Document:

sonm-ex1017_533.htm

 

Exhibit 10.17

October 29, 2019

 

Robert Plaschke

 

 

Re:Transition and Separation Agreement

 

Dear Bob:

 

This letter (the “Agreement”) sets forth the terms and conditions that Sonim Technologies, Inc. (the “Company” or “Sonim”) is offering to aid in your employment transition.

 

1.         EMPLOYMENT AND TRANSITION PERIOD.   As discussed, your service as Chief Executive Officer (“CEO”) of Sonim ended effective October 29, 2019 (the “Transition Date”), as of which date the Company’s Board of Directors (the “Board”) elected a new CEO.  Subject to the terms of this Agreement, you will remain employed by the Company as a Senior Advisor to the Board as described below from the Transition Date through April 30, 2020 (or such earlier date as your employment may be terminated by you or the Company pursuant to Section 1(i) (Early Termination) below) (the “Separation Date”). Additionally, you hereby resign from the Board effective as of the Transition Date.  The period from the Transition Date through the Separation Date shall be deemed the “Transition Period” and your continued employment shall be subject to the following terms:

 

(a)       Title/Position.    As  of  the  Transition  Date,  your  title  shall  change  to “Senior Advisor,” and you agree that you will be deemed to have resigned from any other office or position you may hold within the Company, except that you will remain employed through the Separation Date as contemplated in this Agreement.  You agree to provide any documentation requested by the Company to confirm any such resignation.  You further agree that after the Transition Date, you will not have authority to bind the Company and shall not purport to bind the Company to any representation, promise, or agreement, except with the prior written consent of the Company’s CEO.

 

(b)       Duties.  During  the  Transition  Period,  you  shall  be  responsible  for providing transition information to the CEO and other Sonim personnel, including electronic files, a written briefing, face to face meetings, and personal assistance in transitioning key customer relationships, as requested, with respect to any matters about which you are knowledgeable; and you shall remain available, as requested, to assist with management, oversight, or execution with respect to projects and matters in which you have been involved and to work to finalize deals with customers in which you have been involved  (collectively, the “Transition Duties”).  You agree to make yourself available to perform Transition Duties for up to 40 hours per week for the duration of Transition Period.

 

(c)       Compensation.   During the Transition Period, you will continue to be paid the same base salary now in effect, on the Company’s normal employee payroll schedule, subject to standard deductions and withholdings.

 

 

 

 

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(d)       Benefits.  During the Transition Period, you will be eligible to receive the same employment benefits made available to the Company’s employees generally, in accordance with the terms and conditions of the Company’s benefit plans and policies which may be in effect from time to time and may utilize any and all vacation or paid time off benefits available to you under the Company’s policies.

 

(e)       Equity.   Any outstanding unvested equity awards shall continue to vest during the Transition Period and, if the Company terminates the Transition Period without Cause pursuant to Section 1(i) below, then a portion of your outstanding unvested equity awards shall accelerate and vest, at the date of such termination, to the same extent as they would have vested had you remained in service until April 30, 2020, subject to your satisfaction of the conditions for receipt of the Severance Benefits (as set forth below).  If you resign your employment during the Transition Period, no amount of unvested equity awards shall be accelerated.

 

(f)       Facilities.  During the Transition Period, you shall have continued use of a workspace at the Company’s offices, but will not be required to work from the Company’s offices except as requested by the CEO.  During the Transition Period, you shall have continued use of your Sonim email and voicemail accounts, and you will be expected to perform Transition Duties using such accounts.  After the Separation Date, you shall no longer have access to your Sonim email and voicemail accounts, and you shall provide the Company access and passwords to facilitate monitoring of such accounts by the Company thereafter to ensure Sonim business matters are timely handled.  Upon the Separation Date, an automatic reply message shall be set on your Sonim email account, and an out of office greeting shall be recorded on your Sonim voicemail account, both of which shall be mutually-agreed between you and the Company.

 

(g)       Outside Activities.   During the Transition Period, you may enter into other employment or consulting relationships or otherwise provide services to or engage in business activities for other persons and entities (collectively, “Outside Activities”), provided that such Outside Activities do not: (i) interfere with your availability to perform the Transition Duties; (ii) involve competition with the Company or preparation for such competition; (iii) create an actual, apparent, or potential conflict of interest with the Company, or (iv) harm or threaten to harm the Company’s business or reputation, all as determined in good-faith by the Company in its sole discretion.  To ensure compliance with the foregoing provision, you agree not to engage in any Outside Activities without providing specific information to the Board about any such proposed Outside Activities and obtaining the Board’s advance written approval which approval shall not be unreasonably delayed or withheld.

 

(h)       Compliance  with  Company  Policies  and  Insider  Trading  Laws. During the Transition Period, you will continue to be required to abide by all Company employment policies and procedures, as adopted or modified from time to time.  If requested, you will acknowledge in writing your receipt and understanding of existing, modified, or new Company policies.  The Company may modify, suspend, or revoke any such policies in whole or in  part,  at  any time,  without  advance  notice.    You  further  agree  to  comply with  all  laws applicable to the Company and your continued service to the Company.

 

(i)        Early Termination.   Nothing in this Agreement alters your employment at-will  status.    Accordingly,  during  the  Transition  Period  you  are  entitled  to  resign  your

 

 

 

employment with or without Cause (as defined below) or advance notice, and the Company may terminate your employment with or without Cause or advance notice.

 

(i)        If prior to April 30, 2020, you resign your employment for any reason, then you will be eligible for the Severance Benefits in Section 2 (and not Section 3) as set forth below, provided that you have satisfied the conditions for receipt of the Severance Benefits (as set forth below, including without limitation satisfactory transition of duties during the Transition Period, as determined in good faith by the Board).

 

(ii)       If   prior   to   April   30,   2020,   the   Company   terminates   your employment with Cause, then you will no longer be eligible for participation in any Company benefit plans, and you will not be entitled to any Severance Benefits.

 

(iii)     If you remain employed through April 30, 2020 or if the Company terminates your employment without Cause prior to April 30, 2020, you will be eligible for the Severance Benefits in Section 3 (and not Section 2), provided that you have satisfied the conditions for receipt of the Severance Benefits (as set forth below, including without limitation satisfactory transition of duties during the Transition Period, as determined in good faith by the Board).

 

(j)        Definition of Cause.  For purposes of this Agreement, “Cause” is defined as any of the following: (i) theft, dishonesty, or falsification of any employment or Company record; (ii) conviction (including any plea of guilty or nolo contendere) of a felony or any criminal act that impairs your ability to perform your duties with the Company; (iii) failure or inability to perform any reasonable assigned duties after written notice from the Board of Directors of the Company of, and a reasonable opportunity to cure (of no fewer than 10 business days), such failure or inability, if capable of cure; (iv) improper disclosure of the Company’s confidential or proprietary information; (v) commission of an intentional or grossly negligent act that has a material detrimental effect on the Company’s reputation or business; or (vi) any material breach of any written agreement with the Company, which breach is not cured pursuant to the terms of such agreement (or, if no cure provision is specified therein, after written notice from the Board of Directors of the Company of such breach providing no fewer than 10 business days to cure), if capable of cure, or a material breach of a confidentiality or proprietary information and inventions agreement, which breach shall be deemed non-curable.

