<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
COMMISSION FILE NUMBER: 000-28217
AIRNET COMMUNICATIONS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 59-3218138
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
</TABLE>
100 RIALTO PLACE, SUITE 300,
MELBOURNE, FLORIDA 32901
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(321) 953-6600
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check X whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT MAY 10, 2000
----- ---------------------------
<S> <C>
Common stock, par value $.001 24,748,435
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
AIRNET COMMUNICATIONS CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Balance Sheets.................................... 3
Condensed Statements of Operations.......................... 4
Condensed Statements of Cash Flows.......................... 5
Notes to Condensed Financial Statements..................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 7
PART II. OTHER INFORMATION:
Item 2. Changes in Securities and Use of Proceeds................... 10
Item 5. Other Information........................................... 10
Item 6. Exhibits and Reports on Form 8-K............................ 10
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
AIRNET COMMUNICATIONS CORPORATION
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
UNAUDITED AUDITED
MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
<S> <C> <C>
Assets
Cash and cash equivalents................................. $ 86,106 $100,423
Accounts receivable, net.................................. 16,360 10,122
Inventories............................................... 20,128 15,978
Other..................................................... 644 500
-------- --------
Total current assets................................... $123,238 $127,023
======== ========
Property and equipment, net............................... 4,583 3,968
Other long-term assets.................................... 22 22
-------- --------
Total assets........................................... $127,843 $131,013
======== ========
Liabilities and Stockholders' Equity
Accounts payable.......................................... $ 6,399 $ 6,464
Accrued expenses.......................................... 2,597 2,101
Current portion of capital lease obligations.............. 364 540
Customer deposits......................................... 4,027 5,234
Deferred revenues......................................... 11,625 8,209
-------- --------
Total current liabilities.............................. 25,012 22,548
Capital lease obligations................................. 300 202
Stockholders' equity...................................... 102,531 108,263
-------- --------
Total liabilities and stockholders' equity............. $127,843 $131,013
======== ========
</TABLE>
See Notes to Condensed Financial Statements.
3
<PAGE> 4
AIRNET COMMUNICATIONS CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
UNAUDITED
THREE MONTHS END
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Net revenues................................................ $ 7,065 $ 2,158
Cost of revenues............................................ 4,628 1,457
------- -------
Gross profit................................................ 2,437 701
Operating expenses
Research and development.................................. 6,078 3,735
Sales and marketing....................................... 2,475 891
General and administrative................................ 1,125 561
Stock-based compensation.................................. 109 46
------- -------
Total costs and expenses............................... 9,787 5,233
------- -------
Loss from operations........................................ (7,350) (4,532)
Other income, net........................................... 1,345 74
------- -------
Net loss.................................................... $(6,005) $(4,458)
------- -------
Preferred dividends(1)...................................... -- 1,694
------- -------
Net loss attributable to common stockholders................ $(6,005) $(6,152)
======= =======
Net loss per share attributable in common
stockholders -- basic and diluted......................... $ (0.26) $(16.66)
Weighted average shares used in calculating basic and
diluted loss per common share............................. 23,262,720 369,309
</TABLE>
- ---------------
(1) All accumulated dividends were cancelled when the Company closed on its
initial public offering in December 1999. This is a non-cash item.
See Notes to Condensed Financial Statements.
4
<PAGE> 5
AIRNET COMMUNICATIONS CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
UNAUDITED
FOR THE THREE MONTHS ENDED
-------------------------------
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Operating activities
Net loss.................................................. $ (6,005) $(4,457)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization.......................... 429 477
Stock-based compensation............................... 109 46
Provision for losses on accounts receivable............ 200 --
Changes in operating assets and liabilities:
Accounts receivable.................................... (6,438) (789)
Inventories............................................ (4,150) (220)
Other assets........................................... (144) 136
Accounts payable....................................... (65) 134
Accrued expenses....................................... 496 (366)
Customer deposits...................................... (1,207) 51
Deferred revenues...................................... 3,416 317
-------- -------
Net cash used in operating activities................ $(13,359) $(4,671)
======== =======
Investing activities
Purchases of property and equipment....................... (897) (126)
-------- -------
Net cash used in investing activities................ $ (897) $ (126)
======== =======
Financing activities
Principal payments on capital lease obligations........... (225) (214)
Proceeds from issuance of common stock.................... 164 2
-------- -------
Net cash used in financing activities................ $ (61) $ (212)
======== =======
Decrease in cash and cash equivalents....................... (14,317) (5,009)
Cash and cash equivalents at beginning of period............ 100,423 7,580
-------- -------
Cash and cash equivalents at end of period.................. $ 86,106 $ 2,571
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest.................. $ 23 $ 13
======== =======
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
Property and equipment acquired under capital lease
obligations............................................ $ 147 $ 518
======== =======
</TABLE>
See Notes to Condensed Financial Statements.
5
<PAGE> 6
AIRNET COMMUNICATIONS CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
1.) BASIS OF PRESENTATION
The accompanying condensed financial statements are unaudited, but in the
opinion of management, reflect all adjustments (consisting only of normal
recurring adjustments) necessary to fairly state the Company's financial
position, results of operations, and cash flows as of and for the dates and
periods presented. The financial statements of the Company are prepared in
accordance with generally accepted accounting principles as adopted in the
United States for interim financial information, the instructions to Form 10-Q
and Rule 10-01 of Regulation S-X.
These unaudited condensed financial statements should be read in
conjunction with the Company's audited financial statements and footnotes
included in the Company's Form 10-K filing on March 29, 2000 and the Company's
Registration Statement on Form S-1 declared effective by the Securities and
Exchange Commission on December 6, 1999. The results of operations for the three
month period ended March 31, 2000 are not necessarily indicative of the results
for the entire year ended December 31, 2000.
2.) INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
<S> <C> <C>
Raw materials.................................. $ 9,947 $ 6,929
Work in process................................ $ 1,192 $ 2,660
Finish goods delivered to customers............ $ 8,989 $ 6,389
------- -------
$20,128 $15,978
</TABLE>
3.) BASIC AND DILUTED NET LOSS PER SHARE
Basic and diluted net loss per share is calculated in accordance with
Statements of Financial Accounting Standards No. 128, "Earnings Per Share." The
denominator used in the computation of basic and diluted net loss per share is
the weighted average number of common shares outstanding for the respective
period. All potentially dilutive securities were excluded from the calculation
of diluted net loss per share, as the effect would be anti-dilutive.
The computation of loss per share is as follows (in thousands, except per
share data):
<TABLE>
<CAPTION>
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Net loss attributable to common stockholders..... $ (6,005) $ (6,152)
Weighted average shares outstanding.............. 23,262,720 369,309
----------- --------
Basic and diluted loss per share................. $ (0.26) $ (16.66)
</TABLE>
4.) CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. The Company's policy
is to invest excess funds with only well-capitalized financial institutions.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FORWARD-LOOKING STATEMENTS
This Form 10-Q includes forward-looking statements concerning pending legal
proceedings and other aspects of future operations. These forward-looking
statements are based on certain underlying assumptions and expectations of
management. Certain factors could cause actual results to differ materially from
the forward-looking statements included in this Form 10-Q. For additional
information on those factors that could affect actual results, please refer to
the Company's Form 10-K for the year ended December 31, 1999.
FINANCIAL CONDITION
This discussion should be read in conjunction with the Notes to Condensed
Financial Statements contained in this report and Management's Discussion and
Analysis of Financial Condition and Results of Operations appearing in the
Company's 1999 Form 10-K. The results of operations for an interim period may
not give a true indication of results for the year. In the following discussion,
all comparisons are with the corresponding items in the prior year.
Overview
The Company provides base stations and other wireless telecommunications
infrastructure products designed to support the GSM, or Global Standard for
Mobile Communications, system of mobile voice and data transmission. The Company
markets its products to operators of wireless networks. A base station is a key
component of a wireless network and is used to receive and transmit voice and
data signals over radio frequencies. The Company's products include the
AdaptaCell, a software-defined base station, meaning it uses software to control
the way it encodes and decodes wireless signals, and the AirSite, a backhaul
free base station, meaning it carries voice and data signals back to the
wireline network without using a physical communications link.
From its inception in January 1994 through May 1997, the Company's
operations consisted principally of start-up activity associated with the
design, development, and marketing of its products. As a result, the Company did
not generate significant revenues until 1998 and generated $26.3 million in net
revenues in 1999 and $7.1 million for the three months ended March 31, 2000. The
Company has incurred substantial losses since commencing operations, and as of
March 31, 2000 had an accumulated deficit of $107.4 million. The Company has not
achieved profitability on a quarterly or annual basis. Because the Company will
need to continue to focus heavily on developing its technology and products,
organizing its sales and distribution systems and assembling the personnel
necessary to support its anticipated growth in the near future, the Company
expects to continue to incur net losses for at least the next several quarters.
The Company will need to generate significantly higher revenues in order to
support expected increases in research and development, sales and marketing and
general and administrative expenses, and to achieve and maintain profitability.
The Company's revenues are derived from sales of a single product line
based on the GSM system. The Company generates a substantial portion of its
revenues from a limited number of customers, with two customers accounting for
96% of net revenues during the three months ended March 31, 2000. Most of the
Company's existing and potential customers are start-up operators that have not
yet commenced the buildout of their networks, obtained necessary financing or
acquired a high degree of familiarity with the Company's products.
7
<PAGE> 8
Results of Operations
The following table sets forth for the periods indicated the results of
operations expressed as a percentage of revenues:
<TABLE>
<CAPTION>
UNAUDITED
THREE MONTHS ENDED
-------------------------------
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Net revenues..................................... 100.0% 100.0%
Cost of revenues................................. 65.5% 67.5%
Gross profit..................................... 34.5% 32.5%
Operating expenses
Research and development....................... 86.0% 173.1%
Sales and marketing............................ 35.0% 41.3%
General and administrative..................... 15.9% 26.0%
Stock based compensation....................... 1.5% 2.1%
Total operating expenses.................... 138.4% 242.5%
Loss from operations............................. -104.1% -210.0%
Other income, net................................ 19.1% 3.4%
Net loss......................................... -85.0% -206.6%
</TABLE>
Three Months Ended March 31, 2000 Compared to Three Months Ended March 31,
1999
Net revenues: Net revenues increased $4.9 million or 227% from $2.2
million for the three months ended March 31, 1999 to $7.1 million for the three
months ended March 31, 2000. This increase is the result of higher shipments,
customer deployments and installations to new and existing customers as they
expand their commercial service networks.
Gross profits: Gross profits increased $1.7 million or 248% from $0.7
million for the three months ended March 31, 1999 to $2.4 million for the three
months ended March 31, 2000. The gross profit margin was 32% for the three
months ended March 31, 1999 and 34% for the three months ended March 31, 2000.
The increase in gross profit margin was attributable to the product mix of the
increased volume of shipments during the period.
Research and development: Research and development expenses increased $2.4
million or 63% from $3.7 million for the three months ended March 31, 1999 to
$6.1 million for the three months ended March 31, 2000. This increase was due to
the costs associated with a significant increase in new hires and purchases of
engineering lab equipment and supplies driven by increased demand by the
Company's larger customers for advanced features and a rapid increase in the
adoption of wireless Internet services by subscribers.
Sales and marketing: Sales and marketing expenses increased $1.6 million
or 178% from $0.9 million for the three months ended March 31, 1999 to $2.5
million for the three months ended March 31, 2000. Expenses increased due to the
costs associated with a significant increase in new hires to expand the
Company's international sales and distribution activities and sales support
functions. In addition, international travel and public relations expenses
contributed to the increase in the expense for the quarter.
General and administrative: General and administrative expenses increased
$0.6 million or 101% from $0.5 million for the three months ended March 31, 1999
to $1.1 million for the three months ended March 31, 2000. This increase was
primarily due to the cost of being a publicly traded company, such as travel,
outside legal and accounting services and a provision for bad debts.
Liquidity and Capital Resources
The Company has funded its operations to date primarily through the sale of
convertible preferred stock and capital equipment leases. In December 1999 the
Company raised $88.6 million in its initial public
8
<PAGE> 9
offering. The Company's principal sources of liquidity as of March 31, 2000
consisted of $86.1 million of cash and cash equivalents.
Net cash used in operating activities for the three months ended March 31,
2000 was $13.4 million compared to net cash used in operating activities of $4.7
million for the three months ended March 31, 1999. The change from period to
period was due primarily to an increase in accounts receivable and inventories
as the Company experienced a significant increase in shipments.
Net cash used in investing activities for the three months ended March 31,
2000 was $0.9 million compared to net cash used in investing activities for the
three months ended March 31, 1999 of $0.1 million. The increase was primarily
due to purchases of capital equipment for its manufacturing and engineering
departments.
Net cash used in financing activities was $0.1 million for the three months
ended March 31, 2000 compared to net cash used in financing activities of $0.2
million for the three months ended March 31, 1999. This decrease was primarily
due to proceeds generated from the sale of common stock.
The Company believes that its existing cash and cash equivalents will be
sufficient to meet capital requirements at least through the next twelve months,
although it could be required, or could elect, to seek additional funding prior
to that time. The Company's future capital requirements will depend upon many
factors, including rate of revenue growth, the timing and extent of spending to
support product development efforts and expansion of sales and marketing. There
can be no assurances that additional equity or debt financing, if required, will
be available on acceptable terms or at all.
YEAR 2000 COMPLIANCE
The Company's total costs of year 2000 compliance were less than $100,000.
These costs included updating its computer software and hardware, as well as
contracting outside experts and out-of-pocket expense. The Company cannot
anticipate all customer situations, and it may see an increase in warranty and
other claims as a result of the year 2000 transition.
9
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
On January 21, 1997, the Company filed a complaint against Amplidyne, Inc.
in the Circuit Court for the 18th Judicial Circuit in Brevard County, Florida,
alleging breach of contract and non-performance in connection with the delivery
of certain high-power amplifier units used the Company's base stations. The
Company is seeking approximately $4.4 million in damages. Amplidyne filed an
answer alleging certain affirmative defenses and a counterclaim against the
Company for approximately $463,000. Amplidyne's motion for summary judgment was
denied in February 1999. Additional discovery is being conducted and the matter
has been docketed for trial in August 2000.
The Company is also involved in various claims and litigation matters
arising in the ordinary course of business. The Company believes that the
ultimate outcome of these matters will not have a material effect on its results
of operations or financial condition.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Use of Proceeds of Initial Public Offering
The effective date of the Company's registration statement on Form S-1
filed under the Securities Act of 1933 (No. 333-87693) relating to the initial
public offering of the Company's common stock was December 6, 1999. A total of
5,500,000 shares of the Company's common stock were sold at a price of $14.00
per share to an underwriting syndicate led by Salomon Smith Barney Inc., Chase
Hambrecht & Quist LLC and Prudential Volpe Technology Group. The offering
commenced on December 7, 1999 and closed on December 10, 1999. An additional
825,000 shares of common stock were sold to the underwriters named above to
cover over-allotments.
The initial public offering resulted in gross proceeds of $88.6 million.
Net proceeds from the offering amounted to $80.4 million after deducting
offering expenses of approximately $2.0 million and underwriting commissions and
discounts of approximately $6.2 million. From the time of receipt through March
31, 2000, the proceeds were included within cash and cash equivalents.
The Company has not yet spent any of the net proceeds of the initial public
offering. The Company intends to use the net proceeds for general corporate
purposes, including working capital, expansion of its engineering organization,
product development programs, sales and marketing capabilities, and general and
administrative functions and capital expenditures. The Company may also use a
portion of the net proceeds to invest in complementary products, to license
other technology or to make potential acquisitions. However, it has no current
understandings or agreements relating to potential acquisitions.
