8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) March 21, 2007

VYYO INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	000-30189	94-3241270
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)
6625 The Corners Parkway, Suite 100, Norcross, Georgia		30092
(Address of principal executive offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code  (678) 282-8000

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01               Entry into a Material Definitive Agreement.

Wayne Davis — Chief Executive Officer.  On March 21, 2007 (the “Effective Date”), Vyyo Inc. (the “Registrant”) entered into an Employment Agreement with Wayne Davis, to serve as the Registrant’s Chief Executive Officer (the “Davis Employment Agreement”).  A copy of the Davis Employment Agreement is attached hereto as Exhibit 10.1.

Mr. Davis, age 53, joined Charter Communications Inc. in 2001 and most recently served as Executive Vice President Engineering and Chief Technology Officer. Prior to that time, Mr. Davis served in various capacities at Charter, including Vice President Engineering, Western Division.  Before joining Charter, Mr. Davis served as Vice President of Engineering at Comcast Corporation from 1999 to January 2000, serving as Comcast’s engineering lead in managing the integration and upgrade of plant acquired from Jones Intercable Inc., into the Comcast network.  Mr. Davis joined Jones Intercable, Inc., in 1989 until its acquisition by Comcast.  While at Jones Intercable, Mr. Davis rose from Fund Engineering Director for that company’s Midwest systems to Vice President, Technical Operations and Group Vice President, Engineering.

The Davis Employment Agreement is for a three-year term, with automatic one-year renewals, subject to termination upon prior notice by either party.  Mr. Davis will receive an annual base salary of $300,000, which will be reviewed on or before December 31, 2007 and thereafter based on Mr. Davis’ services and the Registrant’s financial results.  Mr. Davis is eligible to receive employee benefits available to all employees and may become eligible to receive an annual cash bonus up to $300,000 based on performance objectives to be agreed to by Mr. Davis and the Registrant’s Board of Directors.   Mr. Davis also was granted a stock option to purchase 600,000 shares of the Registrant’s common stock subject to the Registrant’s standard vesting for new employees:  25% vest at the one year anniversary of the grant with the remaining vesting in equal monthly installments for the next 36 months.  The exercise price of the stock options is $6.31, the closing price of the Registrant’s common stock on the date of grant.   Mr. Davis accrues 30 days of paid vacation for each calendar year during the term of the Davis Employment Agreement.

If the Davis Employment Agreement is terminated without “Cause” (as defined therein), (a) before the first anniversary of the Effective Date, the Registrant must pay Mr. Davis severance equal to six months of his annual salary (without bonus), (b) after the first anniversary of the Effective Date but on or before the second anniversary of the Effective Date, the Registrant must pay Mr. Davis severance equal to nine months of his annual salary (without bonus), and (c) after the second anniversary of the Effective Date, the Registrant must pay Mr. Davis severance equal to 12 months of his annual salary (without bonus).

If Mr. Davis’ employment is terminated upon a “Change of Control” (as defined in the Davis Employment Agreement), Mr. Davis shall be entitled to (a) in lieu of the severance described in the foregoing paragraph, severance equal to his annual salary plus 100% of his annual target bonus in effect during the year in which a Change of Control occurs; (b) immediate vesting of all unvested stock options; and (c) continuation of life, health, disability, vision, hospitalization, dental and other insurance coverage for one year for Mr. Davis and his spouse and dependent children.  If upon a Change of Control Mr. Davis is offered employment by the Registrant’s successor with responsibilities substantially similar to those in the Davis Employment Agreement and Mr. Davis does not accept the offer, 33.3% of Mr. Davis’ stock options will immediately vest.  If upon a Change of Control Mr. Davis accepts employment by the Registrant’s successor with responsibilities substantially similar to those in the Davis Employment Agreement, 33.3% of  Mr. Davis’ stock options will immediately vest.  If Mr. Davis terminates his employment for Good Reason (as defined in the Davis Employment Agreement) with the Registrant’s successor on or after the six-month anniversary of the Effective Date of the Davis Employment Agreement, all remaining stock options held by Mr. Davis will immediately vest.

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James A. Chiddix — Vice Chairman of the Board of Directors.  On March 21, 2007, the Registrant’s Board of Directors increased the authorized number of directors from nine to 10 directors and, upon recommendation of the Registrant’s Nominating Committee, elected James A. Chiddix to fill the newly-created vacancy on the Board of Directors.  Mr. Chiddix is a Class I director, and his nomination will be submitted to the Registrant’s stockholders at the 2007 annual meeting of stockholders.

In accordance with the Registrant’s compensation policy for new directors, Mr. Chiddix was granted options to purchase 25,000 shares of the Registrant’s common stock pursuant to the Registrant’s Third Amended and Restated 2000 Employee and Consultant Equity Incentive Plan (the “Plan”), at $6.31, the closing price of the Registrant’s common stock on the date of grant.  The options have a 10-year term and vest monthly over 48 months.  Mr. Chiddix also will be granted additional option grants for his service on the Board of Directors as described in the Registrant’s proxy statement relating to the annual meting of stockholders to be held in May 2007.

On March 21, 2007, the Registrant and Mr. Chiddix also entered into a Consulting Agreement pursuant to which Mr. Chiddix will receive $15,000 per month in exchange for providing certain services to the Registrant for on average 40 hours per month.  A copy of the Consulting Agreement is attached hereto as Exhibit 10.2.  Mr. Chiddix also was granted a stock option under the Plan to purchase 250,000 shares of the Registrant’s common stock which vests in equal monthly installments over 48 months.  The exercise price of the stock options is $6.31, the closing price of the Registrant’s common stock on the date of grant.

