Exhibit 10.3
CHANGE
IN CONTROL AND SEVERANCE AGREEMENT
This Change in Control and Severance
Agreement (the “Agreement”) is made and entered into by and between Robert G. Barbieri (“Executive”)
and Inseego Corp., a Delaware corporation (the “Company”), this 25th day of October, 2021 (the “Effective
Date”).
WHEREAS, The Board of Directors of the Company (the
“Board”) recognizes the importance of Executive’s role at the Company and that the possibility of an
acquisition of the Company or an involuntary termination can be a distraction to Executive and can cause Executive to consider alternative
employment opportunities. The Board has determined that it is in the best interests of the Company and its shareholders to assure that
the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of
such an event.
WHEREAS, the Board believes
that it is in the best interests of the Company and its shareholders to provide Executive with an incentive to continue Executive’s
employment and to motivate Executive to maximize the value of the Company upon a Change in Control (as defined below) for the benefit
of its stockholders.
WHEREAS, the Board believes that it is imperative
to provide Executive with severance benefits upon certain terminations of Executive’s service to the Company that enhance Executive’s
financial security and provide incentive and encouragement to Executive to remain with the Company notwithstanding the possibility of
such an event.
WHEREAS, unless otherwise
defined herein, capitalized terms used in this Agreement are defined in Section 9 below.
NOW, THEREFORE, in consideration
of the foregoing, and for other good and valuable consideration, including the agreements set forth below, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
This Agreement shall become effective
as of the Effective Date and terminate upon the date that all obligations of the parties hereto with respect to this Agreement have been
satisfied.
The Company and Executive acknowledge
that Executive’s employment shall be “at-will,” as defined under applicable law. If Executive’s employment terminates
for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this
Agreement, the Indemnification Agreement between the Company and Executive entered into on or about the date hereof (the “Indemnification
Agreement”), the Company’s bylaws (as may be amended from time to time), the Company’s Amended and Restated
Certificate of Incorporation (as may be amended from time to time), and/or any other agreement evidencing the grant to Executive of equity
compensation that is concurrently or hereafter entered into by the parties.
| 3. | Covered Termination Other Than During a Change in Control Period. |
If Executive experiences a Covered
Termination other than during a Change in Control Period, and if Executive delivers to the Company a general release of all claims against
the Company and its affiliates, in the form provided by the Company which shall be substantially in the form attached as Exhibit A (which
form may be modified by the Company to comply with the facts and applicable law) (a “Release of Claims”) that
becomes effective within 55 days following the Covered Termination and irrevocable within 62 days following the Covered Termination (the
“Release Requirements”), then in addition to any accrued but unpaid salary, accrued but unused vacation, incurred
but unreimbursed business expenses payable in accordance with applicable law, or vested benefits (other than severance) under any Company
benefit plan (the “Accrued Amounts”) the Company shall provide Executive with the following:
(a)
Severance. Executive shall be entitled to receive an amount equal to six (6) months of his or her base salary, payable in
cash in the form of salary continuation, commencing on the first normally-scheduled Company payroll date that is at least 75 days following
the Termination Date (with any such amounts that normally would have been payable during the period between the Termination Date and such
first payment being included in such first payment), less authorized deductions and applicable withholding taxes.
(b)
Equity Awards. Each outstanding and unvested stock option and restricted stock unit award, held by Executive that vests
solely based upon Executive’s continued employment, shall automatically become vested and, if applicable, exercisable and any forfeiture
restrictions or rights of repurchase thereon shall immediately lapse, as of immediately prior to the Termination Date with respect to
that number of shares of Company Common Stock that would have vested had Executive continued employment with the Company for six months
following the Termination Date. All such equity awards or the proceeds therefrom shall be held by the Company until such time as the Executive
has timely satisfied the Release Requirements.
