Severance Change in Control



 

EX-10.13 17 dex1013.htm OFFER LETTER DATED 4/9/2003 BY AND BETWEEN THE REGISTRANT AND CRAIG BARRATT

 

EXHIBIT 10.13

 

April 9, 2003

 

Craig Barratt

1060 Lakeview Way

Redwood City, CA 94062

 

Dear Craig:

 

On behalf of the Board of Directors (the “Board”), I am pleased to confirm our offer to you of the position of President and Chief Executive Officer of Atheros Communications, Inc. (the “Company”). You will report directly to the Board, which will recommend you for election to the Board. Your duties will be commensurate with those of a president and chief executive officer of a similarly situated technology company. Your base salary will be $258,000 annually and will be paid in accordance with our standard payroll practices. Other components of the compensation package are as follows:

 

Bonus: You will be eligible for an annual bonus pursuant to the Company’s bonus program as determined by the Board.

 

Benefits: You will be entitled to participate in, and receive benefits under, the Company employee benefit plans, programs and arrangements that are or may be available from time to time to any executive officer of the Company. For the purposes of determining vacation accrual, your years of service will be increased by 2 years.

 

Equity: Subject to approval of the shareholders of the Company for an increase in the number of shares of common stock authorized for issuance under the Company’s Stock Incentive Plan (the “Plan”), you will be granted options under the Plan to purchase 1.7 million shares of common stock of the Company at an exercise price equal to the fair market value of the common stock on the date of grant, as determined by the Board. The options will be intended to qualify as incentive stock options under section 422 of the Internal Revenue Code to the maximum extent permitted under the applicable limitations. The options will be subject to the terms and conditions of the Plan and a stock option agreement to be entered into between you and the Company in the standard form approved by the Company, which provides for vesting over four years from the date of grant. The stock option agreement will also contain a provision for partial acceleration of vesting under certain circumstances following a change of control, as provided below.

 

Change of Control: In the event that your employment is terminated by the Company without Cause (as defined below) or you terminate your employment for Good Reason (as defined below), in either case within twelve (12) months following a Change of Control (as defined below), and you sign and do not revoke within the time period specified by the Company a standard release of claims in a form acceptable to the Company, then fifty percent (50%) of the then unvested shares subject to options granted by the Company to you prior to the Change of Control shall become fully vested and the Company’s right of repurchase with respect thereto shall lapse as of the date of termination. This provision shall apply only in the event your options are assumed,

 


substituted or otherwise continued by the continuing or successor entity following the Change of Control, or the continuing or successor entity has a right of repurchase with respect to unvested shares purchased by you upon exercise of unvested options prior to the Change of Control (or with respect to the proceeds payable in respect of such unvested shares pursuant to the Change of Control transaction).

 

Severance: If (i) the Company terminates your employment other than for Cause, (ii) your employment is terminated due to death or your total and permanent disability (as determined under the Company’s long-term disability policy), or (iii) you terminate your employment for Good Reason, and (except in the event of death) you sign and do not revoke within the time period specified by the Company a standard release of claims in a form acceptable to the Company, then (a) you will be paid a lump sum severance at such time equal to six months base salary, (b) your option shares that would have vested during the six-month period immediately following your termination of employment shall become fully vested and the Company’s right of repurchase with respect thereto shall lapse (unless the provision described above for accelerated vesting of option shares under certain circumstances following a Change of Control applies), and (c) the period in which vested options may be exercised will be extended to the earlier of 2 years following your termination date, or 10 years following the original option grant. You specifically acknowledge that the modification of your previously granted options pursuant to this Agreement to provide for an extension of the post-termination exercise period under certain circumstances may cause the loss of incentive stock option status, if otherwise applicable, for those options.

 

For purposes of this agreement, the following definitions shall apply:

 

Change of Control” shall mean: (a) a merger, acquisition or similar transaction or series of related transactions in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated, (b) the sale, transfer or other disposition of all or substantially all of the assets of the Company, or (c) any reverse merger or acquisition in which the Company is the surviving entity but in which more than fifty percent (50%) of the Company’s outstanding voting stock is transferred to holders different from those who held the stock immediately prior to such merger.