ITEM 5. OTHER INFORMATION
In February and March 2000 the Company entered into Amendments to Option
Agreements with its directors and employees. In the event of a change in
control, options which would have vested through the date of the closing and for
two years thereafter (if otherwise vested daily) will accelerate and be
exercisable, subject to the closing of a change in control. The Amendments
signed with certain management personnel also provide for additional
acceleration of options if their employment is terminated in connection with a
change in control.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits:
<TABLE>
<C> <S>
*3.1 Sixth Amended and Restated Certificate of Incorporation.
*3.2 Second Amended and Restated Bylaws.
**3.3 Amendment to Second Amended and Restated Bylaws.
*4.1 Specimen Certificate evidencing shares of Common Stock.
</TABLE>
10
<PAGE> 11
<TABLE>
<C> <S>
*4.2 Second Amended and Restated Shareholders' and Registration
Rights Agreement dated as of April 16, 1997.
*4.3 First Amendment to Second Amended and Restated Shareholders'
and Registration Rights Agreement dated as of September 20,
1999.
*4.4 Second Amended and Restated Agreement Among Series E, Series
F and Series G Second Amended and Restated Preferred
Stockholders and Senior Registration Rights Agreement dated
as of September 7, 1999.
*4.5 First Amendment to Second Amended and Restated Agreement
Among Series E, Series F and Series G Preferred Stockholders
and Senior Registration Rights Agreement dated as of
September 20, 1999.
*10.1 AirNet Communications Corporation 1999 Equity Incentive
Plan.
*10.2 OEM and Patent License Option Agreement dated January 27,
1995 between Motorola, Inc. and AirNet Communications
Corporation.
*10.3 Employee Noncompete and Post-Termination Benefits Agreement
dated October 26, 1999 between AirNet Communications
Corporation and R. Lee Hamilton, Jr.
10.4 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and R. Lee Hamilton, Jr.
10.5 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and Gerald Y. Hattori.
10.6 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and William J. Lee.
10.7 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and Mark G. Demange.
10.8 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and Glenn A. Ehley.
10.9 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and Timothy Mahar.
27 Financial Data Schedule, March 31, 2000.
</TABLE>
- ---------------
* Incorporated by reference to Registration Statement No. 333-87693 on Form S-1
as filed with the Securities and Exchange Commission on September 24, 1999,
as amended.
** Incorporated by reference to Annual Report on Form 10-K as filed with the
Securities and Exchange Commission on March 29, 2000.
b. Reports on Form 8-K
None.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
Dated: May 12, 2000 /s/ R. LEE HAMILTON, JR.
---------------------------------------------
R. Lee Hamilton, Jr.,
President and Chief Executive Officer
(Principal Executive Officer)
/s/ GERALD Y. HATTORI
---------------------------------------------
Gerald Y. Hattori,
Vice President, Finance, Chief Financial
Officer, Secretary and Treasurer
(Principal Financial and Principal Accounting
Officer)
</TABLE>
12
<PAGE> 13
AIRNET COMMUNICATIONS CORPORATION
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<C> <S>
*3.1 Sixth Amended and Restated Certificate of Incorporation.
*3.2 Second Amended and Restated Bylaws.
**3.3 Amendment to Second Amended and Restated Bylaws.
*4.1 Specimen Certificate evidencing shares of Common Stock.
*4.2 Second Amended and Restated Shareholders' and Registration
Rights Agreement dated as of April 16, 1997.
*4.3 First Amendment to Second Amended and Restated Shareholders'
and Registration Rights Agreement dated as of September 20,
1999.
*4.4 Second Amended and Restated Agreement Among Series E, Series
F and Series G Second Amended and Restated Preferred
Stockholders and Senior Registration Rights Agreement dated
as of September 7, 1999.
*4.5 First Amendment to Second Amended and Restated Agreement
Among Series E, Series F and Series G Preferred Stockholders
and Senior Registration Rights Agreement dated as of
September 20, 1999.
*10.1 AirNet Communications Corporation 1999 Equity Incentive
Plan.
*10.2 OEM and Patent License Option Agreement dated January 27,
1995 between Motorola, Inc. and AirNet Communications
Corporation.
*10.3 Employee Noncompete and Post-Termination Benefits Agreement
dated October 26, 1999 between AirNet Communications
Corporation and R. Lee Hamilton, Jr.
10.4 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and R. Lee Hamilton, Jr.
10.5 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and Gerald Y. Hattori.
10.6 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and William J. Lee.
10.7 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and Mark G. Demange.
10.8 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and Glenn A. Ehley.
10.9 Amendment to Incentive Stock Option Agreements dated
February 11, 2000 between AirNet Communications Corporation
and Timothy Mahar.
27 Financial Data Schedule, March 31, 2000.
</TABLE>
- ---------------
* Incorporated by reference to Registration Statement No. 333-87693 on Form S-1
as filed with the Securities and Exchange Commission on September 24, 1999,
as amended.
** Incorporated by reference to Annual Report on Form 10-K as filed with the
Securities and Exchange Commission on March 29, 2000.
13
<PAGE> 1
EXHIBIT 10.4
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
This Amendment to Incentive Stock Option Agreements dated February 11, 2000 is
between AirNet Communications Corporation ("AirNet" or the "Company") and R. Lee
Hamilton, Jr. (the "Employee").
RECITALS:
A. The Employee is an at-will employee of the Company.
B. Employee serves in the capacities of President and Chief Executive Officer
at the behest of and at the discretion of the Board of Directors.
C. The Company recognizes that the possibility of a Change in Control of the
Company may exist which, if preceded or followed by termination of the
employment of Employee, would cause the Employee to lose the opportunity to
exercise unvested stock options, and that such possibility, and the uncertainty
and questions which it may raise, may result in the distraction of the Employee
to the detriment of the Company.
D. In order to encourage the Employee to maintain his/her continued attention
and dedication to his/her duties and responsibilities, the Company desires to
enter into this Amendment with the Employee setting forth additional terms and
conditions as to the Employee's stock options in connection with a Change in
Control of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, the parties agree as follows:
SECTION 1.DEFINITIONS.
The following Capitalized terms shall have the following meanings:
"Business" means the business of AirNet as conducted immediately prior to
any Change in Control.
"Cause" means the Employee's intentional bad faith act or omission, felony
conviction, or gross dereliction of duty, which is materially harmful or
damaging to the Company, or intentional material breach of any of Employee's
obligations under the Proprietary Information and Inventions Agreement executed
by Company and the Employee.
"Change in Control" shall mean:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange act) of 50% or more of either (i) then outstanding shares of common
stock of the Company (the "Outstanding
Hamilton
<PAGE> 2
Company Common Stock") or (ii) the combined voting power of then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities") or;
(ii) the cessation for any reason of individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; or
(iii) the approval by the shareholders of the Company and the closing of
a reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, more than 50% of, respectively, then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or
(iv) the approval by the shareholders of the Company and the closing of
(i) a complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the Company.
"Company" means AirNet Communications Corporation or, in the event of a
Change in Control, the successor(s) in interest to AirNet Communications
Corporation.
"Person" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
SECTION 2. TERMINATION EVENTS.
2.1 This Agreement does not constitute an employment agreement. The
Company retains its right to terminate Employee's employment with or without
Cause.
2.2 Either of the following events which occur (i) at any time
following execution of a letter of intent or definitive agreement for a Change
in Control transaction and on or before
Hamilton -2-
<PAGE> 3
consummation of such transaction, or (ii) within 135 days prior to any
consummated Change in Control, or (iii) within 12 months following a Change of
Control, shall be a "Termination Event:"
(a) The termination without Cause of the Employee; or
(b) The resignation of Employee upon no less than two weeks' written
notice to the Company under circumstances constituting Good Reason (as defined
in Section 2.3) to resign.
2.3 "Good Reason" shall mean, without the Employee's written consent,
the occurrence of any of the following circumstances prior to a Change in
Control, in connection with a Change in Control, in anticipation of a Change in
Control, at a time when discussions relating to a Change in Control are taking
place, or within 12 months following a Change in Control:
(a) The Employee is assigned a new position, which entails a
reduction in the nature of Employee's authority with respect to
the operation of the Company's business compared to Employee's
position as in effect on the date of this Agreement or immediately
prior to a Change in Control or Termination Event, whichever
position is greater or more senior;
(b) A reduction in the Employee's annual base salary as in
effect on the date of this Agreement or immediately prior to a
Change in Control or Termination Event, whichever is greater, or
an adverse change in benefits or perquisites other than a change
that is generally applicable to all executive employees;
(c) The Company's requirement that the Employee's site of
principal employment be more than twenty-five miles from the
offices at which the Employee was principally employed on the date
of this Agreement; or
(d) The Employee is assigned duties inconsistent with the
status of the position that the Employee held on the date of this
Agreement or immediately prior to a Change in Control or
Termination Event, whichever is greater, or an adverse alteration
in the nature or status of the Employee's responsibilities or in
the quality or amount of office accommodations or assistance
provided to the Employee from those in effect on the date of this
Agreement, which shall constitute a constructive demotion.
SECTION 3. AMENDMENT OF OPTION AGREEMENTS.
3.1 This Amendment amends each Incentive Stock Option Agreement (the
"Option Agreement or Agreements") listed below covering the grant to Employee of
stock options for the purchase of the number of shares of common stock of the
Company and at the exercise price per share specified below (as granted and in
effect prior to the Company's recent one for 66.38 reverse stock split):
Hamilton -3-
<PAGE> 4
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Date of Grant Under Incentive Number of Shares Underlying Exercise Price Per Share
Stock Option Agreement Option Grant (pre-split) (pre-split)
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
See Attached Schedule
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
The options ("Options") granted to Employee under the Option Agreements were
granted under the Company's stock option plan as amended, now the 1999 Equity
Incentive Plan (the "Plan").
Each of the Options shall vest and become exercisable as specified in Section 3
of each Option Agreement, as hereby amended.
Employee and the Company each acknowledge that the number of shares underlying
the Options and the applicable exercise price per share are pre-split numbers
and the actual numbers have been adjusted to reflect the Company's recent one
for 66.38 reverse stock split.
3.2 Section 3 of each Option Agreement is amended to provide for
accelerated vesting of some or all of the Options upon the occurrence of a
"Change in Control" or a Termination Event as provided in this Section 3.
3.3 No Termination Event Prior to a Change in Control.
(a) Two Year Accelerated Options With Closing. If there is no
Termination Event prior to an anticipated Change in Control and a Change in
Control is consummated, unvested Options (the "Two Year Accelerated Options With
Closing") (i) which would have vested through the closing of the Change in
Control and (ii) which would have vested during the two years following the
closing of the Change in Control (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall accelerate
and become immediately exercisable commencing 15 days prior to a scheduled
closing of a Change in Control; provided, however, that such acceleration (and
any exercise of Options not otherwise vested and exercisable) shall be
conditioned on the closing of the Change in Control.
(b) Options Maintained or Matched; Third Year Accelerated Options. If
there is no Termination Event prior to an anticipated Change in Control and a
Change in Control is consummated and as of the closing either:
(i) AirNet is the surviving company to the Change in Control
transaction, the Business is to be continued and AirNet maintains the Employee's
then outstanding stock options or,
Hamilton -4-
<PAGE> 5
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be continued by the buyer or
successor; and
(B) the buyer or successor grants options to the Employee
for the purchase of the buyer's or successor's stock with a proportionate number
of shares and exercise price per share and the same vesting schedule as with the
Options; and
(C) the buyer or successor specifically assumes the
potential obligation to accelerate the vesting of options under this Section
3.3(b);
then the following provisions in this Section 3.3(b) apply.
In the event of (i) a Termination Event within 12 months following the Change in
Control; or (ii) in the event the Employee completes 12 months of employment
with the Company or its successor following the Change in Control, then unvested
Options or the equivalent unvested buyer or successor options ("Third Year
Accelerated Options") which would have vested during the third year following
the closing of the Change in Control, (assuming and calculated as if all Options
or the equivalent unvested buyer or successor options would otherwise have
vested on a pro rata daily basis) shall vest and become immediately exercisable
for as long as Employee continues to be employed by the Company or such
successor and for a period of 90 days thereafter.
(c) Options Not Maintained or Matched; Escrow in Lieu of Third Year
Accelerated Options. If there is no Termination Event prior to an anticipated
Change in Control and a Change in Control is consummated and as of the closing
either:
(i) AirNet is the surviving company to the Change in Control
transaction and AirNet does not maintain the Employee's then outstanding stock
options or the Business is to be discontinued; or
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be discontinued; or
(B) the buyer or successor does not grant to Employee
options for the purchase of the buyer's or successor's stock with a
proportionate number of shares and exercise price per share and the same vesting
schedule as with the Options; or
(C) the buyer or successor does not specifically assume the
potential obligation to accelerate the vesting of the Third Year Accelerated
Options under Section 3.3(b) above;
then the following provisions in this Section 3.3(c) apply:
Hamilton -5-
<PAGE> 6
(1) The Company will place in escrow with a third party
Escrow Agent an amount ("Escrow Amount") of sale proceeds from the
Change in Control transaction equal to the gain the Employee could
have realized if the Third Year Accelerated Options had been
exercised and sold in connection with the Change in Control
transaction.
(2) In the event (A) a Termination Event occurs within
12 months following the Change in Control; or (B) in the event the
Employee completes 12 months of employment with the Company, its
successor or the buyer following the Change in Control, then the
Escrow Amount will be released and paid to the Employee.
(3) In the event the Employee resigns or is terminated
with Cause within 12 months following the Change in Control, the
Escrow Amount will be released and distributed pro rata in the
manner other sale proceeds were distributed in connection with the
Change in Control transaction.
3.4 Termination Event On or Before a Change in Control; Closing
Within 135 Days.
If there is a Termination Event on or before a Change in Control and a Change in
Control is consummated within 135 days of the Termination Event (a) unvested
Options ("Two Year Accelerated Options") (i) which would have vested through the
closing of the Change in Control and (ii) which would have vested during the two
years following the closing of the Change in Control (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata daily
basis) shall accelerate and become immediately exercisable through the date of
the closing of the Change in Control; and (b) unvested Options (the "Third Year
Accelerated Options With Closing") which would have vested during the third year
following the closing of the Change in Control (assuming and calculated as if
all Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable through the date of the closing of the Change
in Control.
3.5 Termination Event Prior to a Change in Control; No Closing
Within 135 Days.
If there is a Termination Event prior to an anticipated Change in Control, but
the anticipated Change in Control is not closed within 135 days following the
Termination Event:
(a) unvested Options (the "Two Year Accelerated Options
Without Closing") (i) which would have vested through a date 135
days after the Termination Event and (ii) which would have vested
during the two years following such 135th day (in each case
assuming and calculated as if all Options would otherwise have
vested on a pro rata daily basis) shall vest and become
immediately exercisable for a period of up to one year, but no
later than the closing of the Change in Control; and
(b) unvested Options (the "Third Year Accelerated
Options Without Closing") which would have vested during the third
year following such 135th day after the Termination Event (in each
case assuming and calculated as if all Options would otherwise
have vested on a pro rata daily basis) shall vest and become
immediately
Hamilton -6-
<PAGE> 7
exercisable for a period of up to one year, but no later than the
closing of the Change in Control.
4. OPTION AGREEMENTS IN FULL FORCE AND EFFECT.
4.1 Except for the acceleration of the vesting of the Options
upon a Change in Control or upon a Termination Event, as provided for in this
Amendment, all of the terms of the Option Agreements remain in full force and
effect.
5. SEPARATE NONCOMPETE AGREEMENT.
5.1 The parties acknowledge the Employee Noncompete and
Post-Termination Benefits Agreement (the "Noncompete Agreement") dated October
26, 1999 between AirNet and Employee. The provisions of Paragraph 9(a) of the
Noncompete Agreement and the applicable provisions of this Amendment relating to
acceleration of the vesting of options shall be read and interpreted together as
follows in this Section 5.
5.2 Any acceleration of Options, or acceleration of equivalent
options of a buyer or successor, or payment of an Escrow Amount under this
Amendment shall not cause a reduction in the amount of any severance pay payable
to Employee under Paragraph 9(a) of the Noncompete Agreement.
