EXHIBIT 10.1
ROBERT C. FITTING
Chief Executive Officer
[RADYNE COMSTREAM LOGO]
June 18, 2003
HAND DELIVERED
Mr. Richard P. Johnson
[Address]
Re: Change in Control Agreement
Dear Rich:
Upon execution by you, this letter will constitute your Change in Control
Agreement ("Agreement") with Radyne ComStream Corp., (the "Company").
1. Term. This Agreement will become effective June 18, 2003 and will
terminate when you terminate your employment with the Company.
2. Termination in Connection with a Change in Control. In the event of a
Change of Control (as defined in the Company's Long-Term Incentive
Plan, a copy of which definition is attached), you will be entitled to
receive the following:
(a) Immediately prior to the effective date of a Change of
Control, all stock options granted to you and not otherwise
vested shall vest and become exercisable by you for a minimum
of 90 days (or, if longer, the term thereof) so that you may
participate in the Change of Control transaction to the
fullest extent feasible, provided, however, that if the
acceleration of your options would cause a charge to the
Company's earnings, then at the Company's option it may offer
you a consulting position for the term of your options during
which your options would continue to vest;
(b) Upon any termination of your employment after a Change of
Control, for a period of eighteen months from the date of your
termination, the Company will pay for the COBRA benefits due
you;
(c) If you are terminated without Cause (as defined in the
attachment), or you resign for Good Reason (as set forth in
the attachment) within the first twenty-four (24) months
following the Change in Control, upon such event you shall be
paid in a lump sum an amount equal to two times your current
salary from the Company;
Richard P. Johnson - Change in Control Agreement (continued)
(d) Upon a Change in Control, funds sufficient to satisfy your
Change of Control payments in (c) or (d) above shall be
deposited into a trust account maintained by a major financial
institution and shall be paid to you upon your written notice
to the Trustee to the effect that you have been terminated
without Cause or you have resigned for Good Reason. The
Company shall not have the ability to prevent such payment
from the trust upon your notice, but shall have the right to
dispute your termination as provided in Section 8 below, and
pursue all other available remedies;
(e) To the extent that the benefits provided to you upon a Change
in Control would exceed the amount deductible pursuant to
Section 280G of the Internal Revenue Code (or any successor
law), or the rules and regulations thereunder, and thereby
result in an excise tax payable by you, then at least 30 days
prior to the due date of any such tax, the Company shall pay
you an amount equal to the tax (together with any tax on such
payment).
3. Covenant Not to Compete.
(a) For a period of 1 year from any termination of your
employment, (or, if later, upon conclusion of your service as
a consultant), you shall not, directly or indirectly, for your
own benefit or for, with or through any other individual,
firm, corporation, partnership or other entity, whether acting
in an individual, fiduciary or other capacity, own, manage,
operate, control, advise, invest in (except as a 1% or less
shareholder of a public company), loan money to, or
participate or assist in the ownership, management, operation
or control of or be associated as a director, officer,
employee, partner, consultant, advisor, creditor, agent,
independent contractor or otherwise with, or acquiesce in the
use of your name by, any business enterprise that is in direct
competition with the Company or any subsidiary within the
United States of America or any other country that the Company
conducts business at the time of your termination.
(b) In addition to the foregoing, at all times during the period
of your employment and for 1 year after any termination
thereof (or, if later, upon conclusion of your services as a
consultant), you will not, directly or indirectly (as
described above), for your benefit or for, with or through any
business, hire, employ, solicit, or otherwise encourage or
entice any of the Company's (or subsidiary's) employees or
consultants to leave or terminate their employment with the
Company.
(c) You and the Company consider the restrictions contained in
subparagraphs (a) and (b) above to be reasonable for the
purpose of preserving the Company's proprietary rights and
interests. If a court makes a final judicial determination
that any such restrictions are unreasonable or otherwise
unenforceable against you, you and the
Page 2 of 7
Richard P. Johnson - Change in Control Agreement (continued)
Company hereby authorize such court to amend this Agreement so
as to produce the broadest, legally enforceable agreement, and
for this purpose the restrictions on time period, geographical
area and scope of activities set forth in subparagraphs (a)
and (b) above are divisible; if the court refuses to do so,
you and the Company hereto agree to modify the provisions held
to be unenforceable to preserve each party's anticipated
benefits thereunder to the maximum extent legal.
(d) You acknowledge and agree that the Company's remedies at law
for breach or threatened breach of any of the provisions of
this Paragraph would be inadequate. Therefore, you agree that
in the event of a breach or threatened breach by you of the
provisions in this Paragraph, the Company shall be entitled
to, in addition to its remedies at law and without posting any
bond, equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent
injunction, or any other equitable remedy that may then be
available.
4. Personal Rights and Obligations. This Agreement and all rights and
obligations hereunder are personal and shall not be assignable by
either you or the Company except as provided in this subparagraph, and
any purported assignment in violation thereof shall be null and void.
Any person, firm or corporation succeeding to the business of the
Company by merger, consolidation, purchase of assets or otherwise,
shall assume by contract or operation of law the obligations of the
Company hereunder and in such a case you shall continue to honor this
Agreement with such business substituted for the Company as the
employer.
5. Notices. Any notice, election or communication to be given under this
Agreement shall be in writing and delivered in person or deposited,
certified or registered, in the United States mail, postage prepaid,
addressed as follows:
If to the Company: Radyne ComStream Corp.