 

(k)      Final Pay and Benefits.  On the Separation Date, you will cease to be employed by or hold any office or position with the Company and the Company will pay you all accrued wages, including all accrued and unused paid time off earned through the Separation Date,  subject  to  standard  payroll  deductions  and  withholdings.    You  are  entitled  to  these payments by law.

 

2.SEVERANCE BENEFITS IF RESIGNATION FOR ANY REASON BEFORE APRIL 30,

2020. If prior to April 30, 2020, you resign your employment for any reason, and: you (i) timely

sign  and  return  this  Agreement  to  the  Company,  (ii)  comply  fully  with  your  obligations hereunder (including without limitation satisfactorily transitioning your duties during the Transition Period); and (iii) within twenty-one (21) days after the Separation Date, execute and return to the Company the a release of claims in the form attached hereto as Exhibit A (the

 

 

 

“Separation Date Release”) and allow the Separation Date Release to become effective, then, you and the Company agree that, in full satisfaction of any obligations for the Company to provide you with severance benefits as stated in the Employment Agreement between you and the Company dated August 18, 2018 (the “Offer Letter”), the Company will provide you with the following severance benefits:

 

(a)       Cash Severance.   The Company will pay you salary continuation as if you remained employed through April 30, 2020, at your base salary in effect as of the Separation Date, subject to standard payroll deductions and withholdings (“Early Termination Severance Pay”).  Your Early Termination Severance Pay will be paid in the form of salary continuation payments.    The  salary  continuation  payments  will  be  paid  in  equal  installments  on  the Company’s regular payroll schedule and will be subject to applicable tax withholdings over the period beginning on the Separation Date and ending on April 30, 2020; provided, however, that no payments will be paid prior to the 30th  day following the Separation Date.  On the 30th day following  your  Separation  Date,  the  Company  will  pay  you  in  a  lump  sum  the  salary continuation payments that you would have received on or prior to such date under the original schedule but for the delay while waiting for the 30th day in compliance with Section 409A of the Code and the effectiveness of the release, with the balance of the salary continuation payments being paid as originally scheduled.

 

(b)Health Care Continuation Coverage.

 

(i)        COBRA.  To the extent provided by the federal COBRA law or, if applicable, state insurance laws, and by the Company’s current group health insurance policies, you will be eligible to continue your group health insurance benefits at your own expense.  Later, you may be able to convert to an individual policy through the provider of the Company’s health insurance, if you wish.

 

(ii)       COBRA Premiums. If you timely elect continued coverage under COBRA, the Company will pay your COBRA premiums to continue your coverage (including coverage for eligible dependents, if applicable) (“COBRA Premiums”) through the period (the “COBRA Premium Period”) starting on the Separation Date and ending on the earliest to occur of: (i) April 30, 2020; (ii) the date you become eligible for group health insurance coverage through a new employer; or (iii) the date you cease to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event you become covered under another employer's group health plan or otherwise cease to be eligible for COBRA during the COBRA Premium Period, you must immediately notify the Company in writing of such event.

 

(iii)   Special Cash Payments in Lieu of COBRA Premiums. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the COBRA Premiums without a substantial risk of violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company instead shall pay to you, on the first day of each calendar month, a fully taxable cash payment equal to the applicable COBRA premiums for that month (including premiums for you and your eligible dependents who have elected and remain enrolled in such COBRA coverage), subject to applicable tax withholdings (such amount, the “Special Cash Payment”), for the remainder of the COBRA  Premium  Period.    You  may,  but  are not  obligated  to,  use such  Special  Cash

 

 

 

Payments toward the cost of COBRA premiums.  On the thirtieth (30th) day following your Separation from Service, the Company will make the first payment to you under this paragraph, in a lump sum, equal to the aggregate Special Cash Payments that the Company would have paid to you through such date had the Special Cash Payments commenced on the first day of the first month following the Separation from Service through such thirtieth (30th) day, with the balance of the Special Cash Payments paid thereafter on the schedule described above.

 

3.SEVERANCE BENEFITS IF THE TRANSITION PERIOD ENDS ON APRIL 30, 2020

OR TERMINATION WITHOUT CAUSE PRIOR THERETO. If, prior to April 30, 2020, the Company

terminates your employment without Cause, or, if you remain employed through April 30, 2020, and: you (i) timely sign and return this Agreement to the Company, (ii) comply fully with your obligations hereunder (including without limitation satisfactorily transitioning your duties during the Transition Period through April 30, 2020); and (iii) within twenty-one (21) days after the Separation Date, execute and return to the Company the Separation Date Release and allow the Separation Date Release to become effective, then, you and the Company agree that, in full satisfaction of any obligations for the Company to provide you with severance benefits as stated in the Offer Letter, the Company will provide you with the following severance benefits:

 

(a)Severance.

 

(i)        If,  prior  to  April  30,  2020,  the  Company  terminates   your employment without Cause, the Company will pay you salary continuation as if you remained employed through April 30, 2020, at your base salary in effect as of the Separation Date, subject to standard payroll deductions and withholdings; and

 

(ii)      Regardless of payments under Section 3(a)(i) above, if any, the Company will pay you a lump sum amount equal to not less than three (3), but no more than six (6), months of your base salary, subject to standard payroll deductions and withholdings (excluding payments under Section 3(a)(i), if any, “Full Period Severance Pay”).   Your Full Period Severance Pay will be determined by the Board, in its sole discretion, based on your performance as a Senior Advisor during the Transition Period. On the 30th  day following the Separation Date, the Company will pay you the Full Period Severance Pay amount that the Board determined to pay to you, in its sole discretion, based on your performance.

 

(b)Health Care Continuation Coverage.

 

(i)        COBRA.  To the extent provided by the federal COBRA law or, if applicable, state insurance laws, and by the Company’s current group health insurance policies, you will be eligible to continue your group health insurance benefits at your own expense.  Later, you may be able to convert to an individual policy through the provider of the Company’s health insurance, if you wish.

 

(ii)       COBRA Premiums. If you timely elect continued coverage under COBRA, the Company will pay your COBRA premiums to continue your coverage (including coverage for eligible dependents, if applicable) (“COBRA Premiums”) through the period (the “COBRA Premium Period”) starting on the Separation Date and ending on the earliest to occur of: (i) July 30, 2020; (ii) the date you become eligible for group health insurance coverage

 

 

 

through a new employer; or (iii) the date you cease to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event you become covered under another employer's group health plan or otherwise cease to be eligible for COBRA during the COBRA Premium Period, you must immediately notify the Company in writing of such event.

