**Exhibit 10.6**

 

**SPECTRALINK CORPORATION**

 

**CHANGE OFCONTROL SEVERANCE AGREEMENT**

 

This Change of ControlSeverance Agreement (the “Agreement”) is made and entered into by and between                         (the “Employee”) and SpectraLink Corporation, a Delaware corporation (the “Company”),effective as of                            (the“Effective Date”).

 

**RECITALS**

 

A.                                   It is expected that the Company from time totime will consider the possibility of an acquisition by another company orother change of control.  The Board of Directors of the Company (the “Board”)recognizes that such consideration can be a distraction to the Employee and cancause the Employee to consider alternative employment opportunities.  TheBoard has determined that it is in the best interests of the Company and itsstockholders to assure that the Company will have the continued dedication andobjectivity of the Employee, notwithstanding the possibility, threat oroccurrence of a Change of Control (as defined herein) of the Company.

 

B.                                     The Board believes that it is in the bestinterests of the Company and its stockholders to provide the Employee with anincentive to continue his or her employment and to motivate the Employee tomaximize the value of the Company upon a Change of Control for the benefit ofits stockholders.

 

C.                                     The Board believes that it is important toprovide the Employee with certain severance benefits upon the Employee’stermination of employment following a Change of Control.  These benefitswill provide the Employee with enhanced financial security and incentive andencouragement to remain with the Company notwithstanding the possibility of aChange of Control.

 

D.                                    Certain capitalized terms used in theAgreement are defined in Section 5 below.

 

AGREEMENT

 

NOW, THEREFORE, inconsideration of the mutual covenants contained herein, the parties heretoagree as follows:

 

1.                                       Term of Agreement.  This Agreement shall terminate uponthe date that all of the obligations of the parties hereto with respect to thisAgreement have been satisfied.

 

2.                                       At-Will Employment.  The Company and the Employeeacknowledge that the Employee’s employment is and shall continue to be at-will,as defined under applicable law, except as may otherwise be specificallyprovided under the terms of any written formal employment agreement between theCompany and the Employee (an “Employment Agreement”).  If the Employee’semployment terminates for any reason, including (without limitation) anytermination prior to a Change of Control, the Employee shall not be entitled toany payments, benefits, damages, awards or compensation other than as providedby this Agreement or under his or her Employment Agreement, if applicable.

 

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3.                                       Severance Benefits.

 

(a)                    Involuntary Termination Other than for Causeor Voluntary Termination for Good Reason Following a Change of Control.  If within twelve (12) monthsfollowing a Change of Control (i) the Employee terminates his or heremployment with the Company (or any parent or subsidiary of the Company) for “GoodReason” (as defined herein) or (ii) the Company (or any parent orsubsidiary of the Company) terminates the Employee’s employment for other than “Cause”(as defined herein):

 

(i)                                     Severance Payment.  The Employee shall be entitled toreceive a lump-sum severance payment (less applicable withholding taxes) equalto:

 

•                  One (1) times the sum of  the Employee’s annual base salary (as ineffect immediately prior to (A) the Change of Control, or (B) theEmployee’s termination, whichever is greater), plus

 

•                  100% of the Employee’s target annualincentive compensation (including any applicable quarterly incentives assuming100% of achievement) for the year in which the date of termination occurs forthe fiscal year in which the Change of Control or the Employee’s termination occurs,whichever is greater, plus

 

•                  The Employee’s annual base salary through thedate of termination, plus

 

•                  Any prior year’s annual (including anyapplicable quarterly) incentive payments awarded to the employee and to theextent not previously paid, any target incentive payment for such prior year,and

 

•                  Payment for any accrued vacation or personaltime off.

