EMPLOYEE
SEVERANCE AGREEMENT
WHEREAS, the Board of Directors of CellNet Data Systems, Inc. (the
"Company") has determined it to be in the best interests of the Company and its
shareholders to provide Company executives holding stock options and restricted
stock purchase agreements with certain protection from events that could occur
in connection with certain chances of control of the Company, and
WHEREAS, to accomplish this objective and encourage such executives to
continue employment with the Company, the Company desires to enter into this
agreement,
NOW THEREFORE, for good and valuable consideration, the Company and the
undersigned individual ("Optionee") hereby agree as follows:
Unless otherwise defined herein, the terms defined in the applicable
Company stock option plans and stock option and restricted stock purchase
agreements shall have the same defined meanings therein.
1. VESTING ACCELERATION ON CHANGE OF CONTROL.
(a) VESTING ACCELERATION. In the event of a "Change of Control",
(i) all of the Optionee's rights to purchase stock under all stock option
agreements with the Company shall be automatically vested in their entirety on
an accelerated basis and be fully exercisable, and (ii) all of the Company's
rights to repurchase unvested stock under all restricted stock purchase
agreements with the Optionee shall lapse in their entirety on an accelerated
basis:
(A) as of the date immediately preceding such "Change of Control" in the
event any such stock option agreement or restricted stock purchase
agreement is or will be terminated or canceled (except by mutual consent)
or any successor to the Company fails to assume and agree to perform all
such stock option agreements and restricted stock purchase agreements as
provided in Section 2(a) hereof at or prior to such time as any such person
becomes a successor to the Company; or
(B) as of the date immediately preceding such "Change of Control" in the
event the Optionee does not or will not receive upon exercise of the
Optionee's stock purchase rights under any such stock option agreement or
in exchange for the Optionee's restricted stock acquired pursuant to any
such restricted stock purchase agreement the same identical securities
and/or other consideration as is received by all other shareholders in any
merger, consolidation, sale, exchange or similar transaction occurring upon
or after such "Change of Control"; or
(C) as of the date immediately preceding any "Involuntary Termination" of
the Optionee occurring upon or after any such "Change of Control"; or
(D) as of the date six (6) months following the first such "Change of
Control," provided that the Optionee shall have remained an employee of the
Company continuously throughout such six-month period:
whichever shall first occur (all quoted terms as defined below).
(b) CHANGE OF CONTROL. "Change of Control" means the occurrence of
any of the following events:
(i) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% of more of the total
voting power represented by the Company's then outstanding voting securities; or
(ii) A change in the composition of the Board of Directors of the
Company as a result of which fewer than a majority of the directors are
"Incumbent Directors." "Incumbent Directors" shall mean directors who either
(A) are directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board of Directors with the affirmative votes
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for election as a director without
objection to such nomination) of at least three-quarters of the Incumbent
Directors at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors of the Company);
or
(iii) The shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
the Company's assets.
(c) INVOLUNTARY TERMINATION. "Involuntary Termination" shall mean
(i) a termination by the Company of the Optionee's employment with the Company
other than for Cause; (ii) a material reduction of or variation in the
Optionee's duties, authority or responsibilities, relative to the Optionee's
duties, authority or responsibilities as in effect immediately prior to such
reduction or variation; (iii) a reduction by the Company in the base salary of
the Optionee as in effect immediately prior to such reduction; (iv) a material
reduction by the Company in the kind or level of employee benefits, including
bonuses, to which the Optionee was entitled immediately prior to such reduction,
with the result that the Optionee's overall benefits package is materially
reduced; or (v) the relocation of the Optionee to a facility or a location more
than thirty (30) miles from the Optionee's then present location.
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(d) CAUSE. "Cause" shall mean (i) any willful act of personal
dishonesty, fraud or misrepresentation taken by the Optionee in connection with
his or her responsibilities as an employee which was intended to result in
substantial gain or personal enrichment of the Optionee as the expense of the
Company and was materially and demonstrably injurious to the Company; (ii) the
Optionee's conviction of a felony on account of any act which was materially and
demonstrably injurious to the Company; or (iii) the Optionee's willful and
continued failure to substantially perform his or her principal duties and
obligations of employment (other than any such failure resulting from incapacity
due to physical or mental illness), which failure is not remedied in a
reasonable period of time after receipt of written notice from the Company. For
the purposes of this Section 1(d), no act or failure to act shall be considered
"willful" unless done or omitted to be done in bad faith and without reasonable
belief that the act or omission was in or not opposed to the best interests of
the Company. Any act or failure to act based upon authority given pursuant to a
resolution duly adopted by the Board of Directors of the Company or based upon
the advice of counsel for the Company shall be conclusively presumed to be done
or omitted to be done in good faith and in the best interests of the Company.
Notwithstanding anything herein to the contrary, the Optionee shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to the Optionee a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Board of
Directors of the Company at a meeting of the Board called and held for the
purpose (after reasonable notice to the Optionee and an opportunity for the
Optionee with Optionee's counsel to be heard before the Board) finding that in
the good faith opinion of the Board the Optionee was properly terminated for
Cause.
(e) VOLUNTARY RESIGNATION; TERMINATION FOR CAUSE. If the Optionee's
continuous status as an employee of the Company terminates by reason of the
Optionee's voluntary resignation (and not Involuntary Termination) or if the
Optionee's continuous status as an employee of the Company is terminated for
Cause, in either case prior to such time as accelerated vesting occurs as
provided in Section 1(a) hereof, then the Optionee shall not be entitled to
receive accelerated vesting under Section 1(a) hereof.
2. SUCCESSORS.
(a) COMPANY'S SUCCESSORS. Any successor to the Company (whether
direct or indirect and whether by purchase, merger or consolidation) shall
assume the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession.
(b) SUCCESSORS. The terms of this Agreement and all rights of the
Optionee hereunder shall inure to the benefit of, and be enforceable by, the
Optionee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
3. MODIFICATION; WAIVER. No provision of this Agreement shall be
modified or waived unless the modification or waiver is agreed to in writing and
signed by the Optionee and by an authorized officer of the Company (other than
the Optionee).
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4. ENTIRE AGREEMENT. This Agreement, together with all present and
future stock option agreements and restricted stock purchase agreements entered
into between the Company and the Optionee represent the entire agreement of the
parties hereto with respect to the subject matter thereof. In the event of any
conflict between the terms of this Agreement and the terms of any such present
or future stock purchase agreements, the terms of this Agreement shall prevail.
5. CHOICE OF LAW; ARBITRATION. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of California. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
San Francisco, California by three arbitrators in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction. The Company shall bear
all costs and expenses arising out of or in connection with any arbitration
pursuant to this Section 5.
6. NO EMPLOYMENT AGREEMENT. This Agreement shall not constitute an
employment agreement. The Optionee's employment with the Company shall
constitute employment "at-will," unless otherwise provided in some other written
agreement between the Company and the Optionee.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the date and year set
forth below.
COMPANY CELLNET DATA SYSTEMS, INC.
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By:
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Date:
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OPTIONEE
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Name:
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Date:
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