 

(iii)   Special Cash Payments in Lieu of COBRA Premiums. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the COBRA Premiums without a substantial risk of violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company instead shall pay to you, on the first day of each calendar month, a fully taxable cash payment equal to the applicable COBRA premiums for that month (including premiums for you and your eligible dependents who have elected and remain enrolled in such COBRA coverage), subject to applicable tax withholdings (such amount, the “Special Cash Payment”), for the remainder of the COBRA  Premium  Period.    You  may,  but  are not  obligated  to,  use such  Special  Cash Payments toward the cost of COBRA premiums.  On the thirtieth (30th) day following your Separation from Service, the Company will make the first payment to you under this paragraph, in a lump sum, equal to the aggregate Special Cash Payments that the Company would have paid to you through such date had the Special Cash Payments commenced on the first day of the first month following the Separation from Service through such thirtieth (30th) day, with the balance of the Special Cash Payments paid thereafter on the schedule described above.

 

(c)       Extended  Exercise  Period.    The  Company  will  agree  to  extend  the exercise period applicable to your stock options until October 30, 2020.  To the extent the stock options were granted as “incentive stock options” under the Internal Revenue Code, an extension of the exercise period of the stock options may cause them to lose such status and the stock options instead may be treated as non-qualified stock options for federal tax purposes.   This change may be less advantageous to you from a personal tax perspective in certain respects, including an obligation on your part to satisfy any income and employment tax withholding obligations  that  arise  when  you  exercise  the  stock  options.     The  Company  makes  no representation or guarantees regarding the status of your stock options as incentive stock options or otherwise.  You acknowledge that the Company is not providing tax advice to you and that you have been advised by the Company to seek independent tax advice with respect to the exercise and modification of the stock options and any other compensation and benefits that you are receiving under this Agreement.  You acknowledge and agree that, as a condition to any exercise of your stock options, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company (except for the employer’s share of any FICA), arising by reason of the exercise of your stock options with respect to the vested shares.  Except as expressly modified herein, your rights, duties, and obligations with respect to your equity awards (including your right to exercise any vested shares) shall continue to be governed by the terms set forth in the applicable equity plans and agreements.

 

4.         EQUITY.    You  were  granted  options  to  purchase  shares  of  the  Company’s common stock, pursuant to the Company’s 2012 Equity Incentive Plan (the “Plan”).  Except as specifically provided with respect to accelerated vesting under certain conditions set forth in Section 1(e) above and with respect to an extended exercise period under certain conditions set forth in Section 3(c) above, vesting will cease as of the Separation Date and, your rights to

 

 

 

exercise any vested options shall be as set forth in the applicable stock option grant notice, stock option agreement, and/or the Plan and your options shall continue to be governed by the terms of the applicable grant notices, stock option agreements and the Plan.

 

5.         OTHER   COMPENSATION  OR  BENEFITS.    You  acknowledge  that,  except  as expressly provided in this Agreement, you have not earned and will not receive from the Company any additional compensation (including base salary, bonus, incentive compensation, or equity), severance, or benefits after the Separation Date, with the exception of any vested right you may have under the express terms of a written ERISA-qualified benefit plan (e.g., 401(k) account) or any vested equity interests.

 

6.        EXPENSE REIMBURSEMENTS.  You agree that, within ten (10) days after the Separation Date, you will submit your final documented expense reimbursement statement reflecting all business expenses you incurred through the Separation Date, if any, for which you seek reimbursement.  The Company will reimburse you for these expenses pursuant to its regular business practice.

 

7.         RETURN OF  PROPERTY.   By the Separation Date, you agree to return to the Company all Company documents (and all copies thereof) and other Company property which you have in your possession or control, including, but not limited to, Company files, notes, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, customer lists, prospect information, pipeline reports, sales reports, operational and personnel information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited to, computers, printers, mobile telephones, servers), credit cards, entry cards, identification badges and keys; and any materials of any kind which contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part).  You agree that you will make a diligent search to locate any such documents, property and information by the Separation Date.  If you have used any personally owned computer, server, or e-mail system to receive, store, review, prepare or transmit any Company confidential or proprietary data, materials or information, within five (5) business days after the Separation Date, you shall provide the Company with a computer-useable copy of such information and then permanently delete and expunge such Company confidential or proprietary information from those systems; and you agree to provide the Company access to your system as requested to verify that the necessary copying and/or deletion is done.  Your timely compliance with this paragraph is a condition precedent to your receipt of the Severance Benefits.

 

8.       PROPRIETARY INFORMATION OBLIGATIONS.   Both during and after your employment you acknowledge your continuing obligations under your Employee Confidential Information and Invention Assignment Agreement, including your obligations not to use or disclose any confidential or proprietary information of the Company.  A copy of your Employee Confidential Information and Invention Assignment Agreement is attached hereto as Exhibit B.

 

9.         NONDISPARAGEMENT.  You agree not to disparage the Company and its officers, directors and employees in any manner likely to be harmful to them or their business, business reputations or personal reputations; provided that you may respond accurately and fully to any question,  inquiry  or  request  for  information  when  required  by  legal  process  (e.g.,  a  valid

 

 

 

subpoena or other similar compulsion of law) or as part of a government investigation. In addition, nothing in this provision or this Agreement is intended to prohibit or restrain you in any manner from making disclosures that are protected under the whistleblower provisions of federal or state law or regulation.

 

10.      NO VOLUNTARY ADVERSE ACTION; COOPERATION.  Other than with respect to claims brought on your own behalf with respect to unreleased claims you may have against the Company and with respect to claims of breach of this Agreement (“Claims by You”), you agree that you will not voluntarily provide assistance, information or advice, directly or indirectly (including  through  agents  or  attorneys),  to  any  person  or  entity  in  connection  with  any proposed  or  pending  litigation,  arbitration,  administrative  claim,  cause  of  action,  or  other formal proceeding of any kind brought against the Company, its parent or subsidiary entities, affiliates,  officers, directors,  employees  or agents,  nor shall  you  induce or encourage any person or entity to bring any such claims; provided that you may respond accurately and fully to any question, inquiry or request for information when required by legal process (e.g., a valid subpoena or other similar compulsion of law) or as part of a government investigation.  In addition, other than with respect to Claims by You, you agree to voluntarily cooperate with the Company if you have knowledge of facts relevant to any existing or future litigation or arbitration initiated by or filed against the Company by making yourself reasonably available without  further  compensation  for  interviews  with  the  Company  or  its  legal  counsel,  for preparing for and providing deposition testimony, and for preparing for and providing trial testimony.