5.3 In the event Employee is entitled to accelerated vesting of
options under the Noncompete Agreement and under this Agreement, Employee will
be entitled to the benefits under each agreement with any inconsistency
interpreted in Employee's favor. For example, if the vesting of options for the
purchase of 10,000 shares is accelerated under the Noncompete Agreement with an
exercise period of 18 months and those same options are vested under Section 3.5
of this Amendment with an exercise period of up to one year but no later than
the closing of an applicable Change in Control, then the exercise period shall
be for a period of up to 18 months, but no later than the closing of the
applicable Change in Control.
5.4 The last sentence of Paragraph 9(d) providing for the
forfeiture of options not vested and exercisable after giving effect to the
provisions of Paragraph 9(d), shall not apply to any such options which could
otherwise be accelerated and become exercisable under the terms of this
Amendment.
6. MISCELLANEOUS.
6.1 This Amendment may be signed and executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement,
6.2 This Agreement is binding on the successors and assigns of
AirNet. AirNet agrees to require any Person who purchases substantially all of
AirNet's assets or is a successor in interest to AirNet in connection with a
Change in Control transaction to assume its obligations under this Agreement.
Hamilton -7-
<PAGE> 8
IN WITNESS, the Company has caused this Amendment to be executed by its
authorized officer and the Employee has executed this Amendment as of the above
date.
<TABLE>
<CAPTION>
<S> <C>
Employee: /s/ R. Lee Hamilton, Jr. AirNet Communications Corporation
---------------------------------------
Name: R. Lee Hamilton, Jr. By: /s/ James W. Brown
---------------------------------- ----------------------
Title: Chairman
---------------
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
R. LEE HAMILTON - PRE-SPLIT STOCK OPTIONS
- -------------------------------------------------------------------------------------------------------------------------------
IMMEDIDATE VESTING FIRST YEAR VESTING
- -------------------------------------------------------------------------------------------------------------------------------
OPTIONS
DATE GRANTE GRANTED PRICE # OF SHARES PRICE DATE # OF SHARES PRICE DATE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
29-Jul-96 886,250.00 $0.001 886,250.00 $886.25 02/03/97
- -------------------------------------------------------------------------------------------------------------------------------
29-Jul-96 125,000.00 $0.020 125,000.00 $2,500.00 02/03/97
- -------------------------------------------------------------------------------------------------------------------------------
29-Jul-96 886,250.00 $0.020 886,250.00 $17,725.00 02/03/97
- -------------------------------------------------------------------------------------------------------------------------------
29-Jul-96 125,000.00 $0.050 125,000.00 $6,250.00 02/03/97
- -------------------------------------------------------------------------------------------------------------------------------
29-Jul-96 61,376.70 $0.020 61,376.70 $1,227.53 02/03/97
- -------------------------------------------------------------------------------------------------------------------------------
29-Jul-96 8,656.80 $0.020 8,656.80 $173.14 02/03/97
- -------------------------------------------------------------------------------------------------------------------------------
29-Jul-96 61,376.70 $0.020 61,376.70 $1,227.53 05/31/97
- -------------------------------------------------------------------------------------------------------------------------------
29-Jul-96 8,656.80 $0.020 8,656.80 $173.14 05/31/97
- -------------------------------------------------------------------------------------------------------------------------------
16-Apr-97 221,250.00 $0.020 55,312.50 $1,106.25 05/31/97 55,312.50 $1,106.25 04/16/98
- -------------------------------------------------------------------------------------------------------------------------------
16-Apr-97 221,250.00 $0.050 55,312.50 $2,765.63 05/31/97 55,312.50 $2,765.63 04/16/98
- -------------------------------------------------------------------------------------------------------------------------------
16-Apr-97 1,568,663.00 $0.001 392,165.75 $392.17 05/31/97 392,165.75 $392.17 04/16/98
- -------------------------------------------------------------------------------------------------------------------------------
16-Apr-97 1,568,663.00 $0.020 392,165.75 $7,843.32 05/31/97 392,165.75 $7,843.32 04/16/98
- -------------------------------------------------------------------------------------------------------------------------------
16-Apr-97 15,322.53 $0.020 3,830.63 $76.61 05/31/97 3,830.63 $76.61 04/16/98
- -------------------------------------------------------------------------------------------------------------------------------
16-Apr-97 108,636.80 $0.020 27,159.20 $543.18 05/31/97 27,159.20 $543.18 04/16/98
- -------------------------------------------------------------------------------------------------------------------------------
16-Apr-97 108,636.80 $0.020 27,159.20 $543.18 05/31/97 27,159.20 $543.18 04/16/98
- -------------------------------------------------------------------------------------------------------------------------------
16-Apr-97 15,322.53 $0.020 3,830.63 $76.61 05/31/97 3,830.63 $76.61 04/16/98
- -------------------------------------------------------------------------------------------------------------------------------
7/2/1997* 153,750.00 $0.020 76,875.00 $1,537.50 05/31/97 76,875.00 $1,537.50 07/02/98
- -------------------------------------------------------------------------------------------------------------------------------
2-Jul-97 153,750.00 $0.050 76,875.00 $3,843.75 05/31/97 76,875.00 $3,843.75 07/02/98
- -------------------------------------------------------------------------------------------------------------------------------
2-Jul-97 1,090,088.00 $0.001 545,044.00 $545.04 05/31/97 545,044.00 $545.04 07/02/98
- -------------------------------------------------------------------------------------------------------------------------------
2-Jul-97 1,090,088.00 $0.020 545,044.00 $10,900.88 05/31/97 545,044.00 $10,900.88 07/02/98
- -------------------------------------------------------------------------------------------------------------------------------
2-Jul-97 10,647.86 $0.020 5,323.93 $106.48 05/31/97 5,323.93 $106.48 07/02/98
- -------------------------------------------------------------------------------------------------------------------------------
2-Jul-97 75,493.31 $0.020 37,746.66 $754.93 05/31/97 37,746.66 $754.93 07/02/98
- -------------------------------------------------------------------------------------------------------------------------------
2-Jul-97 10,647.86 $0.020 5,323.93 $106.48 05/31/97 5,323.93 $106.48 07/02/98
- -------------------------------------------------------------------------------------------------------------------------------
2-Jul-97 75,493.31 $0.020 37,746.66 $754.93 05/31/97 37,746.66 $754.93 07/02/98
- -------------------------------------------------------------------------------------------------------------------------------
19-Feb-98 1,300,000.00 $0.020 325,000.00 $6,500.00 02/19/99
- -------------------------------------------------------------------------------------------------------------------------------
19-Jan-99 21,000,000.00 $0.036 5,250,000.00 $189,000.000 01/19/00
- -------------------------------------------------------------------------------------------------------------------------------
1-Sep-99 2,000,000 $0.130 500,000.00 $65,000.000 09/01/00
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
32,950,270.00 4,449,482.34 $62,059.54 8,361,915.34 $292,396.95
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
R. LEE HAMILTON - PRE-SPLIT STOCK OPTIONS
- -----------------------------------------------------------------------------------------------------------------------
SECOND YEAR VESTING THIRD YEAR VESTING FOURTH YEAR VESTING
- -----------------------------------------------------------------------------------------------------------------------
# OF SHARES PRICE DATE # OF SHARES PRICE DATE # OF SHARES PRICE DATE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
55,312.50 $1,106.25 04/16/99 55,312.50 $1,106.25 04/16/00
- -----------------------------------------------------------------------------------------------------------------------
55,312.50 $2,765.63 04/16/99 55,312.50 $2,765.63 04/16/00
- -----------------------------------------------------------------------------------------------------------------------
392,165.75 $392.17 04/16/99 392,165.75 $392.17 04/16/00
- -----------------------------------------------------------------------------------------------------------------------
392,165.75 $7,843.32 04/16/99 392,165.75 $7,843.32 04/16/00
- -----------------------------------------------------------------------------------------------------------------------
3,830.63 $76.61 04/16/99 3,830.63 $76.61 04/16/00
- -----------------------------------------------------------------------------------------------------------------------
27,159.20 $543.18 04/16/99 27,159.20 $543.18 04/16/00
- -----------------------------------------------------------------------------------------------------------------------
27,159.20 $543.18 04/16/99 27,159.20 $543.18 04/16/00
- -----------------------------------------------------------------------------------------------------------------------
3,830.63 $76.61 04/16/99 3,830.63 $76.61 04/16/00
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
325,000.00 $6,500.00 02/19/00 325,000.00 $6,500.00 02/19/01 325,000.00 $6,500.00 02/19/02
- -----------------------------------------------------------------------------------------------------------------------
5,250,000.00 $189,000.00 01/19/01 5,250,000.00 $189,000.00 01/19/02 5,250,000.00 $189,000.00 01/19/03
- -----------------------------------------------------------------------------------------------------------------------
500,000.00 $65,000.00 09/01/01 500,000.00 $65,000.00 09/01/02 500,000.00 $65,000.00 09/01/03
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
7,031,936.17 $273,846.95 7,031,936.17 $273,846.95 6,075,000.00 $260,500.00
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 10.5
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
This Amendment to Incentive Stock Option Agreements dated February 11, 2000 is
between AirNet Communications Corporation ("AirNet" or the "Company") and Gerald
Y. Hattori (the "Employee").
RECITALS:
A. The Employee is an at-will employee of the Company.
B. Employee serves in the capacities of Vice President of Finance, Chief
Financial Officer, Treasurer and Secretary at the behest of and at the
discretion of the Board of Directors.
C. The Company recognizes that the possibility of a Change in Control of the
Company may exist which, if preceded or followed by termination of the
employment of Employee, would cause the Employee to lose the opportunity to
exercise unvested stock options, and that such possibility, and the uncertainty
and questions which it may raise, may result in the distraction of the Employee
to the detriment of the Company.
D. In order to encourage the Employee to maintain his/her continued attention
and dedication to his/her duties and responsibilities, the Company desires to
enter into this Amendment with the Employee setting forth additional terms and
conditions as to the Employee's stock options in connection with a Change in
Control of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, the parties agree as follows:
SECTION 1. DEFINITIONS.
The following Capitalized terms shall have the following meanings:
"Business" means the business of AirNet as conducted immediately prior to
any Change in Control.
"Cause" means the Employee's intentional bad faith act or omission, felony
conviction, or gross dereliction of duty, which is materially harmful or
damaging to the Company, or intentional material breach of any of Employee's
obligations under the Proprietary Information and Inventions Agreement executed
by Company and the Employee.
"Change in Control" shall mean:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange act) of 50% or more of either (i) then outstanding shares of common
stock of the Company (the "Outstanding
<PAGE> 2
Company Common Stock") or (ii) the combined voting power of then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities") or;
(ii) the cessation for any reason of individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; or
(iii) the approval by the shareholders of the Company and the closing of
a reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, more than 50% of, respectively, then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or
(iv) the approval by the shareholders of the Company and the closing of
(i) a complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the Company.
"Company" means AirNet Communications Corporation or, in the event of a
Change in Control, the successor(s) in interest to AirNet Communications
Corporation.
"Person" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
SECTION 2. TERMINATION EVENTS.
2.1 This Agreement does not constitute an employment agreement. The
Company retains its right to terminate Employee's employment with or without
Cause.
2.2 Either of the following events which occur (i) at any time
following execution of a letter of intent or definitive agreement for a Change
in Control transaction and on or before
Hattori -2-
<PAGE> 3
consummation of such transaction, or (ii) within 135 days prior to any
consummated Change in Control, or (iii) within 12 months following a Change of
Control, shall be a "Termination Event:"
(a) The termination without Cause of the Employee; or
(b) The resignation of Employee upon no less than two weeks' written
notice to the Company under circumstances constituting Good Reason (as defined
in Section 2.3) to resign.
2.3 "Good Reason" shall mean, without the Employee's written consent,
the occurrence of any of the following circumstances prior to a Change in
Control, in connection with a Change in Control, in anticipation of a Change in
Control, at a time when discussions relating to a Change in Control are taking
place, or within 12 months following a Change in Control:
(a) The Employee is assigned a new position, which entails a
reduction in the nature of Employee's authority with respect to
the operation of the Company's business compared to Employee's
position as in effect on the date of this Agreement or immediately
prior to a Change in Control or Termination Event, whichever
position is greater or more senior;
(b) A reduction in the Employee's annual base salary as in
effect on the date of this Agreement or immediately prior to a
Change in Control or Termination Event, whichever is greater, or
an adverse change in benefits or perquisites other than a change
that is generally applicable to all executive employees;
(c) The Company's requirement that the Employee's site of
principal employment be more than twenty-five miles from the
offices at which the Employee was principally employed on the date
of this Agreement; or
(d) The Employee is assigned duties inconsistent with the
status of the position that the Employee held on the date of this
Agreement or immediately prior to a Change in Control or
Termination Event, whichever is greater, or an adverse alteration
in the nature or status of the Employee's responsibilities or in
the quality or amount of office accommodations or assistance
provided to the Employee from those in effect on the date of this
Agreement, which shall constitute a constructive demotion.
SECTION 3. AMENDMENT OF OPTION AGREEMENTS.
3.1 This Amendment amends each Incentive Stock Option Agreement (the
"Option Agreement or Agreements") listed below covering the grant to Employee of
stock options for the purchase of the number of shares of common stock of the
Company and at the exercise price per share specified below (as granted and in
effect prior to the Company's recent one for 66.38 reverse stock split):
Hattori -3-
<PAGE> 4
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Date of Grant Under Incentive Number of Shares Underlying Exercise Price Per Share
Stock Option Agreement Option Grant (pre-split) (pre-split)
- -----------------------------------------------------------------------------------------------------
3-22-99 5,147,422.819 $0.036
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
The options ("Options") granted to Employee under the Option Agreements were
granted under the Company's stock option plan as amended, now the 1999 Equity
Incentive Plan (the "Plan").
Each of the Options shall vest and become exercisable as specified in Section 3
of each Option Agreement, as hereby amended.
Employee and the Company each acknowledge that the number of shares underlying
the Options and the applicable exercise price per share are pre-split numbers
and the actual numbers have been adjusted to reflect the Company's recent one
for 66.38 reverse stock split.
3.2 Section 3 of each Option Agreement is amended to provide for
accelerated vesting of some or all of the Options upon the occurrence of a
"Change in Control" or a Termination Event as provided in this Section 3.
3.3 No Termination Event Prior to a Change in Control.
(a) Two Year Accelerated Options With Closing. If there is no
Termination Event prior to an anticipated Change in Control and a Change in
Control is consummated, unvested Options (the "Two Year Accelerated Options With
Closing") (i) which would have vested through the closing of the Change in
Control and (ii) which would have vested during the two years following the
closing of the Change in Control (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall accelerate
and become immediately exercisable commencing 15 days prior to a scheduled
closing of a Change in Control; provided, however, that such acceleration (and
any exercise of Options not otherwise vested and exercisable) shall be
conditioned on the closing of the Change in Control.
(b) Options Maintained or Matched; Third Year Accelerated Options. If
there is no Termination Event prior to an anticipated Change in Control and a
Change in Control is consummated and as of the closing either:
(i) AirNet is the surviving company to the Change in Control
transaction, the Business is to be continued and AirNet maintains the Employee's
then outstanding stock options or,
Hattori -4-
<PAGE> 5
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be continued by the buyer or
successor; and
(B) the buyer or successor grants options to the Employee
for the purchase of the buyer's or successor's stock with a proportionate number
of shares and exercise price per share and the same vesting schedule as with the
Options; and
(C) the buyer or successor specifically assumes the
potential obligation to accelerate the vesting of options under this Section
3.3(b);
then the following provisions in this Section 3.3(b) apply.
In the event of (i) a Termination Event within 12 months following the Change in
Control; or (ii) in the event the Employee completes 12 months of employment
with the Company or its successor following the Change in Control, then unvested
Options or the equivalent unvested buyer or successor options ("Third Year
Accelerated Options") which would have vested during the third year following
the closing of the Change in Control, (assuming and calculated as if all Options
or the equivalent unvested buyer or successor options would otherwise have
vested on a pro rata daily basis) shall vest and become immediately exercisable
for as long as Employee continues to be employed by the Company or such
successor and for a period of 90 days thereafter.
