UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 12, 2005
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TERABEAM, INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-29053 04-2751645
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(State or other jurisdiction of (Commission (IRS employer
incorporation) file number) identification no.)
2115 O'Nel Drive, San Jose, CA 95131
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (408) 731-2700
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Not Applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
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Employment Agreement with David F. Olson
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On December 8, 2005, Proxim Wireless Corporation ("Proxim Wireless"), a
Delaware corporation that is a wholly owned subsidiary of Terabeam, Inc.
("Terabeam"), entered into an amended and restated employment agreement with
David F. Olson for Mr. Olson to be Proxim Wireless' President and Chief
Operating Officer reporting to Robert E. Fitzgerald, Proxim Wireless' Chief
Executive Officer. This amended and restated agreement replaced the employment
agreement, dated July 27, 2005, between Mr. Olson and Terabeam. The key terms of
the amended and restated employment agreement with Mr. Olson are the following:
o Mr. Olson's employment is "at will" and subject to termination at
any time by either Proxim Wireless or Mr. Olson subject to the other
terms of the agreement;
o Mr. Olson's base salary is $295,000 per year;
o Mr. Olson is eligible for an annual bonus pursuant to an incentive
plan to be established by Proxim Wireless' board of directors with a
target annual bonus opportunity of at least 75% of Mr. Olson's base
salary including quarterly revenue based bonuses;
o Mr. Olson would be entitled to severance benefits if Proxim Wireless
terminates his employment without cause (as defined in the
employment agreement) or if Mr. Olson terminates his employment for
good reason (as defined in the employment agreement). The severance
benefits consist of (a) continued payment of base salary for twelve
months (the "Severance Period"), (b) a pro rated portion of his
annual bonus (if the payment criteria are met), (c) acceleration of
any of Mr. Olson's stock options that would have otherwise vested
during the Severance Period with those options remaining exercisable
for the entire Severance Period, and (d) continued coverage during
the Severance Period under Proxim Wireless' medical insurance plans
at the same cost to Mr. Olson as prior to termination;
o Mr. Olson's severance benefits described above would be modified as
described below if Proxim Wireless terminates his employment without
cause (as defined in the employment agreement) or if Mr. Olson
terminates his employment for good reason (as defined in the
employment agreement) within thirteen months following a change of
control of Terabeam subject to possible reduction for excise tax
reasons: (a) Mr. Olson's base salary amount described above would be
paid in a lump sum shortly after termination, (b) Mr. Olson's annual
bonus amount would be paid in a lump sum shortly after termination
without regard to meeting the payment criteria, (c) all of Mr.
Olson's unvested options would accelerate, and (d) Mr. Olson would
not receive the continued insurance coverage described above;
o Mr. Olson agreed to keep Proxim Wireless' and Terabeam's information
confidential; and
o During his employment and for one year thereafter, Mr. Olson agreed
not to compete with Proxim Wireless and Terabeam and to not solicit
employees of Proxim Wireless or Terabeam subject to the provisions
of California law.
The foregoing description of the employment agreement with Mr. Olson does
not purport to be complete and is qualified in its entirety by the terms and
conditions of that employment agreement, a copy of which is filed as Exhibit
10.1 to this Form 8-K and is incorporated by reference.
Employment Agreement with Geoffrey L. Smith
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On December 8, 2005, Proxim Wireless Corporation ("Proxim Wireless"), a
Delaware corporation that is a wholly owned subsidiary of Terabeam, Inc.
