Exhibit 10.1

     
(AVIAT LOGO) [f57729f5772900.gif]
  AVIAT NETWORKS
5200 Great America Parkway
Santa Clara, CA 94054
Phone: +408 567 7000
Fax: +408 567 7001
WWW.AVIATNETWORKS.COM

John J. Madigan
2716 Fairbrook Drive
Mountain View, CA 94040
Employment Agreement
Dear John:
     This letter agreement sets forth the terms of your employment with Aviat
Networks, Inc. (the “Company”) as well as our understanding with respect to any
termination of that employment relationship. This Agreement will become
effective on your first day of employment which is anticipated to be on
January 4, 2011.
     1. Position and Duties. You will be employed by the Company as its Vice
President, Corporate Controller and Principal Accounting Officer, reporting to
the Senior Vice President and Chief Financial Officer. This position will be
based at our facility location in Santa Clara, California. You accept employment
with the Company on the terms and conditions set forth in this Agreement, and
you agree to devote your full business time, energy and skill to your duties at
the Company.
     2. Term of Employment. Your employment with the Company is for no specified
term, and may be terminated by you or the Company at any time, with or without
cause, subject to the provisions of Paragraphs 4 and 5 below.
     3. Compensation. You will be compensated by the Company for your services
as follows:
          (a) Salary: You will be paid a monthly base salary of $21,666.67, less
applicable withholding, in accordance with the Company’s normal payroll
procedures. In conjunction with your annual performance review, which will occur
at or about the start of each fiscal year, your base salary will be reviewed by
the Board, and may be subject to adjustment in Fiscal Year 2012 based upon
various factors including, but not limited to, your performance and the
Company’s profitability. Your base salary will not be reduced except as part of
a salary reduction program that similarly affects all members of the executive
staff reporting to the Chief Executive Officer of the Company.
          (b) Annual Short-Term Incentive Plan: Subject to the Board’s approval
of such a plan for Company employees each year, starting in FY 2012, you will be
eligible to participate in the Company’s Annual Incentive Plan with a target
annual bonus of 45% of your annual base salary. You will also be entitled to
participate in the Company’s FY 2011 Annual Incentive

 

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Plan on the same basis, prorated for the portion of FY 2011 falling between your
start date and the end of FY 2011. Any payment under the Annual Incentive Plan
will be made (if minimum targets are met) in the calendar year in which the
relevant fiscal year ends.
          (c) Long-Term Incentive Program: Subject to Board approval each year,
you will be eligible to participate in a Long Term Incentive Plan. You will be
eligible to participate in the Company’s fiscal year 2011-13 Long-Term Incentive
Program with an award of 27,500 options with a 3-year vesting period
(50%/25%/25%), 13,750 performance shares subject to vesting based on achievement
of Company financial performance criteria for the three-year period ending at
the end of FY 2013 and 13,750 shares of restricted stock with a 3-year vesting
period (33.3%/33.3%/33.3%). Any award under the current fiscal 2011-13 LTIP will
be prorated for the portion of that period falling between your start date and
the end of FY 2013. The structure for future periods is subject to determination
by the Board.
          (d) Benefits: You will have the right, on the same basis as other
employees of the Company, to participate in and to receive benefits under any
Company group medical, dental, life, disability or other group insurance plans,
as well as under the Company’s business expense reimbursement, educational
assistance, holiday, and other benefit plans and policies. You will also be
eligible to participate in the Company’s 401(k) plan.
          (e) Vacation: Once your employment begins, you will also accrue paid
vacation at the rate of three weeks per year. Maximum accrued vacation will be
in accordance with the Company’s vacation policy.
          (f) Foregone Compensation: In recognition of certain compensation with
your former employer that you are relinquishing, the Company will make two
one-time payments (assuming continued employment on the due date) of $40,000
each ($80,000 total), the first of which is payable thirty (30) days after your
start date and the second of which is payable thirty (30) days after the date
which is six (6) months after your start date. You agree to repay the amount of
any such payment to the Company if you resign from your employment with the
Company (other than for Good Reason as defined below) prior to twelve
(12) months after the date such payment is made.
     4. Voluntary Termination. In the event that you voluntarily resign from
your employment with the Company (other than for Good Reason or Good Reason
Following a Change of Control as defined in Paragraphs 5(d) and 6(b)), or in the
event that your employment terminates as a result of your death, you will be
entitled to no compensation or benefits from the Company other than those earned
under Paragraph 3 through the date of your termination. (For purposes of this
Agreement, no part of (i) the Annual Incentive Plan for the year in which your
termination occurs, (ii) the performance shares for the multi-year period in
which your termination occurs or (iii) options or restricted shares that are not
vested as of your termination date, will be deemed earned.) You agree that if
you voluntarily terminate your employment with the Company for any reason, you
will provide the Company with at least 10 business days’ written notice of your
resignation. The Company shall have the option, in its sole discretion, to make
your resignation effective at any time prior to the end of such notice period,
provided the Company pays you an amount equal to the base salary you would have
earned through the end of the notice period.

