Document:

pcti-ex1015_444.htm

Exhibit 10.15

PCTEL, INC.

DAVID A. NEUMANN
EMPLOYMENT AGREEMENT

This Employment Agreement, dated as of December 5, 2016 (the “Effective Date”), is made and entered into by and between PCTEL, Inc. (the “Company”) and David A. Neumann (“Executive”).

1.Duties and Scope of Employment.  Commencing January 2, 2017, Executive will serve as the Company’s Chief Executive Officer and will render such business and professional services in the performance of his duties, consistent with Executive’s position within the Company, as shall reasonably be assigned to him by the Company’s Board of Directors (the “Board”).  The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”

2.At‐Will Employment.  The parties agree that Executive’s employment with the Company will be “at will” employment and may be terminated at any time, with or without cause or notice, by either the Company or Executive. 

3.Compensation.

(a)Base Salary.  During the Employment Term, the Company will pay Executive as compensation for his services a base salary at an annualized rate determined by the Board (the “Base Salary”).  Executive’s initial Base Salary is $350,000 per annum.  Executive’s Base Salary will be reviewed on an annual basis by the Compensation Committee (the “Committee”), with advice from its compensation consultant or other advisors, if any, and the Committee shall make a recommendation regarding the Executive’s Base Salary to the Board in accordance with the Committee’s and the Board’s established procedures. 

(b)Bonus and Incentives.  Executive shall be eligible to receive annual bonuses through short-term incentives (“STI”), long‐term incentives, and such other elements of compensation (whether in cash or equity) as determined by and at the discretion of the Board.  For 2017, the maximum potential award under the short-term incentive plan as a percentage of annual salary will be 130%. 

(c)Modifications. The Company will not, without Executive’s written consent, materially modify Executive’s combined Base Salary and STI in a manner which (either individually or when aggregated with any prior modifications) results in a reduction for Executive of 10% or more (determined for the purpose of the STI at the incentive opportunity at target), unless such reduction is made on the same or substantially similar basis for substantially all senior executives of the Company.

4.Employee Benefits.  During the Employment Term, Executive will be entitled to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other employees of the Company, including, without limitation, the 

 

 

Company’s group medical, dental, vision, disability, life insurance, and 401(k) plans.  The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.  The Company will not materially reduce, without good business reasons, the facilities or perquisites (including office space and location) available to Executive immediately prior to such reduction.

5.Vacation.  Executive will be entitled to paid vacation of twenty‐five (25) days per year, in addition to the Company’s paid holidays.

6.Expenses.  The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.  In addition, the Company will provide the following:

	
(i) 
	
a one‐time reimbursement to Executive of actual and reasonable expenses incurred by Executive in connection with a legal review of this Agreement; 

	
(ii)
	
in connection with his relocation to Illinois:  

(a)reimbursement for actual expenses for two house hunting trips; 

	
 
	
(b)
	
reimbursement for actual closing costs associated with the sale of his current home and purchase of his new home in Illinois;

(c)reimbursement for the cost of up to sixty (60) days of temporary housing, if temporary housing is necessary;

(d)reimbursement for actual costs of moving and any temporary storage; and

(e)$25,000 as a one-time grant for miscellaneous expenses related to relocation; and

	
(iii)
	
an annual reimbursement of up to $6,000 per year for financial and tax advisory services and tax preparation.  

Such reimbursements will be subject to documentation required under, and will be paid in accordance with, the Company’s expense reimbursement policy as in effect from time to time and may constitute income to Executive under then current tax laws.

7.Severance.

(a)Termination Following a Change of Control.  If Executive’s employment is terminated within twelve (12) months following a Change of Control, the severance and other benefits to which Executive is entitled shall be governed by the Management Retention Agreement then in effect between the Company and Executive (which includes the definition of Change of Control).

(b)Involuntary Termination other than for Cause; Voluntary Termination for Good Reason Apart From a Change of Control.  If either prior to the occurrence of a 

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Change of Control or after the twelve (12) month period following a Change of Control, Executive’s employment with the Company is terminated either (A) involuntarily by the Company for reasons other than Cause, or (B) by Executive pursuant to a Voluntary Termination for Good Reason, and Executive signs and does not revoke a standard mutual release of claims with the Company pursuant to Section 11, then, subject to Section 12, Executive shall be entitled to receive the following benefits from the Company:

(i)Salary Continuation.  Executive shall be entitled to receive continuing payments of salary (less applicable withholding taxes) at the rate equal to Executive’s Base Salary, as then in effect, for a period of twelve (12) months from the date of such termination in accordance with the Company’s normal payroll policies.  