(c) Options Not Maintained or Matched; Escrow in Lieu of Third Year
Accelerated Options. If there is no Termination Event prior to an anticipated
Change in Control and a Change in Control is consummated and as of the closing
either:
(i) AirNet is the surviving company to the Change in Control
transaction and AirNet does not maintain the Employee's then outstanding stock
options or the Business is to be discontinued; or
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be discontinued; or
(B) the buyer or successor does not grant to Employee
options for the purchase of the buyer's or successor's stock with a
proportionate number of shares and exercise price per share and the same vesting
schedule as with the Options; or
(C) the buyer or successor does not specifically assume the
potential obligation to accelerate the vesting of the Third Year Accelerated
Options under Section 3.3(b) above;
then the following provisions in this Section 3.3(c) apply:
Hattori -5-
<PAGE> 6
(1) The Company will place in escrow with a third party Escrow
Agent an amount ("Escrow Amount") of sale proceeds from the Change in
Control transaction equal to the gain the Employee could have realized if
the Third Year Accelerated Options had been exercised and sold in
connection with the Change in Control transaction.
(2) In the event (A) a Termination Event occurs within 12
months following the Change in Control; or (B) in the event the Employee
completes 12 months of employment with the Company, its successor or the
buyer following the Change in Control, then the Escrow Amount will be
released and paid to the Employee.
(3) In the event the Employee resigns or is terminated with
Cause within 12 months following the Change in Control, the Escrow Amount
will be released and distributed pro rata in the manner other sale
proceeds were distributed in connection with the Change in Control
transaction.
3.4 Termination Event On or Before a Change in Control; Closing Within
135 Days.
If there is a Termination Event on or before a Change in Control and a Change in
Control is consummated within 135 days of the Termination Event (a) unvested
Options ("Two Year Accelerated Options") (i) which would have vested through the
closing of the Change in Control and (ii) which would have vested during the two
years following the closing of the Change in Control (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata daily
basis) shall accelerate and become immediately exercisable through the date of
the closing of the Change in Control; and (b) unvested Options (the "Third Year
Accelerated Options With Closing") which would have vested during the third year
following the closing of the Change in Control (assuming and calculated as if
all Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable through the date of the closing of the Change
in Control.
3.5 Termination Event Prior to a Change in Control; No Closing Within
135 Days.
If there is a Termination Event prior to an anticipated Change in Control, but
the anticipated Change in Control is not closed within 135 days following the
Termination Event:
(a) unvested Options (the "Two Year Accelerated Options Without
Closing") (i) which would have vested through a date 135 days after the
Termination Event and (ii) which would have vested during the two years
following such 135th day (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable for a period of up to one year, but no
later than the closing of the Change in Control; and
(b) unvested Options (the "Third Year Accelerated Options
Without Closing") which would have vested during the third year following
such 135th day after the Termination Event (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata
daily basis) shall vest and become immediately
Hattori -6-
<PAGE> 7
exercisable for a period of up to one year, but no later than the closing
of the Change in Control.
4. OPTION AGREEMENTS IN FULL FORCE AND EFFECT.
4.1 Except for the acceleration of the vesting of the Options upon a
Change in Control or upon a Termination Event, as provided for in this
Amendment, all of the terms of the Option Agreements remain in full force and
effect.
5. MISCELLANEOUS.
5.1 This Amendment may be signed and executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement,
5.2 This Agreement is binding on the successors and assigns of AirNet.
AirNet agrees to require any Person who purchases substantially all of AirNet's
assets or is a successor in interest to AirNet in connection with a Change in
Control transaction to assume its obligations under this Agreement.
IN WITNESS, the Company has caused this Amendment to be executed by its
authorized officer and the Employee has executed this Amendment as of the above
date.
<TABLE>
<CAPTION>
<S> <C>
Employee: /s/ Gerald Y. Hattori AirNet Communications Corporation
-------------------------------
Name: Gerald Y. Hattori By: /s/ R. Lee Hamilton, Jr.
-------------------------- -------------------------------
Title: President & CEO
-------------------------
</TABLE>
Hattori -7-
<PAGE> 1
EXHIBIT 10.6
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
This Amendment to Incentive Stock Option Agreements dated February 11, 2000 is
between AirNet Communications Corporation ("AirNet" or the "Company") and
William J. Lee (the "Employee").
RECITALS:
A. The Employee is an at-will employee of the Company.
B. Employee serves in the capacity of Vice President of Services at the
behest of and at the discretion of the Board of Directors.
C. The Company recognizes that the possibility of a Change in Control of the
Company may exist which, if preceded or followed by termination of the
employment of Employee, would cause the Employee to lose the opportunity to
exercise unvested stock options, and that such possibility, and the uncertainty
and questions which it may raise, may result in the distraction of the Employee
to the detriment of the Company.
D. In order to encourage the Employee to maintain his/her continued attention
and dedication to his/her duties and responsibilities, the Company desires to
enter into this Amendment with the Employee setting forth additional terms and
conditions as to the Employee's stock options in connection with a Change in
Control of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, the parties agree as follows:
SECTION 1. DEFINITIONS.
The following Capitalized terms shall have the following meanings:
"Business" means the business of AirNet as conducted immediately prior to
any Change in Control.
"Cause" means the Employee's intentional bad faith act or omission, felony
conviction, or gross dereliction of duty, which is materially harmful or
damaging to the Company, or intentional material breach of any of Employee's
obligations under the Proprietary Information and Inventions Agreement executed
by Company and the Employee.
"Change in Control" shall mean:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange act) of 50% or more of either (i) then outstanding shares of common
stock of the Company (the "Outstanding
<PAGE> 2
Company Common Stock") or (ii) the combined voting power of then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities") or;
(ii) the cessation for any reason of individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; or
(iii) the approval by the shareholders of the Company and the closing of
a reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, more than 50% of, respectively, then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or
(iv) the approval by the shareholders of the Company and the closing of
(i) a complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the Company.
"Company" means AirNet Communications Corporation or, in the event of a
Change in Control, the successor(s) in interest to AirNet Communications
Corporation.
"Person" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
SECTION 2. TERMINATION EVENTS.
2.1 This Agreement does not constitute an employment agreement. The
Company retains its right to terminate Employee's employment with or without
Cause.
2.2 Either of the following events which occur (i) at any time
following execution of a letter of intent or definitive agreement for a Change
in Control transaction and on or before
Lee -2-
<PAGE> 3
consummation of such transaction, or (ii) within 135 days prior to any
consummated Change in Control, or (iii) within 12 months following a Change of
Control, shall be a "Termination Event:"
(a) The termination without Cause of the Employee; or
(b) The resignation of Employee upon no less than two weeks' written
notice to the Company under circumstances constituting Good Reason (as defined
in Section 2.3) to resign.
2.3 "Good Reason" shall mean, without the Employee's written consent,
the occurrence of any of the following circumstances prior to a Change in
Control, in connection with a Change in Control, in anticipation of a Change in
Control, at a time when discussions relating to a Change in Control are taking
place, or within 12 months following a Change in Control:
(a) The Employee is assigned a new position, which entails a
reduction in the nature of Employee's authority with respect to
the operation of the Company's business compared to Employee's
position as in effect on the date of this Agreement or immediately
prior to a Change in Control or Termination Event, whichever
position is greater or more senior;
(b) A reduction in the Employee's annual base salary as in
effect on the date of this Agreement or immediately prior to a
Change in Control or Termination Event, whichever is greater, or
an adverse change in benefits or perquisites other than a change
that is generally applicable to all executive employees;
(c) The Company's requirement that the Employee's site of
principal employment be more than twenty-five miles from the
offices at which the Employee was principally employed on the date
of this Agreement; or
(d) The Employee is assigned duties inconsistent with the
status of the position that the Employee held on the date of this
Agreement or immediately prior to a Change in Control or
Termination Event, whichever is greater, or an adverse alteration
in the nature or status of the Employee's responsibilities or in
the quality or amount of office accommodations or assistance
provided to the Employee from those in effect on the date of this
Agreement, which shall constitute a constructive demotion.
SECTION 3. AMENDMENT OF OPTION AGREEMENTS.
3.1 This Amendment amends each Incentive Stock Option Agreement (the
"Option Agreement or Agreements") listed below covering the grant to Employee of
stock options for the purchase of the number of shares of common stock of the
Company and at the exercise price per share specified below (as granted and in
effect prior to the Company's recent one for 66.38 reverse stock split):
Lee -3-
<PAGE> 4
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Date of Grant Under Incentive Number of Shares Underlying Exercise Price Per Share
Stock Option Agreement Option Grant (pre-split) (pre-split)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
6-21-99 1,000,000 $0.036
- --------------------------------------------------------------------------------------------------------
9-2-99 500,000 $0.13
- --------------------------------------------------------------------------------------------------------
10-19-99 3,500,000 $0.16
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
The options ("Options") granted to Employee under the Option Agreements were
granted under the Company's stock option plan as amended, now the 1999 Equity
Incentive Plan (the "Plan").
Each of the Options shall vest and become exercisable as specified in Section 3
of each Option Agreement, as hereby amended.
Employee and the Company each acknowledge that the number of shares underlying
the Options and the applicable exercise price per share are pre-split numbers
and the actual numbers have been adjusted to reflect the Company's recent one
for 66.38 reverse stock split.
3.2 Section 3 of each Option Agreement is amended to provide for
accelerated vesting of some or all of the Options upon the occurrence of a
"Change in Control" or a Termination Event as provided in this Section 3.
3.3 No Termination Event Prior to a Change in Control.
(a) Two Year Accelerated Options With Closing. If there is no
Termination Event prior to an anticipated Change in Control and a Change in
Control is consummated, unvested Options (the "Two Year Accelerated Options With
Closing") (i) which would have vested through the closing of the Change in
Control and (ii) which would have vested during the two years following the
closing of the Change in Control (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall accelerate
and become immediately exercisable commencing 15 days prior to a scheduled
closing of a Change in Control; provided, however, that such acceleration (and
any exercise of Options not otherwise vested and exercisable) shall be
conditioned on the closing of the Change in Control.
(b) Options Maintained or Matched; Third Year Accelerated Options. If
there is no Termination Event prior to an anticipated Change in Control and a
Change in Control is consummated and as of the closing either:
(i) AirNet is the surviving company to the Change in Control
transaction, the Business is to be continued and AirNet maintains the Employee's
then outstanding stock options or,
Lee -4-
<PAGE> 5
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be continued by the buyer or
successor; and
(B) the buyer or successor grants options to the Employee
for the purchase of the buyer's or successor's stock with a proportionate number
of shares and exercise price per share and the same vesting schedule as with the
Options; and
(C) the buyer or successor specifically assumes the
potential obligation to accelerate the vesting of options under this Section
3.3(b);
then the following provisions in this Section 3.3(b) apply.
In the event of (i) a Termination Event within 12 months following the Change in
Control; or (ii) in the event the Employee completes 12 months of employment
with the Company or its successor following the Change in Control, then unvested
Options or the equivalent unvested buyer or successor options ("Third Year
Accelerated Options") which would have vested during the third year following
the closing of the Change in Control, (assuming and calculated as if all Options
or the equivalent unvested buyer or successor options would otherwise have
vested on a pro rata daily basis) shall vest and become immediately exercisable
for as long as Employee continues to be employed by the Company or such
successor and for a period of 90 days thereafter.
(c) Options Not Maintained or Matched; Escrow in Lieu of Third Year
Accelerated Options. If there is no Termination Event prior to an anticipated
Change in Control and a Change in Control is consummated and as of the closing
either:
(i) AirNet is the surviving company to the Change in Control
transaction and AirNet does not maintain the Employee's then outstanding stock
options or the Business is to be discontinued; or
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be discontinued; or
(B) the buyer or successor does not grant to Employee
options for the purchase of the buyer's or successor's stock with a
proportionate number of shares and exercise price per share and the same vesting
schedule as with the Options; or
(C) the buyer or successor does not specifically assume the
potential obligation to accelerate the vesting of the Third Year Accelerated
Options under Section 3.3(b) above;
then the following provisions in this Section 3.3(c) apply:
Lee -5-
<PAGE> 6
(1) The Company will place in escrow with a third party Escrow
Agent an amount ("Escrow Amount") of sale proceeds from the Change in
Control transaction equal to the gain the Employee could have realized if
the Third Year Accelerated Options had been exercised and sold in
connection with the Change in Control transaction.
(2) In the event (A) a Termination Event occurs within 12
months following the Change in Control; or (B) in the event the Employee
completes 12 months of employment with the Company, its successor or the
buyer following the Change in Control, then the Escrow Amount will be
released and paid to the Employee.
(3) In the event the Employee resigns or is terminated with
Cause within 12 months following the Change in Control, the Escrow Amount
will be released and distributed pro rata in the manner other sale
proceeds were distributed in connection with the Change in Control
transaction.
3.4 Termination Event On or Before a Change in Control; Closing Within
135 Days.
If there is a Termination Event on or before a Change in Control and a Change in
Control is consummated within 135 days of the Termination Event (a) unvested
Options ("Two Year Accelerated Options") (i) which would have vested through the
closing of the Change in Control and (ii) which would have vested during the two
years following the closing of the Change in Control (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata daily
basis) shall accelerate and become immediately exercisable through the date of
the closing of the Change in Control; and (b) unvested Options (the "Third Year
Accelerated Options With Closing") which would have vested during the third year
following the closing of the Change in Control (assuming and calculated as if
all Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable through the date of the closing of the Change
in Control.
3.5 Termination Event Prior to a Change in Control; No Closing Within
135 Days.
If there is a Termination Event prior to an anticipated Change in Control, but
the anticipated Change in Control is not closed within 135 days following the
Termination Event:
(a) unvested Options (the "Two Year Accelerated Options Without
Closing") (i) which would have vested through a date 135 days after the
Termination Event and (ii) which would have vested during the two years
following such 135th day (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable for a period of up to one year, but no
later than the closing of the Change in Control; and
(b) unvested Options (the "Third Year Accelerated Options
Without Closing") which would have vested during the third year following
such 135th day after the Termination Event (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata
daily basis) shall vest and become immediately
Lee -6-
<PAGE> 7
exercisable for a period of up to one year, but no later than the closing
of the Change in Control.
4. OPTION AGREEMENTS IN FULL FORCE AND EFFECT.
4.1 Except for the acceleration of the vesting of the Options upon a
Change in Control or upon a Termination Event, as provided for in this
Amendment, all of the terms of the Option Agreements remain in full force and
effect.
5. MISCELLANEOUS.
5.1 This Amendment may be signed and executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement,
5.2 This Agreement is binding on the successors and assigns of AirNet.
AirNet agrees to require any Person who purchases substantially all of AirNet's
assets or is a successor in interest to AirNet in connection with a Change in
Control transaction to assume its obligations under this Agreement.
IN WITNESS, the Company has caused this Amendment to be executed by its
authorized officer and the Employee has executed this Amendment as of the above
date.
<TABLE>
<CAPTION>
<S> <C>
Employee: /s/ William J. Lee AirNet Communications Corporation
---------------------------------
Name: William J. Lee By: /s/ R. Lee Hamilton, Jr.
------------------------ -------------------------------
Title: President & CEO
------------------------
</TABLE>
Lee -7-
<PAGE> 1
EXHIBIT 10.7
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
This Amendment to Incentive Stock Option Agreements dated February 11, 2000 is
between AirNet Communications Corporation ("AirNet" or the "Company") and Mark
G. Demange (the "Employee").
RECITALS:
A. The Employee is an at-will employee of the Company.
B. Employee serves in the capacity of Vice President of Engineering at the
behest of and at the discretion of the Board of Directors.