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     5. Other Termination. Your employment may be terminated under the
circumstances set forth below.
          (a) Termination by Disability. If, by reason of any physical or mental
incapacity, you have been or will be prevented from performing your then-current
duties under this Agreement for more than three consecutive months, then, to the
extent permitted by law, the Company may terminate your employment without any
advance notice. Upon such termination, if you sign a general release of known
and unknown claims in a form satisfactory to the Company, the Company will
provide you with the severance payments and benefits described in
Paragraph 5(c). Nothing in this paragraph shall affect your rights under any
applicable Company disability plan; provided, however, that your severance
payments will be offset by any disability income payments received by you so
that the total monthly severance and disability income payments during your
severance period shall not exceed your then-current base salary.
          (b) Termination for Cause or Death: The Company may terminate your
employment at any time for cause (as described below). If your employment is
terminated by the Company for cause, or if your employment terminates as a
result of your death, you shall be entitled to no compensation or benefits from
the Company other than those earned under Paragraph 3 through the date of your
termination. Provided, however, that if your employment terminates as a result
of your death, the Company will pay your estate the prorated portion of any
incentive bonus that you would have earned during the incentive bonus period in
which your employment terminates; such prorated bonus will be paid at the time
that such incentive bonuses are paid to other Company employees.
     For purposes of this Agreement, a termination “for cause” occurs if you are
terminated for any of the following reasons: (i) theft, dishonesty, misconduct
or falsification of any employment or Company records; (ii) improper disclosure
of the Company’s confidential or proprietary information; (iii) any action by
you which has a material detrimental effect on the Company’s reputation or
business; (iv) your refusal or inability to perform any assigned duties (other
than as a result of a disability) after written notice from the Company to you
of, and a reasonable opportunity to cure, such failure or inability; or (v) your
conviction (including any plea of guilty or no contest) for any criminal act
that impairs your ability to perform your duties under this Agreement.
          (c) Termination Without Cause: The Company may terminate your
employment without cause at any time. If your employment is terminated by the
Company without cause, and you sign a general release of known and unknown
claims in a form satisfactory to the Company within sixty (60) days of the
termination of your employment (or such shorter period as is necessary to comply
with the following clause) which becomes valid and effective no later than the
ninetieth (90th) day after your termination, and you fully comply with your
obligations under Paragraphs 7, 8 and 10, you will receive the following
severance benefits:
               (i) severance payments at your final base salary rate for a
period of twelve (12) months following your termination; such payments will be
subject to applicable withholding and made in accordance with the Company’s
normal payroll practices; provided

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that any payment otherwise due under this clause (i) or clause (iii) below prior
to the ninetieth (90th) day after your termination shall instead be paid,
without interest, on such ninetieth (90th) day;
               (ii) payment of the premiums necessary to continue your group
health insurance under COBRA (or to purchase other comparable health insurance
coverage on an individual basis if you are no longer eligible for COBRA
coverage) until the earlier of (x) twelve (12) months following your termination
date; or (y) the date you first became eligible to participate in another
employer’s group health insurance plan; or (z) the date on which you are no
longer eligible for COBRA coverage;
               (iii) the Company will pay you the prorated portion of any
incentive bonus that you would have earned, if any, during the incentive bonus
period in which your employment terminates (the pro-ration shall be equal to the
percentage of that bonus period that you are actually employed by the Company),
and such prorated bonus will be paid to you in the calendar year following your
termination of employment, on or about the time that such incentive bonuses are
paid to other Company employees;
               (iv) with respect to any stock options granted to you by the
Company, you will cease vesting upon your termination date; however, you will be
entitled to purchase any vested shares of stock that are subject to those
options until the earlier of (x) twelve (12) months following your termination
date, or (y) the date on which the applicable option(s) expire(s); except as set
forth in this clause (iv), your Company stock options will continue to be
subject to and governed by the Company’s 2007 Stock Equity Plan as amended from
time to time and the applicable stock option agreements between you and the
Company; and
               (v) reasonable outplacement assistance selected and paid for by
the Company and actually incurred and directly related to the termination of
your services for the Company.
          (d) Resignation for Good Reason: If you resign from your employment
with the Company for Good Reason (as defined in this subparagraph (d)), and such
resignation does not qualify as a Resignation for Good Reason Following a Change
of Control as set forth in subparagraph (e) below, and you sign a general
release of known and unknown claims in a form satisfactory to the Company within
sixty (60) days of the termination of your employment (or such shorter period as
is necessary to comply with the following clause) which becomes valid and
effective no later than the ninetieth (90th) day after your termination, and you
fully comply with your obligations under Paragraphs 7, 8 and 10, you shall
receive the severance benefits described in Paragraph 5(c). For purposes of this
Paragraph, “Good Reason” means any of the following conditions, which
condition(s) remain in effect 60 days after written notice from you to the Chief
Executive Officer of said condition(s):
               (i) a reduction in your base salary of 20% or more, other than a
reduction that is similarly applicable to all members of the Company’s executive
staff; or
               (ii) a material reduction in your employee benefits, other than a
reduction that is similarly applicable to all of the members of the Company’s
executive staff; or

