Exhibit 10.5
(SOMERA LOGO) [d38480d3848000.gif]
SOMERA COMMUNICATIONS INC.
WAYNE HIGGINS EMPLOYMENT AGREEMENT
     This Agreement is entered into on May 30, 2006 and shall be effective as of
June 1, 2006 (the “Effective Date”) by and between Somera Communications, Inc.,
a Delaware Corporation, (the “Company”), and Morris Wayne Higgins (“Executive”).
     1. Duties and Scope of Employment.
          (a) Positions and Duties. As of the Effective Date, Executive will
serve as Chief Operating Officer of the Company. Executive will render such
business and professional services in the performance of Executive’s duties,
consistent with Executive’s position within the Company, and shall initially
report directly to the Chief Executive Officer. In the absence of the Chief
Executive Officer, the Executive will report directly to the Company’s Board of
Directors (the “Board”). The period of Executive’s employment under this
Agreement is referred to herein as the “Employment Term.” It is expressly
understood that nothing in the foregoing shall preclude the Company from making
any organizational and reporting changes it may deem necessary in it’s sole
discretion, to most effectively operate the business of the Company.
          (b) Obligations. During the Employment Term, Executive will perform
Executive’s duties faithfully and to the best of Executive’s ability and will
devote Executive’s full business efforts and time to the Company. For the
duration of the Employment Term, Executive agrees not to actively engage in any
other employment, occupation or consulting activity for any direct or indirect
remuneration without the prior approval of the Board. Further, Executive shall
perform such services and assume such duties and responsibilities customary or
appropriate to the position of Chief Operating Officer (as is typical in growing
technology companies of similar size to the Company), including those assigned
to him from time to time by the Chief Executive Officer and the Board, acting at
all times under the direction of the Chief Executive Officer, or in his absence,
of the Board. Upon the prior approval of the Board, which approval shall not be
unreasonably withheld, the Company agrees that during the Employment Period,
Executive may serve as a member on no more than one (1) Board of Directors, so
long as such relationship does not impede or impair Executive’s performance of
Executive’s duties and responsibilities.
     2. At-Will Employment. The parties agree that Executive’s employment with
the Company will be “at-will” employment and may be terminated at any time for
any reason, with or without cause or notice. Executive understands and agrees
that neither Executive’s job performance nor promotions, commendations, bonuses
or the like from the Company give rise to or in any way serve as the basis for
modification, amendment, or extension, by implication or otherwise, of
Executive’s employment with the Company.

 

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     3. Compensation.
          (a) Base Salary. During the Employment Term, the Company will pay
Executive as compensation for Executive’s services a base salary at the
annualized rate of $275,000 (the “Base Salary”). The Base Salary will be paid
periodically in accordance with the Company’s normal payroll practices and be
subject to the usual, required withholding.
          (b) Bonus. Executive shall be a participant in the Company’s 2006
Executive Bonus Plan or such equivalent successor plan (the “Incentive Plan”) as
may be adopted by the Company and be eligible to earn an annual bonus of up to
36% of base salary ($100,000) to be paid against business plan performance at
the operating income line, according to the terms of the Incentive Plan (See
exhibit A). Payouts in excess of the terms of the Incentive Plan for over
performance may be made at the discretion of the Board of Directors (“BOD”). In
addition, if twelve (12) months following your date of hire you are still
employed, you will be eligible to receive a one time, lump sum payment of 5% of
the billed gross profit of all incremental business (based on current forecast)
the Company secures (to a maximum of $125,000).
          (c) Stock Option. The Company shall recommend to the Company’s Board
of Directors (the “Board”) that Executive be granted a new stock option, which
will be, to the extent possible under the $100,000 rule of Section 422(d) of the
Internal Revenue Code of 1986, as amended (the “Code”), an “incentive stock
option” (as defined in Section 422 of the Code), to purchase 100,000 shares,
(See Exhibit A, attached hereto), of the Company’s Common Stock at an exercise
price equal to the price per share of the Company’s Common Stock as listed on
the Nasdaq National Market on the date of grant as determined by the Board (the
“Option”). Subject to the accelerated vesting provisions set forth herein, the
Option will vest as to 33-1/3% of the shares subject to the Option one year
after the date of grant, and as to 1/36th of the shares subject to the Option
monthly thereafter, so that the Option will be fully vested and exercisable
three (3) years from the date of grant, subject to Executive’s continued service
to the Company on the relevant vesting dates. The Option will be subject to the
terms, definitions and provisions of the Company’s 1999 Stock Option Plan (the
“Option Plan”) and the stock option agreement by and between Executive and the
Company (the “Option Agreement”), both of which documents are incorporated
herein by reference. Following the initial stock grant, the executive shall be
granted the option to purchase 25,000 shares annually, beginning with the next
Corporate cycle of option grants.
     4. Employee Benefits. During the Employment Term, Executive will be
entitled to participate in the employee benefit plans currently and hereafter
maintained by the Company of general applicability to other senior executives of
the Company, including, without limitation, the Company’s group medical, dental,
vision, disability, life insurance, and flexible-spending account plans. The
Company reserves the right to cancel or change the benefit plans and programs it
offers to its employees at any time.
     5. Vacation. Executive will be entitled to paid vacation of up to six weeks
annually to be administered in accordance with the Company’s vacation policy,
with the timing and duration of specific vacations mutually and reasonably
agreed to by the parties hereto.