 

Cause” means (a) intentional and material dishonesty in the performance of your duties for the Company; (b) conduct (including conviction of or plea of nolo contendere to a felony) which has a direct and material adverse effect on the Company or its reputation; (c) failure to perform your reasonable duties or comply with your obligations under this Agreement or the Company’s Confidential Information and Invention Assignment Agreement after receipt of written notice specifying the failure, if you do not remedy that failure within 10 business days of receipt of written notice from the Company, which notice will state that failure to remedy such conduct may result in termination for Cause. or (d) an incurable material breach of the Company’s Confidential Information and Invention Assignment Agreement, including without limitation theft or other misappropriation of the Company’s proprietary information.

 


Good Reason” shall mean: (a) any material reduction in your job title, duties and responsibilities (not including termination of your membership on the Board) not approved in writing by you; provided, however, that any reduction in title, duties or responsibilities occurring in connection with a Change of Control of the Company shall not constitute either Good Reason or a constructive termination of your employment; (b) any reduction in your base salary from that set forth herein or material reduction in your benefits compared to typical benefits offered to executives of the Company; or (c) any requirement that your principal place of business be relocated more than 25 miles from the current location of the Company’s principal place of business at 529 Almanor Avenue Sunnyvale, CA 94085.

 

Any successor to the Company (whether direct or indirect and whether by acquisition of stock or assets) shall assume all of the Company’s rights and obligations under this agreement, and the term “Company” shall include any such successor.

 

Notwithstanding the severance benefits described above, your employment with the Company will be “at will,” meaning that either you or the Company will be entitled to terminate your employment at any time and for any reason, with or without cause and with or without notice, without liability to you other than as expressly provided in this agreement. Any contrary representations, which may have been made to you, are superseded by this offer. This is the full and complete agreement between you and the Company on this matter. Although your job duties, title, compensation and benefits, as well as the Company personnel policies and procedures, may change from time to time (subject to your rights hereunder in any such event), the “at will” nature of your employment may only be changed in an express written agreement signed by you and a duly authorized member of the Compensation Committee of the Board.

 

By signing this letter agreement, you represent and warrant to the Company that you are under no contractual commitments inconsistent with your obligations to the Company. While you are a full time employee at the Company, you will abide by your duty of loyalty to the Company and will devote your full time, energy and attention to the interests of the Company, subject to your devotion of time to manage your personal assets and investments, to participate in charitable, professional and community activities and to service on boards of directors of other companies, provided such devotion of time does not materially interfere with your service to the Company. This offer is contingent on your executing the enclosed Arbitration Agreement. This offer is void unless accepted within 7 days of the date hereof.

 

This letter agreement may not be amended or modified except by an express written agreement signed by the Compensation Committee of the Board. The terms of this letter agreement and the resolution of any disputes will be governed by California law. If any term of this letter agreement is held to be invalid, void or unenforceable, the remainder of this letter agreement shall remain in full force and effect and shall in no way be affected, and the parties shall use their best efforts to find an alternative way to achieve the same result.

 


The Board is very excited about your assuming the role of President and CEO and we look forward to your positive response to this offer. Please confirm your acceptance of these terms by signing a copy of this letter and returning it to us as soon as possible. We look forward to your acceptance of this offer.

 

Yours sincerely,

 

Andy Rappaport, Member of the Board

the Company

 

I accept the offer of continued employment with the Company under the terms described in this letter. I acknowledge that this letter, the Proprietary Information and Inventions Agreement previously entered into between the Company and me, the attached Arbitration Agreement and various stock option agreements are the complete agreement concerning my employment with the Company and supersedes all prior and contemporaneous agreements and representations. I sign this letter voluntarily and not in reliance on any promises other than those contained in the letter.

 

Signed on:

 

4/9/03


 

 

 

By:

 

/s/ Craig Barratt


 

 

Date

 

 

 

 

 

Signature

 


ARBITRATION AGREEMENT

 

1.