3138 East Elwood Street
Phoenix, Arizona 85034
Attn: Chief Executive Officer
If to you: Richard P. Johnson
[Address]
or to such other addresses as the Company or you may from time to time
designate by notice hereunder. Notices will be effective upon delivery
in person or upon receipt of any facsimile or e-mail, or at midnight on
the fourth business day after the date of mailing, if mailed.
6. Entire Agreement. Except for any confidentiality agreement, option
grants or Company plans or policies, to which you are subject, this
Agreement constitutes and embodies the full and complete understanding
and agreement of the Company and you with respect to your employment by
the Company and
Page 3 of 7
Richard P. Johnson - Change in Control Agreement (continued)
supersedes all prior understandings or agreements whether oral or in
writing. This Agreement may be amended only by a writing signed by you
and the Company. This Agreement may be executed in any number of
counterparts, each of which will be considered a duplicate original.
7. Binding Nature of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns and
shall be binding upon you, your heirs and legal representatives.
8. Arbitration. Any controversy relating to this Agreement or relating to
the breach hereof shall be settled by arbitration conducted in Phoenix,
Arizona in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect. The award rendered by
the arbitrator(s) shall be final and judgment upon the award rendered
by the arbitrator(s) may be entered upon it in any court having
jurisdiction thereof. The arbitrator(s) shall possess the powers to
issue mandatory orders and restraining orders in connection with such
arbitration. The expenses of the arbitration shall be borne by the
losing party unless otherwise allocated by the arbitrator(s). This
agreement to arbitrate shall be specifically enforceable under the
prevailing arbitration law. During the continuance of any arbitration
proceedings, the parties shall continue to perform their respective
obligations under this Agreement. Nothing in this Agreement shall
preclude the Company or any affiliate or successor from seeking
equitable relief, including injunction or specific performance, in any
court having jurisdiction, in connection with the non-compete
provisions herein and any obligations of confidentiality.
9. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Arizona.
10. Withholding and Release. You acknowledge and agree that payments made
to you hereunder may be subject to taxes and withholding. You further
acknowledge and agree that payment of any of the benefits to be
provided to you under this Agreement following any termination of your
employment is subject to:
(a) your compliance with your agreements hereunder, including in
particular the non-competition provisions of Paragraph 3,
(b) any reasonable and lawful policies or procedures of the
Company relating to employee severances; and
(c) the execution and delivery by you of a release reasonably
satisfactory to the Company of any and all claims that you may
have against the Company or related persons, except for (i)
the continuing obligations provided herein, and (ii) for any
continuing obligations of indemnification due you as an
officer or director (or a former officer or director).
Very truly yours,
Page 4 of 7
Richard P. Johnson - Change in Control Agreement (continued)
________________________________________
Robert C. Fitting
Chief Executive Officer
ACCEPTED:
_______________________________
Richard P. Johnson
Date: _________________________
Page 5 of 7
Richard P. Johnson - Change in Control Agreement (continued)
DEFINITIONS
"Cause" means in the event that you, in the reasonable judgment of the
Board:
(1) materially breach this Agreement;
(2) fail to follow any reasonable and lawful direction of the
Board of Directions of the Company or materially violate any
reasonable rule or regulation established by the Company from
time to time regarding conduct of its business;
(3) engage in any act of dishonesty with respect to the Company;
(4) engage in criminal conduct (whether related to or not related
to your employment); or
(5) fail to perform your duties satisfactorily.
"Change of Control" means any of the following:
(1) any merger of the Company in which the Company is not the
continuing or surviving entity, or pursuant to which Stock
would be converted into cash, securities, or other property
other than a merger of the Company in which the holders of the
Company's Stock immediately prior to the merger have the same
proportionate ownership of beneficial interest of common stock
or other voting securities of the surviving entity immediately
after the merger;
(2) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of assets or
earning power aggregating more than 50% of the assets or
earning power of the Company and its subsidiaries (taken as a
whole), other than pursuant to a sale-leaseback, structured
finance or other form of financing transaction;
(3) the shareholders of the Company approve any plan or proposal
for liquidation or dissolution of the Company;
(4) any person (as such term is used in Section 13(d) and 14(d)(2)
of the Exchange Act), other than any current shareholder of
the Company or affiliate thereof or any employee benefit plan
of the Company or any subsidiary of the Company or any entity
holding shares of capital stock of the Company for or pursuant
to the terms of any such employee benefit plan in its role as
an agent or trustee for such plan, shall become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange
Act) of 50% or more of the Company's outstanding Stock; or
(5) during any two-year period, individuals who at the beginning
of such period do not constitute a majority of the Board at
the end of
Page 6 of 7
Richard P. Johnson - Change in Control Agreement (continued)
that period, excluding any new director approved by a vote of
at least two-thirds of the directors who were directors at the
beginning of the period.
"Good Reason" means, without your consent:
(1) suffer a reduction in position or a material change in your
functions, duties or responsibilities;
(2) your annual salary is reduced by the Company or there is a
material reduction in your current benefits (other than a
reduction in benefits as part of overall reduction applicable
to all or substantially all other officers arising out of
deteriorating economic conditions effecting the Company); or
(3) you are required to reside other than in Maricopa County,
Arizona.
Page 7 of 7