(c)
Continued Healthcare. If Executive elects to receive continued healthcare coverage pursuant to the provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall directly pay the premium
for Executive and Executive’s covered dependents, if any, through the earliest of (i) the nine (9) month anniversary of the Termination
Date, (ii) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another
employer of Executive’s plan(s) and (iii) the date that Executive and/or Executive’s covered dependents, if any, become no
longer eligible for COBRA. Any such payment or reimbursement shall be subject to any required withholding taxes. After the Company ceases
to pay premiums pursuant to the preceding sentence, Executive may, if eligible, elect to continue healthcare coverage at Executive’s
expense in accordance the provisions of COBRA. The Company shall have no obligation to make any payment under this subsection (c) if it
reasonably determines that doing so would cause adverse consequences under Section 105(h) of the Internal Revenue Code or the Patient
Protection and Affordable Care Act or other similar law.
(d)
Pro Rata Bonus. Executive shall receive a pro rata bonus for the fiscal year of termination based on achievement of the
applicable performance goals for the fiscal year of termination based on the number of days in the fiscal year during which Executive
was employed as compared to 365, which shall be based on actual achievement of corporate performance goals and criteria as determined
by the Board, shall be based on assumed full achievement of any individual performance goal and criteria, and shall be paid to Executive
at the time such bonuses normally are paid, but not later than the March 15 of the calendar year following the Covered Termination. Any
such pro rata bonus shall be paid in a single cash lump sum, less authorized deductions and applicable withholding taxes.
| 4. | Covered Termination During a Change in Control Period. |
If Executive experiences a Covered
Termination during a Change in Control Period, and if Executive satisfies the Release Requirements, then in addition to any Accrued Amounts,
but in lieu of any amounts the Executive otherwise could have received under Section 3 of this Agreement, the Company shall provide Executive
with the following:
(a)
Severance. Executive shall be entitled to receive an amount equal to the sum of eighteen (18) months of Executive’s
base salary, plus an amount equal to 12 months of the Executive’s annual target bonus opportunity, in each case, at the rate in
effect immediately prior to the Termination Date. The base salary component shall be payable in cash in the form of salary continuation,
commencing on the first normally- scheduled Company payroll date that is at least 75 days following the Termination Date (with any such
amounts that normally would have been payable during the period between the Termination Date and such first payment being included in
such first payment), less authorized deductions and applicable withholding taxes. The target annual bonus component shall be payable in
cash in a lump sum within 10 days of the date the Executive timely satisfied the Release Requirements.
(b)
Equity Awards. Each outstanding and unvested stock option and restricted stock unit award, held by Executive, shall automatically
become vested and, if applicable, exercisable and any forfeiture restrictions or rights of repurchase thereon shall immediately lapse,
as of immediately prior to the Termination Date with respect to one hundred percent (100%) of the unvested shares underlying Executive’s
equity awards. In all other respects Executive’s equity awards shall continue to be bound by and subject to the terms of their respective
agreements and equity plans. All such equity awards or the proceeds therefrom shall be held by the Company until such time as the Executive
timely satisfied the Release Requirements, if at all.
(c)
Continued Healthcare. If Executive elects to receive continued healthcare coverage pursuant to the provisions of COBRA,
the Company shall directly pay the premium for Executive and Executive’s covered dependents, if any, through the earliest of (i)
the eighteen (18) month anniversary of the Termination Date, (ii) the
date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer of Executive’s
plan(s) and (iii) the date that Executive and/or Executive’s covered dependents, if any, become no longer eligible for COBRA. Any
such payment or reimbursement shall be subject to any required withholding taxes. After the Company ceases to pay premiums pursuant to
the preceding sentence, Executive may, if eligible, elect to continue healthcare coverage at Executive’s expense in accordance
the provisions of COBRA. The Company shall have no obligation to make any payment under this subsection (c) if it reasonably determines
that doing so would cause adverse consequences under Section 105(h) of the Internal Revenue Code or the Patient Protection and Affordable
Care Act or other similar law.
In the event Executive is terminated
in Contemplation of a Change in Control, Executive initially shall receive the amounts under Section 3 hereof, provided that, if the
Change of Control actually occurs, that Change in Control satisfies the requirements of Treasury Regulation 1.409A-3(i)(5), and the Executive
timely satisfied the Release Requirements, then (1) the reference to “six (6) months” in Section 3(a) shall be extended to
eighteen (18) months, (2) the Executive shall receive the target annual bonus amount described in Section 4(a), less any amount paid
or payable under Section 3(d), within 10 days of the Change in Control, (3) Section 4(b) shall apply to any outstanding and unvested
stock option and restricted stock unit award held by Executive, and (4) the reference to “nine (9) months” in Section 3(c)
shall be extended to eighteen months.