(ii)Short‐Term and Long‐term Incentives.  Executive shall be entitled to receive cash and/or equity awards under the Company’s short‐term incentive program (or other bonus program) then in effect and equity under the long‐term incentive program then in effect, in each case, in the amount determined in accordance with the terms of such programs (without giving effect to any requirement to remain an employee on the date of vesting or payment of the award).  The awards shall be determined based upon actual performance and will be paid on a pro‐rated basis for the period of employment, less applicable withholding taxes, following the completion of the performance period and the determination by the Committee of the amount to be paid.  The Company shall pay the bonuses and awards to the Executive at the same time that other employees participating in the program receive them, but in no event later than the next regular payday after the date when the Committee has determined the amount to be paid.

(iii)Benefits.  Subject to  Executive’s right to continue health insurance under the Consolidated Omnibus Reconciliation Act of 1985, as amended (“COBRA”), should Executive elect COBRA within the required period, the Company shall pay, or reimburse Executive for the cost of, COBRA premiums for continued health coverage (i.e., medical, dental and vision as then offered by Company) for a period of twelve (12) months for Executive and his eligible dependents who were receiving healthcare coverage under the Company’s healthcare plans on the date of separation.  Executive will be responsible for any and all taxes on income related to such subsidized COBRA payments, as well as any COBRA payments after such twelve‐month period elapses.

(iv)Accelerated Vesting.  All equity awards then held by Executive with restrictions that are time‐based shall accelerate or if Executive is then holding unvested shares, the Company’s right to repurchase the then‐unvested shares under each such equity award shall lapse.  All performance‐based equity awards then held by Executive shall vest and then pay‐out in accordance with the terms thereof based upon actual performance for the entirety of the then current performance period. 

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(v)Terms.  The benefits set forth in this Section 7(b) are in addition to and not in lieu of any other benefits which Executive may be expressly entitled to receive resulting from Executive’s involuntary termination of employment pursuant to any Company severance and benefit plans and practices, or pursuant to other agreements with the Company.  Such other benefits will be provided to Executive in accordance with the terms of the related plans or agreements.

8.Sections 280G and 4999.  The Company’s obligations to provide the compensation, equity and other benefits as set forth in Section 7 above are expressly conditioned upon Executive’s compliance with the covenants set forth in Section 14 below, and are not contingent upon any event constituting a change of effective control or ownership of the Company or in the ownership of a substantial portion of the assets of the Company.  In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s severance benefits under the Employment Agreement shall be payable either

(i)in full, or

	
 
	
(ii)
	
as to such lesser amount which would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive, on an after‐tax basis, of the greatest amount of severance benefits under the Employment Agreement, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code.  Any determination required under this Section shall be made in writing by the Company’s independent public accountants (the “Accountants”) whose determination shall be conclusive and binding upon Executive and the Company for all purposes; provided, however, that upon request of Executive the Company shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the “Accountants” hereunder).  For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section.  Any reduction in payments and/or benefits required by this Section 8 shall occur in the following order: (1) reduction of cash payments, and (2) reduction of other benefits paid to Executive.  In the event that acceleration of vesting of equity awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant for Executive’s equity awards. 

9.Voluntary Termination; Termination for Cause.  If Executive’s employment is terminated by the Company for Cause, or by Executive for any reason other than pursuant to a 

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Voluntary Termination for Good Reason, then all further vesting of any stock options, restricted stock award or other Company equity compensation held by Executive will cease immediately and all rights to receive further compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned).

10.Death and Disability.  If Executive’s employment terminates as a result of death or Disability, Executive (or his estate, as applicable) shall be entitled to receive the following benefits from the Company:

(a)Salary.  Executive shall be entitled to receive continuing payments of salary (less applicable withholding taxes) at the rate equal to Executive’s Base Salary, as then in effect, for a period of twelve (12) months in accordance with the Company’s normal payroll policies.

(b)Bonuses.  Executive shall receive the target bonus in effect for the performance period during which Executive’s employment is terminated.  Such bonus shall be paid to Executive as soon as practicable following the completion of the performance period and the determination of the amount of bonus to be paid.

(c)Equity Incentives.  All unvested equity incentives, whether time‐based or performance‐based, shall immediately accelerate and vest in full, and all repurchase restrictions in favor of the Company shall immediately lapse.  Performance‐based incentives in which a range of incentives above or below the target may be earned dependent on the achievement of different levels of performance, which this section shall accelerate and vest as to the targeted number of incentives.

