Exhibit 10.1

 

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EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is by and between Vyyo Inc., a
Delaware corporation (the “Company”), and Walter Ungerer (“Ungerer”).

 

                                                In connection with Ungerer’s
employment with the Company, the Company and Ungerer desire to enter into this
Agreement according to the terms and conditions set forth below.

 

                                                NOW, THEREFORE, the parties
hereto hereby agree as follows:

 

1.                                      Employment Duties.

 

                                               
a.                                      General.  The Company hereby agrees to
employ Ungerer, and Ungerer hereby agrees to accept employment with the Company,
on the terms and conditions set forth below, which change shall be effective as
of September 1, 2007 (the “Effective Date”).

 

                                               
b.                                      Company’s Duties.  The Company shall
allow Ungerer to, and Ungerer shall, perform responsibilities normally incident
to his position of Executive Vice President, Corporate Strategy and Investor
Relations, commen­surate with his background, education, experience and
professional standing.  The Company shall provide Ungerer with such office
equipment, supplies, customary services and cooperation suitable for the
performance of his duties.

 

                                               
c.                                       Ungerer’s Duties.  Ungerer shall devote
such time as necessary to fully perform his services as Executive Vice
President, Corporate Strategy and Investor Relations and shall report directly
to the Company’s Chief Executive Officer. The parties acknowledge that Ungerer
will perform his duties from the Company’s facility in Norcross, Georgia, and
shall be required to travel to the Company’s other facilities and other
locations as the Company’s business dictates.

 

2.                                      Term.  The initial term of this
Agreement is two years (the “Initial Term”).  There­after, this Agreement may be
renewed by Ungerer and the Company on such terms as the parties may agree to in
writing.  Absent written notice of termination of this Agreement given by one
party to the other party not less than 30 days prior to the end of the Initial
Term or any Renewal Term (as defined below), this Agreement will be
automatically renewed for a one-year extension (each such extension a “Renewal
Term” and the Initial Term together with any and all Renewal Terms, the
“Term”).  Notwithstanding the foregoing, this Agreement is subject to earlier
termination as provided herein.

 

 

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3.                                      Compensation.  Ungerer shall be
compensated as follows:

 

                                               
a.                                      Salary.  Ungerer shall receive an annual
salary of Two Hundred Ten Thousand Dollars ($210,000).  The Company agrees to
review the salary on or before December 31, 2008, and thereafter at the end of
each calendar year during the Term based upon Ungerer’s services and the
financial results of the Company, and to make such changes as may be determined
appropriate in the sole discretion of the Company’s Compensation Committee or
Board of Directors.  Ungerer’s annual salary shall be payable on a semi-monthly
basis, in accordance with the Company’s usual payroll practices.

 

                                               
b.                                      Bonus Compensation.  During each
calendar year in the Initial Term, Ungerer may become eligible to participate in
the Company’s bonus programs based on performance objectives to be agreed to by
Ungerer and the Company’s Chief Executive Officer.  Any bonus earned by Ungerer
in a particular calendar year will be paid by the Company in the manner and time
period agreed to by the parties.  The bonus shall be prorated should Ungerer’s
employment terminate prior to a full calendar year.

 

                                               
c.                                       Stock Options.  The Company’s
management will recommend to the Company’s Board of Directors or Compensation
Committee that Ungerer be granted a stock option to purchase 30,000 shares of
the Company’s capital stock at the next regularly scheduled quarterly meeting. 
If approved, the stock options would be granted with an exercise price equal to
fair market value of the Company’s common stock on the date of grant and would
be governed by the terms of an option agreement setting forth the vesting
schedule of such shares (equal monthly installments over 48 months).  If there
is any conflict between this Agreement and the terms of the option agreement,
the terms of the option agreement will control.

 

                                               
d.                                      Paid Time-Off.  Ungerer shall accrue
paid time-off in accordance with the terms of the Company’s paid time-off
policy.  Ungerer shall be compensated at his usual rate of base compen­sation
during any such paid time-off.  Ungerer shall be entitled to paid holi­days as
generally given by the Company and shall receive sick leave or disability leave
in accordance with the terms of the Company’s standard sick leave or disability
leave policy.

