_____________ __, 2003
Mr. E. Van Cullens
Chief Executive Officer
Westell Technologies, Inc.
750 N. Commons Drive
Aurora, Illinois 60504
Dear Van:
I am pleased to advise you that the Compensation Committee of the Board
of Directors of Westell Technologies, Inc. (the "Company") has approved a
deferred incentive compensation program for you effective for the Company's
fiscal year ended March 31, 2004 and subsequent fiscal years.
The amount of deferred incentive compensation to be awarded to you in
each year you serve as Chief Executive Officer of the Company shall be based on
the Company's Consolidated Net Income Before Income Taxes as set forth in the
Company's audited financial statements for March 31, 2004 and subsequent fiscal
years plus any gain on the sale of the Company's interest in Conference Plus,
Inc. The amount of the award shall be determined in accordance with Exhibit A
attached to this letter.
Your rights to the deferred compensation awarded to you under this
program shall vest on March 31, 2006 if you are employed by the Company on that
date. Any amounts earned
Mr. E. Van Cullens
_____________ __, 2003
Page 2
by you in the fiscal years ending after March 31, 2006 will be fully vested at
the time the amounts are determined as set forth above. The amounts earned under
the program will also be fully vested in the event of your death or termination
of employment by permanent and total disability prior to March 31, 2006 or upon
a change in control of the Company (as defined in the Company's employment offer
to you dated June 28, 2001). Any amounts which you may earn under the program
prior to March 31, 2006 will be forfeited if you terminate employment in any
other manner prior to that date.
Unless you elect otherwise, the deferred incentive compensation earned
by you and vested hereunder will be paid to you upon your retirement or other
termination of employment. You may elect to receive part or all of any amounts
earned and vested hereunder on a date or dates earlier than your retirement or
other termination of employment. Any such election must be made on or before
September 30, 2005. You may amend your election to further defer receipt of
amounts earned under the program to a later date by providing the Company
written notice not less than six months prior to the date the first payment is
otherwise due to be made under the program.
Your vested earnings under this program will be paid to you either in a
lump sum or in equal installments over a period of not more than ten years, as
you may elect. Installment payments will bear interest at a rate equal to the
yield on 90-day securities of the United States, or any agency or
instrumentality thereof.
Mr. E. Van Cullens
_____________ __, 2003
Page 3
Any amounts you earn under this program will be credited to a
bookkeeping account on the Company's books. The amount credited to this account
will be treated as if it were invested in accordance with the directions given
by you to the Company from time to time pursuant to the form of direction
attached as Exhibit B to this letter. The balance in the account will be
adjusted at the end of each calendar quarter while you are employed to reflect
any earnings or losses from these deemed investments.
The Company shall establish a rabbi trust and pay to the trust from
time to time an amount equal to any amount earned under the deferred incentive
compensation program as determined in accordance with Exhibit A. The amounts
contributed to the rabbi trust may be invested by the trustee to fund the
Company's obligations to make the deferred payments to you under the program.
Notwithstanding the foregoing, the balance in your deferred
compensation account will be paid to you in a lump sum within 30 days after a
change in control of the Company or within 90 days after your death or
termination of employment by permanent and total disability.
The Compensation Committee shall have the right to accelerate the
payment of vested amounts earned under this program in the event of substantial
hardship to you arising out of your mental or physical disability or that of any
member of your immediate family, the death of a family member or such other
cause as the Committee shall, in its sole discretion, determine to be a
substantial hardship.
Mr. E. Van Cullens
_____________ __, 2003
Page 4
You shall also have the right to withdraw any and all vested amounts
earned under this program (including any deemed earnings thereon) at any time
even though you are not otherwise entitled to withdrawal, provided that 5% of
the amount withdrawn shall be forfeited to the Company.
Your rights under the program will not be assignable by you or
otherwise transferable. However, you may designate your beneficiary or
beneficiaries to receive payments due under the program in the event of your
death. Your beneficiary designation will be effective only upon filing with the
Company's [Director of Human Resources]. A beneficiary designation form is
attached. In the event of your death without having designated a beneficiary,
any remaining unpaid amounts credited to you under the program will be paid to
your estate.
This program shall be interpreted under the laws of the state of
Illinois.
Very truly yours,
EXHIBIT A
Consolidated Deferred Compensation
Income Before Cumulative
Income Taxes* Rate Max Award Maximum
------------ ----- ---------- -------
Up to $2,500,000 5% $125,000 $ 125,000
Next $3,750,000 4% $150,000 $ 275,000
Next $6,250,000 3% $187,500 $ 462,500
Next $6,250,000 2% $125.000 $ 587,500
Next $6,250,000 1% $ 62,500 $ 650,000
*Plus any gain on the sale of the Company's interest in Conference Plus, Inc.