11.Separation Agreement and Mutual Release.  The receipt of any severance payments or benefits pursuant to this Agreement will be subject to Executive signing and not revoking a separation agreement and mutual release of claims (in a form reasonably acceptable to the Company) and provided that such separation agreement and mutual release of claims is effective within sixty (60) days following the termination date.  No severance pursuant to this Agreement will be paid or provided until the separation agreement and mutual release of claims becomes effective.  If Executive should die before all of the severance amounts have been paid, such unpaid amounts will be paid in a lump‐sum payment promptly following such event to Executive’s designated beneficiary, if living, or otherwise to the personal representative of Executive ‘s estate.

12.Section 409A.

(a)Timing of Severance Payments.  Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A of the Code and the final regulations and any other guidance promulgated thereunder (“Section 409A”) at the time of his termination (other than due to death), the severance payable to Executive, if any, pursuant to this Agreement, when considered together with any other severance payments or separation benefits which may be considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”), that is payable within the first six (6) months 

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following Executive’s termination of employment will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s termination of employment.  All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.  Notwithstanding anything herein to the contrary, if Executive dies following his termination but prior to the six (6) month anniversary of his termination, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under this Agreement is intended to constitute separate payments for purposes of Section 1.409A‐2(b)(2) of the Treasury Regulations.  In addition to the foregoing, to the extent that any payment of deferred compensation subject to Section 409A is contingent upon the execution of a written release, if the designated period for executing a written release spans two of Executive’s tax years, the payment will be paid in the second tax year.

(b)Short‐Term Deferral.  Any amount paid under the Agreement that satisfies the requirements of the “short‐term deferral” rule set forth in Section 1.409A‐1(b)(4) of the Treasury Regulations shall not constitute Deferred Compensation Separation Benefits for purposes of Section 12(a).

(c)Involuntary Separation from Service.  Any amount paid under the Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section l.409A‐1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit shall not constitute Deferred Compensation Separation Benefits for purposes of Section 12(a).  For purposes of this Agreement, “Section 409A Limit” shall mean the lesser of two (2) times: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s taxable year of Executive ‘s termination of employment as determined under Treasury Regulation 1.409A‐l(b)(9)(iii)(A)(l) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

(d)Amendment.  This provision is intended to comply with the requirements of Section 409A so that none of the Deferred Compensation Separation Benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.  The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

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13.Definitions.

(a)Cause.  “Cause” shall mean:

(i)An act of personal dishonesty taken by Executive in connection with his responsibilities as an employee and intended to result in substantial personal enrichment of Executive;

(ii)Executive being convicted of, or a plea of nolo contendere to, a felony;

(iii)A willful act by Executive which constitutes gross misconduct and which is injurious to the Company; or

(iv)Following delivery to Executive of a written demand for performance from the Company that describes the basis for the Company’s reasonable belief that Executive has not substantially performed his duties, and after affording the Executive a reasonable opportunity to cure within a reasonable period of time, there are continued violations by Executive of Executive’s obligations to the Company which are demonstrably willful and deliberate on Executive’s part.

(b)Disability.  “Disability” shall mean that:

(i)the Executive has been unable to perform his Company duties as the result of his incapacity due to physical or mental illness, and such inability, at least 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be unreasonably withheld). Termination resulting from Disability may only be effected after at least 30 days' written notice by the Company of its intention to terminate the Executive's employment. In the event that the Executive resumes the performance of substantially all of his duties hereunder before the termination of his employment becomes effective, the notice of intent to terminate shall automatically be deemed to have been revoked.

(ii)Executive is determined to be totally disabled by the Social Security Administration.

(c)Voluntary Termination for Good Reason.  “Voluntary Termination for Good Reason” shall mean Executive voluntarily resigns after the occurrence of any of the following without Executive’s express written consent:

(i)A material reduction of Executive’s duties, authority or responsibilities (including any change in title that would compromise Executive’s direct reporting responsibility to the Board) relative to Executive’s duties, authority or responsibilities as in effect immediately prior to such reduction, or the assignment to Executive of such reduced duties, authority or responsibilities;

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(ii)A violation of the covenants regarding Executive’s compensation in Section 3; 

(iii)A relocation of Executive to a facility or location more than fifty (50) miles from the principal business office of the Company on the execution date of this Agreement (excluding Executive’s voluntary relocation to Chicago); or

(iv)Any other action or inaction that constitutes a material breach by the Company of this Agreement;

provided, however, that before Executive’s employment may be terminated by a Voluntary Termination for Good Reason, (A) Executive must provide written notice to the Company, within ninety (90) days of the initial existence of the Voluntary Termination for Good Reason condition, setting forth the reasons for Executive’s intention to terminate his employment as a result of a Voluntary Termination for Good Reason, (B) the Company must have an opportunity within thirty (30) days following delivery of such notice to cure the Voluntary Termination for Good Reason condition, and (C) Executive’s employment must terminate within twelve (12) months of the initial existence of the Voluntary Termination for Good Reason condition.