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     6. Expenses. The Company will reimburse Executive for reasonable travel,
entertainment or other expenses incurred by Executive in the furtherance of or
in connection with the performance of Executive’s duties hereunder, in
accordance with the Company’s expense reimbursement policy as in effect from
time to time.
     7. Severance.
          (a) Involuntary Termination. If Executive’s employment with the
Company terminates as a result of “Constructive Termination” (as defined herein)
or other than voluntarily or for “Cause” (as defined herein), and Executive
signs and does not revoke a standard release of claims with the Company, then
subject to Section 10, Executive shall be entitled to receive (i) continuing
payments of severance pay (less applicable withholding taxes) at a rate equal to
Executive’s Base Salary rate, as then in effect, for a period of six (6) months
from the date of such termination, to be paid periodically in accordance with
the Company’s normal payroll policies; and (ii) an amount equal to the aggregate
of the bonus amounts earned by and paid to Executive for the two (2) fiscal
quarters prior to the date upon which Executive’s employment with the Company
terminates (less applicable withholding taxes). In no event shall Executive be
entitled to any bonus amounts under the Incentive Plan for the period in which
Executive’s employment with the Company terminates. Additionally, the Company
shall waive the cost for the Executive to continue Executive’s group medical
coverage with the Company should Executive decide to exercise Executive’s right
to do so in accordance with Title X of the Consolidated Budget Reconciliation
Act of 1985, as amended (“COBRA”). Such waiver of cost shall cease upon the
earlier of six (6) months from the effective date of such coverage or the date
in which the Executive obtains equivalent coverage elsewhere.
          (b) Voluntary Termination; Termination for Cause. If Executive’s
employment with the Company terminates voluntarily by Executive or for “Cause”
by the Company, then (i) all vesting of the Option will terminate immediately
and all payments of compensation by the Company to Executive hereunder will
terminate immediately (except as to amounts already earned), and (ii) Executive
will only be eligible for severance benefits in accordance with the Company’s
established policies as then in effect.
          (c) Change of Control. If within one (1) month of employment, (between
June 1, 2006 and June 30, 2006) there is a “Change of Control” (as defined
below), then 25% of the stock options granted in section 3(c) shall vest and
become exercisable after the Change of Control has been consummated. If between
two (2) and five (5) months of employment, (between July 1, 2006 and
September 30, 2006) there is a “Change of Control” (as defined below), then 50%
of the stock options granted in section 3(c) shall vest and become exercisable
after the Change of Control has been consummated. If after more than five
(5) months of employment, (on or after October 1, 2006) there is a “Change of
Control” (as defined below), then 100% of the stock options granted in section
3(c) shall vest and become exercisable after the Change of Control has been
consummated.
          (d) Additional Options. Additional Options will be subject to the
terms, definitions and provisions of the Option Plan and the respective Option
Agreements.

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     8. Definitions.
          (a) Cause. For purposes of this Agreement, “Cause” is defined as:
(i) an act of dishonesty made by Executive in connection with Executive’s
responsibilities as an employee, (ii) Executive’s conviction of, or plea of nolo
contendere to, a felony, (iii) Executive’s gross misconduct, which shall
include, but is not limited to, fraud, theft, embezzlement, breach of the
Company’s Code of Conduct and Conflicts of Interest policy on the part of the
Executive and any material breach of the Executive’s responsibilities as an
employee or (iv) Executive’s continued substantial violations of Executive’s
employment duties after Executive has received (1) a written demand for
performance from the Company which specifically sets forth the factual basis for
the Company’s belief that Executive has not substantially performed Executive’s
duties, (2) a reasonable time to cure.
          (b) Change of Control. For purposes of this Agreement, “Change of
Control” of the Company is defined as: (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% or 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 occurring within a
two-year period, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” will 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 with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but will 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 the Company); (iii) the date of the consummation of a merger or
consolidation of the Company with any other corporation that has been approved
by the stockholders of the Company, 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) more than 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 stockholders of the Company approve a plan of complete
liquidation of the Company; or (iv) the date of the consummation of the sale or
disposition by the Company of all or substantially all the Company’s assets.
          (c) Constructive Termination. For purposes of this Agreement,
“Constructive Termination” is defined as the resignation of Executive within
sixty (60) days following: (i) a material reduction in Executive’s Base Salary,
(ii) a material reduction in Executive’s authority or duties, or (iii) the
relocation of Executive to a facility or location more than fifty (50) miles
from Executive’s then present location and then present residence, without
Executive’s written consent.
     9. Confidential Information. Executive agrees to enter into the Company’s
standard Confidential Information and Invention Assignment Agreement (the
“Confidential Information Agreement”) upon commencing employment in the new
position of Chief Operating Officer hereunder.