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               (iii) a material breach by the Company of any material provision
of this Agreement; or
               (iv) the relocation of the Company’s workplace to a location that
is more than 75 miles from your Company workplace of Santa Clara, California.
The foregoing condition(s) shall not constitute “Good Reason” if you do not
provide the Chief Executive Officer with the written notice described above
within 45 days after you first become aware of the condition(s).
          (e) Termination or Resignation For Good Reason Following a Change of
Control: If, within 18 months following any Change of Control (as defined
below), your employment is terminated by the Company without cause, or if you
resign from your employment with the Company for Good Reason Following a Change
of Control (as defined below), you sign a general release of known and unknown
claims in a form satisfactory to the Company within sixty (60) days of the
termination of your employment (or such shorter period as is necessary to comply
with the following clause) which becomes valid and effective no later than the
ninetieth (90th) day after your termination, and you fully comply with your
obligations under Paragraphs 7, 8 and 10, you shall receive the severance
benefits described in Paragraph 5(c); provided, that the time periods set forth
in subparagraphs 5(c)(i), (ii), and (iv) shall each be increased by an
additional twelve (12) months. In addition, if such termination occurs, you
shall receive a payment (in lieu of any payment under subparagraph 5(c)(iii))
equal to the greater of (i) the average of the annual incentive bonus payments
received by you, if any, for the previous three years, or (ii) your target
incentive bonus for the year in which your employment terminates. Such payment
will be made to you within 15 days following the date on which the general
release of claims described above becomes effective. The Company will also
accelerate the vesting of all unvested time-vesting equity awards granted to you
by the Company such that all of your time-vesting equity awards will be fully
vested as of the date of your termination/resignation.
     6. Change of Control/Good Reason.
          (a) For purposes of this Agreement, a “Change of Control” of the
Company shall mean the occurrence of any of the following:
               (i) any merger, consolidation, share exchange or Acquisition,
unless immediately following such merger, consolidation, share exchange or
Acquisition of at least 50% of the total voting power (in respect of the
election of directors, or similar officials in the case of an entity other than
a corporation) of (A) the entity resulting from such merger, consolidation or
share exchange, or the entity which has acquired all or substantially all of the
assets of the Company (in the case of an asset sale that satisfies the criteria
of an Acquisition) (in either case, the “Surviving Entity”), or (B) if
applicable, the ultimate parent entity that directly or indirectly has
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the total voting power (in respect of the
election of directors, or similar officials in the case of an entity other than
a corporation) of the Surviving Entity (the “Parent Entity”) is represented by
Company securities that were outstanding immediately prior to such merger,
consolidation, share exchange or Acquisition (or, if applicable, is represented
by shares into which such Company