 

                                               
e.                                       Benefits.  Ungerer shall be entitled to
participate in any group plans or programs maintained by the Company for any
employees relating to group health, disability, life insurance and other related
benefits as in effect from time to time subject to the terms and conditions of
such plans. Ungerer shall also be entitled to director and officer insurance in
such amounts and coverage and such indemnification provisions as are afforded
other officers and directors of the Company.  The foregoing benefits shall be
paid by the Company.

 

                                               
f.                                        Expenses.  The Company shall
reim­burse Ungerer for his normal and reasonable expenses incurred for travel,
entertainment and similar items in promoting and carrying out the Company’s
business in accordance with the Company’s general policy as adopted from time to
time.  In addition, Ungerer shall be reimbursed for the reasonable costs
associated with cellular telephone usage and shall be entitled to reimbursement
for such reasonable continuing professional education, memberships and
certifications as are deemed normal and appropriate for executive officers as
determined by the Company.  As a condition of

 

 

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payment or reimbursement, Ungerer agrees to provide the Company with copies of
all available invoices and receipts, and otherwise account to the Company in
sufficient detail to allow the Company to claim an income tax deduction for such
paid item, if such item is deductible.  Reimbursements shall be made on a
monthly or more frequent basis in accordance with the Company’s reimbursement
policies then in effect.

 

4.                                      Confidentiality and Competitive
Activities.  Ungerer agrees to execute the Company’s current form of  employee
proprietary information and inventions agreement, which will include provisions
related to confidentiality of Company information, assignment of inventions,
non-competition and non-solicitation of customers and employees.

 

5.                                      Termination.

 

                                               
a.                                      Termination without Cause; Voluntary
Termination.  The Company may terminate this Agreement and Ungerer’s employment
hereunder without Cause (as defined below) and with or without prior review or
warning by providing 60 days prior written notice to Ungerer.  Ungerer may
volun­tarily terminate his employ­ment at any time upon 60 days’ prior written
notice to the Company.

 

                                               
b.                                      Termination for Cause.  The Company may
immedi­ately terminate Ungerer’s employment at any time for Cause.  Termin­ation
for Cause shall be effective from the receipt of written notice thereof to
Ungerer­ specifying the grounds for termination.  “Cause” shall be deemed to
include:  (i) Ungerer’s willful misconduct, or failure to perform, his material
duties provided that Ungerer is given written notice setting forth with
reasonable specificity such misconduct or failure and Ungerer fails to correct
such behavior within 30 days following receipt of notice; (ii) Ungerer’s
conviction of a felony offense or conviction for any unlawful act which would be
materially detrimental to the Company’s reputation, or a material act of
dishonesty, moral turpitude, fraud, embezzlement, misappropriation or financial
dishonesty against the Company; or (iii) Ungerer’s breach of any material
provision of this Agreement, including his obligations under Section 8(a), or
breach of his employee proprietary information agreement. The Company’s exercise
of its rights to terminate with Cause shall be without prejudice to any other
remedies it may be entitled at law, in equity or under this Agreement.

 

                                               
c.                                       Termination Upon Death or Disability. 
This Agree­ment shall automatic­ally terminate upon Ungerer’s death.  In
addition, if any disability or incapacity of Ungerer to perform his duties as
the result of any injury, sickness, or physical, mental or emotional condition
continues for a period of 30 days (excluding any accrued paid time-off) out of
any 120 calendar day period, the Company may terminate Ungerer’s employ­ment
upon written notice.  Payment of salary to Ungerer during any sick leave shall
only be to the extent that Ungerer has accrued paid time-off.

 

6.                                      Severance Payment Upon Termination of
Employment.  The severance payment set forth below shall be in addition to any
amounts owed to Ungerer as earned but unpaid wages through the date of
termination and accrued but unused vacation through the date of termination.

 

 

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a.                                      Termination Without Cause.  If the
Company terminates this Agreement without Cause prior to the end of the Initial
Term, the Company shall pay Ungerer a severance payment equal to six months of
his annual salary (without bonus), payable over such period in accordance with
the Company’s usual payroll practices.  For the avoidance of doubt, the six
months of severance provided for in this Section 6(a) shall include the 60 days
of notice required by Section 5(a) regarding termination without Cause.