 

(ii)                            Options; Restricted Stock.  All of the Employee’s thenoutstanding options to purchase shares of the Company’s Common Stock (the “Options”)shall immediately vest and became exercisable.  Additionally, all of theshares of the Company’s Common Stock then held by the Employee subject to aCompany repurchase right (the “Restricted Stock”), if any, shall immediatelyvest and the Company’s right of repurchase with respect to such shares ofRestricted Stock shall lapse.  The Options shall remain exercisablefollowing the termination for the greater of (a) the period prescribed inthe respective option agreements or (b) three (3) years.

 

(iii)      ContinuedEmployee Benefits. Company-paid health, dental and vision insurancecoverage at the same level of coverage as was provided to such Employeeimmediately prior to the Change of Control and at the same ratio of Companypremium payment to Employee premium payment as was in effect immediately priorto the Change of Control (the “Company-Paid Coverage”).  If such coverageincluded the Employee’s dependents immediately prior to the Change of Control,such dependents shall also be covered at Company expense.  Company-PaidCoverage shall continue until the earlier of (i) twelve (12)months from the date of termination, or (ii) the date upon which theEmployee and his dependents become covered under another employer’s grouphealth, dental or vision insurance plans that provide Employee and hisdependents with comparable benefits and levels of coverage.  For purposesof Title X of the Consolidated 

 

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BudgetReconciliation Act of 1985 (“COBRA”), the date of the “qualifying event” forEmployee and his or her dependents shall be the date upon which the Employeeterminates employment. Any Company match contributions to the Employee’s 401(k)shall be vested upon termination.

 

Timing of Severance Payments.  The severance payment to whichEmployee is entitled shall be paid by the Company to Employee in a lump sumcash payment in full not later than ten (10) calendar days after the dateof the termination of Employee’s employment as provided in Section 3(a);provided, however, that, if required pursuant to Section 409A of theInternal Revenue Code of 1986, as amended (the “Code”) as determined in goodfaith by the Company, such payments will be made six (6) months after thedate of the Employee’s termination of employment.  If the Employee shoulddie before all amounts have been paid, such unpaid amounts shall be paid in alump-sum payment (less any withholding taxes) to the Employee’s designatedbeneficiary, if living, or otherwise to the personal representative of theEmployee’s estate

 

(c)                                  Disability. “Disability” shall mean that the Employee has been unable to perform his or herCompany duties as the result of his incapacity due to physical or mentalillness, and such inability, at least twenty-six (26) weeks after itscommencement, is determined to be total and permanent by a physician selectedby the Company or its insurers and acceptable to the Employee or the Employee’slegal representative (such Agreement as to acceptability not to be unreasonablywithheld).  Termination resulting from Disability may only be effectedafter at least thirty (30) days’ written notice by the Company of its intentionto terminate the Employee’s employment.  In the event that the Employeeresumes the performance of substantially all of his or her duties hereunderbefore the termination of his or her employment becomes effective, the noticeof intent to terminate shall automatically be deemed to have been revoked.

 

(d)                                 Voluntary Resignation; Termination for Cause.  If the Employee’s employment with theCompany terminates (i) voluntarily by the Employee other than for GoodReason or Disability or (ii) for Cause by the Company, then the Employeeshall not be entitled to receive severance or other benefits except for those(if any) as may then be established under the Company’s then existing severanceand benefits plans and practices or pursuant to other written agreements withthe Company.

 

(e)                                  Termination Apart from Change of Control.  In the event the Employee’semployment is terminated for any reason, either prior to the occurrence of a Changeof Control or after the twelve (12)–month period following a Change of Control,then the Employee shall be entitled to receive severance and any other benefitsonly as may then be established under the Company’s existing written severanceand benefits plans and practices or pursuant to other written agreements withthe Company.

 

(f)                                    Noncumulationof Benefits.  The Employee may notcumulate cash severance payments, stock option vesting and exercisability andrestricted stock vesting under this Agreement, any other written agreement withthe Company and/or another plan or policy of the Company.  If the Employee has any other binding writtenagreement with the Company which provides that upon a Change of Control or atermination following a Change of Control the Employee shall receivetermination, severance or similar benefits, then no benefits shall be 

 

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received byEmployee under this Agreement unless prior to payment or receipt of benefitsunder this Agreement the Employee waives Employee’s rights to all such otherbenefits, in which case this Agreement shall supersede any such writtenagreement with respect to such other benefits.