C. The Company recognizes that the possibility of a Change in Control of the
Company may exist which, if preceded or followed by termination of the
employment of Employee, would cause the Employee to lose the opportunity to
exercise unvested stock options, and that such possibility, and the uncertainty
and questions which it may raise, may result in the distraction of the Employee
to the detriment of the Company.
D. In order to encourage the Employee to maintain his/her continued attention
and dedication to his/her duties and responsibilities, the Company desires to
enter into this Amendment with the Employee setting forth additional terms and
conditions as to the Employee's stock options in connection with a Change in
Control of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, the parties agree as follows:
SECTION 1. DEFINITIONS.
The following Capitalized terms shall have the following meanings:
"Business" means the business of AirNet as conducted immediately prior to
any Change in Control.
"Cause" means the Employee's intentional bad faith act or omission, felony
conviction, or gross dereliction of duty, which is materially harmful or
damaging to the Company, or intentional material breach of any of Employee's
obligations under the Proprietary Information and Inventions Agreement executed
by Company and the Employee.
"Change in Control" shall mean:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange act) of 50% or more of either (i) then outstanding shares of common
stock of the Company (the "Outstanding
<PAGE> 2
Company Common Stock") or (ii) the combined voting power of then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities") or;
(ii) the cessation for any reason of individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; or
(iii) the approval by the shareholders of the Company and the closing of
a reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, more than 50% of, respectively, then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or
(iv) the approval by the shareholders of the Company and the closing of
(i) a complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the Company.
"Company" means AirNet Communications Corporation or, in the event of a
Change in Control, the successor(s) in interest to AirNet Communications
Corporation.
"Person" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
SECTION 2. TERMINATION EVENTS.
2.1 This Agreement does not constitute an employment agreement. The
Company retains its right to terminate Employee's employment with or without
Cause.
2.2 Either of the following events which occur (i) at any time
following execution of a letter of intent or definitive agreement for a Change
in Control transaction and on or before
Demange -2-
<PAGE> 3
consummation of such transaction, or (ii) within 135 days prior to any
consummated Change in Control, or (iii) within 12 months following a Change of
Control, shall be a "Termination Event:"
(a) The termination without Cause of the Employee; or
(b) The resignation of Employee upon no less than two weeks' written
notice to the Company under circumstances constituting Good Reason (as defined
in Section 2.3) to resign.
2.3 "Good Reason" shall mean, without the Employee's written consent,
the occurrence of any of the following circumstances prior to a Change in
Control, in connection with a Change in Control, in anticipation of a Change in
Control, at a time when discussions relating to a Change in Control are taking
place, or within 12 months following a Change in Control:
(a) The Employee is assigned a new position, which entails a
reduction in the nature of Employee's authority with respect to
the operation of the Company's business compared to Employee's
position as in effect on the date of this Agreement or immediately
prior to a Change in Control or Termination Event, whichever
position is greater or more senior;
(b) A reduction in the Employee's annual base salary as in
effect on the date of this Agreement or immediately prior to a
Change in Control or Termination Event, whichever is greater, or
an adverse change in benefits or perquisites other than a change
that is generally applicable to all executive employees;
(c) The Company's requirement that the Employee's site of
principal employment be more than twenty-five miles from the
offices at which the Employee was principally employed on the date
of this Agreement; or
(d) The Employee is assigned duties inconsistent with the
status of the position that the Employee held on the date of this
Agreement or immediately prior to a Change in Control or
Termination Event, whichever is greater, or an adverse alteration
in the nature or status of the Employee's responsibilities or in
the quality or amount of office accommodations or assistance
provided to the Employee from those in effect on the date of this
Agreement, which shall constitute a constructive demotion.
SECTION 3. AMENDMENT OF OPTION AGREEMENTS.
3.1 This Amendment amends each Incentive Stock Option Agreement (the
"Option Agreement or Agreements") listed below covering the grant to Employee of
stock options for the purchase of the number of shares of common stock of the
Company and at the exercise price per share specified below (as granted and in
effect prior to the Company's recent one for 66.38 reverse stock split):
Demange -3-
<PAGE> 4
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Date of Grant Under Incentive Number of Shares Underlying Exercise Price Per Share
Stock Option Agreement Option Grant (pre-split) (pre-split)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
3-8-99 5,147,422.819 $0.036
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The options ("Options") granted to Employee under the Option Agreements were
granted under the Company's stock option plan as amended, now the 1999 Equity
Incentive Plan (the "Plan").
Each of the Options shall vest and become exercisable as specified in Section 3
of each Option Agreement, as hereby amended.
Employee and the Company each acknowledge that the number of shares underlying
the Options and the applicable exercise price per share are pre-split numbers
and the actual numbers have been adjusted to reflect the Company's recent one
for 66.38 reverse stock split.
3.2 Section 3 of each Option Agreement is amended to provide for
accelerated vesting of some or all of the Options upon the occurrence of a
"Change in Control" or a Termination Event as provided in this Section 3.
3.3 No Termination Event Prior to a Change in Control.
(a) Two Year Accelerated Options With Closing. If there is no
Termination Event prior to an anticipated Change in Control and a Change in
Control is consummated, unvested Options (the "Two Year Accelerated Options With
Closing") (i) which would have vested through the closing of the Change in
Control and (ii) which would have vested during the two years following the
closing of the Change in Control (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall accelerate
and become immediately exercisable commencing 15 days prior to a scheduled
closing of a Change in Control; provided, however, that such acceleration (and
any exercise of Options not otherwise vested and exercisable) shall be
conditioned on the closing of the Change in Control.
(b) Options Maintained or Matched; Third Year Accelerated Options. If
there is no Termination Event prior to an anticipated Change in Control and a
Change in Control is consummated and as of the closing either:
(i) AirNet is the surviving company to the Change in Control
transaction, the Business is to be continued and AirNet maintains the Employee's
then outstanding stock options or,
Demange -4-
<PAGE> 5
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be continued by the buyer or
successor; and
(B) the buyer or successor grants options to the Employee
for the purchase of the buyer's or successor's stock with a proportionate number
of shares and exercise price per share and the same vesting schedule as with the
Options; and
(C) the buyer or successor specifically assumes the
potential obligation to accelerate the vesting of options under this Section
3.3(b);
then the following provisions in this Section 3.3(b) apply.
In the event of (i) a Termination Event within 12 months following the Change in
Control; or (ii) in the event the Employee completes 12 months of employment
with the Company or its successor following the Change in Control, then unvested
Options or the equivalent unvested buyer or successor options ("Third Year
Accelerated Options") which would have vested during the third year following
the closing of the Change in Control, (assuming and calculated as if all Options
or the equivalent unvested buyer or successor options would otherwise have
vested on a pro rata daily basis) shall vest and become immediately exercisable
for as long as Employee continues to be employed by the Company or such
successor and for a period of 90 days thereafter.
(c) Options Not Maintained or Matched; Escrow in Lieu of Third Year
Accelerated Options. If there is no Termination Event prior to an anticipated
Change in Control and a Change in Control is consummated and as of the closing
either:
(i) AirNet is the surviving company to the Change in Control
transaction and AirNet does not maintain the Employee's then outstanding stock
options or the Business is to be discontinued; or
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be discontinued; or
(B) the buyer or successor does not grant to Employee
options for the purchase of the buyer's or successor's stock with a
proportionate number of shares and exercise price per share and the same vesting
schedule as with the Options; or
(C) the buyer or successor does not specifically assume the
potential obligation to accelerate the vesting of the Third Year Accelerated
Options under Section 3.3(b) above;
then the following provisions in this Section 3.3(c) apply:
Demange -5-
<PAGE> 6
(1) The Company will place in escrow with a third party Escrow
Agent an amount ("Escrow Amount") of sale proceeds from the Change in
Control transaction equal to the gain the Employee could have realized if
the Third Year Accelerated Options had been exercised and sold in
connection with the Change in Control transaction.
(2) In the event (A) a Termination Event occurs within 12
months following the Change in Control; or (B) in the event the Employee
completes 12 months of employment with the Company, its successor or the
buyer following the Change in Control, then the Escrow Amount will be
released and paid to the Employee.
(3) In the event the Employee resigns or is terminated with
Cause within 12 months following the Change in Control, the Escrow Amount
will be released and distributed pro rata in the manner other sale
proceeds were distributed in connection with the Change in Control
transaction.
3.4 Termination Event On or Before a Change in Control; Closing Within
135 Days.
If there is a Termination Event on or before a Change in Control and a Change in
Control is consummated within 135 days of the Termination Event (a) unvested
Options ("Two Year Accelerated Options") (i) which would have vested through the
closing of the Change in Control and (ii) which would have vested during the two
years following the closing of the Change in Control (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata daily
basis) shall accelerate and become immediately exercisable through the date of
the closing of the Change in Control; and (b) unvested Options (the "Third Year
Accelerated Options With Closing") which would have vested during the third year
following the closing of the Change in Control (assuming and calculated as if
all Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable through the date of the closing of the Change
in Control.
3.5 Termination Event Prior to a Change in Control; No Closing Within
135 Days.
If there is a Termination Event prior to an anticipated Change in Control, but
the anticipated Change in Control is not closed within 135 days following the
Termination Event:
(a) unvested Options (the "Two Year Accelerated Options Without
Closing") (i) which would have vested through a date 135 days after the
Termination Event and (ii) which would have vested during the two years
following such 135th day (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable for a period of up to one year, but no
later than the closing of the Change in Control; and
(b) unvested Options (the "Third Year Accelerated Options
Without Closing") which would have vested during the third year following
such 135th day after the Termination Event (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata
daily basis) shall vest and become immediately
Demange -6-
<PAGE> 7
exercisable for a period of up to one year, but no later than the closing
of the Change in Control.
4. OPTION AGREEMENTS IN FULL FORCE AND EFFECT.
4.1 Except for the acceleration of the vesting of the Options upon a
Change in Control or upon a Termination Event, as provided for in this
Amendment, all of the terms of the Option Agreements remain in full force and
effect.
5. MISCELLANEOUS.
5.1 This Amendment may be signed and executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement,
5.2 This Agreement is binding on the successors and assigns of AirNet.
AirNet agrees to require any Person who purchases substantially all of AirNet's
assets or is a successor in interest to AirNet in connection with a Change in
Control transaction to assume its obligations under this Agreement.
IN WITNESS, the Company has caused this Amendment to be executed by its
authorized officer and the Employee has executed this Amendment as of the above
date.
<TABLE>
<CAPTION>
<S> <C>
Employee: /s/ Mark G. Demange AirNet Communications Corporation
------------------------
Name:Mark G. Demange
------------------ By: /s/ R. Lee Hamilton, Jr.
-------------------------------
Title: President & CEO
------------------------
</TABLE>
Demange -7-
<PAGE> 1
EXHIBIT 10.7
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
This Amendment to Incentive Stock Option Agreements dated February 11, 2000 is
between AirNet Communications Corporation ("AirNet" or the "Company") and Mark
G. Demange (the "Employee").
RECITALS:
A. The Employee is an at-will employee of the Company.
B. Employee serves in the capacity of Vice President of Engineering at the
behest of and at the discretion of the Board of Directors.
C. The Company recognizes that the possibility of a Change in Control of the
Company may exist which, if preceded or followed by termination of the
employment of Employee, would cause the Employee to lose the opportunity to
exercise unvested stock options, and that such possibility, and the uncertainty
and questions which it may raise, may result in the distraction of the Employee
to the detriment of the Company.
D. In order to encourage the Employee to maintain his/her continued attention
and dedication to his/her duties and responsibilities, the Company desires to
enter into this Amendment with the Employee setting forth additional terms and
conditions as to the Employee's stock options in connection with a Change in
Control of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, the parties agree as follows:
SECTION 1. DEFINITIONS.
The following Capitalized terms shall have the following meanings:
"Business" means the business of AirNet as conducted immediately prior to
any Change in Control.
"Cause" means the Employee's intentional bad faith act or omission, felony
conviction, or gross dereliction of duty, which is materially harmful or
damaging to the Company, or intentional material breach of any of Employee's
obligations under the Proprietary Information and Inventions Agreement executed
by Company and the Employee.
"Change in Control" shall mean:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange act) of 50% or more of either (i) then outstanding shares of common
stock of the Company (the "Outstanding
<PAGE> 2
Company Common Stock") or (ii) the combined voting power of then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities") or;
(ii) the cessation for any reason of individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; or
(iii) the approval by the shareholders of the Company and the closing of
a reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, more than 50% of, respectively, then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or
(iv) the approval by the shareholders of the Company and the closing of
(i) a complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the Company.
"Company" means AirNet Communications Corporation or, in the event of a
Change in Control, the successor(s) in interest to AirNet Communications
Corporation.
"Person" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
SECTION 2. TERMINATION EVENTS.
2.1 This Agreement does not constitute an employment agreement. The
Company retains its right to terminate Employee's employment with or without
Cause.
2.2 Either of the following events which occur (i) at any time
following execution of a letter of intent or definitive agreement for a Change
in Control transaction and on or before
Demange -2-
<PAGE> 3
consummation of such transaction, or (ii) within 135 days prior to any
consummated Change in Control, or (iii) within 12 months following a Change of
Control, shall be a "Termination Event:"
(a) The termination without Cause of the Employee; or
(b) The resignation of Employee upon no less than two weeks' written
notice to the Company under circumstances constituting Good Reason (as defined
in Section 2.3) to resign.
2.3 "Good Reason" shall mean, without the Employee's written consent,
the occurrence of any of the following circumstances prior to a Change in
Control, in connection with a Change in Control, in anticipation of a Change in
Control, at a time when discussions relating to a Change in Control are taking
place, or within 12 months following a Change in Control:
(a) The Employee is assigned a new position, which entails a
reduction in the nature of Employee's authority with respect to
the operation of the Company's business compared to Employee's
position as in effect on the date of this Agreement or immediately
prior to a Change in Control or Termination Event, whichever
position is greater or more senior;
(b) A reduction in the Employee's annual base salary as in
effect on the date of this Agreement or immediately prior to a
Change in Control or Termination Event, whichever is greater, or
an adverse change in benefits or perquisites other than a change
that is generally applicable to all executive employees;
(c) The Company's requirement that the Employee's site of
principal employment be more than twenty-five miles from the
offices at which the Employee was principally employed on the date
of this Agreement; or
(d) The Employee is assigned duties inconsistent with the
status of the position that the Employee held on the date of this
Agreement or immediately prior to a Change in Control or
Termination Event, whichever is greater, or an adverse alteration
in the nature or status of the Employee's responsibilities or in
the quality or amount of office accommodations or assistance
provided to the Employee from those in effect on the date of this
Agreement, which shall constitute a constructive demotion.
SECTION 3. AMENDMENT OF OPTION AGREEMENTS.
3.1 This Amendment amends each Incentive Stock Option Agreement (the
"Option Agreement or Agreements") listed below covering the grant to Employee of
stock options for the purchase of the number of shares of common stock of the
Company and at the exercise price per share specified below (as granted and in
effect prior to the Company's recent one for 66.38 reverse stock split):
Demange -3-
<PAGE> 4
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Date of Grant Under Incentive Number of Shares Underlying Exercise Price Per Share
Stock Option Agreement Option Grant (pre-split) (pre-split)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
3-8-99 5,147,422.819 $0.036
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The options ("Options") granted to Employee under the Option Agreements were
granted under the Company's stock option plan as amended, now the 1999 Equity
Incentive Plan (the "Plan").
Each of the Options shall vest and become exercisable as specified in Section 3
of each Option Agreement, as hereby amended.
Employee and the Company each acknowledge that the number of shares underlying
the Options and the applicable exercise price per share are pre-split numbers
and the actual numbers have been adjusted to reflect the Company's recent one
for 66.38 reverse stock split.
3.2 Section 3 of each Option Agreement is amended to provide for
accelerated vesting of some or all of the Options upon the occurrence of a
"Change in Control" or a Termination Event as provided in this Section 3.