To the maximum extent permitted by law, I, Craig Barratt, and Atheros Communications, Inc. (“the Company”), agree that, except as noted below, any controversy, claim or dispute arising out of or related to my employment or the termination thereof (“claims”) shall be arbitrated in accordance with the following procedure:

 

 

(a)

Any and all claims shall be submitted to final and binding arbitration before the American Arbitration Association (“AAA”) in the city closest to my place of work at the Company where the AAA has an office. Such arbitration shall be in accordance with the AAA’s then current version of the National Rules for the Resolution of Employment Disputes. The arbitrator shall be selected in accordance with the AAA’s selection procedures in effect at the time. Either party may initiate arbitration proceedings by filing a demand for arbitration with the AAA in the city closest to my place of work at the Company where AAA has an office.

 

 

(b)

The arbitrator shall have the authority to grant any relief authorized by law.

 

 

(c)

The arbitrator shall have exclusive authority to resolve all claims covered by this arbitration agreement, and any dispute relating to the interpretation, applicability, enforceability or formation of this arbitration agreement, including, but not limited to, any claim that all or any part of this arbitration agreement is void or voidable. Any issues involving the arbitrability of a dispute shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq.

 

 

(d)

The Company will pay all arbitration fees, deposits and administrative costs assessed by the AAA; except that I may be required to pay administrative fees to the AAA not to exceed the amount of the then-current filing fee for a civil action filed in the court of general jurisdiction in the state where I was last employed by the Company. The arbitrator shall have power to award attorneys’ fees, expert witness fees and costs according to statute, or according to a separate written agreement between the parties, or the National Rules for the Resolution of Employment Disputes of the AAA, but shall have no other power to award attorneys’ fees, costs or expert witness fees, and shall in no event award all or any portion of the Company’s attorneys fees, costs or expert witness fees against me.

 

 

(e)

The claims covered by the above include, but are not limited to, claims for wrongful termination, unpaid wages or compensation, breach of contract, torts, violation of public policy, claims for harassment or discrimination (including, but not limited to, race, sex, religion, national origin, age, marital status, medical condition, disability, or sexual orientation), claims for benefits (except where an employee benefit or

 


 

pension plan specifies a procedure for resolving claims different from this one), claims for physical or mental harm or distress, or any other employment-related claims under any federal, state or other governmental law, statute, regulation or ordinance, including, but not limited to, Title VII of the Civil Rights Act of 1965, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the California Fair Employment and Housing Act, and any other statutes or laws relating to an employee’s relationship with the employer, and claims related to the Proprietary Information and Inventions Agreement executed by me on                     . However, claims for workers’ compensation benefits and unemployment compensation benefits are not covered by this arbitration agreement, and such claims may be presented to the appropriate court or government agency.

 

 

(f)

Notwithstanding this agreement to arbitrate, neither party waives the right to seek through judicial process, preliminary injunctive relief to preserve the status quo or prevent irreparable injury before the matter can be heard in arbitration.

 

 

(g)

The arbitrator shall issue a written arbitration decision stating the arbitrator’s essential findings and conclusions upon which any award is based. A party’s right for review of the decision is limited to grounds provided under applicable law.

 

 

(h)

The parties agree that the arbitration shall be final and binding and any arbitration award shall be enforceable in any court having jurisdiction to enforce this arbitration agreement.

 

2.

BY AGREEING TO THIS BINDING ARBITRATION PROVISION, BOTH THE COMPANY AND I GIVE UP ALL RIGHTS TO TRIAL BY JURY, EXCEPT AS EXPRESSLY PROVIDED HEREIN.

 

3.

I agree that this agreement to arbitrate shall survive the termination of my employment.

 

4.

This is the complete agreement between me and the Company on the subject of arbitration of disputes. This agreement supersedes any prior or contemporaneous oral or written understanding on the subject. This agreement cannot be changed unless in writing, signed by me and a duly authorized member of the Company’s Board.

 

AGREED TO AND ACCEPTED:

 

 

 

 

 

 

 

 

 

 

/s/ Craig Barratt      


 

 

 

Dated:

 

4/9/03


(Signature)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

Craig Barratt

 

 

 

 

 

 

 

 

 

 

 


 

 

 

Dated:

 

 


 

 

 

 

 

 

 

 

 

 

 

 


Atheros Communications, Inc.