 

11.       NO ADMISSIONS.  You understand and agree that the promises and payments in consideration of this Agreement shall not be construed to be an admission of any liability or obligation by the Company to you or to any other person, and that the Company makes no such admission.

 

12.RELEASE OF CLAIMS.

 

(a)       General Release.   In exchange for the consideration provided to  you under this Agreement to which you would not otherwise be entitled, you hereby generally and completely release the Company, and its affiliated, related, parent and subsidiary entities,  and its and their current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to or on the date you sign this Agreement (collectively, the “Released Claims”).

 

(b)       Scope of Release.  The Released Claims include, but are not limited to: (i) all claims arising out of or in any way related to your employment with the Company, or the termination of that employment; (ii) all claims related to your compensation or benefits from the Company, including salary, bonuses, commissions, vacation, paid time off, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership, equity, or profits interests in the Company; (iii) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (iv) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of

 

 

 

public policy; and (v) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act (“ADEA”), and the California Labor Code (as amended).

 

(c)       ADEA  Waiver.     You  acknowledge  that   you  are  knowingly  and voluntarily  waiving  and  releasing  any  rights  you  may  have  under  the  ADEA  (“ADEA Waiver”), and that the consideration given for the waiver and release in this Section is in addition to anything of value to which you are already entitled.  You further acknowledge that you have been advised, as required by the ADEA, that:   (i) your waiver and release do not apply to any rights or claims that may arise after the date that you sign this Agreement; (ii) you should consult with an attorney prior to signing this Agreement (although you may choose voluntarily not to do so); (iii) you have twenty-one (21) days to consider this Agreement (although you may choose voluntarily to sign it earlier); (iv) you have seven (7) days following the date you sign this Agreement to revoke the ADEA Waiver (by providing written notice of your revocation to me); and (v) the ADEA Waiver will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth day after you sign this Agreement (“Effective Date”).  Nevertheless, your general release of claims, except for the ADEA Waiver, is effective immediately, and not revocable.

 

(d)       SECTION  1542 WAIVER.    In  giving  the  release  herein,  which  include claims which may be unknown to you at present, you acknowledge having read and understood Section 1542 of the California Civil Code, which reads as follows:  “A general release does not extend to claims which the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”   You hereby expressly waive and relinquish all rights and benefits under that section and any law of any other jurisdiction of similar effect with respect to the releases of claims herein, including but not limited to your release of unknown claims.

 

(e)       Excluded Claims.  Notwithstanding the foregoing, the following are not included  in  the  Released  Claims  (the  “Excluded  Claims”):  (i) any  rights  or  claims  for indemnification you may have pursuant to (A) the charter, bylaws or operating agreements of the Company, (B) any written indemnification agreement with the Company to which you are a party or (C) under applicable law; (ii) any rights which cannot be waived as a matter of law, including without limitation claims under the California Fair Employment and Housing Act, to the extent such claims are not waivable as a matter of law with this release; (iii) any rights you have to file or pursue a claim for workers’ compensation or unemployment insurance; and (iv) any claims for breach of this Agreement.  You hereby represent and warrant that, other than the Excluded Claims, you are not aware of any claims you have or might have against any of the Released Parties that are not included in the Released Claims.

 

13.       PROTECTED RIGHTS. You understand that nothing in this Agreement limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, the California Department of Fair

 

 

 

Employment and Housing, or any other federal, state, or local governmental agency or commission (“Government Agencies”).  You further understand this Agreement does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing  documents  or  other  information,  without  notice  to  the  Company.  While  this Agreement  does  not  limit  your  right  to  receive  an  award  for  information  provided  to  the Securities and Exchange Commission, you understand and agree that, to the maximum extent permitted by law, you are otherwise waiving any and all rights you may have to a monetary award or other individual relief based on any claims that you have released and any rights you have waived by signing this Agreement.

 

14.       REPRESENTATIONS.     You  hereby  represent  that  you  have  been  paid  all compensation owed and for all hours worked, you have received all the leave and leave benefits and protections for which you are eligible pursuant to the federal Family and Medical Leave Act, the California Family Rights Act, or otherwise, and you have not suffered any on-the-job injury for which you have not already filed a workers’ compensation claim.

 

15.       DISPUTE  RESOLUTION.  To  ensure  the  timely  and  economical  resolution  of disputes that may arise in connection with your employment with the Company, you and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the   enforcement,   breach,   performance,   negotiation,   execution,   or   interpretation   of   this Agreement, your employment, or the termination of your employment, including but not limited to statutory claims, shall be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, and to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator, in San Francisco, California, conducted by JAMS, Inc. (“JAMS”) under the then applicable JAMS rules (which can be found at the following web address: https://www.jamsadr.com/rules-employment-arbitration/).   By agreeing to this arbitration procedure, both you and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding.  The Company acknowledges that you will have the right to be represented by legal counsel at any arbitration proceeding.  In addition, all claims, disputes, or causes of action under this paragraph, whether by you or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity.  The arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding.  To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration.  This paragraph shall not apply to an action or claim brought in court pursuant to the California Private Attorneys General Act of 2004, as amended.   The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise  be  permitted  by  law;  and  (b) issue  a  written  arbitration  decision,  to  include  the arbitrator’s essential findings and conclusions and a statement of the award.  The arbitrator shall be authorized to award any or all remedies that you or the Company would be entitled to seek in a court of law.  The Company shall pay all JAMS’ arbitration fees in excess of the amount of court fees that would be required of you if the dispute were decided in a court of law.  Nothing in this Agreement is intended to prevent either you or the Company from obtaining injunctive relief

 

 

 

in court to prevent irreparable harm pending the conclusion of any such arbitration.  Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.

 

16.        IRS CODE SECTION 409A COMPLIANCE.  Notwithstanding anything set forth in this Agreement to the contrary, any payments and benefits provided pursuant to this Agreement which constitute “deferred compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A shall not commence until you have incurred a separation from service as  provided  under  Treasury  Regulation  Section 1.409A-1(h)  (“Separation  From  Service”), unless the Company reasonably determines that such amounts may be provided to you without causing you to incur the additional 20% tax under Section 409A.  For the avoidance of doubt, it is intended that the payments and benefits set forth in this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9) and this Agreement will  be  construed  to  the  greatest  extent  possible  as  consistent  with  those  provisions.    For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulation Section  1.409A-2(b)(2)(iii)),  your  right  to  receive  any  installment  payments  under  this Agreement (whether severance payments, reimbursements, or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment.  To the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A and incorporates by reference all required definitions and payment terms.  Notwithstanding any provision to the contrary in this Agreement, if the Company (or, if applicable, the successor entity thereto) determines that any payments upon your Separation From Service set forth herein and/or under any other agreement with the Company constitute “deferred compensation” under Section 409A and you are, on your Separation From Service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section  409A(a)(2)(B)(i)  of  the  Code,  then,  solely,  to  the  extent  necessary  to  avoid  the incurrence of the adverse personal tax consequences under Section 409A, the timing of the payments upon your Separation From Service shall be delayed until the earlier to occur of: (a) the date that is six months and one day after your Separation From Service, or (b) the date of your death (such applicable date, the “Specified Employee Initial Payment Date”).  On the Specified Employee Initial Payment Date, the Company (or the successor entity thereto, as applicable) shall (A) pay you a lump sum amount equal to the sum of the payments upon your Separation  From  Service  that  you  would  otherwise  have  received  through  the  Specified Employee Initial Payment Date if the commencement of the payment of the severance benefits had not been so delayed pursuant to this section, and (B) commence paying the balance of the severance benefits in accordance with the applicable payment schedules set forth in this Agreement.  Except to the minimum extent that payments must be delayed because you are a “specified employee” (as described above) or until the effectiveness of the Release, all amounts will be paid as soon as practicable in accordance with the Company’s normal payroll practices and no interest will be due on any amounts so deferred.