3.3 No Termination Event Prior to a Change in Control.
(a) Two Year Accelerated Options With Closing. If there is no
Termination Event prior to an anticipated Change in Control and a Change in
Control is consummated, unvested Options (the "Two Year Accelerated Options With
Closing") (i) which would have vested through the closing of the Change in
Control and (ii) which would have vested during the two years following the
closing of the Change in Control (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall accelerate
and become immediately exercisable commencing 15 days prior to a scheduled
closing of a Change in Control; provided, however, that such acceleration (and
any exercise of Options not otherwise vested and exercisable) shall be
conditioned on the closing of the Change in Control.
(b) Options Maintained or Matched; Third Year Accelerated Options. If
there is no Termination Event prior to an anticipated Change in Control and a
Change in Control is consummated and as of the closing either:
(i) AirNet is the surviving company to the Change in Control
transaction, the Business is to be continued and AirNet maintains the Employee's
then outstanding stock options or,
Demange -4-
<PAGE> 5
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be continued by the buyer or
successor; and
(B) the buyer or successor grants options to the Employee
for the purchase of the buyer's or successor's stock with a proportionate number
of shares and exercise price per share and the same vesting schedule as with the
Options; and
(C) the buyer or successor specifically assumes the
potential obligation to accelerate the vesting of options under this Section
3.3(b);
then the following provisions in this Section 3.3(b) apply.
In the event of (i) a Termination Event within 12 months following the Change in
Control; or (ii) in the event the Employee completes 12 months of employment
with the Company or its successor following the Change in Control, then unvested
Options or the equivalent unvested buyer or successor options ("Third Year
Accelerated Options") which would have vested during the third year following
the closing of the Change in Control, (assuming and calculated as if all Options
or the equivalent unvested buyer or successor options would otherwise have
vested on a pro rata daily basis) shall vest and become immediately exercisable
for as long as Employee continues to be employed by the Company or such
successor and for a period of 90 days thereafter.
(c) Options Not Maintained or Matched; Escrow in Lieu of Third Year
Accelerated Options. If there is no Termination Event prior to an anticipated
Change in Control and a Change in Control is consummated and as of the closing
either:
(i) AirNet is the surviving company to the Change in Control
transaction and AirNet does not maintain the Employee's then outstanding stock
options or the Business is to be discontinued; or
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be discontinued; or
(B) the buyer or successor does not grant to Employee
options for the purchase of the buyer's or successor's stock with a
proportionate number of shares and exercise price per share and the same vesting
schedule as with the Options; or
(C) the buyer or successor does not specifically assume the
potential obligation to accelerate the vesting of the Third Year Accelerated
Options under Section 3.3(b) above;
then the following provisions in this Section 3.3(c) apply:
Demange -5-
<PAGE> 6
(1) The Company will place in escrow with a third party Escrow
Agent an amount ("Escrow Amount") of sale proceeds from the Change in
Control transaction equal to the gain the Employee could have realized if
the Third Year Accelerated Options had been exercised and sold in
connection with the Change in Control transaction.
(2) In the event (A) a Termination Event occurs within 12
months following the Change in Control; or (B) in the event the Employee
completes 12 months of employment with the Company, its successor or the
buyer following the Change in Control, then the Escrow Amount will be
released and paid to the Employee.
(3) In the event the Employee resigns or is terminated with
Cause within 12 months following the Change in Control, the Escrow Amount
will be released and distributed pro rata in the manner other sale
proceeds were distributed in connection with the Change in Control
transaction.
3.4 Termination Event On or Before a Change in Control; Closing Within
135 Days.
If there is a Termination Event on or before a Change in Control and a Change in
Control is consummated within 135 days of the Termination Event (a) unvested
Options ("Two Year Accelerated Options") (i) which would have vested through the
closing of the Change in Control and (ii) which would have vested during the two
years following the closing of the Change in Control (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata daily
basis) shall accelerate and become immediately exercisable through the date of
the closing of the Change in Control; and (b) unvested Options (the "Third Year
Accelerated Options With Closing") which would have vested during the third year
following the closing of the Change in Control (assuming and calculated as if
all Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable through the date of the closing of the Change
in Control.
3.5 Termination Event Prior to a Change in Control; No Closing Within
135 Days.
If there is a Termination Event prior to an anticipated Change in Control, but
the anticipated Change in Control is not closed within 135 days following the
Termination Event:
(a) unvested Options (the "Two Year Accelerated Options Without
Closing") (i) which would have vested through a date 135 days after the
Termination Event and (ii) which would have vested during the two years
following such 135th day (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable for a period of up to one year, but no
later than the closing of the Change in Control; and
(b) unvested Options (the "Third Year Accelerated Options
Without Closing") which would have vested during the third year following
such 135th day after the Termination Event (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata
daily basis) shall vest and become immediately
Demange -6-
<PAGE> 7
exercisable for a period of up to one year, but no later than the closing
of the Change in Control.
4. OPTION AGREEMENTS IN FULL FORCE AND EFFECT.
4.1 Except for the acceleration of the vesting of the Options upon a
Change in Control or upon a Termination Event, as provided for in this
Amendment, all of the terms of the Option Agreements remain in full force and
effect.
5. MISCELLANEOUS.
5.1 This Amendment may be signed and executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement,
5.2 This Agreement is binding on the successors and assigns of AirNet.
AirNet agrees to require any Person who purchases substantially all of AirNet's
assets or is a successor in interest to AirNet in connection with a Change in
Control transaction to assume its obligations under this Agreement.
IN WITNESS, the Company has caused this Amendment to be executed by its
authorized officer and the Employee has executed this Amendment as of the above
date.
<TABLE>
<CAPTION>
<S> <C>
Employee: /s/ Mark G. Demange AirNet Communications Corporation
------------------------
Name:Mark G. Demange
------------------ By: /s/ R. Lee Hamilton, Jr.
-------------------------------
Title: President & CEO
------------------------
</TABLE>
Demange -7-
<PAGE> 1
EXHIBIT 10.8
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
This Amendment to Incentive Stock Option Agreements dated February 11, 2000 is
between AirNet Communications Corporation ("AirNet" or the "Company") and Glenn
A. Ehley (the "Employee").
RECITALS:
A. The Employee is an at-will employee of the Company.
B. Employee serves in the capacity of Senior Vice President of Worldwide
Sales and Marketing at the behest of and at the discretion of the Board of
Directors.
C. The Company recognizes that the possibility of a Change in Control of the
Company may exist which, if preceded or followed by termination of the
employment of Employee, would cause the Employee to lose the opportunity to
exercise unvested stock options, and that such possibility, and the uncertainty
and questions which it may raise, may result in the distraction of the Employee
to the detriment of the Company.
D. In order to encourage the Employee to maintain his/her continued attention
and dedication to his/her duties and responsibilities, the Company desires to
enter into this Amendment with the Employee setting forth additional terms and
conditions as to the Employee's stock options in connection with a Change in
Control of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, the parties agree as follows:
SECTION 1. DEFINITIONS.
The following Capitalized terms shall have the following meanings:
"Business" means the business of AirNet as conducted immediately prior to
any Change in Control.
"Cause" means the Employee's intentional bad faith act or omission, felony
conviction, or gross dereliction of duty, which is materially harmful or
damaging to the Company, or intentional material breach of any of Employee's
obligations under the Proprietary Information and Inventions Agreement executed
by Company and the Employee.
"Change in Control" shall mean:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange act) of 50% or more of either (i) then outstanding shares of common
stock of the Company (the "Outstanding
<PAGE> 2
Company Common Stock") or (ii) the combined voting power of then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities") or;
(ii) the cessation for any reason of individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; or
(iii) the approval by the shareholders of the Company and the closing
of a reorganization, merger or consolidation, in each case, unless, following
such reorganization, merger or consolidation, more than 50% of, respectively,
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or
(iv) the approval by the shareholders of the Company and the closing of
(i) a complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the Company.
"Company" means AirNet Communications Corporation or, in the event of a
Change in Control, the successor(s) in interest to AirNet Communications
Corporation.
"Person" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
SECTION 2. TERMINATION EVENTS.
2.1 This Agreement does not constitute an employment agreement. The
Company retains its right to terminate Employee's employment with or without
Cause.
2.2 Either of the following events which occur (i) at any time
following execution of a letter of intent or definitive agreement for a Change
in Control transaction and on or before
Ehley -2-
<PAGE> 3
consummation of such transaction, or (ii) within 135 days prior to any
consummated Change in Control, or (iii) within 12 months following a Change of
Control, shall be a "Termination Event:"
(a) The termination without Cause of the Employee; or
(b) The resignation of Employee upon no less than two weeks' written
notice to the Company under circumstances constituting Good Reason (as defined
in Section 2.3) to resign.
2.3 "Good Reason" shall mean, without the Employee's written consent,
the occurrence of any of the following circumstances prior to a Change in
Control, in connection with a Change in Control, in anticipation of a Change in
Control, at a time when discussions relating to a Change in Control are taking
place, or within 12 months following a Change in Control:
(a) The Employee is assigned a new position, which entails a
reduction in the nature of Employee's authority with respect to
the operation of the Company's business compared to Employee's
position as in effect on the date of this Agreement or immediately
prior to a Change in Control or Termination Event, whichever
position is greater or more senior;
(b) A reduction in the Employee's annual base salary as in
effect on the date of this Agreement or immediately prior to a
Change in Control or Termination Event, whichever is greater, or
an adverse change in benefits or perquisites other than a change
that is generally applicable to all executive employees;
(c) The Company's requirement that the Employee's site of
principal employment be more than twenty-five miles from the
offices at which the Employee was principally employed on the date
of this Agreement; or
(d) The Employee is assigned duties inconsistent with the
status of the position that the Employee held on the date of this
Agreement or immediately prior to a Change in Control or
Termination Event, whichever is greater, or an adverse alteration
in the nature or status of the Employee's responsibilities or in
the quality or amount of office accommodations or assistance
provided to the Employee from those in effect on the date of this
Agreement, which shall constitute a constructive demotion.
SECTION 3. AMENDMENT OF OPTION AGREEMENTS.
3.1 This Amendment amends each Incentive Stock Option Agreement (the
"Option Agreement or Agreements") listed below covering the grant to Employee of
stock options for the purchase of the number of shares of common stock of the
Company and at the exercise price per share specified below (as granted and in
effect prior to the Company's recent one for 66.38 reverse stock split):
Ehley -3-
<PAGE> 4
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Date of Grant Under Incentive Number of Shares Underlying Exercise Price Per Share
Stock Option Agreement Option Grant (pre-split) (pre-split)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------
SEE SCHEDULE A
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
The options ("Options") granted to Employee under the Option Agreements were
granted under the Company's stock option plan as amended, now the 1999 Equity
Incentive Plan (the "Plan").
Each of the Options shall vest and become exercisable as specified in Section 3
of each Option Agreement, as hereby amended.
Employee and the Company each acknowledge that the number of shares underlying
the Options and the applicable exercise price per share are pre-split numbers
and the actual numbers have been adjusted to reflect the Company's recent one
for 66.38 reverse stock split.
3.2 Section 3 of each Option Agreement is amended to provide for
accelerated vesting of some or all of the Options upon the occurrence of a
"Change in Control" or a Termination Event as provided in this Section 3.
3.3 No Termination Event Prior to a Change in Control.
(a) Two Year Accelerated Options With Closing. If there is no
Termination Event prior to an anticipated Change in Control and a Change in
Control is consummated, unvested Options (the "Two Year Accelerated Options With
Closing") (i) which would have vested through the closing of the Change in
Control and (ii) which would have vested during the two years following the
closing of the Change in Control (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall accelerate
and become immediately exercisable commencing 15 days prior to a scheduled
closing of a Change in Control; provided, however, that such acceleration (and
any exercise of Options not otherwise vested and exercisable) shall be
conditioned on the closing of the Change in Control.
(b) Options Maintained or Matched; Third Year Accelerated Options. If
there is no Termination Event prior to an anticipated Change in Control and a
Change in Control is consummated and as of the closing either:
(i) AirNet is the surviving company to the Change in Control
transaction, the Business is to be continued and AirNet maintains the Employee's
then outstanding stock options or,
Ehley -4-
<PAGE> 5
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be continued by the buyer or
successor; and
(B) the buyer or successor grants options to the Employee
for the purchase of the buyer's or successor's stock with a proportionate number
of shares and exercise price per share and the same vesting schedule as with the
Options; and
(C) the buyer or successor specifically assumes the
potential obligation to accelerate the vesting of options under this Section
3.3(b);
then the following provisions in this Section 3.3(b) apply.
In the event of (i) a Termination Event within 12 months following the Change in
Control; or (ii) in the event the Employee completes 12 months of employment
with the Company or its successor following the Change in Control, then unvested
Options or the equivalent unvested buyer or successor options ("Third Year
Accelerated Options") which would have vested during the third year following
the closing of the Change in Control, (assuming and calculated as if all Options
or the equivalent unvested buyer or successor options would otherwise have
vested on a pro rata daily basis) shall vest and become immediately exercisable
for as long as Employee continues to be employed by the Company or such
successor and for a period of 90 days thereafter.
(c) Options Not Maintained or Matched; Escrow in Lieu of Third Year
Accelerated Options. If there is no Termination Event prior to an anticipated
Change in Control and a Change in Control is consummated and as of the closing
either:
(i) AirNet is the surviving company to the Change in Control
transaction and AirNet does not maintain the Employee's then outstanding stock
options or the Business is to be discontinued; or
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be discontinued; or
(B) the buyer or successor does not grant to Employee
options for the purchase of the buyer's or successor's stock with a
proportionate number of shares and exercise price per share and the same vesting
schedule as with the Options; or
(C) the buyer or successor does not specifically assume the
potential obligation to accelerate the vesting of the Third Year Accelerated
Options under Section 3.3(b) above;
then the following provisions in this Section 3.3(c) apply:
Ehley -5-
<PAGE> 6
(1) The Company will place in escrow with a third party Escrow
Agent an amount ("Escrow Amount") of sale proceeds from the Change in
Control transaction equal to the gain the Employee could have realized if
the Third Year Accelerated Options had been exercised and sold in
connection with the Change in Control transaction.
(2) In the event (A) a Termination Event occurs within 12
months following the Change in Control; or (B) in the event the Employee
completes 12 months of employment with the Company, its successor or the
buyer following the Change in Control, then the Escrow Amount will be
released and paid to the Employee.
(3) In the event the Employee resigns or is terminated with
Cause within 12 months following the Change in Control, the Escrow Amount
will be released and distributed pro rata in the manner other sale
proceeds were distributed in connection with the Change in Control
transaction.
3.4 Termination Event On or Before a Change in Control; Closing Within
135 Days.
If there is a Termination Event on or before a Change in Control and a Change in
Control is consummated within 135 days of the Termination Event (a) unvested
Options ("Two Year Accelerated Options") (i) which would have vested through the
closing of the Change in Control and (ii) which would have vested during the two
years following the closing of the Change in Control (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata daily
basis) shall accelerate and become immediately exercisable through the date of
the closing of the Change in Control; and (b) unvested Options (the "Third Year
Accelerated Options With Closing") which would have vested during the third year
following the closing of the Change in Control (assuming and calculated as if
all Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable through the date of the closing of the Change
in Control.
3.5 Termination Event Prior to a Change in Control; No Closing Within
135 Days.
If there is a Termination Event prior to an anticipated Change in Control, but
the anticipated Change in Control is not closed within 135 days following the
Termination Event:
(a) unvested Options (the "Two Year Accelerated Options Without
Closing") (i) which would have vested through a date 135 days after the
Termination Event and (ii) which would have vested during the two years
following such 135th day (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable for a period of up to one year, but no
later than the closing of the Change in Control; and
(b) unvested Options (the "Third Year Accelerated Options
Without Closing") which would have vested during the third year following
such 135th day after the Termination Event (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata
daily basis) shall vest and become immediately
Ehley -6-
<PAGE> 7
exercisable for a period of up to one year, but no later than the closing
of the Change in Control.