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securities were converted pursuant to such merger, consolidation, share exchange
or Acquisition), or
               (ii) any person or group of persons (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended and in
effect from time to time) directly or indirectly acquires beneficial ownership
(determined pursuant to Securities and Exchange Commission Rule 13d-3
promulgated under the said Exchange Act) other than through a merger,
consolidation, or Acquisition of securities possessing more than 30% of the
total combined voting power of the Company’s outstanding securities other than
(A) an employee benefit plan of the Company or any of its Affiliates, (B) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, or (C) an underwriter temporarily holding
securities pursuant to an offering of such securities, or
               (iii) over a period of 36 consecutive months or less, there is a
change in the composition of the Board such that a majority of the Board members
(rounded up to the next whole number, if a fraction) ceases, by reason of one or
more proxy contests for the election of Board members, to be composed of
individuals each of whom meet one of the following criteria: (A) have been a
Board member continuously since the adoption of the Company’s 2007 Stock Equity
Plan or the beginning of such 36 month period, or (B) have been elected or
nominated during such 36 month period by at least a majority of the Board
members that satisfied the criteria of this subsection (iii) when they were
elected or nominated, or
               (iv) a majority of the Board determines that a Change of Control
has occurred, or
               (v) the complete liquidation or dissolution of the Company.
For the purposes of this Agreement, the term “Acquisition” means a merger or
consolidation of the Company into another person (i.e., which merger or
consolidation the Company does not survive) or the sale, transfer or other
disposition of all or substantially all of the Company’s assets to one or more
other persons in a single transaction or series of related transactions, and the
term “Affiliate” means any corporation, partnership, limited liability company,
business trust, or other entity controlling, controlled by or under common
control with the Company.
          (b) For purposes of this Agreement, “Good Reason Following a Change of
Control” means any of the following conditions, which condition(s) remain in
effect 60 days after written notice from you to the Chief Executive Officer of
said condition(s):
               (i) a material and adverse change in your position, duties or
responsibilities for the Company, as measured against your position, duties or
responsibilities immediately prior to the Change of Control; or
               (ii) a reduction in your base salary as measured against your
base salary immediately prior to the Change in Control; or
               (iii) a material reduction in your employee benefits, other than
a reduction that is similarly applicable to a majority of the members of the
Company’s executive staff; or

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               (iv) the relocation by more than 75 miles of your Company
workplace of Santa Clara, California.
     7. Confidential and Proprietary Information: As a condition of your
employment, you agree to sign and abide by the Company’s standard form of
employee proprietary information/confidentiality/assignment of inventions
agreement.
     8. Termination Obligations.
          (a) You agree that all property, including, without limitation, all
equipment, proprietary information, documents, books, records, reports, notes,
contracts, lists, computer disks (and other computer-generated files and data),
and copies thereof, created on any medium and furnished to, obtained by, or
prepared by you in the course of or incident to your employment, belongs to the
Company and shall be returned to the Company promptly upon any termination of
your employment.
          (b) Upon your termination for any reason, and as a condition of your
receipt of any severance benefits hereunder, you will promptly resign in writing
from all offices and directorships then held with the Company or any affiliate
of the Company.
          (c) Following the termination of your employment with the Company for
any reason, you shall fully cooperate with the Company in all matters relating
to the winding up of pending work on behalf of the Company and the orderly
transfer of work to other employees of the Company. You shall also cooperate in
the defense of any action brought by any third party against the Company.
     9. Limitation of Payments and Benefits. To the extent that any of the
payments and benefits provided for in this Agreement or otherwise payable to you
(the “Payments”) constitute “parachute payments” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the
amount of such Payments shall be either:
          (a) the full amount of the Payments, or
          (b) a reduced amount that would result in no portion of the Payments
being subject to the excise tax imposed pursuant to Section 4999 of the Code
(the “Excise Tax”),
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax, results in the receipt by you,
on an after-tax basis, of the greatest amount of benefit. In the event that any
Excise Tax is imposed on the Payments, you will be fully responsible for the
payment of any and all Excise Tax, and the Company will not be obligated to pay
all or any portion of any Excise Tax.
     10. Other Activities. In order to protect the Company’s valuable
proprietary information, you agree that during your employment and for the
period, if any, during which severance payments at your final base salary rate
are payable under Paragraph 5(c) or 5(d) above, you will not, as a compensated
or uncompensated officer, director, consultant, advisor, partner, joint
venturer, investor, independent contractor, employee or otherwise, provide any
labor, services, advice or assistance to any entity or its successor involved in
the design,