 

17.       Better After Tax Provision.   If any payment or benefit that you will or may receive from the Company or otherwise (a “280G Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such

 

 

280G Payment will be equal to the Reduced Amount.  The “Reduced Amount” will be either
 
(x) the largest portion of the 280G Payment that would result in no portion of the 280G Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the 280G Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the 280G Payment may be subject to the Excise Tax.  If a reduction in a 280G Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction will occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for you.  If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).  Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the 280G Payment being subject to taxes pursuant to Section 409A of the Code that would not otherwise be subject to taxes pursuant to Section 409A of the Code, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, will be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows: (A) as a first priority, the modification will preserve to the greatest extent possible, the greatest economic benefit for you as determined on an after-tax basis; (B) as a second priority, 280G Payments that are contingent on future events (e.g., being terminated without Cause), will be reduced (or eliminated) before 280G Payments that are not contingent on future events; and (C) as a third priority, 280G Payments that are “deferred compensation” within the meaning of Section 409A of the Code will be reduced (or eliminated) before 280G Payments that are not “deferred compensation” within the meaning of Section 409A of the Code.  If Section 280G of the Code is not applicable by law to you, the Company will determine whether any similar law in your jurisdiction applies and should be taken into account.  The independent professional firm engaged by the Company for general tax audit purposes as of the day prior to the effective date of the Separation Date will make all determinations required to be made under this section.  If the firm so engaged by the Company is serving as accountant or auditor for you, the Company will appoint a nationally recognized independent professional firm to make the determinations required hereunder.   The Company will bear all expenses with respect to the determinations by such firm required to be made hereunder.  The Company will use commercially reasonable efforts to cause the firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to the Company and you within thirty (30) calendar days after the date on which your right to a 280G Payment becomes reasonably likely to occur (if requested at that time by the Company or you) or such other time as requested by the Company or you.  If you receive a

280G Payment for which the Reduced Amount was determined pursuant to clause (x) of the first paragraph of this section and the Internal Revenue Service determines thereafter that some portion of the 280G Payment is subject to the Excise Tax, you will promptly return to the Company a sufficient amount of the 280G Payment (after reduction pursuant to clause (x) of the first paragraph of this section) so that no portion of the remaining 280G Payment is subject to the Excise Tax.  For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of the first paragraph of this section, you will have no obligation to return any portion of the 280G Payment pursuant to the preceding sentence.

 

 

18.

MISCELLANEOUS.

This  Agreement,  including  its  exhibits,  constitutes  the
 
complete,  final  and  exclusive  embodiment  of  the  entire  agreement  between  you  and  the Company with regard to the subject matter hereof, including without limitation your employment agreement with the Company dated August 18, 2018.  It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other agreements, promises, warranties or representations concerning its subject matter.  This Agreement may not be modified or amended except in a writing signed by both you and a duly authorized officer of the Company.  This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns.  If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination shall not affect any other provision of this Agreement and the provision in question shall be modified so as to be rendered enforceable in a manner consistent with the intent of the parties insofar as possible under applicable law.  This Agreement shall be construed and enforced in accordance with the laws of the State of California without regard to conflicts of law principles. Any ambiguity in this Agreement shall not be construed against either party as the drafter. Any waiver of a breach of this Agreement, or rights hereunder, shall be in writing and shall not be deemed to be a waiver of any successive breach or rights hereunder.  This Agreement may be executed in counterparts which shall be deemed to be part of one original, and facsimile and signatures transmitted by PDF shall be equivalent to original signatures.

 

 

 

 

If this Agreement is acceptable to you, please sign below and return the original to me within twenty-one (21) days after the date you receive it.  The Company’s offer contained herein will automatically expire if you do not sign and return it by that date.

 

We wish you the best in your future endeavors.

Sincerely,

Sonim Technologies, Inc.

 

 

 

 

I HAVE READ, UNDERSTAND, AND AGREE FULLY TO THE FOREGOING AGREEMENT:

 

 

 

Exhibit A – Separation Date Release

Exhibit B – Employee Confidential Information and Invention Assignment Agreement

 

 

 

 

EXHIBIT A 

SEPARATION DATE RELEASE

(To be signed on Separation Date or within twenty-one (21) Days thereafter)

 

In exchange for the consideration to be provided to me pursuant to that certain letter transition and separation agreement between me and Sonim Technologies, Inc. (the “Company”) dated [date] (the “Agreement”), I hereby provide the following Separation Date Release. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement.

 

I hereby represent that: (i) I have been paid all compensation owed and have been paid for all hours worked for the Company through the Separation Date; (ii) I have received all the leave and leave benefits and protections for which I am eligible pursuant to the federal Family and Medical Leave Act or otherwise; and (iii) I have not suffered any on-the-job injury for which I have not already filed a claim.

 

I hereby generally and completely release the Company, and its affiliated, related, parent and subsidiary entities,   and its and their current and former directors, officers, employees, shareholders,  partners,  agents,  attorneys,  predecessors,  successors,  insurers,  affiliates,  and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to or on the date I sign this Separation Date Release (the “Released Claims”). The Released Claims include, but are not limited to:  (i) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (ii) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation, paid time off, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership, equity, or profits interests in the Company; (iii) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (iv) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (v) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act (“ADEA”), the California Fair Employment and Housing Act (as amended), and the California Labor Code (as amended).