 

 

By:

 

 

 


 

 

 

 

 





EX-10.12 3 dex1012.htm SEVERANCE AND CHANGE IN CONTROL AGREEMENT - CRAIG BARRATT

EXHIBIT 10.12

SEVERANCE AND CHANGE IN CONTROL AGREEMENT

Craig Barratt

Address on File

Dear Craig:

This Severance and Change in Control Agreement (this “Agreement”) amends the employment letter agreement dated April 9, 2003 (the “Prior Agreement”), by and between Atheros Communications, Inc. (the “Company”) and you. This Agreement supersedes any provisions in the Prior Agreement relating to severance payments and benefits, including payments and benefits upon termination in the event of a change in control of the Company.

Severance. If (i) the Company terminates your employment other than for Cause (as defined below) or you terminate your employment for Good Reason (as defined below), in each case prior to a Change of Control (as defined below) or more than 12 months following a Change of Control, or (ii) your employment is terminated at any time due to death or your total and permanent disability (as determined by the Company’s long term disability policy), and provided in each such case (except in the event of death) that you sign and do not revoke within the time period specified by the Company a standard release of claims in a form mutually acceptable to the Company and you, then you will receive the following: (a) a lump sum severance payment within 30 days following your termination equal to 12 months of your base salary at the highest rate in effect during your employment with the Company; (b) your stock options and restricted stock units that would have vested during the 12-month period immediately following your termination of employment shall become fully vested (provided that any such restricted stock units that are subject to performance-based vesting shall only vest if the performance period ends within such twelve-month period, and only to the extent justified by the satisfaction of the performance goals prescribed for such awards); (c) the period in which your vested stock options may be exercised will be extended to the earlier of two years following your termination date or the original expiration of the option grant; and (d) if you properly elect to continue the Company’s group health plan coverage under COBRA, the continuation of your health coverage for you and your enrolled dependents at no cost to you for 12 months following the effective date of termination. You will be able to continue your health benefits beyond 12 months at your own expense as allowed under the Company’s health plans.

Change In Control: In the event of a Change of Control (as defined below), if your employment is terminated without Cause (as defined below) or you terminate your employment for Good Reason (as defined below), in either case within 12 months following the Change of Control, and provided that you sign and do not revoke within the time period specified by the Company (or its successor) a standard release of claims in a form mutually acceptable to the Company (or its successor) and you, then you shall receive the following: (a) a lump sum severance payment within 30 days following your termination equal to 18 months of your base salary at the highest rate in effect during your employment with the Company; (b) if you properly elect to continue the Company’s group health plan coverage under COBRA, continuation by the Company (or its successor) of your health coverage for you and your enrolled dependents at no cost to you for 18 months following the effective date of termination (you will be able to continue your health benefits beyond 18 months at your own expense if allowed under the Company’s health plans); (c) if not


already paid to you at the time of termination, your earned cash incentive bonus under the Company’s bonus plan in effect for the calendar year immediately prior to the termination, as determined by the Board of Directors, payable at the time of termination or the time at which the Board of Directors has determined the amount of the bonus, whichever is later; (d) your baseline target annual cash incentive bonus under the Company’s bonus plan in effect during the calendar year of the termination, pro rated for the portion of the then current calendar year prior to the date of termination, payable within 30 days after the date of your termination; (e) all of your unvested stock options and restricted stock units granted by the Company to you prior to the Change of Control and that have been assumed or substituted by the acquiring company, shall become fully vested as of the date of termination; and (f) the period in which vested stock options may be exercised will be extended to the earlier of two years following your termination date or the original expiration date of the option grant.

Change of Control” means: (a) any merger, acquisition or similar transaction or series of related transactions in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated, (b) the sale, transfer or other disposition of all or substantially all of the assets of the Company, or (c) any reverse merger or acquisition in which the Company is the surviving entity but in which more than fifty percent (50%) of the Company’s outstanding voting stock is transferred to holders different from those who held the stock immediately prior to such merger.

Cause” means (a) intentional and material dishonesty in the performance of your duties for the Company; (b) conduct (including conviction of or plea of nolo contendere to a felony) which has a direct and material adverse effect on the Company or its reputation; (c) failure to materially perform your reasonable duties or comply with your obligations under this Agreement or the Company’s Confidential Information and Invention Assignment Agreement after receipt of written notice specifying the failure, if you do not remedy that failure within 10 business days of receipt of written notice from the Company, which notice will state that failure to remedy such conduct may result in termination for Cause; or (d) an incurable material breach of the Company’s Confidential Information and Invention Assignment Agreement, including, without limitation, theft or other misappropriation of the Company’s proprietary information.