14.Conditional Nature of Severance Payments.

(a)Noncompete.  Executive acknowledges that the nature of the Company’s business is such that if Executive were to become employed by, or substantially involved in, a Restricted Business (as defined below) during the twelve (12) months following the termination of Executive’s employment (the “Restricted Period”) with the Company for any reason (whether during the Employment Term or subsequent to the end of such period), it would be very difficult for Executive not to rely on or use the Company’s trade secrets and confidential information. Thus, Executive agrees and acknowledges that his right to receive the severance payments and benefits set forth in Section 7 (to the extent Executive is otherwise entitled to such payments and benefits) shall be conditioned upon Executive not directly or indirectly engaging in (whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate officer, director or otherwise), nor having any ownership interest in or participating in the financing, operation, management or control of, any person, firm, corporation or business that competes in the markets for the Restricted Business (as defined below) during the Restricted Period; provided, however, that nothing in this Section 14(a) shall prevent Executive from owning as a passive investment less than one percent (1%) of the outstanding shares of the capital stock of a publicly‐held company if (A) such shares are actively traded on the New York Stock Exchange or the Nasdaq Global Market and (B) Executive is not otherwise associated with such company or any of its affiliates.  A “Restricted Business” is a business which is engaged in the design, development, manufacture, production, marketing, sale, licensing or servicing of any products, or the provision of any services, that are the same as or substantially similar to those of the Company, or a business which is otherwise one of the top fifteen (15) competitors of the Company during the Restricted Period.  Upon any breach of this section, all severance payments and benefits pursuant to this Agreement shall immediately cease.

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(b)Non‐Solicitation.  During the twelve (12) month period following the termination of Executive’s employment with the Company for any reason (whether during or after the Employment Term), Executive agrees and acknowledges that Executive’s right to receive the severance payments and benefits set forth in Section 7 (to the extent Executive is otherwise entitled to such payments and benefits) shall be conditioned upon Executive not either directly or indirectly soliciting, inducing, attempting to hire, recruiting, encouraging, taking away, hiring any employee of the Company or causing an employee to leave his or her employment either for Executive or for any other entity or person.

15.Assignment.  This Agreement will inure to the benefit of the heirs, executors and legal representatives of Executive upon Executive’s death and will be binding upon and inure to the benefit of any successor of the Company.  Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes.  For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.  None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution.  Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

16.Notices.  All notices, requests, demands and other communications called for hereunder shall be in writing and shall be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a well‐established commercial overnight service, or four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

If to the Company:

PCTEL, Inc.
471 Brighton Drive
Bloomingdale, Illinois 60108
Attention: General Counsel

If to Executive:

David A. Neumann
at the last residential address known by the Company.

17.Severability.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

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18.Arbitration and Equitable Relief.

(a)Arbitration.  Except as provided in Section 18(b) below, Executive agrees that any dispute or controversy arising out of, relating to, or concerning Executive’s employment with the Company or the termination of Executive’s employment with the Company, or any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Cook County, Illinois, in accordance with the National Rules for Resolution of Employment Disputes then in effect of the American Arbitration Association, except as provided in Section 18(b) below.  The arbitrator may grant injunctions or other relief in such dispute or controversy.  The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration.  Judgment may be entered on the arbitrator’s decision in any court having jurisdiction.  The substantially prevailing party shall be awarded his or its reasonable attorney’s fees and costs, including any amounts paid to the arbitrator and American Arbitration Association.  This arbitration clause constitutes a waiver of Executive’s and the Company’s right to a jury trial and relates to the resolution of all disputes relating to all aspects of the employer/employee relationship, including, but not limited to, the following claims:

(i)Any and all claims for wrongful discharge of employment; breach of contract, both express and implied; breach of the covenant of good faith and fair dealing, both express and implied; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; and defamation;

(ii)Any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, and the Fair Labor Standards Act; and

(iii)Any and all claims arising out of any other laws and regulations relating to employment or employment discrimination.