("Terabeam"), entered into an employment agreement with Geoffrey L. Smith for
Mr. Smith to be Proxim Wireless' Vice President Research & Development and
Product Line
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Management reporting to David F. Olson, Proxim Wireless' President and Chief
Operating Officer. The key terms of the employment agreement with Mr. Smith are
the following:
o Mr. Smith's employment is "at will" and subject to termination at
any time by either Proxim Wireless or Mr. Smith subject to the other
terms of the agreement;
o Mr. Smith's base salary is $230,000 per year;
o Mr. Smith is eligible for an annual bonus pursuant to an annual
incentive plan to be established at the discretion of the Proxim
Wireless' board of directors with a target annual bonus opportunity
of at least 50% of Mr. Smith's base salary;
o Mr. Smith would be entitled to severance benefits if Proxim Wireless
terminates his employment without cause (as defined in the
employment agreement) or if Mr. Smith terminates his employment for
good reason (as defined in the employment agreement). The severance
benefits consist of (a) continued payment of base salary for the
shorter of twelve months or the number of months Mr. Smith was
employed by Proxim Wireless (the "Severance Period"), (b) a pro
rated portion of his annual bonus (if the payment criteria are met),
(c) acceleration of any of Mr. Smith's stock options that would have
otherwise vested during the Severance Period with those options
remaining exercisable for the entire Severance Period, and (d)
continued coverage during the Severance Period under Proxim
Wireless' medical insurance plans at the same cost to Mr. Smith as
prior to termination;
o Mr. Smith's severance benefits described above would be modified as
described below if Proxim Wireless terminates his employment without
cause (as defined in the employment agreement) or if Mr. Smith
terminates his employment for good reason (as defined in the
employment agreement) within thirteen months following a change of
control of Terabeam subject to possible reduction for excise tax
reasons: (a) Mr. Smith's base salary amount described above would be
paid in a lump sum shortly after termination, (b) Mr. Smith's annual
bonus amount would be paid in a lump sum shortly after termination
without regard to meeting the payment criteria, (c) all of Mr.
Smith's unvested options would accelerate, and (d) Mr. Smith would
not receive the continued insurance coverage described above;
o Mr. Smith agreed to keep Proxim Wireless' and Terabeam's information
confidential; and
o During his employment and for one year thereafter, Mr. Smith agreed
not to compete with Proxim Wireless and Terabeam and to not solicit
employees of Proxim Wireless or Terabeam subject to the provisions
of California law.
The foregoing description of the employment agreement with Mr. Smith does
not purport to be complete and is qualified in its entirety by the terms and
conditions of that employment agreement, a copy of which is filed as Exhibit
10.2 to this Form 8-K and is incorporated by reference.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
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Appointment of Principal Officers.
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David F. Olson was appointed as President and Chief Operating Officer of
Proxim Wireless Corporation effective September 14, 2005. The terms of his
employment agreement are described above under Item 1.01. There is no family
relationship between Mr. Olson and any directors or executive officers of
Terabeam, Inc. or Proxim Wireless Corporation.
From July 2005 to September 2005, Mr. Olson was Senior Vice President
Operations and Global Sales for Terabeam. Prior to joining Terabeam, Mr. Olson
held a variety of roles of increasing responsibility at Proxim Corporation
beginning in April 2003. From April 2003 until September 2004, he was its Senior
Vice President of Operations. From October 2004 to July 2005, he served as its
Senior Vice President, Global Sales and Operations. In late 2002, Mr. Olson
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served as interim COO for Danger, Inc. From January 2002 to September 2002, Mr.
Olson served as President and CEO for iGO, Inc., leading that company's
restructuring and eventual acquisition. From November 1999 to December 2001, Mr.
Olson served as Vice President of Sales/ Operations/ Services for Sky Stream
Networks. Prior to that he held management positions at Avid Technologies and
Sun Microsystems.
The foregoing disclosure is for informational purposes and does not
constitute an admission that Mr. Olson occupies any of the positions for which
disclosure is required pursuant to Item 5.02 of Form 8-K.
Item 9.01 Financial Statements and Exhibits.
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(c) Exhibits
See Exhibit Index.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TERABEAM, INC.
Dated: December 12, 2005 By: /s/ David L. Renauld
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David L. Renauld
Vice President
EXHIBIT INDEX
Number Title
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10.1 Amended and Restated Employment Agreement, effective
as of December 8, 2005, between Proxim Wireless
Corporation and David F. Olson and consented to by
Terabeam, Inc.
10.2 Employment Agreement, effective as of December 8, 2005,
between Proxim Wireless Corporation and Geoff Smith.
99.1 Press release dated December 12, 2005.
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