The stock options granted to Mr. Chiddix may be accelerated upon the occurrence of specified events, including certain financing events, approval of the Registrant’s products in identified cable companies or upon a “Change of Control” (as defined in the Consulting Agreement), as follows.

Financing Event.  If the Registrant is a party to a Financing Event (as defined in the Consulting Agreement), and it is determined that Mr. Chiddix contributed in a material way (as defined in the Consulting Agreement) to the Financing Event, then the following number of Mr. Chiddix’s stock options will vest:  (a) if the closing of the Financing Event occurs on or before March 31, 2007, then 60,000 of the outstanding and unvested stock options will vest immediately; or (b) if the closing of the Financing Event occurs on or before December 31, 2007, then 30,000 of the outstanding and unvested stock options will vest immediately.

Spectrum Overlay.  If the Registrant’s spectrum overlay product is approved by one of two identified cable companies which generates a required level of revenue and if Mr. Chiddix contributed in a material way to the completion of such orders, then (a) 30,000 of Mr. Chiddix’s stock options will immediately vest, and (b) the remaining number of outstanding and unvested stock options held by Mr. Chiddix (other than the number of stock options that may vest monthly through December 31, 2008) would be eligible to immediately vest if the Registrant subsequently receives the required approval and revenue from the second identified cable company.

Change of Control.  If the Registrant enters into a definitive agreement on or before December 31, 2008 which would result in a Change of Control of the Registrant, then the remaining number of outstanding and unvested stock options held by Mr. Chiddix will immediately vest as of the closing of the Change of Control.

A copy of the press release announcing the foregoing management changes is attached hereto as Exhibit 99.1.

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In its Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2006, the Registrant reported that it had entered into an agreement with CarterBaldwin Executive Search Services (“CarterBaldwin”), whereby CarterBaldwin assists the Registrant in identifying and selecting candidates for certain executive positions at the Registrant.  Margaret Bellville, a director of the Registrant, is a partner at CarterBaldwin.  CarterBaldwin assisted in the placement of Messrs. Davis and Chiddix and, accordingly, CarterBaldwin will be receiving a fee for such services based on a customary percentage of the annual total cash compensation (excluding any equity compensation) for each individual.

Item 5.02               Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.

Wayne Davis.  See Item 1.01 above for a description of the appointment of Mr. Davis as the Registrant’s Chief Executive Officer and details regarding the material terms of the Davis Employment Agreement.

Mr. Davis succeeds Davidi Gilo, who will continue as the Registrant’s Chairman of the Board of Directors.  The Registrant will amend Mr. Gilo’s current employment agreement to address this change.

James A. Chiddix.  See Item 1.01 above for a description of the nomination of Mr. Chiddix as Vice Chairman and details regarding the material terms of his Consulting Agreement.

Item 9.01.              Exhibits.

Item 9.01(d)

Exhibit Number	Description of Exhibit
10.1	Employment Agreement with Wayne Davis, dated March 21, 2007.
10.2	Consulting Agreement with James Chiddix, dated March 21, 2007.
99.1	Press Release of Vyyo Inc. dated March 26, 2007.

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SIGNATURE

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 hereunto duly authorized.

	VYYO INC.
Date: March 26, 2007	By:	/s/ Tashia L. Rivard
		Tashia L. Rivard
		General Counsel and Corporate Secretary

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EXHIBIT INDEX

Exhibit Number	Description of Exhibit
10.1	Employment Agreement of Wayne Davis, dated March 21, 2007.
10.2	Consulting Agreement of James Chiddix, dated March 21, 2007.
99.1	Press Release of Vyyo Inc. dated March 26, 2007.

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into as of March 21, 2007 (the “Effective Date”), by and between Vyyo Inc., a Delaware corporation (the “Company”), and Wayne Davis (“Davis”).

In connection with Davis’ employment with the Company, the Company and Davis desire to enter into this Agreement according to the terms and conditions set forth below.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1.Employment Duties.

a.General.  The Company hereby agrees to employ Davis, and Davis hereby agrees to accept employment with the Company, on the terms and conditions set forth below.

b.Company’s Duties.  The Company shall allow Davis to, and Davis shall, perform responsibilities normally incident to the position of Chief Executive Officer, commen­surate with his background, education, experience and professional standing.  The Company shall provide Davis with such office equipment, supplies, customary services and cooperation suitable for the performance of his duties.

c.Davis’ Duties.  Davis shall devote such time as necessary to fully perform his services as Chief Executive Officer and shall report directly to the Company’s Board of Directors. The parties acknowledge that Davis may perform his duties from any location, and shall travel to the Company’s headquarters in Norcross, Georgia and its facility in Israel as the Company’s business dictates.

2.Term.    The initial term of this Agreement is three years (the “Initial Term”).  There­after, this Agreement may be renewed by Davis and the Company on such terms as the parties may agree to in writing.  Absent written notice of termination of this Agreement given by one party to the other party not less than 30 days prior to the end of the Initial Term or any Renewal Term (as defined below), this Agreement will be automatically renewed for a one-year extension (each such extension a “Renewal Term” and the Initial Term together with any and all Renewal Terms, the “Term”).  Notwithstanding the foregoing, this Agreement is subject to earlier termination as provided herein.

