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Exhibit 10.37
DIGITAL MICROWAVE CORPORATION
FORM OF EMPLOYMENT AGREEMENT
Attached is a form of employment agreement between the Company and
certain executive officers as listed below:
Name Position Annual Salary
---- -------- -------------
Timothy R. Hansen Vice President and General Manager, $127,200
SPECTRUM(TM) Division
Shaun McFall Vice President, Corporate Marketing $132,500
John O'Neil Vice President, Personnel $144,768
Carl A. Thomsen Vice President, Chief Financial $190,800
Officer and Secretary
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E M P L O Y M E N T A G R E E M E N T
This Agreement, dated as of _________, 1996, is between Digital Microwave
Corporation, a California corporation ("Employer"), and ___________
("Employee").
RECITALS
* Employee is and has been employed by Employer and is currently serving as
the ___________________.
* Employer desires to continue to employ Employee and to assure itself of the
continued services of Employee for the Period of Employment provided for in
this Employment Agreement, and Employee desires to be employed by Employer
for such period, upon the following terms and conditions.
ACCORDINGLY, the parties agree as follows:
1. Period of Employment.
(a) Basic Term. Employer shall employ Employee to render services to Employer in
the position and with the duties and responsibilities described in Section 2 for
the period (the "Period of Employment") commencing on the date of this Agreement
and ending on the date upon which the Period of Employment is terminated in
accordance with Section 4.
2. Position and Responsibilities.
(a) Position. Employee shall continue employment with Employer and shall perform
all services as may be assigned by Employer. Employee shall devote his best
efforts and full-time attention to the performance of his duties. Employee shall
be subject to the direction of Employer, which shall retain full control of the
means and methods by which he performs the above services and of the place(s) at
which all services are rendered. Employee shall report to the _____________ or
another officer of Employer. Employee shall be expected to travel if
necessary or advisable in order to meet the obligations of his position.
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(b) Other Activity. Except upon the prior written consent of Employer, Employee
(during the Period of Employment) shall not (i) accept any other employment; or
(ii) 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 Employer, that might create a conflict of interest
with Employer, or that otherwise might interfere with the business of Employer,
or any Affiliate. An "Affiliate" shall mean any person or entity that directly
or indirectly controls, is controlled by, or is under common control with
Employer. Notwithstanding the foregoing, upon reasonable notice to Employer,
Employee may serve as a director of one for profit entity and one not for profit
entity so long as such entity is not competitive with Employer or any Affiliate
and where such service does not otherwise create a conflict of interest.
3. Compensation and Benefits.
(a) Compensation. In consideration of the services to be rendered under this
Agreement, Employer shall pay Employee a base salary of $___________ per year,
payable semi-monthly, pursuant to the procedures regularly established, and as
they may be amended, by Employer in its sole discretion, during the Period of
Employment. Employer shall review annually Employee's compensation and shall
determine, in its sole discretion, whether and how much the existing
compensation shall be adjusted, without regard to any policy or practice
Employer may have for adjusting salaries. In addition to base salary, Employee
shall be eligible to participate in the Employer's executive management
incentive bonus and stock option plans according to the terms of those plans.
(b) Benefits. Employee shall be entitled to vacation leave in accordance with
Employer's standard policies. As Employee becomes eligible therefor, Employee
shall have the right to participate in and to receive benefits from all present
and future benefit plans specified in Employer's policies and generally made
available to similarly situated employees of Employer. The amount and extent of
benefits to which Employee is entitled shall be governed by the specific benefit
plan, as amended. Employee also shall be entitled to any benefits or
compensation tied to termination as described in Section 4. Nothing stated in
this Agreement shall prevent Employer from changing or eliminating any benefit
during the Period of Employment as Employer, in its sole discretion, may deem
necessary or desirable. No statement concerning benefits or compensation to
which Employee is entitled shall alter in any way the term of this Agreement,
any renewal thereof, or its termination. All compensation and comparable
payments to be paid to Employee under this Agreement shall be less withholdings
required by law.
(c) Expenses. Employer shall reimburse Employee for reasonable travel and other
business expenses incurred by Employee in the performance of his duties, in
accordance with Employer's policies, as they may be amended in Employer's sole
discretion.
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4. Termination of Employment.
(a) By Death. The Period of Employment shall terminate automatically upon the
death of Employee. Employer shall pay to Employee's beneficiaries or estate, as
appropriate, any, compensation then due and owing, including payment for accrued
unused vacation, if any, and will when due make a payment of any incentive bonus
to which the Employee would have been entitled prorated based on the number of
months the Employee was employed during the incentive bonus period. Thereafter,
all obligations of Employer under this Agreement shall cease. Nothing in this
Section shall affect any entitlement of Employee's heirs to the benefits of any
life insurance plan or other applicable benefits.