(b)Equitable Remedies.  Executive agrees that it would be impossible or inadequate to measure and calculate the Company’s damages from any breach of the covenants set forth in Section 14.  Accordingly, Executive agrees that if Executive breaches such covenants, the Company will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and to specific performance of any such provision of this Agreement.  Executive further agrees that no bond or other security shall be required in obtaining such equitable relief.

(c)Administrative Relief.  Executive understands that this Agreement does not prohibit Executive from pursuing an administrative claim with a local, state or federal administrative body, such as the Illinois Department of Human Rights, the Equal Employment Opportunity Commission or the Workers’ Compensation Commission.  

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This Agreement does, however, preclude Executive from pursuing court action regarding any such claim (other than workers’ compensation claims).

19.Integration.  This Agreement represents the entire agreement and understanding between the parties as to the subject matter herein except the Management Retention Agreement referenced herein, as it may be amended from time to time.  This Agreement specifically supersedes that certain letter from the Company dated September 24, 2013 regarding severance benefits as well as all other prior or contemporaneous agreements whether written or oral, including any consulting or independent contractor agreements. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto.

20.Tax Withholding.  All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

21.Governing Law.  This Agreement will be governed by the laws of the State of Illinois (with the exception of its conflict of law’s provisions), and all actions to enforce its terms will be venued exclusively in Cook County, Illinois.

 

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

 

PCTEL, INC.

Signature: /s/Gina Haspilaire

Name: Gina Haspilaire

Title: Chair of the Compensation Committee of the Board of Directors

 

EXECUTIVE

Signature: /s/ David A. Neumann

Title: VP/GM

 

‐12‐pcti-ex1016_481.htm

 

EXHIBIT 10.16

PCTEL, INC.

AMENDED AND RESTATED MANAGEMENT RETENTION AGREEMENT

This Amended and Restated Management Retention Agreement (the “Agreement”) is made and entered into on the 9th day of April, 2013 by and between David Neumann (the “Executive”) and PCTEL, Inc. (the “Company”).     

R E C I T A L S

A.It is expected that the Company from time to time may consider a Change of Control (as defined below).  The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to Executive and can cause Executive to consider alternative employment opportunities.  The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of a Change of Control of the Company.

B.The Board believes that it is in the best interests of the Company and its stockholders to provide Executive with an incentive to continue his/her employment and to motivate Executive to maximize the value of the Company upon a Change of Control for the benefit of its stockholders.

C.The Board believes that it is imperative to provide Executive with certain benefits upon a Change of Control and severance benefits upon Executive's termination of employment following a Change of Control which provide Executive with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change of Control.

D.Certain capitalized terms used in this Agreement are defined in Section 4.

The parties hereto agree as follows:

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

2.At-Will Employment.  The Company and Executive acknowledge that Executive’s employment is and shall continue to be at-will, as defined under applicable law, and may be terminated by either party at any time, with or without cause or notice, except as may be provided to the contrary in any written employment agreement or similar arrangement between the Company and Executive.  If Executive’s employment terminates for any reason, including (without limitation) any termination prior to a Change of Control, Executive shall be entitled to such payments, benefits, damages, awards and compensation as provided by this Agreement, or pursuant to other written agreements between Executive and the Company.

 

 

3.Change of Control Severance Benefits.

(a)Change of Control.  Upon the occurrence of a Change of Control, the unvested portion of all Executive’s outstanding equity awards (including, but not limited to, stock options and restricted stock grants) with a performance-based vesting schedule shall be automatically amended to convert such equity awards to a time-based vesting schedule (the “Converted Awards”).  Each Converted Award shall vest as to one forty-eighth (1/48th) of the shares subject to the award each month, provided that Executive remains an employee of the Company through each such date.  Executive shall be given vesting credit from the original date of grant as if each Converted Award had been subject to a time-based vesting schedule from its grant date.  For purposes of this Section 3(a), the number of shares subject to the Converted Award shall be the amount of the award that is targeted for achievement during the total performance period (whether measured in one or more fiscal periods) in which the Change of Control occurs, regardless of any actual level of achievement subsequently determined.  Converted Awards shall be subject to the provisions of Section 3(b)(iii).  In the event of a conflict between the terms and conditions of the Company’s 1997 Stock Plan, as amended from time to time (the “Option Plan”), the agreements relating to Executive’s equity awards, and this Section 3(a), the terms and conditions of this Section 3(a) shall prevail and any subsequent documents that purport to modify this Agreement shall be without effect unless they specifically refer to this Agreement.