 

                                               
b.                                      Execution of Release.  Ungerer agrees
that Ungerer’s right to receive any severance payment is conditioned on the
prior execution by Ungerer of a binding general release (in such form as the
Company may determine) of any and all claims against the Company and any
affiliates, and their respective officers, directors, employees or other agents.

 

7.                                      Compensation Upon a Change of Control.

 

                                               
a.                                      Change of Control Termination.  Upon a
Change of Control Termination (as defined below), Ungerer shall be entitled to
the following compensation:

 

                                                                                               
(i)                                     Cash Payment.  In lieu of any severance
payment described above in Section 6, payment in cash of an amount equal to the
sum of one times Ungerer’s then current annual salary as in effect for the
calendar year in which the Change of Control Termination occurs, payable in
accordance with the Company’s usual payroll practices.

 

                                                                                               
(ii)                                  Stock Options.  Any stock options granted
to Ungerer that are outstanding immediately prior to but are not vested as of
the date of the Change of Control Termination shall become 100% vested as of the
date of the Change of Control Termination.

 

                                                                                               
(iii)                               Benefits.  For a period of one year
following Ungerer’s date of termination, the continuation of the same or
comparable life, health, disability, vision, hospitalization, dental and other
insurance coverage as Ungerer was receiving immediately prior to the Change of
Control.

 

                                               
b.                                      Offer of Employment with Successor.  If
upon a Change of Control Ungerer is offered employment by the Company’s
successor with responsibilities substantially similar to that contemplated by
this Agreement and Ungerer does not accept such offer, 33.3% of the stock
options granted to Ungerer that are outstanding immediately prior to but are not
vested as of the date of the Change of Control shall become vested as of the
date of the Change of Control.

 

                                               
c.                                       Employment with Successor.  If upon a
Change of Control Ungerer accepts employment with the Company’s successor with
responsibilities substantially similar to that contemplated by this Agreement,
33.3% of the stock options granted to Ungerer that are outstanding immediately
prior to but are not vested as of the date of the Change of Control shall become
vested as of the date of the Change of Control. If Ungerer terminates his
employment for Good Reason (as defined below) with the Company’s successor on or
after the 6-month anniversary of commencement of such employment, all remaining
stock options granted to Ungerer that are outstanding immediately prior to but
are not vested as of the date of his termination for Good Reason shall become
vested as of the date of such termination.

 

 

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d.                                      For the purposes of this Section,
“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)
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 then outstanding shares of the Company’s common stock or the total voting
power represented by the Company’s then outstanding voting securities (other
than pursuant to a Business Combination which is covered by clause (iii) below);

 

                                                                                               
(ii)                                  the consummation of the sale or other
disposition (including in whole or in part through licensing arrangement(s)) of
all or substantially all of the Company’s assets, other than sales, other
dispositions or licenses of assets made to a parent or a wholly-owned subsidiary
of the Company, or an entity under common control with the Company;

 

                                                                                               
(iii)                               the consummation of a reorganization,
merger, statutory share exchange or consolidation or similar transaction
involving the Company or the acquisition of assets or stock of another entity by
the Company or any of its subsidiaries, or a series of related such transactions
(each, a “Business Combination”), in each case unless following such Business
Combination (A) the voting securities of the Company outstanding immediately
prior thereto continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any entity (a
“Parent”) that, as a result of such transaction, owns the Company or the
surviving entity or all or substantially all of the Company’s or surviving
entity’s assets directly or through one or more subsidiaries) at least 50% of
the total voting power represented by the Company’s voting securities or such
surviving entity or Parent outstanding immediately after such Business
Combination; and (B) no person (excluding any entity resulting from such
Business Combination or a Parent or any employee benefit plan (or related trust)
of the Company or such entity resulting from such Business Combination or
Parent) beneficially owns, directly or indirectly, 50% or more of, respectively,
the then-outstanding shares of common stock of the entity resulting from such
Business Combination or the total voting power of the then-outstanding voting
securities of such entity, except to the extent that the ownership in excess of
50% existed prior to the Business Combination; or

 

                                                                                               
(iv)                              approval by the Company’s stockholders of a
complete liquidation or dissolution of the Company other than in the context of
a transaction or series of related transactions that would not constitute a
Change of Control under clause (iii) above.