 

(g)                                 NoLimitation of Regular Benefit Plans. Except as provided in Section 3(e), this Agreement is not intendedto and shall not affect, limit or terminate any plans, programs or arrangementsof the Company that are regularly made available to a significant number ofemployees or officers of the Company, including, without limitation, theCompany’s stock option plans.

 

4.                                       Limitation on Payments.  In the event that the severance andother benefits provided for in this Agreement or otherwise payable to theEmployee (i) constitute “parachute payments” within the meaning of Section 280Gthe Code and (ii) but for this Section 4, would be subject to theexcise tax imposed by Section 4999 of the Code, or any correspondingprovisions of state or local tax laws, then the Employee’s severance benefitsunder Section 3(a) shall be either:

 

(a)                                  delivered in full, or

 

(b)                                 delivered with an additional payment in anamount such that after payment by Employee of all taxes (including, but notlimited to, any income taxes, employment taxes, excise taxes and any interestand penalties imposed with to any such taxes) as to such lesser extent whichwould result in no portion of such severance benefits being subject to excisetax under Section 4999 of the Code, whichever of the foregoing amounts,taking into account the applicable federal, state and local income taxes andthe excise tax imposed by Section 4999, results in the receipt by theEmployee on an after-tax basis, of the greatest amount of severance benefits,notwithstanding that all or some portion of such severance benefits may betaxable under Section 4999 of the Code.  Unless the Company and theEmployee otherwise agree in writing, any determination required under this Section 4shall be made in writing by the Company’s independent public accountantsimmediately prior to Change of Control (the “Accountants”), whose determinationshall be conclusive and binding upon the Employee and the Company for allpurposes.  For purposes of making the calculations required by this Section 4,the Accountants may make reasonable assumptions and approximations concerningapplicable taxes and may rely on reasonable, good faith interpretationsconcerning the application of Sections 280G and 4999 of the Code.  TheCompany and the Employee shall furnish to the Accountants such information anddocuments as the Accountants may reasonably request in order to make adetermination under this Section.  The Company shall bear all costs theAccountants may reasonably incur in connection with any calculationscontemplated by this Section 4.

 

5.                                       Definition of Terms.  The following terms referred to inthis Agreement shall have the following meanings:

 

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(a)                                  Cause. “Cause” shall mean (i) an act of personal dishonesty taken bythe Employee in connection with his responsibilities as an employee andintended to result in substantial personal enrichment of the Employee, (ii) Employeebeing convicted of a felony, (iii) a willful act by the Employee whichconstitutes gross misconduct and which is injurious to the Company,  (iv) followingdelivery to the Employee of a written demand for performance from the Companywhich describes the basis for the Company’s reasonable belief that the Employeehas not substantially performed his duties, continued violations (after anopportunity to cure) by the Employee of the Employee’s obligations to theCompany which are demonstrably willful and deliberate on the Employee’s part.

 

(b)                                 Change of Control.  “Change of Control” means theoccurrence of any of the following:

 

(i)                  Any “person” (as such term is used inSections 13(d) and 14(d) of the Securities Exchange Act of 1934, asamended) becomes the “beneficial owner” (as defined in Rule 13d–3 undersaid Act), directly or indirectly, of securities of the Company representingmore than fifty percent (50%)  of thetotal voting power represented by the Company’s then outstanding votingsecurities; or

 