Good Reason” means (a) any material reduction in your authorities, duties or responsibilities not approved in writing by you (not including termination of your membership on the Board); provided, however, that any reduction in your authorities, duties or responsibilities occurring in connection with a Change in Control of the Company shall not constitute either Good Reason or a constructive termination of your employment; (b) any material reduction in your then current base salary plus target bonus opportunity compensation; or (c) any requirement that your principal place of work for the Company be relocated more than 50 miles from its then current location. Notwithstanding the foregoing, a termination shall not be considered to be for “Good Reason” unless you notify the Company of the existence of the condition constituting Good Reason within 90 days following the initial existence thereof, the Company fails to remedy the condition within 30 days following the receipt of such notice, and you terminate employment within 120 days following the initial existence of such condition.

All payments and benefits under this Agreement shall be subject to applicable withholding taxes.

 

2


Section 409A:

 

 

 

If, as of the date of your “separation from service” from the Company, you are a “specified employee” (each, for purposes of this Agreement, within the meaning of Section 409A of the Internal Revenue Code of 1986 (the “Code”) and the guidance issued thereunder (“Section 409A”)), then each payment under this Agreement that would otherwise be paid within the six-month period following your “separation from service” shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, the date of your death), with any such payment that is required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and subsequent payments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any payments if and to the maximum extent that such payments are excluded from the definition of nonqualified deferred compensation subject to Section 409A, or can otherwise be paid during such six-month period without violating the requirements of Section 409A(a)(2) under applicable guidance under Section 409A. Such payments shall bear interest at an annual rate equal to the prime rate as set forth in the Eastern edition of the Wall Street Journal on the date of termination, from the date of termination to the date of payment.

 

 

 

Your date of termination for purposes of determining the date that any payment that is treated as nonqualified deferred compensation under Section 409A is to be paid or provided (or in determining whether an exemption to such treatment applies), shall be the date on which you have incurred a “separation from service” within the meaning of applicable Treasury Department or Internal Revenue Service guidance under Section 409A.

Section 280G:

In the event that any benefits payable to you pursuant to this Agreement (“Termination Benefits”) (i) constitute “parachute payments” within the meaning of the Code, and (ii) but for this paragraph would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then your Termination Benefits shall be reduced to such lesser amount which would result in no portion of such benefits being subject to the Excise Tax. Unless the Company and you otherwise agree in writing, any determination required under this paragraph shall be made in writing in good faith by a nationally recognized accounting firm selected by the Company (the “Accountants”). In the event of a reduction of benefits hereunder, benefits shall be reduced in the order which results in the greatest economic benefit to you. For purposes of making the calculations required by this paragraph, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code, and other applicable legal authority. The Company and you shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this paragraph. The Company shall bear the cost of all fees the Accountants charge in connection with any calculations contemplated by this paragraph.

Nothing in this Agreement shall alter the at-will nature of your employment or provide an obligation express or implied for the payment of severance except as expressly provided herein.

 

3


Except as amended hereby, all other terms and conditions of the Prior Agreement shall remain in full force and effect. This Agreement and the Prior Agreement constitute the complete and entire agreement among the parties relating to the subject matter thereof, and there are no prior or contemporaneous oral or written representations, promises or agreements not expressly set forth therein. This Agreement may not be modified in any respect except by a writing dated and signed by the parties hereto.

In order to confirm your agreement with and acceptance of the foregoing provisions of this Agreement, please sign one copy of this letter and return it to Sharon Thompson. The other copy is for your records.

 

Very truly yours,

ATHEROS COMMUNICATIONS, INC.

By:

 

/s/ Andrew Rappaport

Title:

 

Chairman, Compensation Committee

The undersigned agrees to the amendment of the Prior Agreement set forth in this Severance and Change in Control Agreement.

 

/s/ Craig Barratt

 

 

2/13/09

 

 

Craig Barratt

 

 

Date

 

 

4