(b) By Disability. If, by reason of any physical or mental incapacity, Employee
has been or will be prevented from properly performing his duties under this
Agreement for more than ninety (90) consecutive days, then, to the extent
permitted by law, Employer may terminate the Period of Employment without any
advance notice. Employer shall pay Employee all compensation to which he is
entitled up through the day notice of termination is provided, and, in addition,
Employer shall when due make a payment of any incentive bonus to which the
Employee would have been entitled prorated based on the number of months the
Employee was employed during the incentive bonus period; thereafter, all
obligations of Employer under this Agreement shall cease. Nothing in this
Section shall affect Employee's rights under any applicable Employer disability
plan.
(c) By Employer Not For Cause. At any time, Employer may terminate the Period of
Employment Not for Cause for any reason, by providing Employee ten (10) days'
advance written notice, provided that Employee shall be paid, in addition to all
compensation due and owing through the last day actually worked, severance in an
amount equal to six months of the Employee's then current base salary. Such
severance shall be paid by Employer to Employee in 6 equal monthly installments,
commencing one month from the date of termination, or, at Employer's discretion,
in a single lump sum on the termination date. Employer shall also pay the
Employer's share of health insurance premiums for a period of up to 6 months, or
until Employee is eligible to participate in another employer's plan, whichever
comes first, should Employee elect to convert his health insurance benefits
under COBRA. Employer shall also pay when due any incentive bonus to which the
Employee would have been entitled prorated based on the number of months the
Employee was employed during the incentive bonus period and will permit
Employee's stock options, if any, to continue to vest for 6 months following the
termination date. If Employer terminates the Period of Employment Not for Cause
within eighteen (18) months following a Change of Control as defined in
subparagraph 4(f), Employee shall receive the severance benefits set forth in
subparagraph 4(f)(i)-(iv) rather than the severance benefits set forth in this
subparagraph 4(c). Employer shall have the option, in its complete discretion,
to terminate the Period of Employment at any time prior to the end of such
notice period, provided Employer pays
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Employee all compensation due and owing through the last day actually
worked plus an amount equal to the base salary Employee would have earned
through the balance of the above notice period in addition to the severance
benefits described above; thereafter, all of Employer's obligations under this
Agreement shall cease. Employer may dismiss Employee without cause
notwithstanding anything to the contrary contained in or arising from any
statements, policies, or practices of Employer relating to the employment,
discipline, or termination of its employees.
(d) By Employer For Cause. At any time, and without prior notice, Employer may
terminate the Period of Employment for Cause (as defined below). Employer shall
pay Employee all compensation then due and owing; thereafter, all of Employer's
obligations under this Agreement shall cease. Termination shall be for "Cause"
if Employee: (i) acts in bad faith and to the detriment of Employer; (ii)
exhibits in regard to his employment willful misconduct, dishonesty, habitual
neglect of duties, or any willful act or omission that may materially and
adversely affect the Employer's business or that involves fraud, embezzlement or
misappropriation of any property or proprietary information of the Employer;
(iv) is convicted of a crime involving dishonesty, breach of trust, or physical
or emotional harm to any person; or (v) breaches any material term of this
Agreement. If termination is due to Employee's disability, Section 4(b) above
shall control, and not this subsection on termination for Cause.
(e) By Employee Not for Cause. At any time, Employee may terminate the Period of
Employment for any reason, with or without cause, by providing Employer ten (10)
days' advance written notice. Employer shall have the option, in its complete
discretion, to make termination of the Period of Employment effective at any
time prior to the end of such notice period, provided Employer pays Employee all
compensation due and owing through the last day actually worked, plus an amount
equal to the base salary Employee would have earned through the balance of the
above notice period, not to exceed ten (10) days; thereafter, all of Employer's
obligations under this Agreement shall cease.
(f) By Employee for Good Reason Upon a Change of Control. Employee may
terminate, without liability, the Period of Employment for Good Reason upon a
Change of Control (as defined below), provided Employee gives Employer sixty
(60) days' advance written notice of the reason for termination and his intent
to terminate this Agreement. During this period, Employer shall have an
opportunity to correct the condition constituting Good Reason. If the condition
is remedied within this period, Employee's notice to terminate shall be
rescinded automatically; if not remedied, termination of the Period of
Employment shall become effective upon expiration of the above notice period. In
this event, Employer shall pay Employee all compensation due and owing through
the last day actually worked. Employer shall also have the option, in its
complete discretion, to make termination effective at any time prior to the end
of the notice period, provided that Employer pays Employee all compensation due
and owing through the balance of the notice period (not to exceed sixty (60)
days).