If Executive’s service with
the Company is terminated by the Company or by Executive for any or no reason other than a Covered Termination, then Executive shall only
be entitled to Accrued Amounts.
Upon termination of Executive’s
employment for any reason, Executive shall be deemed to have resigned from all offices and directorships, if any, then held with the Company
or any of its affiliates, and, at the Company’s request, Executive shall execute such documents as are necessary or desirable to
effectuate such resignations.
| 8. | Limitation on Payments. |
Notwithstanding anything in this
Agreement to the contrary, if any payment or distribution Executive would receive pursuant to this Agreement or otherwise (“Payment”)
would (a) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”), and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), then such Payment shall either be (i) delivered in full or (ii) delivered as to such lesser
extent which would result in no portion of such Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into
account the applicable federal, state and local income and payroll taxes and the Excise Tax, results in the receipt by Executive on an
after-tax basis, of the largest payment, notwithstanding that all or some portion the Payment may be taxable under Section 4999 of the
Code. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in
Control or, in the event such accounting firm is precluded from performing calculations hereunder, such other accounting firm of national
reputation as may be determined by the Company, and reasonably acceptable to Executive, shall perform the foregoing calculations. The
Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The accounting
firm shall provide its calculations to the Company and Executive within fifteen (15) calendar days after the date on which Executive’s
right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company
or Executive. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company
and Executive. Any reduction in payments and/or benefits pursuant to this Section 8 will occur in the following order: (1) reduction
of cash payments; (2) cancellation of accelerated vesting of equity awards other than stock options (with the later vesting reduced first)
(3) cancellation of accelerated vesting of stock options (with the later vesting reduced first) and (4) reduction of other benefits payable
to Executive or any such other order determined by the Company that will not result in adverse tax consequences under Section 409A of
the Code.
The following terms referred to in this Agreement shall have
the following meanings:
(a)
“Cause” means (i) any act of material misconduct or material dishonesty by Executive in the performance
of his or her duties; (ii) any willful failure, gross neglect or refusal by Executive to attempt in good faith to perform his or her
duties to the Company or to follow the lawful instructions of the Board (except as a result of physical or mental incapacity or illness)
which is not promptly cured after written notice; (iii) Executive’s commission of any fraud or embezzlement against the Company
(whether or not a misdemeanor); (iv) any material breach of any written agreement with the Company, which breach has not been cured by
Executive (if curable) within thirty (30) days after written notice thereof to Executive by the Company; (v) Executive’s being
convicted of (or pleading guilty or nolo contendere to) any felony or misdemeanor involving theft, embezzlement, dishonesty or moral
turpitude; and/or (vi) Executive’s failure to materially comply with the material policies of the Company in effect from time to
time relating to conflicts of interest, ethics, codes of conduct, insider trading, or discrimination and harassment, or other breach
of Executive’s fiduciary duties to the Company, which failure or breach is or could reasonably be expected to be materially injurious
to the business or reputation of the Company.