(ii)               Any action or event occurring within atwo–year period, as a result of which fewer than a majority of the directorsare Incumbent Directors.  “Incumbent Directors” shall mean directors whoeither (A) are directors of the Company as of the date hereof, or (B) areelected, or nominated for election, to the Board with the affirmative votes ofat least a majority of the Incumbent Directors at the time of such election ornomination (but shall not include an individual whose election or nomination isin connection with an actual or threatened proxy contest relating to theelection of directors to the Company); or

 

(iii)            The consummation of a merger or consolidationof the Company with any other corporation, other than a merger or consolidationwhich would result in the voting securities of the Company outstandingimmediately prior thereto continuing to represent (either by remainingoutstanding or by being converted into voting securities of the survivingentity) in substantially the same respective proportions of at least fiftypercent (50%) of the total voting power represented by the voting securities ofthe Company or such surviving entity outstanding immediately after such mergeror consolidation; or

 

(iv)           The consummation of the sale, lease or other disposition by the Companyof all or substantially all the Company’s assets; or

 

(v)              A “change in control” as defined by theCompany’s currently effective option or equity incentive plan.

 

(c)                                  Good Reason.  “Good Reason” means without the Employee’s express writtenconsent (i) a material reduction of the Employee’s duties, title,authority or responsibilities, relative to the Employee’s duties, title,authority or responsibilities as in effect immediately prior to such reduction,or the assignment to Employee of such reduced duties, title, authority orresponsibilities; provided,however, that a reduction in duties,title, authority or responsibilities solely by virtue of the Company beingacquired and made part of a larger entity 

 

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(without substantial reassignment of personnel) (as,for example, when the Senior Vice-President of a business unit of the Companyremains as the Senior Vice-President following a Change of Control) shall notby itself constitute grounds for a “Voluntary Termination for Good Reason” aslong as  there is no other materialreduction in the Employee’s duties; (ii) a substantial reduction of thefacilities and perquisites (including office space and location) available tothe Employee immediately prior to such reduction; (iii) a reduction by theCompany of more than 10% in the base compensation or target incentive paymentopportunity of the Employee as in effect immediately prior to such reduction; (iv) therelocation of the Employee to a facility or a location more than thirty-five(35) miles from such Employee’s then present location.

 

6.                                       Successors.

 

(a)                    The Company’s Successors.  Any successor to the Company (whetherdirect or indirect and whether by purchase, merger, consolidation, liquidationor otherwise) to all or substantially all of the Company’s business and/orassets shall assume the obligations under this Agreement and agree expressly toperform the obligations under this Agreement in the same manner and to the sameextent as the Company would be required to perform such obligations in theabsence of a succession.  For all purposes under this Agreement, the term “Company”shall include any successor to the Company’s business and/or assets whichexecutes and delivers the assumption agreement described in this Section 7(a) orwhich becomes bound by the terms of this Agreement by operation of law.

 

(b)                   The Employee’s Successors.  The terms of this Agreement and allrights of the Employee hereunder shall inure to the benefit of, and beenforceable by, the Employee’s personal or legal representatives, executors,administrators, successors, heirs, distributees, devisees and legatees.

 

7.                                                     Notice.

 

(a)                    General. All notices and other communications required or permitted hereundershall be in writing, shall be effective when given, and shall in any event bedeemed to be given upon receipt or, if earlier, (a) five (5) daysafter deposit with the U.S. Postal Service or other applicable postal service,if delivered by first class mail, postage prepaid, (b) upon delivery, ifdelivered by hand, (c) one (1) business day after the business day ofdeposit with Federal Express or similar overnight courier, freight prepaid or (d) one (1) businessday after the business day of facsimile transmission, if delivered by facsimiletransmission with copy by first class mail, postage prepaid, and shall beaddressed (i) if to Employee, at his or her last known residentialaddress and (ii) if to the Company, at the address of its principalcorporate offices (attention:  Secretary), or in any such case at such otheraddress as a party may designate by ten (10) days’ advance writtennotice to the other party pursuant to the provisions above.