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Employee shall be entitled to exercise his right to terminate this
Agreement for Good Reason only if he gives the required notice not more than
forty-five (45) days after the occurrence of the event that is the basis for
the Good Reason. If Employee terminates the Period of Employment for Good
Reason upon a Change of Control, Employee shall receive the following:
(i) A severance payment equal to twenty-four (24) months of the
Employee's then base salary. At the discretion of the Employer, the severance
payment may be made in the form of salary continuation over the equivalent pay
periods that the severance covers or in a lump sum payment.
(ii) A payment when due of the incentive bonus to which the Employee
would have been entitled prorated based on the number of months the Employee was
employed during the incentive bonus period.
(iii) A payment equal to the annual incentive bonus payments received
by Employee, if any, for the previous two years, divided by two.
(iv) Payment of the Employee's share of health insurance premiums for a
period of up to eighteen (18) months, or until Employee is eligible to
participate in another Employer's plan, whichever comes first, should Employee
elect to convert his/her health insurance benefits under COBRA.
"Change of Control" shall mean the occurrence of any of the following events as
used herein, after the Effective Date: (i) any "person" (as such term is used in
Sections 13 (d) and 14 (d) of the Securities Exchange Act of 1934, as amended)
other than Digital Microwave or its affiliates (a "Third Party") is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Employer representing fifty percent (50%) or
more of the total voting power represented by the Employer's then outstanding
voting securities; (ii) the stockholders of the Employer approve a merger or
consolidation of the Employer with any other corporation that is a Third Party,
other than a merger or consolidation which would result in the voting securities
of the Employer outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Employer or such surviving entity
outstanding immediately after such merger or consolidation; or (iii) the
stockholders of the Employer approve a plan of complete liquidation or
dissolution of the Employer or an agreement for the sale or disposition by the
Employer of all or substantially all the Employer's assets to a Third Party.
"Change of Control" shall also mean a change in the composition of the Board
over a period of thirty-six (36) months or less such that a majority of the
Board members (rounded up to the next whole number) ceases, by reason of one or
more contested elections for Board membership, to be comprised of individuals
who either (i) have
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been Board members continuously since the beginning of such period or (ii) have
been elected or nominated for election as Board members during such period by
at least a majority of the Board members described in clause (i) who were still
in office at the time such election or nomination was approved by the Board.
Termination shall be for "Good Reason" if: (i) there is a material and
adverse change in Employee's position, duties, responsibilities, or status with
Employer; (ii) there is a reduction in Employee's salary then in effect, other
than a reduction comparable to reductions generally applicable to similarly
situated employees of Employer; (iii) there is a material reduction in
Employee's benefits, other than a reduction comparable to reductions generally
applicable to similarly situated employees of Employer; (iv) the Employer
involuntarily relocates the Employee; or (v) Employer materially breaches this
Agreement.
(g) Termination Obligations.
(i) Employee agrees that all property, including, without limitation, all
equipment, tangible Proprietary Information (as defined below), documents,
books, records, reports, notes, contracts, lists, computer disks (and other
computer-generated files and data), and copies thereof, created on any medium
and furnished to, obtained by, or prepared by Employee in the course of or
incident to his employment, belongs to Employer and shall be returned promptly
to Employer upon termination of the Period of Employment.
(ii) All benefits to which Employee is otherwise entitled shall cease upon
Employee's termination of the Period of Employment, unless explicitly continued
either under this Agreement or under any specific written policy or benefit plan
of Employer.
(iii) Upon termination of the Period of Employment, Employee shall be
deemed to have resigned from all offices and directorships then held with
Employer or any Affiliate.
(iv) The representations and warranties contained in this Agreement and
Employee's obligations under this Section 4(g) on Termination Obligations and
Section 5 on Proprietary Information shall survive the termination of the Period
of Employment and the expiration of this Agreement.
(v) Following any termination of the Period of Employment, Employee shall
fully cooperate with Employer in all matters relating to the winding up of
pending work on behalf of Employer and the orderly transfer of work to other
employees of Employer. Employee shall also cooperate in the defense of any
action brought by any third party against Employer that relates in any way to
Employee's acts or omissions while employed by Employer.
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5. Proprietary Information.