3.Compensation.  Davis shall be compensated as follows:

a.Salary.  Davis shall receive an annual salary of Three Hundred Thousand Dollars ($300,000).  The Company agrees to review the salary on or before December 31, 2007, and thereafter at the end of each calendar year during the Term based upon Davis’ services and the financial results of the Company, and to make such changes as may be determined appropriate in the sole discretion of the Company’s Compensation Committee or Board of Directors.  Davis’ annual salary shall be payable on a semi-monthly basis, in accordance with the Company’s usual payroll practices.

b.Bonus Compensation. During each calendar year in the Initial Term, Davis may become eligible to receive an annual cash bonus up to an aggregate of Three Hundred Thousand Dollars ($300,000) based on performance objectives to be agreed to by Davis and the Board of Directors.  The performance objectives will be established each year as follows:  (i) for the 2007 calendar year, no later than 60 days following the Effective Date; and (ii) for subsequent calendar years, no later than 60 days following the start of such calendar years. Any bonus earned by Davis in a particular calendar year will be paid by the Company in the manner and time period agreed to by the parties.  The bonus shall be prorated should Davis’ employment terminate prior to a full calendar year.

c.Stock Options.  As of the Effective Date, the Company shall grant Davis a stock option to purchase 600,000 shares of the Company’s capital stock.  The stock options shall be granted with an exercise price equal to fair market value of the Company’s common stock on the date of grant and shall be governed by the terms of an option agreement which will set forth the vesting schedule of such shares.  If there is any conflict between this Agreement and the terms of the option agreement, the terms of the option agreement will control.

d.Vacation.  Davis shall accrue paid vaca­tion at the rate of 30 days for each calendar year during the Term, prorated as applicable for any partial calendar year and subject to the terms of the Company’s vacation policy.  Davis shall be compensated at his usual rate of base compen­sation during any such vacation.  Davis shall be entitled to paid holi­days as generally given by the Company and shall receive sick leave or disability leave in accordance with the terms of the Company’s standard sick leave or disability leave policy.

e.Benefits.  Davis and his dependents shall be entitled to participate in any group plans or programs maintained by the Company for any employees relating to group health, disability, life insurance and other related benefits as in effect from time to time subject to the terms and conditions of such plans. Davis shall also be entitled to director and officer insurance in such amounts and coverage and such indemnification provisions as are afforded other officers and directors of the Company.  The foregoing benefits shall be paid by the Company.

f.Expenses.  The Company shall reim­burse Davis for his normal and reasonable expenses incurred for travel, entertainment and similar items in promoting and carrying out the Company’s business in accordance with the Company’s general policy as adopted from time to time.  In addition, Davis shall be reimbursed for the reasonable costs associated with cellular telephone usage and shall be entitled to reimbursement for such reasonable continuing professional education, memberships and certifications as are deemed

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normal and appropriate for chief executive officers as determined by the Board of Directors.  As a condition of payment or reimbursement, Davis agrees to provide the Company with copies of all available invoices and receipts, and otherwise account to the Company in sufficient detail to allow the Company to claim an income tax deduction for such paid item, if such item is deductible.  Reimbursements shall be made on a monthly or more frequent basis in accordance with the Company’s reimbursement policies then in effect.

4.Confidentiality and Competitive Activities.  Davis agrees to execute an employee proprietary information and inventions agreement in a form approved by the parties, which will include provisions related to confidentiality of Company information, assignment of inventions, non-competition and non-solicitation of customers and employees.

5.Termination.

a.Termination without Cause; Voluntary Termination.  The Company may terminate this Agreement and Davis’ employment hereunder without Cause (as defined below) and with or without prior review or warning by providing 60 days prior written notice to Davis.  Davis may volun­tarily terminate his employ­ment at any time upon 60 days’ prior written notice to the Company.

b.Termination for Cause.  The Company may immedi­ately terminate Davis’ employment at any time for Cause.  Termin­ation for Cause shall be effective from the receipt of written notice thereof to Davis­ specifying the grounds for termination.  “Cause” shall be deemed to include:  (i) Davis’ willful misconduct, or failure to perform, his material duties provided that Davis is given written notice setting forth with reasonable specificity such misconduct or failure and Davis fails to correct such behavior within 30 days following receipt of notice; (ii) Davis’ conviction of a felony offense or conviction for any unlawful act which would be materially detrimental to the Company’s reputation, or a material act of dishonesty, fraud, embezzlement, misappropriation or financial dishonesty against the Company; or (iii) Davis’ breach of any material provision of this Agreement or breach of his employee proprietary information agreement. The Company’s exercise of its rights to terminate with Cause shall be without prejudice to any other remedies it may be entitled at law, in equity or under this Agreement.

c.Termination Upon Death or Disability.  This Agree­ment shall automatic­ally terminate upon Davis’ death.  In addition, if any disability or incapacity of Davis to perform his duties as the result of any injury, sickness, or physical, mental or emotional condition continues for a period of 30 days (excluding any accrued vacation) out of any 120 calendar day period, the Company may terminate Davis’ employ­ment upon written notice.  Payment of salary to Davis during any sick leave shall only be to the extent that Davis has accrued sick leave or vacation days.

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6.Severance Payment Upon Termination of Employment.  The severance payment set forth below shall be in addition to any amounts owed to Davis as earned but unpaid wages through the date of termination and accrued but unused vacation through the date of termination.

a.Termination Without Cause.  If the Company terminates this Agreement without Cause prior to the first anniversary of the Effective Date, the Company shall pay Davis a severance payment equal to six months of his annual salary (without bonus), payable over such period in accordance with the Company’s usual payroll practices.  If the Company terminates this Agreement without Cause after the first anniversary of the Effective Date but on or before the second anniversary of the Effective Date, the Company shall pay Davis a severance payment equal to nine months of his annual salary (without bonus) payable over such period in accordance with the Company’s usual payroll practices.  If the Company terminates this Agreement without Cause after the second anniversary of the Effective Date, the Company shall pay Davis a severance payment equal to 12 months of his annual salary (without bonus), payable over such period in accordance with the Company’s usual payroll practices.

b.Execution of Release.  Davis agrees that Davis’ right to receive any severance payment is conditioned on the prior execution by Davis of a binding general release (in such form as the Company may determine) of any and all claims against the Company and any affiliates, and their respective officers, directors, employees or other agents.