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manufacture, distribution (directly or indirectly) or integration of any digital
microwave products substantially similar to current Company products in form,
fit, or function and used in terrestrial microwave point-to-point
telecommunications networks anywhere in the world. You acknowledge and agree
that the restrictions contained in the preceding sentence are reasonable and
necessary, as there is a significant risk that your provision of labor,
services, advice or assistance to any of those competitors could result in the
disclosure of the Company’s proprietary information. You further acknowledge and
agree that the restrictions contained in this paragraph will not preclude you
from engaging in any trade, business or profession that you are qualified to
engage in. In the event of your breach of this Paragraph, the Company shall not
be obligated to provide you with any further severance payments or benefits
subsequent to such breach.
     11. Dispute Resolution. The parties agree that any suit, action, or
proceeding arising out of or relating to this Agreement, the parties’ employment
relationship, or the termination of that relationship for any reason, shall be
brought in the United States District Court for the Northern District of
California (or should such court lack jurisdiction to hear such action, suit or
proceeding, in a California state court in the County of Santa Clara) and that
the parties shall submit to the jurisdiction of such court. The parties
irrevocably waive, to the fullest extent permitted by law, any objection they
may have to the laying of venue for any such suit, action or proceeding brought
in such court. If any one or more provisions of this Paragraph 11 shall for any
reason be held invalid or unenforceable, it is the specific intent of the
parties that such provisions shall be modified to the minimum extent necessary
to make it or its application valid and enforceable.
     12. Compliance With Section 409A. This Agreement is intended to comply
with, or otherwise be exempt from, Section 409A of the Code and the rules and
regulations promulgated thereunder (collectively, “Section 409A”). However, the
Company has not made and is making no representation to you relating to the tax
treatment of any payment pursuant to this Agreement under Section 409A and the
corresponding provisions of any applicable State income tax laws.
     Notwithstanding anything to the contrary in this Agreement, any payments or
benefits due hereunder upon a termination of employment which are a “deferral of
compensation” within the meaning of Section 409A shall only be payable or
provided to you upon a “separation from service” as defined for purposes of
Section 409A. In addition, if you are a “specified employee” as determined
pursuant to Section 409A as of the date of your separation from service, as so
defined, and if any payments or entitlements provided for in this Agreement
constitute a “deferral of compensation” within the meaning of Section 409A and
cannot be paid or provided in the manner provided herein without subjecting you
to additional tax, interest or penalties under Section 409A, then any such
payment or entitlement which is otherwise payable during the first six months
following your separation from service shall be paid or provided to you in a
lump sum on the earlier of (i) the first business day of the seventh calendar
month immediately following the month in which your separation from service
occurs or (ii) the date of your death. To the extent required to satisfy the
provisions of the foregoing sentence with respect to any benefit to be provided
in-kind, the Company shall bill you, and you shall promptly pay, the value for
tax purposes of any such benefit and the Company shall therefore promptly refund
the amount so paid by you as soon as allowed by the foregoing sentence.

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     For purposes of Section 409A, the right to a series of installment payments
under this Agreement shall be treated as a right to a series of separate
payments. With respect to any reimbursement of your expenses, or any provision
of in-kind benefits to you, as specified under this Agreement, such
reimbursement of expenses or provision of in-kind benefits shall be subject to
the following conditions: (1) the expenses eligible for reimbursement or the
amount of in-kind benefits provided in one taxable year shall not affect the
expenses eligible for reimbursement or the amount of in-kind benefits provided
in any other taxable year, except for any medical reimbursement arrangement
providing for the reimbursement of expenses referred to in Section 105(b) of the
Code; (2) the reimbursement of an eligible expense shall be made no later than
the end of the year after the year in which such expense was incurred; and
(3) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit.
     13. Severability. If any provision of this Agreement is deemed invalid,
illegal or unenforceable, such provision shall be modified so as to make it
valid, legal and enforceable, and the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected.
     14. Applicable Withholding. All salary, bonus, severance and other payments
identified in this Agreement are subject to applicable withholding by the
Company.
     15. Assignment. In view of the personal nature of the services to be
performed under this Agreement by you, you cannot assign or transfer any of your
obligations under this Agreement.
     16. Entire Agreement. This Agreement and the agreements referred to above
constitute the entire agreement between you and the Company regarding the terms
and conditions of your employment, and they supersede all prior negotiations,
representations or agreements between you and the Company regarding your
employment, whether written or oral. This Agreement sets forth our entire
agreement regarding the Company’s obligation to provide you with severance
benefits upon any termination of your employment, and you shall not be entitled
to receive any other severance benefits from the Company pursuant to any Company
severance plan, policy or practice.
     17. Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of California.
     18. Modification. This Agreement may only be modified or amended by a
supplemental written agreement signed by you and an authorized representative of
the Board.

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     John, we look forward to having you join us at Aviat Networks, Inc. Please
sign and date this letter on the spaces provided below to acknowledge your
acceptance of the terms of this Agreement.
Sincerely,
Aviat Networks, Inc.

         
By:
  /s/ Thomas L. Cronan III    
 
 
 
 
  Senior Vice President and Chief Financial Officer    

          I agree to and accept employment with Aviat Networks, Inc. on the
terms and conditions set forth in this Agreement.

     
Date: December 30, 2010
  /s/ John J. Madigan
 
   
 
  John J. Madigan

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