 

Notwithstanding the foregoing, I am not hereby releasing any of the following claims (the “Excluded Claims”): (i) any rights or claims for indemnification I may have pursuant to (A) the charter, bylaws or operating agreements of the Company, (B) any written indemnification agreement with the Company to which I am a party or (C) or under applicable law; (ii) any rights that are not waivable as a matter of law; (iii) any rights I have to file or pursue a claim for workers’  compensation  or  unemployment  insurance;  and  (iv) any  claims  arising  under  the Agreement after the Separation Date. I understand that nothing in this Release limits my ability to file a charge or complaint with any Government Agency.   I further understand that this Release does not limit my ability to communicate with any Government Agencies or otherwise participate  in  any  investigation  or  proceeding  that  may  be  conducted  by  any  Government

 

 

 

Agency, including providing documents or other information, without notice to the Company.  I understand that while this Release does not limit my right to receive an award for information provided to the Securities and Exchange Commission, I understand and agree that, to the maximum extent permitted by law, I am otherwise waiving any and all rights I may have to individual relief based on any claims that I have released and any rights I have waived by signing this Release.   I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims that I have or might have against any of the parties released above that are not included in the Released Claims.

 

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA (“Release ADEA Waiver”). I also acknowledge that the consideration given for the Release ADEA Waiver is in addition to anything of value to which I am already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) my waiver and release does not apply to any rights or claims that arise after the date I sign this  Separation  Date  Release;  (b)  I  should  consult  with  an  attorney  prior  to  signing  this Separation  Date  Release;  (c) I have  twenty-one  (21)  days  to  consider  this  Separation  Date Release (although I may choose to voluntarily sign it sooner); (d) I have seven (7) days following the date I sign this Separation Date Release to revoke it, with such revocation to be effective only if I deliver written notice of revocation to the Company within the seven (7)-day period; and (e) the Separation Date Release will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth day after I sign it (the   “Release Effective Date”).

 

In giving the general release of claims herein, which includes claims that may be unknown to me at present, I acknowledge that I have read and understand Section 1542 of the California Civil Code, which reads as follows: “A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any other jurisdiction of similar effect with respect to the releases granted herein, including, without limitation, the release of unknown and unsuspected claims granted in this Separation Date Release.

 

This Separation Date Release, together with the Agreement (and its Exhibits), constitutes the entire agreement between me, and the Company with respect to the subject matter hereof. I am not relying on any representation not contained herein or in the Agreement.

 

UNDERSTOOD AND AGREED:

 

 

 

 

	
 
	
By:  
	
 Robert Plaschke
	
 

 

 

 

 

Date: 

 

 

 

EXHIBIT B

 

 

 

EMPLOYMENT CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENTsonm-ex1018_531.htm

Exhibit 10.18

October 28, 2019

 

Mr. Tom Wilkinson

Via E-mail Delivery

 

Re: Employment Agreement

 

Dear Tom:

 

This letter agreement (the “Agreement”) confirms the terms of your employment with Sonim

Technologies, Inc. (the “Company” or “Sonim”).

 

1.         Position and Duties. Beginning on October 29, 2019 (your “Start Date”), you will serve as the Company’s Chief Executive Officer (the “CEO”), reporting to the Company’s Board of Directors (the “Board”). You will also serve as a member of the Company’s Board.  You will work primarily at your office in Austin, TX but may be required to work out of the Company’s office in San Mateo, CA from time to time when required by the Company. Of course, Sonim may change your position, duties, and work location from time to time, as it deems necessary. You will devote your full business time and attention to the business affairs of the Company, except for reasonable vacations and periods of illness or incapacity. Notwithstanding the foregoing, you will be permitted to continue as Interim CEO for Cipherloc Corporation through November 30, 2019, and to serve on the Board of Directors of the following three entities: (1) Astrotech; (2) Cipherloc; and (3) FourBurner Services.  You must obtain approval from the Company’s Board prior to your membership as a member of the Board of Directors of any other entity. As a Sonim employee, you will be expected to abide by Company rules and policies and to acknowledge in writing that you have read the Company’s Employee handbook.

 

2.Compensation and Benefits.

 

(a)        Base Salary. You will receive a base salary of $400,000 per year, less required and designated payroll deductions and withholdings, and payable according to the Company’s regular payroll schedule.  Your annual base salary will be reviewed from time to time and is subject to change at the discretion of the Board. Salary will begin on November 1, 2019.

 

(b)        Benefits. You will be eligible to participate in the Company’s standard employee benefits pursuant to the terms, conditions and limitations of the applicable benefit plans. The Company will fund up to $15,000 per year for your participation in World Presidents Organization activities, following submission of invoices or receipts for any such expenses.  In addition, the Company will provide you with a monthly $2,000 stipend through July 2020 to assist you in maintaining an office space in Austin, TX.  In the event of the consummation of a Change in Control, the Company will use its reasonable best efforts to ensure that the benefits provided to you following the Change in Control (assuming your employment continues) will be equal to or greater than the benefits provided to you as of the date of this Agreement.

 

(c)        Cash Bonus Plan. Beginning with the Company’s 2020 fiscal year, as a member of senior management of the Company, you will be eligible to participate under the Company’s Cash Bonus Plan, the current terms of which are set forth on Exhibit A attached hereto.

 

(d)       Discretionary Bonus. You will be eligible to receive a bonus based on the achievement of specific initiatives that create incremental value the Company, when such specific initiatives are set forth by the Board.  There is no guarantee that any specific initiatives for which you may receive a bonus will be developed at any time.  Any specific initiatives for which you may be eligible to receive a bonus will be developed by the Board and communicated to you in writing.  Any determination as to whether the specific initiatives are achieved and the amount of any bonus earned as a result of the

 

 

October 28, 2019

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achievement of specific initiatives is determined by the Board in its sole discretion.  Any bonus shall be paid within thirty (30) days after the Board’s determination that a bonus shall be awarded.  You must be employed on the day that your bonus (if any) is paid in order to earn the bonus.  Therefore, if your employment is terminated either by you or the Company for any reason prior to the bonus being paid, you will not have earned the bonus and no partial or prorated bonus will be paid.

 

(e)        Equity Incentive Compensation. Subject to approval by the Board, at the first Board meeting following the Start Date, the Company will grant you an option to purchase 200,000 shares of the Company’s common stock (the “Option”).  The Option shall vest over a four-year period, with one quarter (1/4) of the shares subject to the Option vesting on the one year anniversary of the date of grant, and 1/48th   of the shares  vesting in equal monthly installments thereafter, subject to your continued service to the Company.  The Option shall be issued pursuant to the terms and conditions of the Company’s 2012 Equity Incentive Plan (the “Plan”), at an exercise price equal to 100% of the fair market value of the Company’s common stock on the date of grant, as provided in the Plan and consistent with the requirements for an exemption from the application of Section 409A of the Internal Revenue Code (the “Code”), and shall be governed in all respects by the terms of the Plan, the grant notices and the option agreements. In addition, you may be eligible for additional annual equity grants as determined annually by the Board in its sole discretion.  The terms of any such additional grants will be governed by the Plan and the applicable grant notices and options agreements.