(b)Involuntary Termination other than for Cause, Death or Disability or Voluntary Termination for Good Reason Following a Change of Control.  If, within twelve (12) months following a Change of Control, Executive’s employment is terminated (1) involuntarily by the Company other than for Cause, death or Disability or (2) by Executive pursuant to a Voluntary Termination for Good Reason, and in either case Executive enters into a standard form of release of claims with the Company pursuant to Section 3(g), the Company shall provide Executive with the following benefits upon such termination:

	
 
	
(i)
	
Severance Payment.  Executive shall be entitled to receive a lump-sum cash payment in an amount equal to two hundred percent (200%) of Executive’s annual base salary.  Such severance payment will be made on the sixtieth (60th) day following the date of Executive’s termination of employment.

	
 
	
(ii)
	
Continued Executive Benefits.  Provided (1) Executive constitutes a qualified beneficiary, as defined in Section 4980B(g)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), and (2) Executive elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant to COBRA, the Company will reimburse Executive for the cost of COBRA premiums for continued health (i.e., medical, dental and vision) coverage at the same level of coverage as was provided to Executive immediately prior to the Change of Control and at the same ratio of Company premium payment to Executive premium 

	

	
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payment as was in effect immediately prior to the Change of Control (the “Company-Paid Coverage”).  If such coverage included Executive’s eligible dependents immediately prior to the Change of Control, such dependents shall also be covered in the same proportion as provided above.  Company-Paid Coverage shall continue until the earlier of (x) twelve (12) months following the date of Executive’s termination, and (y) the date upon which Executive or Executive’s eligible dependents become covered under another employer’s group medical, dental and vision insurance benefit plans.   

	
 
	
(iii)
	
Equity Compensation Accelerated Vesting. One hundred percent (100%) of Executive’s outstanding equity awards (including but not limited to stock options and restricted stock grants) with a time-based vesting schedule (including the Converted Awards) shall immediately accelerate and become completely vested.

(c)Voluntary Resignation.  If Executive’s employment terminates by reason of Executive’s voluntary resignation (other than a Voluntary Termination for Good Reason), then Executive shall not be entitled to receive severance or other benefits except for those (if any) established under the Company’s then existing severance and benefits plans or pursuant to other written agreements with the Company.

(d) Disability; Death.  If Executive’s employment with the Company terminates as a result of Executive’s Disability, or if Executive’s employment is terminated due to the death of Executive, then Executive shall not be entitled to receive severance or other benefits except for those benefits (if any) established under the Company’s then existing severance and benefits plans or pursuant to other written agreements with the Company.

(e) Termination for Cause.  If Executive is terminated for Cause, then Executive shall not be entitled to receive severance or other benefits.

(f) Termination Apart from Change of Control.  In the event Executive’s employment is terminated for any reason, either prior to the occurrence of a Change of Control or after the twelve (12) month period following a Change of Control, then Executive shall be entitled to receive severance and any other benefits only as established under the Company’s then existing severance and benefits plans or pursuant to other written agreements with the Company.

(g) Separation Agreement and Release.  The receipt of any severance payments or benefits pursuant to this Agreement will be subject to Executive signing, delivering and not revoking a separation agreement and release of claims (in a form reasonably acceptable to the Company), provided that such separation agreement and release of claims is effective within sixty (60) days following Executive’s termination date.  No severance pursuant to this Agreement will be paid or provided until the separation agreement and release of claims becomes effective.  If the 60th day after the termination date is in the subsequent calendar year, no payment will be made prior to January 1 of such subsequent calendar year.  If Executive should die before all of the severance 

	

	
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amounts have been paid, such unpaid amounts will be paid in a lump sum payment promptly following such event to Executive’s designated beneficiary, if living, or otherwise to the personal representative of Executive’s estate.

4.Definition of Terms.  The following terms referred to in this Agreement shall have the following meanings:

(a)Cause.  “Cause” means (i) any material act (that remains uncured for thirty (30) days following written notice from the Company) which permits the Company to terminate a written employment agreement or similar arrangement between Executive and the Company, for “cause” or a substantially equivalent term as defined in such agreement or arrangement, or (b) in the event there is no such agreement or arrangement, or the agreement or arrangement does not define the term “cause” or a substantially equivalent term, then “Cause” means: (i) an act of personal dishonesty taken by Executive in connection with his/her responsibilities as an employee and intended to result in substantial personal enrichment of Executive, (ii) Executive being convicted of, or a plea of nolo contendere to, a felony, (iii) a willful act by Executive which constitutes gross misconduct and which is injurious to the Company, or (iv) following delivery to Executive of a written demand for performance from the Company which describes the basis for the Company's reasonable belief that Executive has not substantially performed his/her duties, continued violations by Executive of Executive’s obligations to the Company which are demonstrably willful and deliberate on Executive’s part.