7.Compensation Upon a Change of Control.

a.Change of Control Termination.  If Mr. Davis’ employment is terminated upon Change of Control Termination (as defined below), Davis shall be entitled to the following compensation:

(i)Cash Payment.  In lieu of any severance payment described above in Section 6, payment in cash of an amount equal to the sum of one times Davis’ then current annual salary plus 100% of Davis’ annual target bonus as in effect for the calendar year in which the Change of Control Termination occurs, payable in accordance with the Company’s usual payroll practices.

(ii)Stock Options.  Any stock options granted to Davis that are outstanding immediately prior to but are not vested as of the date of the Change of Control Termination shall become 100% vested as of the date of the Change of Control Termination.

(iii)Benefits.  For a period of one year following Davis’ date of termination, the continuation of the same or comparable life, health, disability, vision, hospitalization, dental and other insurance coverage (including equivalent coverage for Davis’ spouse and dependent children) as Davis was receiving immediately prior to the Change of Control.

b.Offer of Employment with Successor.  If upon a Change of Control Davis is offered employment by the Company’s successor with responsibilities substantially similar to that contemplated by this Agreement and Davis does not accept such offer, 33.3% of the stock options granted to Davis that are outstanding immediately prior to but are not vested as of the date of the Change of Control shall become vested as of the date of the Change of Control.

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c.Employment with Successor.  If upon a Change of Control Davis accepts employment with the Company’s successor with responsibilities substantially similar to that contemplated by this Agreement, 33.3% of the stock options granted to Davis that are outstanding immediately prior to but are not vested as of the date of the Change of Control shall become vested as of the date of the Change of Control. If Davis terminates his employment for Good Reason (as defined below) wit h the Company’s successor on or after the 6-month anniversary of commencement of such employment, all remaining stock options granted to Davis that are outstanding immediately prior to but are not vested as of the date of his termination for Good Reason shall become vested as of the date of such termination.

d.For the purposes of this Section, “Change of Control” means the occurrence of any of the following events:

(i)any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the then outstanding shares of the Company’s common stock or the total voting power represented by the Company’s then outstanding voting securities (other than pursuant to a Business Combination which is covered by clause (iii) below);

(ii)the consummation of the sale or other disposition (including in whole or in part through licensing arrangement(s)) of all or substantially all of the Company’s assets, other than sales, other dispositions or licenses of assets made to a parent or a  wholly-owned subsidiary of the Company, or an entity under common control with the Company;

(iii)the consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries, or a series of related such transactions (each, a “Business Combination”), in each case unless following such Business Combination (A) the voting securities of the Company outstanding immediately prior thereto continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any entity (a “Parent”) that, as a result of such transaction, owns the Company or the surviving entity or all or substantially all of the Company’s or surviving entity’s assets directly or through one or more subsidiaries) at least 50% of the total voting power represented by the Company’s voting securities or such surviving entity or Parent outstanding immediately after such Business Combination; and (B) no person (excluding any entity resulting from such Business Combination or a Parent or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination or Parent) beneficially owns, directly or indirectly, 50% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination or the total voting power of the then-outstanding voting securities of such entity, except to the extent that the ownership in excess of 50% existed prior to the Business Combination; or

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(iv)approval by the Company’s stockholders of a complete liquidation or dissolution of the Company other than in the context of a transaction or series of related transactions that would not constitute a Change of Control under clause (iii) above.

e.For the purposes of this Section, a “Change of Control Termination” shall mean a termination of employment within one year following a Change of Control where the Company or a party effecting a Change of Control of the Company terminates Davis’ employment without Cause, other than as the result of Davis’ death or disability.

f.For the purposes of this Section, “Good Reason” shall exist if Davis terminates his employment within 60 days of the occurrence of any of the following:  (i) a material adverse change in his position or title; or (ii) a reduction in his base salary from that provided in this Agreement unless the reduction affects all employees generally.

8. Corporate Opportunities.

a.Duty to Notify.  In the event that during the Term Davis shall become aware of any material and significant business opportunity directly related to any of the Company’s significant businesses, Davis shall promptly notify the Company’s Board of Directors of such opportunity.  Davis shall not appropriate for himself or for any other person other than the Company, or any affiliate of the Company, any such opportunity unless, as to any particular opportunity, the Board of Directors fails to take appropriate action within 30 days.  Davis’ duty to notify the Company and to refrain from appropriating all such opportunities for 30 days shall neither be limited by, nor shall such duty limit, the application of the general law of Georgia relating to the fiduciary duties of an agent or employee.

b.Failure to Notify.  In the event that Davis fails to notify the Company of, or so appropriates, any such opportunity without the express written consent of the Company, Davis shall be deemed to have violated the provisions of this Section notwith­standing (i) the capacity in which Davis shall have acquired such opportunity; or (ii) the probable success in the Company’s hands of such opportunity.

9.Miscellaneous.

a.Entire Agreement.  This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matters herein, and supersedes and replaces any prior agreements and understandings, whether oral or written between them with respect to such matters.  The provisions of this Agreement may be waived, altered, amended or repealed in whole or in part only upon the written consent of both parties to this Agreement.

b.No Implied Waivers.  The failure of either party at any time to require performance by the other party of any provision hereof shall not affect in any way the right to require such per­form­ance at any time thereafter, nor shall the waiver by either party of a breach of any provision hereof be taken or held to be a waiver of any subsequent breach of the same provision or any other provision.

