June 28, 2001
Mr. E. Van Cullens
237 Lansing Island Drive
Indian Harbour Beach FL
32937
Dear Van;
Confirming our recent conversations, I am pleased to extend an
employment offer to you on behalf of Westell, Inc. (the "Company"). Your
employment begins on the date you accept this offer, as specified below (the
"Effective Date"). On July 2, 2001 ( the "Election Date" ) you will be elected
to the positions of CEO of both the Company and its parent Westell Technologies,
Inc. ("WTI") and shall also be elected to the boards of both companies. You will
devote your best efforts and skills to the business and interests of the Company
on a full-time basis based in the Company's Aurora, Illinois office (and will be
expected to travel in accordance with the requirements of the position). You
agree that you will relocate your principal residence to the Chicago area no
later than December 31, 2001.
The terms of our employment offer being extended to you include:
a) a starting base salary of $450,000 annualized beginning on the
Effective Date,
b) a $200,000 signing bonus payable on the Election Date,
c) a $150,000 bonus opportunity for the fiscal year 2002 at 100%
performance target. (The FY `02 bonus has been converted from a cash
payment opportunity to a stock option, as described below, which will
be granted outside the 1995 Incentive Stock Plan. For this purpose you
will treated as if you had been employed since April 1, 2001),
d) an executive tax and financial planning reimbursement benefit with a
cap of $5,000 per year,
e) all other employee benefits customarily available to executives of WTI,
f) a relocation package in accordance with traditional arrangements for
executives, which you acknowledge may be taxable to you,
g) Initiation, dues and assessments of a local country club membership
(including tennis and social benefits), which you acknowledge may be
taxable to you, and
h) A Severance Agreement, as attached.
You agree that the relocation payments shall be repayable to the
Company if you leave voluntarily without Good Reason (as defined in the
Severance Agreement) within one year from your relocation, and that your signing
bonus will be repayable to the Company if you leave voluntarily without Good
Reason within one year of your first day of employment.
In addition, you are being granted non-qualified options as follows:
(i) an option granted outside the 1995 Incentive Stock Plan for one
million (1,000,000) shares of WTI Class A common stock,
exercisable at the average of the high and low reported sale
price on NASDAQ on the Effective Date, vesting 25% per year on
each annual anniversary of the Effective Date, but subject to
100% accelerated vesting upon a Change in Control, as defined
below.
(ii) an option granted outside the 1995 Incentive Stock Plan for an
additional four hundred (400,000) shares of WTI Class A common
stock, exercisable at the average of the high and low reported
sale price on NASDAQ on the Effective Date ( but not less than
$2.00 ), not vesting until seven (7) years from the Effective
Date, but with 100% accelerated vesting on the earlier of such
seventh anniversary or in the event of four (4) consecutive
profitable quarters, determined in accordance with GAAP and
reported in WTI's reports filed with the SEC (in the case of the
fourth quarter of any fiscal year, as determined by the auditors
in connection with their preparation of the 10-k annual report)
(iii)an option granted outside the 1995 Incentive Stock Plan for an
additional four hundred (400,000) shares of WTI Class A common
stock, exercisable at a price of $5.00 per share, not vesting
until seven (7) years from the Effective Date, but with 100%
accelerated vesting on the earlier of such seventh anniversary or
in the event that WTI's closing stock price, as reported on
NASDAQ or on such other primary stock market as WTI's Class A
common stock may then be traded, is $20 or more for 40
consecutive days on which such exchange is open for trading.
WTI will file an S-8 registration statement with the SEC registering
your exercise of options prior to the date any option becomes
exercisable.
For the purposes of the option referred to in clause (i) above, "Change
in Control" shall be deemed to have occurred if at any time (i) all or
substantially all of the assets of WTI are sold as an entirety to any person or
group (within the meaning of Section 13(d) of the Securities Exchange Act of
1934 ("Exchange Act")), or (iii) any person or group (as defined in Rule 13d-3
under the Exchange Act) other than the Florence Penny and her descendants or the
Voting Trustees under the 1994 Voting Trust Agreement, as amended (collectively,
the "Majority Holder") become, directly or indirectly, the beneficial owner as
defined in Rule 13d-3 under the Exchange Act of more than 50% of the total
voting power entitled to vote in the election of directors of WTI, other than
pursuant to voting agreements entered into in connection with specific
transactions, and the Majority Holder no longer directly or indirectly, is the
beneficial owner as so defined of more than 50% of
the total voting power entitled to vote in the election of directors of WTI;
provided, however, that a Change of Control shall not be deemed to have occurred
in the event of a merger of WTI with or into another entity of which the
Majority Holder directly or indirectly, is the beneficial owner as so defined of
more than 50% of the total voting power entitled to vote in the election of
directors.
The number of shares covered by the stock option substitution for FY
'02 cash bonus plan shares is determined by dividing your $150,000 target bonus
opportunity by the average of the high and low reported sale price on NASDAQ on
the Effective Date. Those shares will not vest for seven years and shall vest
100% seven years from the Effective Date, unless a percentage of your bonus plan
criteria is met by the conclusion of the current fiscal year. Whatever portion
of the performance criteria is met (up to 100% ) at by the conclusion of the
fiscal year will be multiplied by the number of shares covered by the stock
option substitution. That portion of shares will be immediately vested 100% at
the conclusion of this current fiscal year and be immediately exercisable.
If 80% of the bonus criteria were achieved this fiscal year, 80% of the
full number of shares covered by your stock option substitution would become
fully vested and exercisable at the end of April, 2002. The 20% balance would
become vested and exercisable only at year seven.
All of the compensation and benefit items that make up your terms of
employment are extended with the rights as well as the conditions of Westell's
policies that govern them. Without limitation of the foregoing, you acknowledge
that you are an employee at will, entitled upon termination solely to the
benefits, if any, provided for in the Severance Agreement attached.
All compensation is payable net of applicable withholding.
You represent and warrant that performance of your duties to the
Company and WTI will not breach any covenants or duties to former employers. You
have provided to the Company copies of any restrictive covenants currently
binding upon you.
The Company will offer certain severance protection as follows, for
employees whom the Company hires during the first six months of your employment
and whom you have recommended, based upon your having worked with them in prior
business relationships ("Protected Employees"). If you leave Company employment
for any reason (other than termination for cause) during the first six months of
a Protected Employee's employment with the Company, and if the Protected
Employee is also terminated (other than for cause) or resigns within that first
six months of his employment, he shall be entitled to six months base pay as
severance.
Please sign and return one copy of this letter and the Severance
Agreement for our records confirming your acceptance of this offer no later than
July 2, 2001.
Sincerely,
Westell Technologies, Inc.
By___________________
John Seazholtz, Chairman
Accepted and Agreed this 28th day of June, 2001:
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E. Van Cullens