 

(f)         Transaction Bonus. The Company will develop a bonus program in which you will be eligible to participate, to incentivize and reward senior managers of the Company in the event of a Change in Control (as defined below) of the Company during a timeframe (the “Term”) to be established by the Company (a “Transaction”), subject to your continued employment at the completion of the Transaction (and with protection for terminations without Cause (as defined below) or resignations for Good Reason (as defined below) after the signing and before completion of a Transaction).  Upon the completion of a Transaction during the Term, a bonus pool (the “Transaction Bonus Pool”) shall be established in an amount that is equal to ten percent (10%) of the consideration payable to Company stockholders in such Transaction after deducting the transaction expenses.  You will have a 50% interest in such Transaction Bonus Pool, and the Board, in consultation with you, shall determine which other members of the Company’s senior management team shall be eligible to participate in the Transaction Bonus Pool and the percentage of the Transaction Bonus Pool that shall be awarded to each.

 

3.         Proprietary Information Agreement and Company Policies. As a condition of your employment, you must sign and abide by the Company’s standard for of Employment, Confidential Information and Invention Assignment Agreement (the “Proprietary Information Agreement”), a copy of which is attached hereto as Exhibit B. In your work for the Company, you will be expected not to use or disclose any confidential information, including trade secrets, of any former employer or other person to whom you have an obligation of confidentiality.  Rather, you will be expected to use only that information which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company.  You agree that you will not bring onto Company premises any unpublished documents or property belonging to any former employer or other person to whom you have an obligation of confidentiality.  You hereby represent that your employment does not create a conflict with any agreement between you and a third-party.

 

4.         No Conflicts. During the term of your employment with the Company, except on behalf of the Company, you agree not to directly or indirectly, whether as an officer, director, employee, stockholder, partner, proprietor, associate, representative, consultant, agent, or in any capacity whatsoever,  engage  in,  become  financially  interested  in,  be  employed  by  or  have  any  business

 

 

October 28, 2019

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connection with any other person, corporation, firm, partnership or other entity whatsoever which is known by you to compete directly with the Company, throughout the world, in any line of business engaged in (or planned to be engaged in) by the Company; provided, however, that you may own, as a passive investor, securities of any publicly-held competitor corporation, so long as your direct holdings in any one such corporation shall not in the aggregate constitute more than 1% of the voting stock of such corporation.

 

5.         At-Will Employment Relationship; Board Resignation. Your employment relationship is at will, meaning either you or the Company may terminate your employment relationship at any time, with or without Cause, and with or without advance notice. In addition, the Company may modify the other terms and conditions of your employment, including, but not limited to, compensation, benefits, position, title, reporting relationship and office location, from time to time in its sole discretion. Your at-will employment  relationship  can  only  be  changed  in  a  written  agreement  signed  by  you  and  a  duly authorized member of the Board.  If you cease serving as the Company’s CEO for any reason, you agree that this Agreement constitutes your resignation from the Board as of the date of such cessation of service.

 

6.Severance Benefits.

 

(a)        Termination by the Company without Cause; Termination Due to Death or Disability; Resignation for Good Reason, Prior to a Change in Control. If at any time prior to a Change in Control, or more than thirteen (13) months after a Change in Control, the Company terminates your  employment  without  Cause,  or  your  employment  terminates  due  to  your  death  or  permanent disability, or you resign for Good Reason, and provided such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “Separation from Service”), and if such termination occurs more than 90 days after your Start Date, then subject to your obligations below, the Company will provide you the following severance benefits:

 

(i)         the Company will make severance payments to you in the form of salary continuation payments for a period of twelve (12) months at the rate of your base salary in effect as of your termination date, less required and designated payroll deductions and withholdings; and

 

(ii)        if you timely elect continued health insurance coverage under COBRA, the Company will reimburse you the cost of your COBRA premiums to continue your coverage (including coverage for eligible dependents, if applicable) (“COBRA Premiums”) through the period (the “COBRA Premium Period”) starting on the Separation Date and ending on the earliest to occur of: (x) twelve (12) months after your termination (y) the date you become eligible for group health insurance coverage through a new employer; or (z) the date you cease to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event you become covered under another employer's group health plan or otherwise cease to be eligible for COBRA during the COBRA Premium Period, you must immediately notify the Company in writing of such event.

 

(b)        Termination by the Company without Cause; Resignation for Good Reason, Following a Change in Control. If at any time within thirteen (13) months after a Change in Control, the Company terminates your employment without Cause, or you resign for Good Reason, and provided such termination constitutes a Separation from Service, then subject to your obligations below, the Company will provide you with the following severance benefits:

 

 

October 28, 2019

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(i)      continuation payments for a period of eighteen (18) months at the rate of your base salary in effect as of your termination date, less required and designated payroll deductions and withholdings;

 

(ii)        if you timely elect continued health insurance coverage under COBRA, the Company will reimburse you for your COBRA Premiums through the period (the “CIC COBRA Premium Period”) starting on the Separation Date and ending on the earliest to occur of: (x) eighteen (18) months after your termination (y) the date you become eligible for group health insurance coverage through a new employer; or (z) the date you cease to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event you become covered under another employer's group health plan or otherwise cease to be eligible for COBRA during the CIC COBRA Premium Period, you must immediately notify the Company in writing of such event; and

 

(iii)       Notwithstanding  the  terms  of  the  Company’s  Cash  Bonus  Plan  that require your continued employment through the determination date of payment of an earned cash bonus, you will be entitled to receive 150% of your Target Bonus for the year of your termination based on full achievement (but no over-achievement) of the Company’s performance targets then in effect under the Cash Bonus Plan.

 

(iv)      the vesting of any then-outstanding stock options/awards as of your termination date shall be accelerated in full as of your termination date.

 

(v)        For purposes of clarity, if you receive severance benefits under this section 6(b), you shall not be eligible for severance benefits under section 6(a).

 

(c)        The severance benefits described above are conditional upon (a) your continuing to comply with your obligations under your Proprietary Information Agreement, including the non- competition and non-solicitation provisions thereof; (b) your delivering to the Company an effective, general release of claims in favor of the Company in a form acceptable to the Company within 30 days following your Separation from Service; and (d) if requested by the Company to confirm your Board resignation pursuant to Section 5 of this Agreement, if you are a member of the Board, your resignation from the Board, to be effective no later than the date of your termination date (or such other date as requested by the Board). The salary continuation payments will be paid in equal installments on the Company’s regular payroll schedule and will be subject to applicable tax withholdings over the period outlined above following the date of your Separation from Service; provided, however, that no payments will be made prior to the 30th day following your Separation from Service. On the 30th day following your Separation from Service, the Company will pay you in a lump sum the salary continuation payments that you would have received on or prior to such date under the original schedule but for the delay while waiting for the 30th day in compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the effectiveness of the release, with the balance of the salary continuation payments being paid as originally scheduled.

 

7.Definitions.