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c.Personal Services.  It is understood that the services to be performed by Davis hereunder are personal in nature and the obligations to perform such services and the conditions and covenants of this Agreement cannot be assigned by Davis.  This Agreement shall inure to the benefit of and bind the successors and assigns of the Company.

d.Severability.  If for any reason any provision of this Agreement shall be determined to be invalid or inoperative, the validity and effect of the other provisions hereof shall not be affected thereby.

e.Applicable Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia without regard to conflict of law principles.

f.Notices.  All notices, requests, demands, instruc­tions or other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given upon delivery, if delivered personally, or if given by prepaid telegram, or mailed first-class, postage prepaid, registered or certified mail, return receipt requested, shall be deemed to have been given 72 hours after such delivery, if addressed to the other party at the addresses as set forth on the signature page below.  Either party hereto may change the address to which such communications are to be directed by giving written notice to the other party hereto of such change in the manner above provided.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

VYYO INC.		WAYNE DAVIS
6625 The Corners Parkway, Suite 100		6625 The Corners Parkway, Suite 100
Norcross, Georgia 30092		Norcross, Georgia 30092
By:	/s/ Davidi Gilo	/s/ Wayne Davis
	Davidi Gilo, Chairman of the Board of	(Signature)
	Directors

**SIGNATURE PAGE TO EMPLOYMENT AGREEMENT**

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EX-10.2

Exhibit 10.2

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (this “Agreement”) is entered into as of March  21st, 2007 (the “Effective Date”), by and between Vyyo Inc., a Delaware corporation having its principal place of business at 6625 The Corners Parkway, Suite 100, Norcross, Georgia 30092 (collectively with its subsidiaries and affiliates, the “Company”), and James A. Chiddix, an individual  (“Consultant”) (collectively the “Parties” and individually a “Party”).

1.Services.

a.Scope of Services.  During the Term (as defined below) of this Agreement, Consultant shall provide services to the Company as described on Exhibit A for on average 40 hours each calendar month (the “Services”).  The parties acknowledge that Consultant shall have the discretion to determine the timing of when Services will be performed, but Consultant’s exercise of such discretion shall take into account the Company’s needs.  The parties further acknowledge that Consultant shall be entitled to take vacations for reasonable periods from time-to-time. Consultant shall perform the Services in a careful, professional and workmanlike manner and to the best of Consultant’s ability.  The parties may mutually agree to adjust the scope of the Services and Consultant agrees to use its reasonable efforts to accommodate any such change in the scope of the Services.  If in the performance of his Services hereunder, Consultant is spending over the course of six months on average more than 40 hours per week, the parties shall mutually agree to discuss in good faith and modify the compensatory terms of this Agreement.  This Agreement governs the terms and conditions of Consultant’s Services to the Company as set forth in this Agreement and does not affect, and is otherwise unrelated to, Consultant’s membership on the Company’s Board of Directors, if applicable.

b.Loyalty.  Without limiting the other terms of this Agreement, Consultant agrees that Consultant will not use any of the Company’s proprietary information provided under this Agreement or in connection with the provision of Services, to compete with the Company or its products.  In addition, Consultant agrees that at all times during the term of this Agreement he shall act in the best interests of the Company.

2. Independent Contractor.  It is understood and agreed, and it is the intention of the Parties, that Consultant is an independent contrac­tor, and not the employee, agent, joint venturer or partner of the Company for any purposes whatsoever.  Consultant is not entitled to participate in any plans, arrangements or distributions pertaining to any employee benefits of the Company’s employees.    Consultant shall be entirely and solely responsible for his acts while engaged in the performance of Services hereunder, and shall have no right, power or authority to create any obligation, express or implied, on behalf of the Company.

3.Compensation.

a.Fees.  During the Term, the Company shall pay Consultant Fifteen Thousand Dollars ($15,000) per month, in accordance with the Company’s normal payroll practices.

b.Stock Option Grant.  The Company shall grant Consultant an option to purchase 250,000 shares of the Company’s Common Stock at the fair market value of the Company’s Common Stock on the date of grant (the “Stock Option”).  The Stock Option will be governed by the Company’s Third Amended and Restated 2000 Employee and Consultant Equity Incentive Plan and Consultant’s individual option agreement.  Unless accelerated as provided in Section 4 (“Acceleration Benefits”) below or in Section 5(c) (“Effect of  Termination”) below, the Stock Option will vest in equal monthly installments over 48 months, beginning on April 20, 2007, subject to continued consultancy.  If there is any conflict between this Agreement and the terms of the option agreement, the terms of this Agreement will control.

c.Expenses.  Consultant shall use his best business judgment when incurring expenses and shall respond in good faith to any future request by the Company that Consultant obtain prior approval of such expenses where the circumstances dictate.  Consultant shall be reimbursed for all reasonable and necessary expenses incurred in performing the Services. Reimbursable expenses shall be invoiced to the Company on a monthly basis, together with all supporting documentation required by the Company.  All such expenses shall be billed at Consultant’s actual out-of-pocket cost, without surcharge.  The Company shall reimburse such expenses within 30 days of its receipt of Consultant’s invoice and sufficient documentation.

d.Taxes.  Consultant shall be responsible for the payment of all applicable taxes, including, but not limited to, federal income tax, employment taxes and any other taxes and shall indemnify the Company for the same.  In the event the Company is required, or deems it appropriate, to withhold applicable taxes, Consultant shall receive payment net of such withheld taxes.