(b) “Change in Control” means either:
(i)
any “person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after the Effective Date, a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more
than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities eligible to vote for the election
of the Board (the “Company Voting Securities”) or of substantially all of the Company’s assets; provided,
however, that an event described in this clause (i) shall not be deemed to be a Change in Control if any of following becomes such a
beneficial owner: (A) the Company or any majority-owned subsidiary (provided, that this exclusion applies solely to the ownership levels
of the Company or the majority-owned subsidiary), (B) any tax-qualified, broad- based employee benefit plan sponsored or maintained by
the Company or any majority-owned subsidiary, (C) any underwriter temporarily holding securities pursuant to an offering of such securities,
or (D) any person pursuant to a Non-Qualifying Transaction (as defined in clause (ii)); or
(ii)
the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company
or any of its subsidiaries that requires the approval of the Company’s stockholders, whether for such transaction or the issuance
of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination:
(A) more than fifty percent (50%) of the total voting power of (x) the corporation resulting from such Business Combination (the “Surviving
Corporation”), or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership
of one hundred (100%) of the voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”),
is represented by Company Voting Securities that were outstanding immediately prior to such Business combination (or, if applicable,
is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting
power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Business Combination, (B) no person (other than any employee benefit plan (or related trust)
sponsored or maintained by the Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner, directly or indirectly,
of more than fifty percent (50%) of the total voting power of the outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation) and (C) at least a majority of the members of the board
of directors of the Parent Corporation (or if there is no Parent Corporation, the Surviving Corporation) following the consummation of
the Business Combination were members of the Board as of the date hereof or at the time of the Board’s approval of the execution
of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified
in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”).
(c)
“Change in Control Period” means the period commencing 30 days prior to a Change in Control and ending
on the 12-month anniversary of such Change in Control.
(d)
“Contemplation of a Change in Control” means a Covered Termination that occurs as a result of an action
directed or requested by a person that directly or indirectly undertakes a transaction that constitutes a Change in Control of the Company.
(e)
“Covered Termination” means Executive’s resignation for Good Reason or the termination of Executive’s
employment by the Company other than a Disability Termination or a termination for Cause that, in each case and to the extent necessary,
constitutes a Separation from Service (as defined below).
(f)
“Disability Termination” means a termination of employment by the Company of the Executive after the
Executive has been unable for 90 days in any 365 day period to perform his or her material duties because of physical or mental incapacity
or illness.
(g)
“Good Reason” means the occurrence, without Executive’s written consent, of any of the following:
(i) a material diminution in Executive’s base compensation, (ii) a material diminution in Executive’s job responsibilities,
duties or authorities, or (iii) a material change of at least fifty (50) miles in the geographic location at which Executive must regularly
perform Executive’s service. Notwithstanding the foregoing, Executive shall not be deemed to have “Good Reason” unless:
(x) the condition giving rise to such resignation continues more than thirty (30) days following Executive’s providing to the Company
a written notice of detailing such condition, (y) such written notice is provided to the Company within ninety (90) days of the initial
occurrence of such condition and (z) Executive’s resignation is effective within thirty (30) days following the expiration of the
Company cure period pursuant to subclause (x).
(h) “Termination Date” means the date Executive experiences a Covered Termination.
| 10. | Assignment and Successors. |
The Company may assign its rights
and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger
or otherwise). This Agreement shall be binding upon and inure to the benefit of the Company, Executive and their respective successors,
permitted assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable.
None of Executive’s rights or obligations may be assigned or transferred by Executive, other than Executive’s rights to payments
hereunder, which may be transferred only by will or operation of law.
Any notice, request, claim, demand,
document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing
and delivered personally or sent by facsimile or certified or registered mail, postage prepaid (or if it is sent through any other method
agreed upon by the parties), as follows:
| (i) | if to the Company: |
| | | |
| | | Inseego Corp. |
| | | Attn: Board of Directors |
| | | 9710 Scranton Road, Suite 300 |
| | | San Diego, CA 92121 |
| (ii) | if to Executive, at the address set forth in Executive’s personnel file with the Company; or |
| (iii) | at any other address as any party shall have specified by notice in writing to the other party. |
Executive agrees that he or she shall
not disparage, criticize or defame the Company, its affiliates and their respective affiliates, directors, officers, agents, partners,
shareholders or employees, either publicly or privately, except in the reasonable good faith performance of his duties to the Company.
Nothing in this Section 12 shall have application to any evidence, testimony or disclosure required by any court, arbitrator or government
agency.