 

(b)                   Notice of Termination.  Any termination by the Company forCause or by the Employee for Good Reason or Disability or as a result of avoluntary resignation shall be communicated by a notice of termination to theother party hereto given in accordance with Section 8(b) of thisAgreement.  Such notice shall indicate the specific termination provisionin this Agreement relied upon, shall set forth in reasonable detail the factsand circumstances claimed to provide a basis for termination under theprovision so indicated, and shall specify the 

 

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termination date (which shall be not more thanthirty (30) days after the giving of such notice).  The failure by theEmployee to include in the notice any fact or circumstance which contributes toa showing of Good Reason or Disability shall not waive any right of theEmployee hereunder or preclude the Employee from asserting such fact orcircumstance in enforcing his or her rights hereunder.

 

8.                                       Miscellaneous Provisions.

 

(a)                                  Rightof Setoff.  The Company’s obligationsunder this Agreement are absolute and unconditional and are not diminishedunder any circumstances other than as set forth in this Agreement, including,without limitation, any set-off, counterclaim, recoupment, defense or otherright which the Company may have against the Employee. Nothing in thisAgreement shall be construed to obligate the Employee to seek other employmentor take any other action by way of mitigation of the amounts payable to theEmployee under any of the provisions of this Agreement

 

(b)                                 Waiver.  No provision of this Agreement shall be modified, waived ordischarged unless the modification, waiver or discharge is agreed to in writingand signed by the Employee and by an authorized officer of the Company (otherthan the Employee).  No waiver by either party of any breach of, or ofcompliance with, any condition or provision of this Agreement by the otherparty shall be considered a waiver of any other condition or provision or ofthe same condition or provision at another time.

 

(c)                                  Headings.  All captions and section headings used in this Agreementare for convenient reference only and do not form a part of this Agreement.

 

(d)                                 Entire Agreement.  This Agreement constitutes the entireagreement of the parties hereto and supersedes in their entirety all priorrepresentations, understandings, undertakings or agreements (whether oral orwritten and whether expressed or implied) of the parties with respect to thesubject matter hereof.

 

(e)                                  Choice of Law.  The validity, interpretation,construction and performance of this Agreement shall be governed by the laws ofthe State of Colorado. The District Court of Boulder County and/or the UnitedStates District Court for the Colorado shall have exclusive jurisdiction andvenue over all controversies in connection herewith.

 

(f)                                    Severability.  The invalidity or unenforceability ofany provision or provisions of this Agreement shall not affect the validity orenforceability of any other provision hereof, which shall remain in full forceand effect.

 

(g)                                 Withholding.  All payments made pursuant to this Agreement will be subject towithholding of applicable income and employment taxes.

 

(h)                                 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemedan original, but all of which together will constitute one and the sameinstrument.

 

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(j)                                     Releaseof Claims.  The Company may conditionpayment of benefits described in Section 3 of this Agreement upon thedelivery by the Employee of a signed release of claims in a form reasonablysatisfactory to the Company; provided, however, that the Employee shall not berequired to release any rights the Employee may have to be indemnified by theCompany.

 

9.      Non-solicitation.  For a period ofone (1) year after termination of Employee’s employment following a Changeof Control, the Employee will not solicit the services or business of anyperson or entity providing services to, or business with, the Company, orsolicit any such person to discontinue provision of such services for, orbusiness with, the Company without the written consent of the Company.

 

IN WITNESS WHEREOF, each ofthe parties has executed this Agreement, in the case of the Company by its dulyauthorized officer, as of the day and year set forth below.

 
|  COMPANY | SPECTRALINK CORPORATION |   |
|---------------|-------------------------|--------|
|          |                    |   |
|          | By:                     |   |   |
|          |                    |   |
|          | Title:                  |   |   |
|          |                    |   |
|          |                    |   |
| EMPLOYEE      | By:                     |   |   |
|          |                    |   |
|          | Title:                  |   |   |
|               |                         |        |  |  |

 

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