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

	
 
	
(i)
	
Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities who is not already such as of the Effective Date of this Agreement; or

	
 
	
(ii)
	
The consummation of the sale or disposition by the Company of all or substantially all the Company’s assets (for these purposes a substantial sale or disposition will in no event be considered to occur unless at least fifty percent (50%) of the total gross fair market value of all of the assets of the Company are sold or disposed of); or

	
 
	
(iii)
	
The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the 

	

	
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voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

Notwithstanding the foregoing, a transaction will not be deemed a Change of Control unless the transaction qualifies as a change in control event within the meaning of Section 409A of the Code (“Section 409A”).  

(c)Disability.  “Disability” means that:

	
 
	
(i)
	
Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months;

	
 
	
(ii)
	
Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for at least three (3) months under the Company’s accident and health plan; or 

	
 
	
(iii)
	
Executive is determined to be totally disabled by the Social Security Administration. 

(d)Voluntary Termination for Good Reason.  “Voluntary Termination for Good Reason” means Executive voluntarily resigns within thirty (30) days following the expiration of any cure period (as discussed below) after the occurrence of any of the following without Executive’s written consent: 

	
 
	
(i)
	
a material diminution by the Company in the annual base salary of Executive as in effect immediately prior to such reduction (other than a reduction that applies to Company officers and/or managers generally);  

	
 
	
(ii)
	
a material change in the geographic location at which Executive must perform service (in other words, the relocation of Executive to a facility or a location more than thirty-five (35) miles from Executive’s then present location); or

	
 
	
(iii)
	
any other action or inaction that constitutes a material breach by the Company of this Agreement; 

provided, however, that before Executive’s employment may be terminated by a Voluntary Termination for Good Reason, (A) Executive must provide written notice to the Company, within ninety (90) days of the initial existence of the Voluntary Termination for Good Reason condition, setting forth the reasons for Executive’s intention to terminate his/her employment as a result of a Voluntary Termination for Good Reason, and (B) the Company must have an opportunity within thirty (30) days following delivery of such notice to cure the Voluntary Termination for Good Reason condition.

	

	
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For the avoidance of doubt, the voluntary resignation by Executive after the occurrence of either of the following shall not constitute grounds for a “Voluntary Termination for Good Reason”: (1) a reduction of Executive’s duties, titles, authority or responsibilities, relative to Executive’s duties, title, authority or responsibilities as in effect immediately prior to such reduction, as a result of (x) the Company being acquired and made part of a larger entity, or (y) a restructuring of the Company and/or its subsidiaries, or a restructuring of the Company’s employees’ functions, and/or reporting relationships; or (2) a material reduction, without good business reasons, of the facilities or perquisites (including office space and location) available to Executive immediately prior to such reduction.

Notwithstanding anything herein to the contrary, the Company agrees that it will not materially reduce Executive’s aggregate level of Executive benefits, including bonuses, to which Executive was entitled immediately prior to such reduction with the result that Executive’s aggregate benefits package is materially reduced (other than a reduction that generally applies to Company officers and/or managers).

5.Non-Solicitation.  During the twelve (12) month period following the termination of Executive’s employment with the Company for any reason, Executive agrees and acknowledges that Executive’s right to receive the payments and benefits Executive is to receive herein (to the extent Executive is otherwise entitled to such payments and benefits), shall be conditioned upon Executive not either directly or indirectly soliciting, inducing, attempting to hire, recruiting, encouraging, taking away, hiring any employee of the Company or causing an employee to leave his/her employment either for Executive or for any other entity or person.  

6.Section 280G.  Notwithstanding any other provision of this Agreement to the contrary, in the event that the amount of severance and other benefits payable to Executive under this Agreement (including, without limitation, the acceleration of any payment or the accelerated vesting of any payment or other benefit), together with any payments, awards or benefits payable under any other plan, program, arrangement or agreement maintained by the Company or one of its affiliates, would constitute an “excess parachute payment” (within the meaning of Section 280G of the Code), the payments under this Agreement shall be reduced (by the minimum possible amount) until no amount payable to Executive under this Agreement constitutes an “excess parachute payment” (within the meaning of Section 280G of the Code); provided, however, that no such reduction shall be made if the net after-tax payment (after taking into account federal, state, local or other income, employment and excise taxes) to which Executive would otherwise be entitled without such reduction would be greater than the net after-tax payment (after taking into account federal, state, local or other income and employment taxes) to Executive resulting from the receipt of such payments with such reduction. Unless the Company and Executive otherwise agree in writing, any determination required under this Section shall be made in writing, by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon Executive and the Company for all purposes.  For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under 

	

	
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this Section.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section.