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     10. Conditional Nature of Severance Payments.
          (a) Non-compete. Executive acknowledges that the nature of the
Company’s business is such that if Executive were to become employed by, or
substantially involved in, the business of a competitor of the Company during
the six (6) months following the termination of Executive’s employment with the
Company, it would be very difficult for Executive not to rely on or use the
Company’s trade secrets and confidential information. Thus, to avoid the
inevitable disclosure of the Company’s trade secrets and confidential
information, Executive agrees and acknowledges that Executive’s right to receive
the severance payments set forth in Section 7 (to the extent Executive is
otherwise entitled to such payments) shall be conditioned upon Executive not
directly or indirectly engaging in (whether as an employee, consultant, agent,
proprietor, principal, partner, stockholder, corporate officer, director or
otherwise), nor having any ownership interested in or participating in the
financing, operation, management or control of, any person, firm, corporation or
business that competes with Company or is a customer of the Company in the
United States, Canada, Asia, Middle East, Europe or South America. Upon any
breach of this section, all severance payments pursuant to this Agreement shall
immediately cease.
          (b) Non-Solicitation. Until the date twelve (12) months after the
termination of Executive’s employment with the Company for any reason, Executive
agrees and acknowledges that Executive’s right to receive the severance payments
set forth in Section 7 (to the extent Executive is otherwise entitled to such
payments) shall be conditioned upon Executive not either directly or indirectly
soliciting, inducing, attempting to hire, recruiting, encouraging, taking away,
hiring any employee of the Company or causing an employee to leave his or her
employment either for Executive or for any other entity or person.
          (c) Understanding of Covenants. Executive represents that he (i) is
familiar with the foregoing covenants not to compete and not to solicit, and
(ii) is fully aware of Executive’s obligations hereunder, including, without
limitation, the reasonableness of the length of time, scope and geographic
coverage of these covenants.
     11. Assignment. This Agreement will be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Executive upon
Executive’s death and (b) any successor of the Company. Any such successor of
the Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes. For this purpose, “successor” means any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by will or the laws of descent
and distribution. Any other attempted assignment, transfer, conveyance or other
disposition of Executive’s right to compensation or other benefits will be null
and void.
     12. Notices. All notices, requests, demands and other communications called
for hereunder shall be in writing and shall be deemed given (i) on the date of
delivery if delivered personally, (ii) one (1) day after being sent by a well
established commercial overnight service, or (iii) four (4) days after being
mailed by registered or certified mail, return receipt requested, prepaid and

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addressed to the parties or their successors at the following addresses, or at
such other addresses as the parties may later designate in writing:
If to the Company:
Somera Communications, Inc.
301 S. Northpoint Drive
Coppell, TX 75019
Attention: VP Human Resources
If to Executive:
at the last residential address known by the Company.
     13. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement will continue in full force and effect without said
provision.
     14. Arbitration. The parties agree that any controversy or claim arising
out of or relating to this Agreement, or any dispute arising out of the
interpretation or application of this Agreement, which the parties hereto are
unable to resolve, shall be finally resolved and settled exclusively by
arbitration as provided in the Arbitration Agreement between the Company and the
Executive which is incorporated by reference herein.
     15. Integration. This Agreement, together with the Option Plan, Option
Agreement, the Arbitration Agreement and the Confidential Information Agreement
represents the entire agreement and understanding between the parties as to the
subject matter herein and supersedes all prior or contemporaneous agreements
whether written or oral, by and between the Company and Executive. No waiver,
alteration, or modification of any of the provisions of this Agreement will be
binding unless in writing and signed by duly authorized representatives of the
parties hereto.
     16. Tax Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable taxes.
     17. Governing Law. This Agreement will be governed by the laws of the State
of Texas.
     18. Acknowledgment. Executive acknowledges that he has had the opportunity
to discuss this matter with and obtain advice from Executive’s private attorney,
has had sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement.

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by their duly authorized officers, as of the day and year first
above written.

              COMPANY:        
 
            SOMERA COMMUNICATIONS, INC.        
 
           
By:
  /s/ Chuck Levine       Date: May 30, 2006
 
           
Name:
  Chuck Levine        
Title:
  Chairperson HR Committee, Board of Directors        
 
           
By:
  /s/ Lynda Starnes       Date: May 30, 2006
 
           
Name:
  Lynda Starnes        
Title:
  Vice President, Human Resources        
 
            EXECUTIVE:        
 
                           /s/ M. Wayne Higgins       Date: May 30, 2006        
  M. Wayne Higgins        

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