EXHIBIT 10.19
 
[Symmetricom Logo]
Change of Control Agreement
Company Confidential
 
February 25, 2002
 
Issued To: Anthony “Tony” Lavia
 
The Board and I expect that from time to time Symmetricom will entertain the
possibility of acquiring other companies, or merging with other companies in one
or more transactions. The Board recognizes that this can be a distraction to
valued executives such as you and could prompt executives such as you to
consider alternative employment possibilities. The Board has determined that it
is in the best interests of Symmetricom and its stockholders to assure that
Symmetricom will have the continued dedication and objectivity of its key
executives, should we entertain transactions which could result in a change of
control. For this reason, on behalf of the Board of Directors of Symmetricom,
Inc., I am pleased to deliver this letter setting forth certain compensation
related arrangements that will apply to you in the event that the Symmetricom
experiences a “Change of Control” (as that term is defined later in this letter)
as set forth herein.
 
Change of Control Benefits.
 
You will receive the following Change of Control benefits if, within twelve (12)
months after a Change of Control: (i) your employment is involuntarily
terminated either by Symmetricom or any successor corporation following a merger
or acquisition for reasons other than for “cause”; or (ii) you “resign with good
cause”:
 
Severance Pay.    Severance pay equal to twelve (12) months base salary (at the
rate in effect at the time of the termination) to be paid on Symmetricom’s
regularly scheduled pay periods. In addition, the annual target bonus would be
paid at the time specified in the annual plan document.
 
Insurance.    Reimbursement for a period of twelve (12) months for the cost of
continuing your group medical, dental, vision, life and disability benefits
(and, if applicable, the costs for your dependent’s medical, dental and vision
benefits) to the same extent that Symmetricom was paying for those benefits
during the three months prior to such termination. To be eligible for this
reimbursement, you must elect to continue these benefits by completing the
necessary “COBRA” paperwork within thirty (30) days of your termination date.
The Human Resources Department will provide you with requisite forms when you
receive a formal COBRA Notice letter.
 
Stock Vesting.    Vesting on all options will be accelerated to be fully vested
as of the date of termination.
 
For purposes of this letter, the following key terms shall have the meaning set
forth below:
 
“Cause” shall mean any of the following:
 

 
(i)
 
the Board reasonably concludes that you have committed a material act of
dishonesty or fraud;

 

 
(ii)
 
you are convicted of a felony; or

 

 
(iii)
 
you have grossly neglected significant duties that are part of your normal job
duties or you have violated a material written policy of Symmetricom or its
successor, other than as a result of incapacity due to physical or mental
illness, and that you continue the neglect of duties or violation of policy,
after: (A) being warned in writing, and (B) having had a reasonable opportunity
to cure. The length of such cure period is to be determined solely by the Board
of Directors; taking into account the nature of the conduct, but in no event
shall the cure period be less than 30 days.

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“Change of Control” shall mean:
 

 
(i)
 
the merger or consolidation of the Company with or into, or the sale, lease or
other disposition of all or substantially all the assets of the Company to,
another entity or group of entities where at least 50% of the combined voting
power of the continuing, surviving or acquiring entity’s outstanding securities
immediately after such merger, consolidation, or acquisition is owned by persons
who were not shareholders of the Company immediately prior to such merger,
consolidation or other reorganization, or

 

 
(ii)
 
the acquisition, directly or indirectly, of capital stock representing more than
45% of the voting power of the then outstanding shares of the Company’s capital
stock by any person or persons acting as a group; provided, however, that a
Change of Control shall not include any acquisition of capital stock by a
subsidiary of Symmetricom; an employee stock ownership plan for employees of
Symmetricom; or a company formed to hold Symmetricom’s common equity securities
and whose shareholders constituted, at the time of such company became such
holding company, substantially all of the shareholders of Symmetricom; or

 

 
(iii)
 
a change in the composition of Symmetricom’s Board of Directors occurring within
a two-year period, 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 Symmetricom as of the date hereof, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority 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 to Symmetricom); or

 

 
(iv)
 
the consummation of a merger or consolidation of Symmetricom with any other
corporation, other than a merger or consolidation which would result in the
voting securities of Symmetricom 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-five percent
(55%) of the total voting power represented by the voting securities of
Symmetricom or such surviving entity outstanding immediately after such merger
or consolidation.

 
“Resignation with Good Cause” shall mean that you resigned your position:
 

 
(i)
 
due to a reduction in your total cash compensation package; or

 

 
(ii)
 
a move of your primary place of work by Symmetricom or its successor of more
than 30 miles from your place of work immediately prior to the move; or

 

 
(iii)
 
a significant reduction in your duties, position or responsibilities relative to
your duties position or responsibilities in effect immediately prior to such
reduction, or

 

 
(iv)
 
your removal from such position, duties and responsibilities, unless you are
provided with a comparable position, duties and responsibilities; provided that
you notify Symmetricom in writing of your intention to terminate your employment
within 30 days of learning of such action, and Symmetricom fails to remedy such
action within 30 days of receipt of such written notice.

 
Release Agreement.    In exchange for the Change of Control Benefits outlined
above, you agree to sign a general release agreement (see attached), releasing
Symmetricom from any liability. Delivery of such a signed agreement by you is a
precondition to Symmetricom’s obligation to provide you with any of the Change
of Control Benefits outlined in this letter.
 
Dispute Resolution.    Symmetricom and you both agree that any dispute or
controversy arising out of this letter agreement, or your employment by
Symmetricom, shall be settled by binding arbitration, to the extent permitted by
law, to be held in Santa Clara County, California in accordance with the
National Rules for Resolution of Employment Disputes then in effect of the
American Arbitration Association. The arbitrator may grant injunctive or other
relief in such dispute or controversy. The decision of the arbitrator shall be
final, conclusive and binding on the all parties to the arbitration. Judgment
may be entered on the arbitrator’s decision in any court having jurisdiction.
The arbitrator shall apply California law to the merits of any dispute or claim,
without reference to rules of conflict of law. You hereby expressly consent to
the personal jurisdiction of the state and federal courts located in California
for any action or proceeding arising from or relating to the letter agreement or
your employment by Symmetricom.

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Changes to the Agreement; Complete Agreement.    The terms of this letter
agreement may be amended only by a written document signed by both you and the
Chief Executive Officer of Symmetricom, Inc. This agreement represents our
complete agreement concerning the terms and conditions of the subject matter
hereof and shall supercede any other agreement we may have, whether written or
oral, or express or implied, relating to the subject matter hereof.
 
Once again, we are pleased to offer you the opportunity to enter into this
Change of Control Agreement. Please acknowledge your acceptance and agreement
with the provisions set forth above by signing your name below.
 
 
SYMMETRICOM, INC
 
 
Thomas Steipp, CEO
 
 
AGREED AND ACKNOWLEDGED:
 
 
/s/    ANTHONY LAVIA

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February 27, 2002

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Anthony “Tony” Lavia Signature
  
Date