(a) Defined. "Proprietary Information" is all information and any idea in
whatever form, tangible or intangible, pertaining in any manner to the business
of Employer, or any Affiliate, or its employees, clients, consultants, or
business associates, which was produced by any employee of Employer, or any
Affiliate, in the course of his or her employment or otherwise produced or
acquired by or on behalf of Employer, or any Affiliate. All Proprietary
Information not generally known outside of Employer's organization, and all
Proprietary Information so known only through improper means, shall be deemed
"Confidential Information." Without limiting the foregoing definition,
Proprietary and Confidential Information shall include, but not be limited to:
(i) formulas, teaching and development techniques, processes, trade secrets,
computer programs, electronic codes, inventions, improvements, and research
projects; (ii) information about costs, profits, markets, sales, and lists of
customers or clients; (iii) business, marketing, and strategic plans; and (iv)
employee personnel files and compensation information. Employee should consult
any Employer procedures instituted to identify and protect certain types of
Confidential Information, which are considered by Employer to be safeguards in
addition to the protection provided by this Agreement. Nothing contained in
those procedures or in this Agreement is intended to limit the effect of the
other.
(b) General Restrictions on Use. During the Period of Employment, Employee shall
use Proprietary Information, and shall disclose Confidential Information, only
for the benefit of Employer and as is necessary to carry out his
responsibilities under this Agreement. Following termination, Employee shall
neither, directly or indirectly, use any Proprietary Information nor disclose
any Confidential Information, except as expressly and specifically authorized in
writing by Employer. The publication of any Proprietary Information through
literature or speeches must be approved in advance in writing by Employer.
6. Arbitration.
(a) Arbitrable Claims. All disputes between Employee (and his attorneys,
successors, and assigns) and Employer (and its Affiliates, shareholders,
directors, officers, employees, agents, successors, attorneys, and assigns)
relating in any manner whatsoever to the employment or termination of Employee,
including, without limitation, all disputes arising under this Agreement,
("Arbitrable Claims") shall be resolved by arbitration. All persons and entities
specified in the preceding sentence (other than Employer and Employee) shall be
considered third-party beneficiaries of the rights and obligations created by
this Section on Arbitration. Arbitrable Claims shall include, but are not
limited to, contract (express or implied) and tort claims of all kinds, as well
as all claims based on any federal, state, or local law, statute, or regulation,
excepting only claims under applicable workers' compensation law and
unemployment insurance claims. By way of example
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and not in limitation of the foregoing, Arbitrable Claims shall include any
claims arising under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and the
California Fair Employment and Housing Act, as well as any claims asserting
wrongful termination, breach of contract, breach of the covenant of good faith
and fair dealing, negligent or intentional infliction of emotional distress,
negligent or intentional misrepresentation, negligent or intentional
interference with contract or prospective economic advantage, defamation,
invasion of privacy, and claims related to disability. Arbitration shall be
final and binding upon the parties and shall be the exclusive remedy for all
Arbitrable Claims, except that Employer may, at its option, seek injunctive
relief and damages in court for any breach of Section 5 of this Agreement.
Subject to the foregoing sentence, THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY
HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS.
(b) Procedure. Arbitration of Arbitrable Claims shall be in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association
("AAA Employment Rules"), except as provided otherwise in this Agreement.
Arbitration shall be initiated by providing written notice to the other party
with a statement of the claim(s) asserted, the facts upon which the claim(s) are
based, and the remedy sought. The burden of proof in any arbitration shall be
allocated as provided by applicable law, unless otherwise specified in this
Agreement. Either party may bring an action in court to compel arbitration under
this Agreement and to enforce an arbitration award. Otherwise, neither party
shall initiate or prosecute any lawsuit or administrative action in any way
related to any Arbitrable Claim. The Federal Arbitration Act shall govern the
interpretation and enforcement of this Section 6.
(c) Arbitrator Selection and Authority. All disputes involving Arbitrable Claims
shall be decided by a single arbitrator. The arbitrator shall be selected by
mutual agreement of the parties within thirty (30) days of the effective date of
the notice initiating the arbitration. If the parties cannot agree on an
arbitrator, then the complaining party shall notify the AAA and request
selection of an arbitrator in accordance with the AAA Employment Rules. The
arbitrator shall have only such authority to award equitable relief, damages,
costs, and fees as a court would have for the particular claim(s) asserted. The
fees of the arbitrator shall be split between both parties equally. The
arbitrator shall have exclusive authority to resolve all Arbitrable Claims,
including, but not limited to, any claim that all or any part of ther Agreement
is void or unenforceable.