7.Section 409A.

(a)Amounts paid under this Agreement are intended to satisfy the requirements of the “short term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations, and thus, will not constitute a “deferral of compensation” governed by Section 409A. 

(b)Amounts paid under this Agreement that do not satisfy the requirements of the “short term deferral” rule as described in clause 7(a) above are intended to satisfy the requirements of the “separation pay plan” rule set forth in Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, and thus, will not constitute a “deferral of compensation” governed by Section 409A.

(c)Amounts paid under this Agreement are intended to constitute “separate payments” for purposes of Treasury Regulation Section 1.409A-2(b)(2).

(d)The Company intends the amounts paid under this Agreement to satisfy either the “short term deferral” rule (described in clause 7(a) above) or the “separation pay plan” rule (described in clause 7(b) above) so that none of the severance payments and benefits provided hereunder will be deemed a deferral of compensation that is subject to the additional tax imposed under Section 409A and any ambiguities herein will be interpreted to satisfy the “short term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations, or alternatively, to satisfy the “separation pay plan” rule set forth in Section 1.409A-1(b)(9)(iii) of the Treasury Regulations.  The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment of severance or other benefits to Executive under Section 409A.

(e)To the extent (i) the requirements for the “short term deferral” rule and/or the “separation pay plan” rule are not satisfied, and (ii) Executive is a “specified employee” of the Company (or any successor entity thereto) within the meaning of Section 409A(a)(2)(B)(i) on the date of Executive’s termination (other than a termination due to death), then the portion of the severance payments payable to Executive, if any, under this Agreement, when considered together with any other severance payments or separation benefits that is deemed a deferral of compensation under Section 409A shall be delayed until the earlier of: (A) the date that is six (6) months and one (1) day after the date of termination, or (B) the date of Executive’s death (such date, the “Delayed Initial Payment Date”), and the Company (or the successor entity thereto) shall (x) pay to Executive a lump sum equal to the amount Executive would have otherwise received on or before the Delayed Initial Payment Date, without any adjustment on account of such delay, as if the payments had not been delayed pursuant to this section, and (y) pay the balance of the payments in accordance with any applicable payment schedules set forth herein.  Notwithstanding anything herein to the contrary, if Executive dies following his 

	

	
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or her termination, but prior to the six (6) month anniversary of Executive’s termination date, then any payments which have been delayed in accordance with this clause will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death.    

8.Successors.

(a)Company’s Successors.  Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under this Agreement, the term “Company” shall include any such successor to the Company which executes and delivers an assumption agreement consistent with this Section 8(a) or which becomes bound by the terms of this Agreement by operation of law.

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

9.Notice.

(a)General.  Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or one (1) business day following mailing via Federal Express or similar overnight courier service.  In the case of Executive, mailed notices shall be addressed to him or her at the home address which he/she most recently communicated to the Company in writing.  In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

(b)Notice of Termination.  Any termination by the Company for Cause shall be communicated by a notice of termination to Executive given in accordance with Section 9(a).  Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than thirty (30) days after the giving of such notice).  A termination by Executive pursuant to a Voluntary Termination for Good Reason shall be communicated by a notice of termination to the Company in accordance with Section 4(d) and Section 9(a).

10.Miscellaneous Provisions.

(a)No Duty to Mitigate.  Executive shall not be required to mitigate the value of any benefits contemplated by this Agreement, nor shall any such benefits be reduced by any earnings or benefits that Executive may receive from any other source.

	

	
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(b)Waiver.  No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by two (2) authorized officers of the Company (other than Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)Integration.  This Agreement represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous oral agreements related to the subject matter of this Agreement and the following written agreements:  that certain Management Retention Agreement entered into on April 10, 2012 that superseded the Management Retention Agreement entered into on December 22, 2010; all other provisions of the Amendment shall remain in full force and effect.   No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties (except that the Option Plan may be revised or modified in accordance with its terms) and any subsequent documents that purport to modify this Agreement shall be without effect unless they specifically refer to this Agreement.  

(d)Choice of Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Illinois.

(e)Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(f)Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

	

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

	
PCTEL, INC.
	
EXECUTIVE

 

		
	
Signature: /s/Martin H. Singer

Name: Martin H. Singer

Title: Chairman & CEO
	
Signature: /s/ David A. Neumann

Title: VP/GM

 

 

	

	
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