 

                                               
e.                                       For the purposes of this Section, a
“Change of Control Termination” shall mean a termination of employment within
one year following a Change of Control where the Company or a party effecting a
Change of Control of the Company terminates Ungerer’s employment without Cause,
other than as the result of Ungerer’s death or disability.

 

 

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f.                                        For the purposes of this Section,
“Good Reason” shall exist if Ungerer terminates his employment within 60 days of
the occurrence of any of the following:  (i) a material adverse change in his
position or title; or (ii) a reduction in his base salary from that provided in
this Agreement unless the reduction affects all employees generally.

 

8.                                      Corporate Opportunities.

 

                                               
a.                                      Duty to Notify.  In the event that
during the Term Ungerer shall become aware of any material and significant
business opportunity directly related to any of the Company’s significant
businesses, Ungerer shall promptly notify the Company’s Board of Directors of
such opportunity.  Ungerer shall not appropriate for himself or for any other
person other than the Company, or any affiliate of the Company, any such
opportunity unless, as to any particular opportunity, the Board of Directors
fails to take appropriate action within 90 days.  Ungerer’s duty to notify the
Company and to refrain from appropriating all such opportunities for 90 days
shall neither be limited by, nor shall such duty limit, the application of the
general law of Georgia relating to the fiduciary duties of an agent or employee.

 

                                               
b.                                      Failure to Notify.  In the event that
Ungerer fails to notify the Company of, or so appropriates, any such opportunity
without the express written consent of the Company, Ungerer shall be deemed to
have violated the provisions of this Section notwith­standing (i) the capacity
in which Ungerer shall have acquired such opportunity; or (ii) the probable
success in the Company’s hands of such opportunity.

 

9.                                      Miscellaneous.

 

                                               
a.                                      Entire Agreement.  This Agreement
constitutes the entire agreement and understanding between the parties with
respect to the subject matters herein, and supersedes and replaces any prior
agreements and understandings, whether oral or written between them with respect
to such matters.  The provisions of this Agreement may be waived, altered,
amended or repealed in whole or in part only upon the written consent of both
parties to this Agreement.

 

                                               
b.                                      No Implied Waivers.  The failure of
either party at any time to require performance by the other party of any
provision hereof shall not affect in any way the right to require such
per­form­ance at any time thereafter, nor shall the waiver by either party of a
breach of any provision hereof be taken or held to be a waiver of any subsequent
breach of the same provision or any other provision.

 

                                               
c.                                       Personal Services.  It is understood
that the services to be performed by Ungerer hereunder are personal in nature
and the obligations to perform such services and the conditions and covenants of
this Agreement cannot be assigned by Ungerer.  This Agreement shall inure to the
benefit of and bind the successors and assigns of the Company.

 

                                               
d.                                      Severability.  If for any reason any
provision of this Agreement shall be determined to be invalid or inoperative,
the validity and effect of the other provisions hereof shall not be affected
thereby.

 

 

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e.                                       Applicable Law.  This Agreement shall
be governed by and construed in accordance with the laws of the State of Georgia
without regard to conflict of law principles.

 

                                               
f.                                        Notices.  All notices, requests,
demands, instruc­tions or other communications required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been duly
given upon delivery, if delivered personally, or if given by prepaid telegram,
or mailed first-class, postage prepaid, registered or certified mail, return
receipt requested, shall be deemed to have been given 72 hours after such
delivery, if addressed to the other party at the addresses as set forth on the
signature page below.  Either party hereto may change the address to which such
communications are to be directed by giving written notice to the other party
hereto of such change in the manner above provided.

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

 

VYYO INC.

 

WALTER UNGERER

188 Inverness Drive West, Suite 140

 

6625 The Corners Parkway, Suite 100

Englewood, Colorado 80112

 

Norcross, Georgia 30092

 

 

 

 

 

 

By:

/s/ Wayne H. Davis

 

/s/ Walter Ungerer

 

 

Wayne H. Davis, Chief Executive Officer

 

(Signature)

 

 

 

Date: November 8, 2007

 

Date: November 8, 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

**SIGNATURE PAGE TO UNGERER EMPLOYMENT AGREEMENT**

 

 

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