(d) Confidentiality. All proceedings and all documents prepared in connection
with any Arbitrable Claim shall be confidential and, unless otherwise required
by law, the subject matter thereof shall not be disclosed to any person other
than the parties to the proceedings, their counsel, witnesses and experts, the
arbitrator, and, if involved, the court and court staff. All documents filed
with the arbitrator or with a court shall be filed under seal. The parties shall
stipulate to all arbitration and
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court orders necessary to effectuate fully the provisions of this subsection
concerning confidentiality.
(e) Continuing Obligations. The rights and obligations of Employee and Employer
set forth in this Section on Arbitration shall survive the termination of
Employee's employment and the expiration of this Agreement.
7. Notices.
Any notice under this Agreement must be in writing and shall be effective upon
delivery by hand, upon facsimile transmission to the number provided below (if
one is provided), or three (3) business days after deposit in the United States
mail, postage prepaid, certified or registered, and addressed to Employer or to
Employee at the corresponding address below. Employee shall be obligated to
notify Employer in writing of any change in his address. Notice of change of
address shall be effective only when done in accordance with this Section.
Employer's Notice Address:
Vice President, Personnel
Digital Microwave Corporation
170 Rose Orchard Way
San Jose, California 95134
Fax Phone No.: (408)944-1701
Employee's Notice Address:
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8. Action by Employer.
All actions required or permitted to be taken under this Agreement by Employer,
including, without limitation, exercise of discretion, consents, waivers, and
amendments to this Agreement, shall be made and authorized only by the President
or by his or her representative specifically authorized to fulfill these
obligations under this Agreement.
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9. Integration.
This Agreement is intended to be the final, complete, and exclusive statement of
the terms of Employee's employment by Employer. This Agreement supersedes all
other prior and contemporaneous agreements and statements pertaining in any
manner to the employment of Employee, and it may not be contradicted by evidence
of any prior or contemporaneous statements or agreements. To the extent that the
practices, policies, or procedures of Employer, now or in the future, apply to
Employee and are inconsistent with the terms of this Agreement, the provisions
of this Agreement shall control.
10. Amendments; Waivers.
This Agreement may not be modified, amended, or terminated except by an
instrument in writing, signed by each of the parties. No failure to exercise and
no delay in exercising any right, remedy, or power under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, or power under this Agreement preclude any other or further
exercise thereof, or the exercise of any other right, remedy, or power provided
herein or by law or in equity.
11. Assignment; Successors and Assigns.
Employee agrees that he will not assign, sell, transfer, delegate, or otherwise
dispose of, whether voluntarily or involuntarily, or by operation of law, any
rights or obligations under this Agreement. Any such purported assignment,
transfer, or delegation shall be null and void. Nothing in this Agreement shall
prevent the consolidation of Employer with, or its merger into, any other
entity, or the sale by Employer of all or substantially all of its assets, or
the otherwise lawful assignment by Employer of any rights or obligations under
this Agreement. Subject to the foregoing, this Agreement shall be binding upon
and shall inure to the benefit of the parties and their respective heirs, legal
representatives, successors, and permitted assigns, and shall not benefit any
person or entity other than those specifically enumerated in this Agreement.
12. Severability.
If any provision of this Agreement, or its application to any person, place, or
circumstance, is held by an arbitrator or a court of competent jurisdiction to
be invalid, unenforceable, or void, such provision shall be enforced to the
greatest extent permitted by law, and the remainder of this Agreement and such
provision as applied to other persons, places, and circumstances shall remain in
full force and effect.
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13. Attorneys' Fees.
In any legal action, arbitration, or other proceeding brought to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees and costs.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with the law of
the State of California.
15. Interpretation.
This Agreement shall be construed as a whole, according to its fair meaning, and
not in favor of or against any party. By way of example and not in limitation,
this Agreement shall not be construed in favor of the party receiving a benefit
nor against the party responsible for any particular language in this Agreement.
Captions are used for reference purposes only and should be ignored in the
interpretation of this Agreement.
16. Employee Acknowledgment.
Employee acknowledges that he has had the opportunity to consult legal counsel
in regard to this Agreement, that he has read and understands this Agreement,
that he is fully aware of its legal effect, and that he has entered into it
freely and voluntarily and based on his own judgment and not on any
representations or promises other than those contained in this Agreement.
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The parties have duly executed this Agreement as of the date first written
above.
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EMPLOYEE'S NAME
Digital Microwave Corporation
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By: Charles D. Kissner
Its: President and Chief Executive Officer
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