4.Acceleration Benefits.

a.Financing Event.  If the Company is a party to a Financing Event (defined below), and the Company’s Board of Directors or Audit Committee, as applicable, determines that Consultant contributed in a material way to the Financing Event, then the following number of Stock Options will vest:  (i) if the closing of the Financing Event occurs on or before March 31, 2007, then 60,000 of the outstanding and unvested Stock Options will vest immediately; or (ii) if the closing of the Financing Event occurs on or before December 31, 2007, then 30,000 of the outstanding and unvested Stock Options will vest immediately.  If vesting of the Stock Options is accelerated pursuant to this Section, the remaining unvested Stock Options shall be redistributed pro-rata in equal monthly installments over the 48-month vesting period set forth in Section 3(b).  For purposes of this Section, a “Financing Event” shall mean the receipt by the Company of $15 million in one or more related transactions of equity or debt, or a combination of equity or debt.  For purposes of this Section, Consultant will be considered to have contributed to a Financing Event “in a material way” if, in the Board of Directors’ or Audit Committee’s determination, the Financing Event occurs as a result of his direct and active provision of the Services listed on Exhibit A.

b.Spectrum Overlay.  If the Company’s Spectrum Overlay product is approved by Time Warner Inc. (“Time Warner”) or Comcast Corporation (“Comcast”) and sales of the Spectrum Overlay product to either such customer generates $10 million in booked revenue on or before December 31, 2008 (the “Required Revenue”), and if the Company’s Board of Directors or

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Audit Committee, as applicable, determines that Consultant contributed in a material way to the completion of such orders from either Time Warner or Comcast, as the case may be, then (i) 30,000 of the outstanding and unvested Stock Options will vest immediately upon the Company’s receipt of the Required Revenue from either Time Warner or Comcast, as the case may be, and (ii) the remaining number of outstanding and unvested Stock Options (other than the number of Stock Options that may vest monthly through December 31, 2008) will vest immediately upon the Company’s subsequent receipt of the Required Revenue from either Time Warner or Comcast, as the case may be.  For purposes of this Section, Consultant will be considered to have contributed to the booking of Required Revenue “in a material way” if, in the Board of Directors’ or Audit Committee’s determination, the approval and sales of our products to such customers occur as a result of his direct and active provision of the Services listed on Exhibit A.

For the avoidance of doubt and as an example only, if the Company closes a Financing Event on May 31, 2007 (at which time 30,000 of the outstanding and unvested Stock Options will immediately vest) and also books the Required Revenue from Time Warner in December 2007 prior to booking the Required Revenue from Comcast, then an additional 30,000 of the outstanding and unvested Stock Options will immediately vest upon booking of the Required Revenue from Time Warner.  As of December 20, 2007, an aggregate of 112,080 of the outstanding and unvested Stock Options will have vested (30,000 Stock Options related to a Financing Event, 30,000 Stock Options related to booking of Required Revenue from Time Warner and 52,080 Stock Options that vest monthly (5,208 per month for 10 months)).  If the Company subsequently books the Required Revenue from Comcast in 2008, then 75,424 of the outstanding and unvested Stock Options will vest immediately upon booking of the Required Revenue from Comcast, with the remaining 62,496 Stock Options (5,208 per month for 12 months) vesting on an equal monthly basis through December [x], 2008.  In all cases, the preceding example assumes that Consultant has contributed in a material way to the events referenced.

c.Change of Control.  If the Company enters into a definitive agreement on or before December 31, 2008 which would result in a Change of Control (defined below) of the Company, then all of Consultant’s outstanding and unvested Stock Options granted under this Agreement will vest immediately as of the closing of the Change of Control.  For purposes of this Section, a “Change of Control” means (i) a sale of all or substantially all of the Company’s assets; (ii) any merger, consolidation or other business combination transaction of the Company with or into another corporation, entity or person, other than a transaction in which the holders of at least a majority of the shares of the Company’s voting capital stock outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of the Company’s voting capital stock (or the surviving entity) outstanding immediately after such transaction; or (iii) the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of such shares representing a majority of the voting power of the then outstanding shares of the Company’s capital stock.

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5.Term; Termination.

a.Term.  Unless sooner terminated as provided below, the Agreement will continue in effect for a period of one year (the “Term”).  On each anniversary of the Effective Date, the Term will automatically be extended for a period of one year unless otherwise terminated in accordance with this Agreement.

b.Termination.  Either Party may terminate this Agreement on 30 days prior written notice.  Either Party may terminate this Agreement immediately and without prior notice if the other Party is in breach of any material provision of the Agreement.

c.Effect of Termination.  Following termination or expiration of this Agreement, the Company shall be obligated to pay Consultant for Services provided through the date of termination or expiration.  Termination of this Agreement for any reason shall not affect the obligations of the Parties under Section 6 of this Agreement entitled “Trade Secrets.”  If the Company terminates this Agreement without cause, Consultant’s unvested Stock Options shall continue to vest for three months after the date of termination, at which time all remaining unvested Stock Options shall be automatically forfeited.  Except as may be otherwise provided in this Agreement, upon termination of this Agreement all unvested Stock Options shall be automatically forfeited.