4. OPTION AGREEMENTS IN FULL FORCE AND EFFECT.
4.1 Except for the acceleration of the vesting of the Options upon a
Change in Control or upon a Termination Event, as provided for in this
Amendment, all of the terms of the Option Agreements remain in full force and
effect.
5. MISCELLANEOUS.
5.1 This Amendment may be signed and executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement,
5.2 This Agreement is binding on the successors and assigns of AirNet.
AirNet agrees to require any Person who purchases substantially all of AirNet's
assets or is a successor in interest to AirNet in connection with a Change in
Control transaction to assume its obligations under this Agreement.
IN WITNESS, the Company has caused this Amendment to be executed by its
authorized officer and the Employee has executed this Amendment as of the above
date.
<TABLE>
<CAPTION>
<S> <C>
Employee: /s/ Glenn A. Ehley AirNet Communications Corporation
---------------------------------
Name: Glenn A. Ehley
-------------------------- By: /s/ R. Lee Hamilton, Jr.
-------------------------------
Title: President & CEO
------------------------
</TABLE>
Ehley -7-
<PAGE> 8
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
GLENN EHLEY - PRE-SPLIT STOCKOPTIONS
- -------------------------------------------------------------------------------------------------------
First Year Vesting
- -------------------------------------------------------------------------------------------------------
Date Granted Options Granted Exercise Price # of Shares Price Date
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
8-Aug-95 70,900.00 0.001 17,725.00 $17.73 8/8/1996
- -------------------------------------------------------------------------------------------------------
8-Aug-95 10,000.00 0.020 2,500.00 $50.00 8/8/1996
- -------------------------------------------------------------------------------------------------------
8-Aug-95 70,900.00 0.020 17,725.00 $354.50 8/8/1996
- -------------------------------------------------------------------------------------------------------
8-Aug-95 10,000.00 0.050 2,500.00 $125.00 8/8/1996
- -------------------------------------------------------------------------------------------------------
8-Aug-95 692.54 0.020 173.14 $3.46 8/8/1996
- -------------------------------------------------------------------------------------------------------
8-Aug-95 4,910.14 0.020 1,227.54 $24.55 8/8/1996
- -------------------------------------------------------------------------------------------------------
8-Aug-95 692.54 0.020 173.14 $3.46 8/8/1996
- -------------------------------------------------------------------------------------------------------
8-Aug-95 4,910.14 0.020 1,227.54 $24.55 8/8/1996
- -------------------------------------------------------------------------------------------------------
20-Oct-95 30,132.00 0.001 7,533.00 $7.53 10/20/1996
- -------------------------------------------------------------------------------------------------------
20-Oct-95 4,250.00 0.020 1,062.50 $21.25 10/20/1996
- -------------------------------------------------------------------------------------------------------
20-Oct-95 30,132.00 0.020 7,533.00 $150.66 10/20/1996
- -------------------------------------------------------------------------------------------------------
20-Oct-95 4,250.00 0.050 1,062.50 $53.13 10/20/1996
- -------------------------------------------------------------------------------------------------------
20-Oct-95 2,086.77 0.020 521.69 $10.43 10/20/1996
- -------------------------------------------------------------------------------------------------------
20-Oct-95 294.33 0.020 73.58 $1.47 10/20/1996
- -------------------------------------------------------------------------------------------------------
20-Oct-95 2,086.77 0.020 521.69 $10.43 10/20/1996
- -------------------------------------------------------------------------------------------------------
20-Oct-95 294.33 0.020 73.58 $1.47 10/20/1996
- -------------------------------------------------------------------------------------------------------
23-Sep-96 21,412.00 0.001 10,706.00 $10.71 9/23/1997
- -------------------------------------------------------------------------------------------------------
23-Sep-96 3,020.00 0.020 1,510.00 $30.20 9/23/1997
- -------------------------------------------------------------------------------------------------------
23-Sep-96 21,412.00 0.020 10,706.00 $214.12 9/23/1997
- -------------------------------------------------------------------------------------------------------
23-Sep-96 3,020.00 0.050 1,510.00 $75.50 9/23/1997
- -------------------------------------------------------------------------------------------------------
23-Sep-96 1,482.87 0.020 741.44 $14.83 9/23/1997
- -------------------------------------------------------------------------------------------------------
23-Sep-96 209.15 0.020 104.58 $2.09 9/23/1997
- -------------------------------------------------------------------------------------------------------
23-Sep-96 1,482.87 0.020 741.44 $14.83 9/23/1997
- -------------------------------------------------------------------------------------------------------
23-Sep-96 209.15 0.020 104.58 $2.09 9/23/1997
- -------------------------------------------------------------------------------------------------------
1-Oct-96 70,900.00 0.001 35,450.00 $35.45 10/1/1997
- -------------------------------------------------------------------------------------------------------
1-Oct-96 10,000.00 0.020 5,000.00 $100.00 10/1/1997
- -------------------------------------------------------------------------------------------------------
1-Oct-96 70,900.00 0.020 35,450.00 $709.00 10/1/1997
- -------------------------------------------------------------------------------------------------------
1-Oct-96 10,000.00 0.050 5,000.00 $250.00 10/1/1997
- -------------------------------------------------------------------------------------------------------
1-Oct-96 4,910.14 0.020 2,455.07 $49.10 10/1/1997
- -------------------------------------------------------------------------------------------------------
1-Oct-96 692.54 0.020 346.27 $6.93 10/1/1997
- -------------------------------------------------------------------------------------------------------
1-Oct-96 4,910.14 0.020 2,455.07 $49.10 10/1/1997
- -------------------------------------------------------------------------------------------------------
1-Oct-96 692.54 0.020 346.27 $6.93 10/1/1997
- -------------------------------------------------------------------------------------------------------
16-Apr-97 196,031.00 0.001 49,007.75 $49.01 4/16/1998
- -------------------------------------------------------------------------------------------------------
16-Apr-97 27,649.00 0.020 6,912.25 $138.25 4/16/1998
- -------------------------------------------------------------------------------------------------------
16-Apr-97 196,031.00 0.020 49,007.75 $980.16 4/16/1998
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Second Year Vesting Third Year Vesting Fourth Year Vesting
- ---------------------------------------------------------------------------------------------------------------------------------
# of Shares Price Date # of Shares Price Date # of Shares Price Date
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
17,725.00 $17.73 8/8/1997 17,725.00 $17.73 8/8/1998 17,725.00 $17.73 8/8/1999
- ---------------------------------------------------------------------------------------------------------------------------------
2,500.00 $50.00 8/8/1997 2,500.00 $50.00 8/8/1998 2,500.00 $50.00 8/8/1999
- ---------------------------------------------------------------------------------------------------------------------------------
17,725.00 $354.50 8/8/1997 17,725.00 $354.50 8/8/1998 17,725.00 $354.50 8/8/1999
- ---------------------------------------------------------------------------------------------------------------------------------
2,500.00 $125.00 8/8/1997 2,500.00 $125.00 8/8/1998 2,500.00 $125.00 8/8/1999
- ---------------------------------------------------------------------------------------------------------------------------------
173.14 $3.46 8/8/1997 173.14 $3.46 8/8/1998 173.14 $3.46 8/8/1999
- ---------------------------------------------------------------------------------------------------------------------------------
1,227.54 $24.55 8/8/1997 1,227.54 $24.55 8/8/1998 1,227.54 $24.55 8/8/1999
- ---------------------------------------------------------------------------------------------------------------------------------
173.14 $3.46 8/8/1997 173.14 $3.46 8/8/1998 173.14 $3.46 8/8/1999
- ---------------------------------------------------------------------------------------------------------------------------------
1,227.54 $24.55 8/8/1997 1,227.54 $24.55 8/8/1998 1,227.54 $24.55 8/8/1999
- ---------------------------------------------------------------------------------------------------------------------------------
7,533.00 $7.53 10/20/1997 7,533.00 $7.53 10/20/1998 7,533.00 $7.53 10/20/1999
- ---------------------------------------------------------------------------------------------------------------------------------
1,062.50 $21.25 10/20/1997 1,062.50 $21.25 10/20/1998 1,062.50 $21.25 10/20/1999
- ---------------------------------------------------------------------------------------------------------------------------------
7,533.00 $150.66 10/20/1997 7,533.00 $150.66 10/20/1998 7,533.00 $150.66 10/20/1999
- ---------------------------------------------------------------------------------------------------------------------------------
1,062.50 $53.13 10/20/1997 1,062.50 $53.13 10/20/1998 1,062.50 $53.13 10/20/1999
- ---------------------------------------------------------------------------------------------------------------------------------
521.69 $10.43 10/20/1997 521.69 $10.43 10/20/1998 521.69 $10.43 10/20/1999
- ---------------------------------------------------------------------------------------------------------------------------------
73.58 $1.47 10/20/1997 73.58 $1.47 10/20/1998 73.58 $1.47 10/20/1999
- ---------------------------------------------------------------------------------------------------------------------------------
521.69 $10.43 10/20/1997 521.69 $10.43 10/20/1998 521.69 $10.43 10/20/1999
- ---------------------------------------------------------------------------------------------------------------------------------
73.58 $1.47 10/20/1997 73.58 $1.47 10/20/1998 73.58 $1.47 10/20/1999
- ---------------------------------------------------------------------------------------------------------------------------------
10,706.00 $10.71 9/23/1998
- ---------------------------------------------------------------------------------------------------------------------------------
1,510.00 $30.20 9/23/1998
- ---------------------------------------------------------------------------------------------------------------------------------
10,706.00 $214.12 9/23/1998
- ---------------------------------------------------------------------------------------------------------------------------------
1,510.00 $75.50 9/23/1998
- ---------------------------------------------------------------------------------------------------------------------------------
741.44 $14.83 9/23/1998
- ---------------------------------------------------------------------------------------------------------------------------------
104.58 $2.09 9/23/1998
- ---------------------------------------------------------------------------------------------------------------------------------
741.44 $14.83 9/23/1998
- ---------------------------------------------------------------------------------------------------------------------------------
104.58 $2.09 9/23/1998
- ---------------------------------------------------------------------------------------------------------------------------------
35,450.00 $35.45 10/1/1998
- ---------------------------------------------------------------------------------------------------------------------------------
5,000.00 $100.00 10/1/1998
- ---------------------------------------------------------------------------------------------------------------------------------
35,450.00 $709.00 10/1/1998
- ---------------------------------------------------------------------------------------------------------------------------------
5,000.00 $250.00 10/1/1998
- ---------------------------------------------------------------------------------------------------------------------------------
2,455.07 $49.10 10/1/1998
- ---------------------------------------------------------------------------------------------------------------------------------
346.27 $6.93 10/1/1998
- ---------------------------------------------------------------------------------------------------------------------------------
2,455.07 $49.10 10/1/1998
- ---------------------------------------------------------------------------------------------------------------------------------
346.27 $6.93 10/1/1998
- ---------------------------------------------------------------------------------------------------------------------------------
49,007.75 $49.01 4/16/1999 49,007.75 $49.01 4/16/2000 49,007.75 $49.01 4/16/2001
- ---------------------------------------------------------------------------------------------------------------------------------
6,912.25 $138.25 4/16/1999 6,912.25 $138.25 4/16/2000 6,912.25 $138.25 4/16/2001
- ---------------------------------------------------------------------------------------------------------------------------------
49,007.75 $980.16 4/16/1999 49,007.75 $980.16 4/16/2000 49,007.75 $980.16 4/16/2001
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Glenn Ehley - Pre-Split StockOptions
- -------------------------------------------------------------------------------------------------------
First Year Vesting
- -------------------------------------------------------------------------------------------------------
Date Granted Options Granted Exercise Price # of Shares Price Date
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
16-Apr-97 27,649.00 0.020 6,912.25 $138.25 4/16/1998
- -------------------------------------------------------------------------------------------------------
16-Apr-97 196,031.00 0.020 49,007.75 $980.16 4/16/1998
- -------------------------------------------------------------------------------------------------------
16-Apr-97 27,649.00 0.050 6,912.25 $345.61 4/16/1998
- -------------------------------------------------------------------------------------------------------
16-Apr-97 13,576.01 0.020 3,394.00 $67.88 4/16/1998
- -------------------------------------------------------------------------------------------------------
16-Apr-97 1,914.81 0.020 478.70 $9.57 4/16/1998
- -------------------------------------------------------------------------------------------------------
16-Apr-97 13,576.01 0.020 3,394.00 $67.88 4/16/1998
- -------------------------------------------------------------------------------------------------------
16-Apr-97 1,914.81 0.020 478.70 $9.57 4/16/1998
- -------------------------------------------------------------------------------------------------------
2-Jul-97 136,220.00 0.001 68,110.00 $68.11 7/2/1998
- -------------------------------------------------------------------------------------------------------
2-Jul-97 19,213.00 0.020 9,606.50 $192.13 7/2/1998
- -------------------------------------------------------------------------------------------------------
2-Jul-97 136,220.00 0.020 68,110.00 $1,362.20 7/2/1998
- -------------------------------------------------------------------------------------------------------
2-Jul-97 19,213.00 0.050 9,606.50 $480.33 7/2/1998
- -------------------------------------------------------------------------------------------------------
2-Jul-97 9,433.83 0.020 4,716.92 $94.34 7/2/1998
- -------------------------------------------------------------------------------------------------------
2-Jul-97 1,330.58 0.020 665.29 $13.31 7/2/1998
- -------------------------------------------------------------------------------------------------------
2-Jul-97 9,433.83 0.020 4,716.92 $94.34 7/2/1998
- -------------------------------------------------------------------------------------------------------
2-Jul-97 1,330.58 0.020 665.29 $13.31 7/2/1998
- -------------------------------------------------------------------------------------------------------
22-Aug-97 1,246,904.00 0.001 311,726.00 $311.73 8/22/1998
- -------------------------------------------------------------------------------------------------------
22-Aug-97 175,868.00 0.020 43,967.00 $879.34 8/22/1998
- -------------------------------------------------------------------------------------------------------
22-Aug-97 1,246,904.00 0.020 311,726.00 $6,234.52 8/22/1998
- -------------------------------------------------------------------------------------------------------
22-Aug-97 175,868.00 0.050 43,967.00 $2,198.35 8/22/1998
- -------------------------------------------------------------------------------------------------------
22-Aug-97 86,352.40 0.020 21,588.10 $431.76 8/22/1998
- -------------------------------------------------------------------------------------------------------
22-Aug-97 12,180.88 0.020 3,045.22 $60.90 8/22/1998
- -------------------------------------------------------------------------------------------------------
22-Aug-97 86,352.40 0.020 21,588.10 $431.76 8/22/1998
- -------------------------------------------------------------------------------------------------------
22-Aug-97 12,180.88 0.020 3,045.22 $60.90 8/22/1998
- -------------------------------------------------------------------------------------------------------
19-Feb-98 700,000.00 0.020 175,000.00 $3,500.00 2/19/1999
- -------------------------------------------------------------------------------------------------------
16-Feb-99 5,000,000.00 0.036 1,250,000.00 $45,000.00 2/16/2000
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Totals 10,025,131.98 2,645,695.05 $65,525.75
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Second Year Vesting Third Year Vesting Fourth Year Vesting
- ---------------------------------------------------------------------------------------------------------------------------------
# of Shares Price Date # of Shares Price Date # of Shares Price Date
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6,912.25 $138.25 4/16/1999 6,912.25 $138.25 4/16/2000 6,912.25 $138.25 4/16/2001
- ---------------------------------------------------------------------------------------------------------------------------------
49,007.75 $980.16 4/16/1999 49,007.75 $980.16 4/16/2000 49,007.75 $980.16 4/16/2001
- ---------------------------------------------------------------------------------------------------------------------------------
6,912.25 $345.61 4/16/1999 6,912.25 $345.61 4/16/2000 6,912.25 $345.61 4/16/2001
- ---------------------------------------------------------------------------------------------------------------------------------
3,394.00 $67.88 4/16/1999 3,394.00 $67.88 4/16/2000 3,394.00 $67.88 4/16/2001
- ---------------------------------------------------------------------------------------------------------------------------------
478.70 $9.57 4/16/1999 478.70 $9.57 4/16/2000 478.70 $9.57 4/16/2001
- ---------------------------------------------------------------------------------------------------------------------------------
3,394.00 $67.88 4/16/1999 3,394.00 $67.88 4/16/2000 3,394.00 $67.88 4/16/2001
- ---------------------------------------------------------------------------------------------------------------------------------
478.70 $9.57 4/16/1999 478.70 $9.57 4/16/2000 478.70 $9.57 4/16/2001
- ---------------------------------------------------------------------------------------------------------------------------------
68,110.00 $68.11 7/2/1999
- ---------------------------------------------------------------------------------------------------------------------------------
9,606.50 $192.13 7/2/1999
- ---------------------------------------------------------------------------------------------------------------------------------
68,110.00 $1,362.20 7/2/1999
- ---------------------------------------------------------------------------------------------------------------------------------
9,606.50 $480.33 7/2/1999
- ---------------------------------------------------------------------------------------------------------------------------------
4,716.92 $94.34 7/2/1999
- ---------------------------------------------------------------------------------------------------------------------------------
665.29 $13.31 7/2/1999
- ---------------------------------------------------------------------------------------------------------------------------------
4,716.92 $94.34 7/2/1999
- ---------------------------------------------------------------------------------------------------------------------------------
665.29 $13.31 7/2/1999
- ---------------------------------------------------------------------------------------------------------------------------------
311,726.00 $311.73 8/22/1999 311,726.00 $311.73 8/22/2000 311,726.00 $311.73 8/22/2001
- ---------------------------------------------------------------------------------------------------------------------------------
43,967.00 $879.34 8/22/1999 43,967.00 $879.34 8/22/2000 43,967.00 $879.34 8/22/2001
- ---------------------------------------------------------------------------------------------------------------------------------
311,726.00 $6,234.52 8/22/1999 311,726.00 $6,234.52 8/22/2000 311,726.00 $6,234.52 8/22/2001
- ---------------------------------------------------------------------------------------------------------------------------------
43,967.00 $2,198.35 8/22/1999 43,967.00 $2,198.35 8/22/2000 43,967.00 $2,198.35 8/22/2001
- ---------------------------------------------------------------------------------------------------------------------------------
21,588.10 $431.76 8/22/1999 21,588.10 $431.76 8/22/2000 21,588.10 $431.76 8/22/2001
- ---------------------------------------------------------------------------------------------------------------------------------
3,045.22 $60.90 8/22/1999 3,045.22 $60.90 8/22/2000 3,045.22 $60.90 8/22/2001
- ---------------------------------------------------------------------------------------------------------------------------------
21,588.10 $431.76 8/22/1999 21,588.10 $431.76 8/22/2000 21,588.10 $431.76 8/22/2001
- ---------------------------------------------------------------------------------------------------------------------------------
3,045.22 $60.90 8/22/1999 3,045.22 $60.90 8/22/2000 3,045.22 $60.90 8/22/2001
- ---------------------------------------------------------------------------------------------------------------------------------
175,000.00 $3,500.00 2/19/2000 175,000.00 $3,500.00 2/19/2001 175,000.00 $3,500.00 2/19/2002
- ---------------------------------------------------------------------------------------------------------------------------------
1,250,000.00 $45,000.00 2/16/2001 1,250,000.00 $45,000.00 2/16/2002 1,250,000.00 $45,000.00 2/16/2003
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
2,645,695.05 $65,525.75 2,366,870.94 $61,636.83 2,366,870.94 $61,636.83
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 10.9
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
This Amendment to Incentive Stock Option Agreements dated February 11, 2000 is
between AirNet Communications Corporation ("AirNet" or the "Company") and
Timothy Mahar (the "Employee").