 

(a)        Cause.  For  purposes  of  this  Agreement,  “Cause”  is  defined  as  any  of  the following: (i) your commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States, any state thereof, or any applicable foreign jurisdiction; (ii) your attempted commission of, or participation in, a fraud or act of dishonesty against the Company or any affiliate of the Company; (iii) your intentional, material violation of any contract or agreement between you and the Company or any affiliate of the Company or of any statutory duty owed to the Company or any

 

 

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affiliate of the Company; (iv) your unauthorized use or disclosure of the Company’s or any affiliate of the Company’s confidential information or trade secrets; or (v) your gross misconduct. The determination that a termination of your employment is either for Cause or without Cause shall be made by the Company in its sole discretion.

 

(b)        Change in Control. For purposes of this Agreement, the definition of a “Change in Control” is as defined in section 13(i) of the Company’s 2019 Equity Incentive Plan (as in effect on the date hereof).

 

(c)        Good Reason. For purposes of this Agreement, you will have “Good Reason” for your resignation from your employment with the Company if any of the following actions are taken by the Company without your express written consent:

 

(i)        any failure by the Company to pay, or any material reduction by the Company of (a) your base salary in effect immediately prior to such failure to pay or reduction (unless reductions comparable in amount and duration are concurrently made generally for employees of the Company with responsibilities, organizational level and title comparable to your own), or (b) your bonus compensation amount eligibility, if any, in effect immediately prior to the date of such failure to pay or such reduction (subject to applicable performance requirements with respect to the actual amount of bonus compensation you earn);

 

(ii)        the assignment of any duties, or the reduction of your responsibilities or duties, that are materially inconsistent with your position, duties, responsibilities and status with the Company immediately prior to such assignment or reduction; provided, however, that your assignment to an operating division of an acquiring company that includes the business of the Company following an acquisition, pursuant to which your duties are commensurate with the duties you had before the acquisition, except that the business of the Company is no longer independent but contained in a division, shall not be deemed a material reduction of your responsibilities, duties, or status hereunder and your resignation in connection therewith shall not be deemed for “Good Reason;” or

 

(iii)       the relocation of your principal place of employment to a location that is more than fifty (50) miles from your then-current Board-approved place of work;

 

provided, however, that to resign for Good Reason, you must (1) provide written notice to the Company’s CFO within 30 days after the first occurrence of the event giving rise to Good Reason setting forth the basis for your resignation, (2) allow the Company at least 30 days from receipt of such written notice to cure such event, and (3) if such event is not reasonably cured within such period, your resignation from all positions you then hold with the Company and its subsidiaries (including Board memberships) is effective not later than 90 days after the expiration of the cure period.

 

8.Code Section 409A. It is intended that all of the benefits and payments under this

Agreement satisfy, to the greatest extent possible, the exemptions from the application of Code Section

409A provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions. If not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Code Section 409A and incorporates by reference all required definitions and payment terms. For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section

1.409A-2(b)(2)(iii)), your right to receive any installment payments under this Agreement (whether severance payments, reimbursements or otherwise) will be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder will at all times be considered

 

 

October 28, 2019

Page Six

 

a separate and distinct payment. Notwithstanding any provision to the contrary in this Agreement, if you are deemed by the Company at the time of your Separation from Service to be a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i), and if any of the payments upon Separation from Service set forth herein and/or under any other agreement with the Company are deemed to be “deferred compensation”, then if delayed commencement of any portion of such payments is required to avoid a prohibited  distribution  under  Code  Section  409A(a)(2)(B)(i)  and  the  related  adverse  taxation  under Section 409A, the timing of the payments upon a Separation from Service will be delayed as follows: on the earlier to occur of (i) the date that is six months and one day after the effective date of your Separation from Service, and (ii) the date of the your death (such earlier date, the “Delayed Initial Payment Date”), the Company will (A) pay to you a lump sum amount equal to the sum of the payments upon  Separation  from  Service  that  you  would  otherwise  have  received  through  the  Delayed  Initial Payment Date if the commencement of the payments had not been delayed pursuant to this paragraph, and (B) commence paying the balance of the payments in accordance with the applicable payment schedules set forth above. No interest will be due on any amounts so deferred.

 

9.         Entire Agreement. This Agreement, including Exhibit A and Exhibit B, constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with respect to the terms and conditions of your employment. If you enter into this Agreement, you are doing so voluntarily, and without reliance on any promise, warranty, representation or agreement, written or oral, other than those expressly contained herein. This Agreement supersedes any and all promises, warranties, representations or agreements, whether oral or written, including the Offer Letter. This Agreement may not be amended or modified except by a written instrument signed by you and a duly authorized member of the Board.

 

10.      Enforceability. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement, and  the  Agreement,  including  the  invalid  or  unenforceable provisions, shall be enforced insofar as possible to achieve the intent of the parties.

 

11.       Binding Nature. This Agreement will be binding upon and inure to the benefit of the personal representatives and successors of the respective parties hereto.

 

12.       Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California without regard to conflicts of law principles.

 

13.       Miscellaneous. With respect to the enforcement of this Agreement, no waiver of any right hereunder shall be effective unless it is in writing. For purposes of construction of this Agreement, any ambiguity shall not be construed against either party as the drafter. This Agreement may be executed in more than one counterpart, and signatures transmitted via facsimile shall be deemed equivalent to originals.

 

 

October 28, 2019

Page Seven

 

If these revised terms of your employment with Sonim are acceptable to you, please sign this Agreement and return it to me.

 

 

 

 

 

 

 

EXHIBIT A: CASH BONUS PLAN

 

 

	
 
	
A.
	
Subject to the discretion of the Board of Directors of the Company (the “Board”), you will be eligible for an annual Bonus that will be based upon performance targets set by the Board:
	
 

 

		
	
 
	
 

	
 

2020 and beyond
	
 

100% of Annual Salary

 

 

	
 
	
B.
	
The Board will determine the actual bonus to which you are entitled each year using a formula mutually agreed upon at the beginning of each year.
	
 

 

	
 
	
C.
	
The Company’s performance against targets for each year shall be approved by the Board as soon as practicable following completion of the respective year-end audit (the date of such determination, the “Determination Date”).   The Company’s performance against targets for a year in which a Change in Control occurs shall be determined without taking into consideration any costs associated with the Change in Control that affect the Company’s financial results for that year.
	
 

 

	
 
	
D.
	
If approved, bonus payments will be made annually and in accordance with Company’s standard policies and procedures. Payment shall be conditioned on (1) you being in the Company’s continuous service through the relevant year’s Determination Date and (2) Sonim maintaining an agreed upon minimum cash balance at the end of the fiscal quarter immediately preceding the respective Determination Date. In the event any approved bonus amounts are not paid pursuant to the foregoing subsection (2), such amounts shall be paid to you when and if Sonim achieves the cash balance, at which time you must be in the Company’s continuous service to earn and receive such bonus payment.

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