6. Trade Secrets.

a. Definition.  The Parties acknowledge and agree that during the Term of this Agreement and in the course of the discharge of his duties hereunder, Consultant shall have access to and become acquainted with the following information concerning the operation of the Company and the Company’s affiliates, and that of the Company’s clients and customers:  confidential information, future plans, business forecasts, data and other technical information, test data, customer lists, research and development activities, marketing plans and strategies, processes, know-how and other trade secrets and proprietary information (the “Confidential Information”).

b. Duty of Confidentiality.  Consultant agrees that he shall not disclose any Confidential Information, directly or indirectly, to any other person or use such Confidential Information in any way, either during the Term of this Agreement or at any other time thereafter, except as is required in the course of Consultant’s Services to the Company, or as otherwise required by applicable law.  Consultant further agrees that all files, records, documents, equipment and similar items relating to the Company’s business, whether prepared by Consultant during the term of this Agreement­ or by others, are and shall remain exclusively the property of the Company.

c. Excluded Information.  The Parties agree that the prohibitions of this Section 6 shall not apply to any information which:

(i) At the time of disclosure is in the public domain;

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(ii) After disclosure becomes a part of the public domain through no act or omission of Consultant;

(iii) Was known by or in the possession of Consultant prior to disclosure by the Company; or

(iv) Is rightfully received by Consultant from third parties not employed by the Company.

7. Miscellaneous Provisions.

a. Notices.  Any notice required to be given pursuant to this Agreement shall be effective only if in writing and delivered personally or by mail.  If given by mail, such notice must be sent by registered or certified mail, postage prepaid, and mailed to the Parties at the addresses set forth on the signature page hereof, or at such other addresses as the Parties may designate from time to time by written notice.  Mailed notices shall be deemed received two business days after the date of deposit in the mail.

b. Partial Invalidity.  If any Section of this Agreement or the application thereof to any person or circumstance shall be held to be invalid or unenforceable to any extent, the other Sections of this Agreement (or the application of the invalid Section to persons or circumstances other than those to which it is held invalid or unenforceable) shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforceable to the fullest extent permitted by law.

c. Waiver.  No waiver of any right hereunder shall be effective for any purpose unless in writing and signed by the Party hereto possessing said right.  No such waiver shall be construed to be a waiver of any subsequent right, term or provision of this Agreement.

d. Attorneys’ Fees; Costs.  If any Party to this Agreement institutes any legal action or proceeding against another Party to enforce or construe any of the provisions of this Agreement, or to determine the validity thereof, the Party prevailing in such action or proceeding shall be entitled to recover from the other Party their costs of the action, including as an element of damages reasonable attorneys’ fees, together with such costs and fees incurred in enforcing any judgment or decisions entered therein.  The Company shall pay the reasonable and actual costs billed to Consultant for review of this Agreement by his legal counsel.

e. Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, applicable to contracts made and to be performed wholly within the State of Delaware, and without reference to the choice of law principles of the State of Delaware, or any other state.

f. Arbitration.  Any disputes arising under this Agreement shall be submitted to binding arbitration by one neutral arbitrator associated with JAMS/Endispute who is mutually acceptable to the Parties.  The County of Gwinnett, Georgia, U.S.A. shall be the venue for any

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proceeding, which proceeding shall be conducted in accordance with the  rules and procedures of JAMS/Endisptue and not by court action, except as provided by Delaware law for judicial review of arbitration proceedings.  Any decision or award entered as a result of such arbitration shall be final and binding upon all Parties.  The filing of a judicial action to enable the recording of a notice of a pending action, for orders of injunction or other provisional remedies, shall not constitute a waiver of the right to arbitrate under this provision.  The Parties agree to the exclusive personal jurisdiction of courts of general jurisdiction in Gwinnett, Georgia, U.S.A., for enforcement of such arbitration awards, agree to accept any service of process by personal service, facsimile, express or overnight mail, or regular mail, return receipt requested, at the address listed below as being binding on such Party and agree to accept such arbitrators and court as being the sole and exclusive forum and venue for hearing such claims, disputes, controversies, breaches or similar events.  The Parties agree to waive any defense of forum non conveniens or improper venue respecting such courts.  The cost of the arbitration shall be borne by the losing Party or in such proportion as the arbitrator shall decide.

g. Representation by Independent Counsel.  Consultant acknowledges that by signing this Agreement, Consultant is deemed to have consulted with counsel of Consultant’s own choosing in connection with this Agreement.  Each Party represents that they have read this Agreement in full and understands and voluntarily consents to each and every provision contained in this Agreement.

h. Compliance.   Consultant represents and warrants to the Company that he is not restricted or prohibited from entering into this Agreement and providing the Services contemplated hereby, and that nothing in this Agreement conflicts with any contract or employment obligation of Consultant.  Nothing contained in this Agreement shall require or  permit Consultant or the Company to do any act inconsistent with the requirements of any statute, regulation or rule of the United States or any State, including, but not limited to the Foreign Corrupt Practices Act or any similar law, regulation or rule that may be in effect from time to time, or any contract or employment relationship of the Consultant of which either the Consultant or the Company may become aware in the future, or any of Consultant’s fiduciary obligations to any company, including without limitation, the Company.

i. Entire Agreement.  This Agreement and the attached Exhibit(s) contain the entire agreement and understanding between the Parties related to Consultant’s Services to­ the Company and super­sedes all prior agreements and understandings, oral or written.  No modification, termination or attempted waiver shall be valid unless in writing and signed by Consultant and the Company.

j.Execution.  This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as set forth below.

Date: March 21, 2007			Date: March 21, 2007
Vyyo Inc.			James A. Chiddix
6625 The Corners Parkway, Suite 100			6625 The Corners Parkway, Suite 100
Norcross, Georgia 30092			Norcross, Georgia 30092
By:	/s/ Davidi Gilo		/s/ James A. Chiddix
Name:		Davidi Gilo
Title:		Chairman

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EX-99.1

Exhibit 99.1

TOP CABLE EXECUTIVES TAKE VYYO HELM:

JIM CHIDDIX NAMED VICE CHAIRMAN;

WAYNE DAVIS TAKES REINS AS CEO

Norcross, GA (March 26, 2007) – Vyyo Inc. (NASDAQ: VYYO), a supplier of broadband access equipment for cable system operators, announced today that two prominent cable industry executives — Jim Chiddix and Wayne Davis — have joined the company as vice chairman and chief executive officer, respectively.