RECITALS:
A. The Employee is an at-will employee of the Company.
B. Employee serves in the capacity of Senior Vice President of Worldwide
Sales and Marketing at the behest of and at the discretion of the Board of
Directors.
C. The Company recognizes that the possibility of a Change in Control of the
Company may exist which, if preceded or followed by termination of the
employment of Employee, would cause the Employee to lose the opportunity to
exercise unvested stock options, and that such possibility, and the uncertainty
and questions which it may raise, may result in the distraction of the Employee
to the detriment of the Company.
D. In order to encourage the Employee to maintain his/her continued attention
and dedication to his/her duties and responsibilities, the Company desires to
enter into this Amendment with the Employee setting forth additional terms and
conditions as to the Employee's stock options in connection with a Change in
Control of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, the parties agree as follows:
SECTION 1. DEFINITIONS.
The following Capitalized terms shall have the following meanings:
"Business" means the business of AirNet as conducted immediately prior to
any Change in Control.
"Cause" means the Employee's intentional bad faith act or omission, felony
conviction, or gross dereliction of duty, which is materially harmful or
damaging to the Company, or intentional material breach of any of Employee's
obligations under the Proprietary Information and Inventions Agreement executed
by Company and the Employee.
"Change in Control" shall mean:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange act) of 50% or more of either (i) then outstanding shares of common
stock of the Company (the "Outstanding
<PAGE> 2
Company Common Stock") or (ii) the combined voting power of then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities") or;
(ii) the cessation for any reason of individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; or
(iii) the approval by the shareholders of the Company and the closing of
a reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, more than 50% of, respectively, then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or
(iv) the approval by the shareholders of the Company and the closing of
(i) a complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the Company.
"Company" means AirNet Communications Corporation or, in the event of a
Change in Control, the successor(s) in interest to AirNet Communications
Corporation.
"Person" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
SECTION 2. TERMINATION EVENTS.
2.1 This Agreement does not constitute an employment agreement. The
Company retains its right to terminate Employee's employment with or without
Cause.
2.2 Either of the following events which occur (i) at any time
following execution of a letter of intent or definitive agreement for a Change
in Control transaction and on or before
Ehley -2-
<PAGE> 3
consummation of such transaction, or (ii) within 135 days prior to any
consummated Change in Control, or (iii) within 12 months following a Change of
Control, shall be a "Termination Event:"
(a) The termination without Cause of the Employee; or
(b) The resignation of Employee upon no less than two weeks' written
notice to the Company under circumstances constituting Good Reason (as defined
in Section 2.3) to resign.
2.3 "Good Reason" shall mean, without the Employee's written consent,
the occurrence of any of the following circumstances prior to a Change in
Control, in connection with a Change in Control, in anticipation of a Change in
Control, at a time when discussions relating to a Change in Control are taking
place, or within 12 months following a Change in Control:
(a) The Employee is assigned a new position, which entails a
reduction in the nature of Employee's authority with respect to
the operation of the Company's business compared to Employee's
position as in effect on the date of this Agreement or immediately
prior to a Change in Control or Termination Event, whichever
position is greater or more senior;
(b) A reduction in the Employee's annual base salary as in
effect on the date of this Agreement or immediately prior to a
Change in Control or Termination Event, whichever is greater, or
an adverse change in benefits or perquisites other than a change
that is generally applicable to all executive employees;
(c) The Company's requirement that the Employee's site of
principal employment be more than twenty-five miles from the
offices at which the Employee was principally employed on the date
of this Agreement; or
(d) The Employee is assigned duties inconsistent with the
status of the position that the Employee held on the date of this
Agreement or immediately prior to a Change in Control or
Termination Event, whichever is greater, or an adverse alteration
in the nature or status of the Employee's responsibilities or in
the quality or amount of office accommodations or assistance
provided to the Employee from those in effect on the date of this
Agreement, which shall constitute a constructive demotion.
SECTION 3. AMENDMENT OF OPTION AGREEMENTS.
3.1 This Amendment amends each Incentive Stock Option Agreement (the
"Option Agreement or Agreements") listed below covering the grant to Employee of
stock options for the purchase of the number of shares of common stock of the
Company and at the exercise price per share specified below (as granted and in
effect prior to the Company's recent one for 66.38 reverse stock split):
Ehley -3-
<PAGE> 4
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Date of Grant Under Incentive Number of Shares Underlying Exercise Price Per Share
Stock Option Agreement Option Grant (pre-split) (pre-split)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
February 4, 2000 60,000 $36.4375
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
The options ("Options") granted to Employee under the Option Agreements were
granted under the Company's stock option plan as amended, now the 1999 Equity
Incentive Plan (the "Plan").
Each of the Options shall vest and become exercisable as specified in Section 3
of each Option Agreement, as hereby amended.
Employee and the Company each acknowledge that the number of shares underlying
the Options and the applicable exercise price per share are pre-split numbers
and the actual numbers have been adjusted to reflect the Company's recent one
for 66.38 reverse stock split.
3.2 Section 3 of each Option Agreement is amended to provide for
accelerated vesting of some or all of the Options upon the occurrence of a
"Change in Control" or a Termination Event as provided in this Section 3.
3.3 No Termination Event Prior to a Change in Control.
(a) Two Year Accelerated Options With Closing. If there is no
Termination Event prior to an anticipated Change in Control and a Change in
Control is consummated, unvested Options (the "Two Year Accelerated Options With
Closing") (i) which would have vested through the closing of the Change in
Control and (ii) which would have vested during the two years following the
closing of the Change in Control (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall accelerate
and become immediately exercisable commencing 15 days prior to a scheduled
closing of a Change in Control; provided, however, that such acceleration (and
any exercise of Options not otherwise vested and exercisable) shall be
conditioned on the closing of the Change in Control.
(b) Options Maintained or Matched; Third Year Accelerated Options. If
there is no Termination Event prior to an anticipated Change in Control and a
Change in Control is consummated and as of the closing either:
(i) AirNet is the surviving company to the Change in Control
transaction, the Business is to be continued and AirNet maintains the Employee's
then outstanding stock options or,
Ehley -4-
<PAGE> 5
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be continued by the buyer or
successor; and
(B) the buyer or successor grants options to the Employee
for the purchase of the buyer's or successor's stock with a proportionate number
of shares and exercise price per share and the same vesting schedule as with the
Options; and
(C) the buyer or successor specifically assumes the
potential obligation to accelerate the vesting of options under this Section
3.3(b);
then the following provisions in this Section 3.3(b) apply.
In the event of (i) a Termination Event within 12 months following the Change in
Control; or (ii) in the event the Employee completes 12 months of employment
with the Company or its successor following the Change in Control, then unvested
Options or the equivalent unvested buyer or successor options ("Third Year
Accelerated Options") which would have vested during the third year following
the closing of the Change in Control, (assuming and calculated as if all Options
or the equivalent unvested buyer or successor options would otherwise have
vested on a pro rata daily basis) shall vest and become immediately exercisable
for as long as Employee continues to be employed by the Company or such
successor and for a period of 90 days thereafter.
(c) Options Not Maintained or Matched; Escrow in Lieu of Third Year
Accelerated Options. If there is no Termination Event prior to an anticipated
Change in Control and a Change in Control is consummated and as of the closing
either:
(i) AirNet is the surviving company to the Change in Control
transaction and AirNet does not maintain the Employee's then outstanding stock
options or the Business is to be discontinued; or
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be discontinued; or
(B) the buyer or successor does not grant to Employee
options for the purchase of the buyer's or successor's stock with a
proportionate number of shares and exercise price per share and the same vesting
schedule as with the Options; or
(C) the buyer or successor does not specifically assume the
potential obligation to accelerate the vesting of the Third Year Accelerated
Options under Section 3.3(b) above;
then the following provisions in this Section 3.3(c) apply:
Ehley -5-
<PAGE> 6
(1) The Company will place in escrow with a third party Escrow
Agent an amount ("Escrow Amount") of sale proceeds from the Change in
Control transaction equal to the gain the Employee could have realized if
the Third Year Accelerated Options had been exercised and sold in
connection with the Change in Control transaction.
(2) In the event (A) a Termination Event occurs within 12
months following the Change in Control; or (B) in the event the Employee
completes 12 months of employment with the Company, its successor or the
buyer following the Change in Control, then the Escrow Amount will be
released and paid to the Employee.
(3) In the event the Employee resigns or is terminated with
Cause within 12 months following the Change in Control, the Escrow Amount
will be released and distributed pro rata in the manner other sale
proceeds were distributed in connection with the Change in Control
transaction.
3.4 Termination Event On or Before a Change in Control; Closing Within
135 Days.
If there is a Termination Event on or before a Change in Control and a Change in
Control is consummated within 135 days of the Termination Event (a) unvested
Options ("Two Year Accelerated Options") (i) which would have vested through the
closing of the Change in Control and (ii) which would have vested during the two
years following the closing of the Change in Control (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata daily
basis) shall accelerate and become immediately exercisable through the date of
the closing of the Change in Control; and (b) unvested Options (the "Third Year
Accelerated Options With Closing") which would have vested during the third year
following the closing of the Change in Control (assuming and calculated as if
all Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable through the date of the closing of the Change
in Control.
3.5 Termination Event Prior to a Change in Control; No Closing Within
135 Days.
If there is a Termination Event prior to an anticipated Change in Control, but
the anticipated Change in Control is not closed within 135 days following the
Termination Event:
(a) unvested Options (the "Two Year Accelerated Options Without
Closing") (i) which would have vested through a date 135 days after the
Termination Event and (ii) which would have vested during the two years
following such 135th day (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable for a period of up to one year, but no
later than the closing of the Change in Control; and
(b) unvested Options (the "Third Year Accelerated Options
Without Closing") which would have vested during the third year following
such 135th day after the Termination Event (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata
daily basis) shall vest and become immediately
Ehley -6-
<PAGE> 7
exercisable for a period of up to one year, but no later than the closing
of the Change in Control.
4. OPTION AGREEMENTS IN FULL FORCE AND EFFECT.
4.1 Except for the acceleration of the vesting of the Options upon a
Change in Control or upon a Termination Event, as provided for in this
Amendment, all of the terms of the Option Agreements remain in full force and
effect.
5. MISCELLANEOUS.
5.1 This Amendment may be signed and executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement,
5.2 This Agreement is binding on the successors and assigns of AirNet.
AirNet agrees to require any Person who purchases substantially all of AirNet's
assets or is a successor in interest to AirNet in connection with a Change in
Control transaction to assume its obligations under this Agreement.
IN WITNESS, the Company has caused this Amendment to be executed by its
authorized officer and the Employee has executed this Amendment as of the above
date.
<TABLE>
<CAPTION>
<S> <C>
Employee: /s/ Timothy Mahar AirNet Communications Corporation
---------------------------------
Name: Timothy Mahar
--------------------------
By: /s/ R. Lee Hamilton, Jr.
-------------------------------
Title: President & CEO
-----------------------
</TABLE>
Ehley -7-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AIRNET
COMMUNICATIONS CORPORATION'S BALANCE SHEET AS OF MARCH 31, 2000 AND STATEMENTS
OF OPERATIONS AND CASH FLOWS FOR THE QUARTER ENDED MARCH 31, 2000 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1.000
<CASH> 86,106
<SECURITIES> 0
<RECEIVABLES> 18,075
<ALLOWANCES> 1,715
<INVENTORY> 20,128
<CURRENT-ASSETS> 123,238
<PP&E> 12,838
<DEPRECIATION> 8,255
<TOTAL-ASSETS> 127,843
<CURRENT-LIABILITIES> 25,012
<BONDS> 0
0
0
<COMMON> 54
<OTHER-SE> 102,477
<TOTAL-LIABILITY-AND-EQUITY> 127,843
<SALES> 7,065
<TOTAL-REVENUES> 7,065
<CGS> 4,628
<TOTAL-COSTS> 9,787
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23
<INCOME-PRETAX> (6,005)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,005)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,005)
<EPS-BASIC> (0.26)
<EPS-DILUTED> (0.26)
</TABLE>