The parties agree that if any disputes
should arise between Executive and the Company (including claims against its employees, officers, directors, shareholders, agents, successors
and assigns) relating or pertaining to or arising out of Executive’s employment with the Company, the dispute will be submitted
exclusively to binding arbitration before a neutral arbitrator in accordance with the rules of the American Arbitration Association in
San Diego, California. This means that disputes will be decided by an arbitrator rather than a court or jury, and that both Executive
and the Company waive their respective rights to a court or jury trial, except to enforce the decision of the arbitrator. The parties
understand that the arbitrator’s decision will be final and exclusive, and cannot be appealed. Nothing in this Agreement is intended
to prevent either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion
of any such arbitration. The Company and the Executive shall share in the arbitrator’s fees and expenses equally. The arbitrator
shall have the power to award the prevailing party its attorneys’ fees and costs of arbitration (including the arbitrator’s
fees paid by the arbitrator) except to the extent prohibited by applicable law. Notwithstanding the foregoing, Executive and the Company
each have the right to resolve any issue or dispute over intellectual property rights by Court action instead of arbitration.
| 14. | Miscellaneous Provisions. |
(a) Section 409A.
(i)
Separation from Service. Notwithstanding any provision to the contrary in this Agreement, no amount deemed deferred compensation
subject to Section 409A of the Code shall be payable pursuant to Sections 3, 4 or 5 above unless Executive’s termination of employment
constitutes a “separation from service” with the Company within the meaning of Section 409A of the Code and the Department
of Treasury regulations and other guidance promulgated thereunder (“Separation from Service”).
(ii)
Specified Employee. Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed at the time
of his or her separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to
the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order
to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s benefits shall not be
provided to Executive prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s
Separation from Service or (B) the date of Executive’s death. Upon the first business day following the expiration of the applicable
Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 14(a)(ii) shall be paid in a lump sum to Executive,
and any remaining payments due under this Agreement shall be paid as otherwise provided herein.
(iii)
Expense Reimbursements. To the extent that any reimbursements payable pursuant to this Agreement are subject to the provisions
of Section 409A of the Code, any such reimbursements payable to Executive pursuant to this Agreement shall be paid to Executive no later
than December 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall
not affect the amount eligible for reimbursement in any subsequent year, and Executive’s right to reimbursement under this Agreement
will not be subject to liquidation or exchange for another benefit.
(iv) Reserved.
(v)
Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due under this Agreement
as a result of Executive’s termination of employment are subject to Executive’s execution and delivery of a Release of Claims,
(A) the Company shall deliver the Release of Claims to Executive within ten (10) business days following the Termination Date, (B) if
Executive fails to execute the Release of Claims on or prior to the Release Expiration Date (as defined below) or timely revokes his
or her acceptance of the Release of Claims thereafter, Executive shall not be entitled to any payments or benefits otherwise conditioned
on the Release of Claims, and (C) in any case where the Termination Date and the Release Expiration Date fall in two separate taxable
years, any payments required to be made to Executive that are conditioned on the Release of Claims and are treated as nonqualified deferred
compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this Section 14(a)(v), “Release
Expiration Date” shall mean the date that is forty-five (45) days following the date upon which the Company timely delivers
the Release of Claims to Executive.
(b)
Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state,
local or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely
on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.
(c)
Amendment; Waiver. This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed
by Executive and a member of the Board or a Company officer designated by the Board. No waiver shall operate as a waiver of, or estoppel
with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder
preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.
(d)
Entire Agreement. The terms of this Agreement, collectively with the Inventions, Disclosure, Confidentiality & Proprietary
Rights Agreement between the Company and Executive entered into on or about the date herewith (the “Confidentiality Agreement”),
and the Indemnification Agreement, is intended by the Parties to be the final expression of their agreement with respect to the employment
of Executive by the Company and supersede all prior understandings and agreements (but not the Confidentiality Agreement or the Indemnification
Agreement), whether written or oral. The parties further intend that this Agreement, collectively with the Confidentiality Agreement,
and the Indemnification Agreement, shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence
whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.
(e)
Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws
of the State of California.
(f)
Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity
or enforceability of any other provision hereof, which shall remain in full force and effect.
(g)
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties
has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.
INSEEGO CORP.
By: /s/ Kurt Scheuerman
Title: SVP & General Counsel
Date: October 25, 2021
EXECUTIVE
/s/ Robert G. Barbieri
Robert G. Barbieri
Date: October 25, 2021