Chiddix, whose career includes 15 years as chief technology officer with Time Warner Cable, joins Vyyo after having served as chairman and chief executive officer of OpenTV for the past three years. Davis was most recently executive vice president, engineering, and chief technology officer of Charter Communications, the third-largest publicly traded cable operator in the United States. At Vyyo, both executives will spearhead the company’s efforts to accelerate industry deployment of Vyyo’s 3 GHz Spectrum Overlay and business services solutions.

Davis succeeds Davidi Gilo, who will remain chairman of Vyyo.

“The commitments that Jim Chiddix and Wayne Davis are making to Vyyo underscore the value of our technology to the cable industry,” said Gilo. “As two of the most respected innovators in cable, their expertise and knowledge will help Vyyo work more closely with operators to leverage the competitive advantages of existing plant infrastructure against fiber.”

Vyyo has quickly emerged as an extremely cost-efficient alternative to incremental bandwidth enhancements during a time of increasing consumer demand for richer, more accessible and relevant content and services.Cable operators have been increasingly attracted to Vyyo’s ability to greatly expand the raw bandwidth of their existing network infrastructures at a fraction of the cost of fiber. With Vyyo, cable operators can meet current and future bandwidth demands today, to capitalize on the lucrative commercial and residential services markets.

“The ability to expand bandwidth well beyond today’s limits and deliver business services over existing networks represents two of cable’s most potent weapons against the telcos,” said Chiddix. “Vyyo’s technology is critical because it delivers the truly advanced capabilities that will help cable operators maintain leadership positioning.”

“The breakneck pace of change in the cable and telecommunications industries requires new, innovative approaches like Vyyo’s that can usher in the next generation of broadband services delivery,” said Davis. “Vyyo’s ability to cost-effectively enable fiber-like performance over HFC networks will truly give cable operators an edge over the competition. It’s an exciting time to join the company.”

Throughout his career with OpenTV, Time Warner Cable and Time Warner’s Mystro TV, Chiddix has earned respect as an industry leader involved in each wave of technical innovation.  As chief technology officer of Time Warner Cable, he was responsible for all corporate engineering and research and development activities and played pioneering roles in the adoption of hybrid/fiber coax broadband network architecture, video-on-demand and digital cable.

In addition to his new role with Vyyo, Chiddix will remain on the board of directors of OpenTV.  A member of the Cable Pioneers, he has been honored with multiple awards for technological innovation, including an Emmy Award for his team’s visionary work on cable’s HFC architecture; and the Vanguard Award for his work on the introduction of addressable converters.

Davis joined Charter in 2001 as vice president, engineering, Western Division, and over the next five years earned responsibility for all engineering activities. As vice president and chief technology officer from 2003 to 2006, his responsibilities included the development of a technical operations structure to facilitate the company’s rollout of advanced digital video programming, high-speed data and voice-over-IP services.

Previously, Davis was vice president of engineering for Comcast, serving as the company’s engineering lead in managing the integration and upgrade of plant acquired from Jones Intercable into the Comcast network. Davis joined Comcast after 15 years with Jones Intercable, during which time he rose from fund engineering director for the company’s Midwest systems to vice president, technical operations and group vice president, engineering.

Highly sought-after for his industry expertise and guidance, Davis was a member of the CTO Technical Advisory Board of CableLabs, and is on the technical advisory boards of Cedar Point Communications, Peak8 Solutions and BroadLogic Network Technologies. He is a member of the SCTE.

About Vyyo Inc.
Vyyo products designed for use by cable television operators include spectrum overlay solutions designed to expand cable operators’ typical HFC (hybrid-fiber coax) network capacity in the “last mile” and business services solutions that can help operators meet the needs of small/medium-sized enterprises using existing cable plant.  Spectrum overlay increases bandwidth by up to 2x in the downstream and 4x or more in the upstream,

addressing requirements for advanced residential and business services.    For more information, please visit www.vyyo.com.

Safe Harbor Statement

Statements made in this press release relating to the future, including those related to the opportunities created for our customers given our ability to provide spectrum overlay solutions and our ability to dramatically increase upstream and downstream bandwidth, are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our business and results of operations to differ materially from those expressed or implied by such forward-looking statements. Risks that may cause these forward-looking statements to be inaccurate include among others: whether we will be able to accelerate the movement from development stage to deployment and establish meaningful commercial relationships with cable system operators; the current limited visibility available in the telecommunications and broadband access equipment markets; the willingness and ability of operators to adopt our new technology and apply it in a manner that meets customer demands; our ability to produce and distribute our spectrum overlay and T1 solutions in the quantities, and with the quality control, desired by the market; and other risks set forth in our annual report on Form 10-K for the year ended December 31, 2005, our quarterly reports on Form 10-Q and other reports filed by us with the Securities and Exchange Commission from time to time. We assume no duty to update these statements.

All trademarks mentioned herein are the property of their respective owners.

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PUBLIC RELATIONS:	INVESTOR RELATIONS
Paul Schneider	Walt Ungerer
Paul Schneider Public Relations, Inc.	VP, Corporate Communications
(w) 215.702.9784	Vyyo Inc.
(m) 215.817.4384	678.488.0468
pspr@att.net	ir@vyyo.com