EMPLOYMENT AGREEMENT by TRANSWITCH CORP /DE
Company: TRANSWITCH CORP /DE
SEC CIK: 944739
SEC Type: EX-10.1
SIC Code: 3674
SIC Industry: SEMICONDUCTORS & RELATED DEVICES
Date Filed: 2012-05-22
This Employment Agreement is made and entered into this 17th day of May, 2012 (the "Agreement"), by and between TranSwitch Corporation, a Delaware corporation whose principal offices are located at 3 Enterprise Drive, Shelton, Connecticut (the "Company") and _______________ (the "Executive").
WHEREAS, Executive is currently employed with the Company; and
WHEREAS, the Company and Executive wish to continue their employment relationship, subject to the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the promises and the covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive hereby agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive hereby accepts such employment upon the terms and conditions set forth in this Agreement.
2. Term. This Agreement shall be effective from May 17, 2012 (the "Effective Date") until terminated by either the Company or the Executive pursuant to Section 5 of this Agreement.
3. Duties and Responsibilities.
(a) The Executive shall function as the ________________ and shall have the full power and authority consistent with the bylaws of the Company to manage and conduct all of the duties of the Executive's position and such other duties consistent with the Executive's position as may be assigned to him from time to time by the President and Chief Executive Officer of the Company. The Executive shall report directly to the President and Chief Executive Officer. In addition, the Company Board of Directors will designate the Executive as a Section 16 officer of the Company. During his employment, the Executive agrees to devote his full time, attention, loyalty, skill and efforts to the performance of his duties to the Company.
(b) The Executive acknowledges that the Company's principal executive offices are currently located in Shelton, Connecticut. The Executive's principal place of employment shall be the Company's principal executive offices. The Executive agrees that he will be regularly present at the Company's principal executive offices. The Executive acknowledges that he may be required to travel from time to time in the course of performing his duties for the Company.
4. Compensation. In consideration of all services rendered by the Executive during the term of his employment, pursuant to this Agreement, the Company will provide the Executive with the following compensation ("Total Compensation") during the term of this Agreement:
(a) Base Annual Salary. The Company shall pay to the Executive a bi-weekly salary of $9,615.39, the annual equivalent of $250,000, for all time worked (the "Base Salary"). The Executive shall receive his Base Salary consistent with the Company's pay periods for similarly situated executives and subject to the regular payroll deductions.
(b) Target Incentive Compensation.
(i) Sales Incentive Plan. Executive shall be eligible to participate in the Company's Sales Incentive Plan, as such plan is promulgated and amended from time to time by the Company Board. The Company retains the right to modify and/or discontinue its Sales Incentive Plan.
(A) Executive shall have a target annual Short-Term Incentive Award for 2012 equivalent to 40% of his base salary payable in cash or Restricted Stock Units ("RSUs") of the Company's common stock or such manner as specified by the terms and conditions of the Company's Sales Incentive Plan. The award of a bonus, if any, will be governed and controlled by the terms and conditions of the Company's Sales Incentive Plan then in effect.
(B) Equity awarded as part of the Company's Sales Incentive Plan for 2012 shall vest 100% on the first anniversary of the grant date pursuant to the terms and conditions of the Company's 2008 Equity Incentive Plan, as amended, the Company's Stock Option Award Terms, and the Company's Restricted Stock Unit Award Agreement.
(ii) Long-Term Incentive Plan. Executive shall be eligible to participate in the Company's Long-Term Incentive Plan, as such plan is promulgated and amended from time to time by the Company Board. The Company retains the right to modify and/or discontinue its Long-Term Incentive Plan.
(c) Employee Benefits.
(i) The Executive will be entitled to participate in the benefit plans and programs (collectively, the "Benefit Plans") as are from time to time generally available to other employees of the Company, subject to the provisions of those Benefit Plans: including, but not limited to, group health, dental and vision insurance, short-term and long-term disability insurance, life and AD&D insurance, flexible spending account, Employee Stock Purchase Plan, and 401(k) plan. Executive will be required to contribute towards the cost of these plans on the same basis as other employees.
(ii) The Executive will be entitled to vacation, holidays, and sick leave in accordance with the Company's policies as they may change from time to time, but in no event shall the Executive be entitled to less than 15 days of paid vacation per year and five days of sick leave per year. Unused vacation days may accrue up to a maximum of 30 days.
(iii) During the term of this Agreement, the Company will provide Executive term life insurance on his life in an amount equal to $500,000.00. The Company will pay for all costs attributable to such coverage. The Executive will have the right to designate the beneficiary of such policy or policies. Upon termination of this Agreement, the Executive shall have the option to assume the premium obligations of the policy or policies, in which event the Company shall assign all its rights in the policy to the Executive.
(d) Business and Travel Related Expenses. Subject to and in accordance with the Company's policies and procedures and upon presentation of itemized receipts, Executive shall be reimbursed by the Company for reasonable and necessary business-related expenses, which expenses are incurred by the Executive on behalf of the Company. Such expenses shall be reviewed from time to time by the Company Chief Financial Officer.
(e) Indemnification Agreement. The Company and the Executive have previously entered into and agree to be bound by that certain Indemnification Agreement which is attached hereto and made a part hereof.
(f) Compensation Review. The Compensation Committee and the Company Board will review the Executive's Total Compensation annually and from time to time with that of other executives in the Company. Executive's performance will be reviewed on a calendar year basis.
5. Termination. This Agreement, and Executive's employment with the Company, shall terminate under the following conditions:
(a) By the Company, immediately on the death of Executive.
(b) By the Executive, upon his voluntary termination, which shall require the Executive to give notice to the Company no later than 30 days before the effective date of such termination. Termination by the Executive for "Good Reason" shall be as set forth in Section 5(g) below.
(c) By the Company, upon the Disability of the Executive, which shall mean a physical or mental infirmity that impairs the Executive's ability to substantially perform the essential duties of his position, with or without a reasonable accommodation as required by applicable federal and state law, for a period of 180 consecutive days ("Disability"). At the end of such 180-day period of Disability, the Company may, at its option, terminate this Agreement.
(d) Termination for Cause. By the Company, for "Cause," which for purposes of this Agreement, shall mean any of the following behaviors by the Executive: (i) the refusal or willful failure to attempt in good faith to perform duties; (ii) dishonesty or willful misconduct in the performance of duties; (iii) involvement in a transaction in connection with the performance of duties for the Company, which transaction is adverse to the interest of the Company or which is engaged in for personal profit; (iv) a
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