company concerning severance benefits in the event of
a Change in Control, and this letter replaces and
supersedes any previous promises, representations or
agreement concerning this subject matter. It is entered
into without reliance on any representation other than
those expressly contained herein. Notwithstanding anything
herein to the contrary, this Agreement does not modify or
supersede any agreement relating to stock options between
Executive and the Company. Except as provided herein, the
terms of the Employment Agreement remain in full force and
effect.
4.
IN WITNESS WHEREOF, the parties have executed this Change in Control
Agreement as of the date first above written.
VIXEL CORPORATION [EXECUTIVE]
By: ____________________________ ___________________________
[Name]
[Title]
5.
EXHIBIT (e)(14)
EXHIBIT A
OFFER LETTER EMPLOYMENT AGREEMENT
1.
EXHIBIT (e)(14)
EXHIBIT B
RELEASE AGREEMENT
I understand that my position with _________________ (the "Company")
terminated effective ___________, _____ (the "Separation Date"). The Company has
agreed that if I choose to sign this Release, the Company will pay me certain
severance or consulting benefits pursuant to the terms of the Change in Control
Agreement (the "Agreement") between myself and the Company, and any agreements
incorporated therein by reference. I understand that I am not entitled to such
benefits unless I sign this Release and it becomes fully effective. I understand
that, regardless of whether I sign this Release, the Company will pay me all of
my accrued salary and vacation through the Separation Date, to which I am
entitled by law.
In consideration for the severance benefits I am receiving under the
Agreement, I hereby release the Company and its officers, directors, agents,
attorneys, employees, shareholders, parents, subsidiaries, and affiliates from
any and all claims, liabilities, demands, causes of action, attorneys' fees,
damages, or obligations of every kind and nature, whether they are now known or
unknown, arising at any time prior to and including the date I sign this
Release. This general release includes, but is not limited to: all federal and
state statutory and common law claims related to my employment or the
termination of my employment or related to all claims for breach of contract,
tort, wrongful termination, discrimination, wages or benefits, or claims for any
form of equity or compensation. Notwithstanding the release in the preceding
sentence, I am not releasing any right of indemnification I may have in my
capacity as an employee, officer and/or director of the Company pursuant to any
express indemnification agreement or pursuant to the Bylaws of the Company, nor
am I releasing any rights I may have as an owner and/or holder of the Company's
common stock and stock options.
In releasing claims unknown to me at present, I am waiving all rights
and benefits under Section 1542 of the California Civil Code, and any law or
legal principle of similar effect in any jurisdiction: "A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
If I am forty (40) years of age or older as of the Separation Date, I
acknowledge that I am knowingly and voluntarily waiving and releasing any rights
I may have under the federal Age Discrimination in Employment Act of 1967, as
amended ("ADEA"). I also acknowledge that the consideration given for the waiver
in the above paragraph is in addition to anything of value to which I was
already entitled. I have been advised by this writing, as required by the ADEA
that: (a) my waiver and release do not apply to any claims that may arise after
my signing of this Release; (b) I should consult with an attorney prior to
xecuting this Release; (c) I have twenty-one (21) days within which to consider
this Release (although I may choose to voluntarily execute this Release
earlier); (d) I have seven (7) days following the execution of this release to
1.
revoke the Release; and (e) this Release will not be effective until the eighth
day after this Release has been signed both by me and by the Company ("Effective
Date").
AGREED:
[THE COMPANY] [EXECUTIVE]
By:________________________________ __________________________________
[Name]
[Title]
Date:______________________________ Date:_____________________________
2.