Separation Agreement For Allan Kline

Exhibit 10.23


RETIREMENT AGREEMENT, dated as of February 28, 2002 (the "Agreement"), by and among Acterna Corporation, a Delaware corporation (the "Company"), and Allan M. Kline ("Executive").


W I T N E S S E T H:


WHEREAS, the Company and Executive entered into an Employment Agreement, dated as of November 1, 1998, (the "Employment Agreement");


WHEREAS, Executive has previously been granted options (collectively, the "Initial Options") to purchase 1,293,600 shares of the Common Stock, par value $.01 per share (the "Common Stock"), pursuant to the Management Equity Agreement, dated as of May 21, 1998, between the Company, Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands limited partnership (the "Fund"), and Executive (the "Equity Agreement");


WHEREAS, the Executive has also been granted options pursuant to the Dynatech Corporation Amended and Restated 1994 Stock Option and Incentive Plan (the "Stock Option Plan") to purchase 75,000 shares of the Common Stock (collectively, the "Subsequent Options");


WHEREAS, Executive has decided to retire from employment with the Company and each of its subsidiaries, effective as of February 28, 2002;


WHEREAS, pursuant to the Employment Agreement, Executive has agreed to be bound by certain covenants and restrictions concerning non-competition, non-disclosure and non-solicitation following any termination of his employment;


WHEREAS, due to economic circumstances, the Company will be ceasing its operations at the location at which the Executive has been performing his services;


WHEREAS, the Company and Executive wish to agree upon the consequences of the termination of Executive's employment.


NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises contained herein and for other good and valuable consideration, the Company and Executive hereby agree as follows:


1. Certain Definitions.


For purposes of this Agreement, all capitalized terms used herein without definition shall have the respective meanings assigned to such terms in the Employment


Agreement.


2. Employment.


(a) Executive hereby resigns, effective as of February 28, 2002, or such earlier date as shall be mutually agreed (the "Termination Date"), from any and all positions, other than as a director of the Company, he then holds with the Company or any of its direct or indirect subsidiaries or affiliates. Executive agrees to execute any document the Company shall reasonably request to effect such resignation. Such resignation is hereinafter referred to as "Executive's Resignation".


(b) Executive will continue to serve as a director of the Company after February 28, 2002, on the same terms and conditions, including compensation afforded to other directors who are neither employees of the Company nor employees or other persons affiliated with the Fund.


3. Consequences of Executive's Resignation Under Certain Agreements


(a) In General. The Company and Executive each hereby acknowledges and agrees that, for purposes of the Employment Agreement and Equity Agreement, Executive's Resignation is and will be treated solely as a termination by the Company Without Cause.


(b) Payment of Accrued Obligations. Executive shall be entitled to payment of his current base salary through the Termination Date. Executive shall not be paid any annual bonus for the period from April 1, 2001 through the Termination Date. Any accrued vacation amount shall also be paid on the Termination Date. Executive agrees to submit to the Company any and all expenses, which are business-related and reimbursable to Executive by the Company, on or before March 31, 2002.


(c) Continued Payments of Base Salary. Subject to Section 3(f) of this Agreement, the Company shall make payments to Executive of his Average Base Salary. The Average Base Salary is equal to $297,667, and shall be payable in installments in accordance with the Company's regular payroll practices from the Termination Date until February 28, 2004 (the "Salary Continuance Period"). Executive shall not have the right to make contributions to the Company's 401(k) Savings Plan (the "401(k) Plan") and the Company's Supplemental 401(k) Savings Plan (the "Supplemental Savings Plan") from the base salary payments made under this Section 3(c).


(d) Continued Payments in Respect of Bonus. Subject to Section 3(f) of this Agreement, the Company shall pay to Executive, in 24 monthly installments,


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commencing on March 1, 2002, and on the last day of the next 23 succeeding months, an amount equal to one-twelfth of the Average Annual Bonus (the "Bonus Payment"). The Average Annual Bonus is equal to $352,227, so that, subject to Section 3(f) of this Agreement, each monthly Bonus Payment will be $29,352.25.


(e) Continued Participation in Benefit Plans.


(i) During the period commencing on the Termination Date and
ending on the earlier of (i) Executive's 65th birthday and (ii)
the date of Executive's death, subject to timely payment by
Executive of all premiums, contributions and other co-payments
required to be paid by senior executives of the Company under the
terms of such plans, the Executive shall be permitted to
participate in the Company's medical insurance plans. If such
continued participation is either not legally permissible or
otherwise allowed under the terms of the applicable plan or any
insurance policy or other arrangement, the Company will provide
equivalent coverage from its general assets or another available
source.


(ii) During the Salary Continuance Period, Executive shall be
permitted to participate in the Company's group life insurance
plan in accordance with its terms, on the same basis as similarly
situated employees and shall continue to receive a monthly car
allowance of $1300 per month.


(iii) For purposes of the 401(k) Plan and Supplemental Savings
Plan, February 28, 2002, will constitute the date of Executive's
"termination." No contributions may be made to such plans after
the Termination Date. Promptly after the Termination Date
Executive shall be paid his balance residing in the Supplemental
Savings Plan.


(iv) Executive's participation in any other employee or executive
benefit or perquisite plan or program not specifically addressed
in this Section 3(e) shall cease as of February 28, 2002.


(f) Mitigation. If Executive obtains new employment (including self-employment and services as a consultant) (i) during the Salary Continuance Period, any salary continuation payments or Bonus Payments to which Executive is entitled pursuant to Section 3(c) or 3(d) shall be reduced by the amount of any compensation earned by Executive (whether paid currently or deferred) from any subsequent employer or other Person for which Executive performs services, including but not limited to consulting services, and (ii) the continued medical benefits coverage to which Executive is entitled pursuant to Section 3(e) shall be secondary to any other medical benefit coverage


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available to Executive from any subsequent employer or other Person for which Executive performs services, including, but not limited to, consulting services, at any time after the Termination Date. Notwithstanding the foregoing, any consideration paid to Executive by reason of his continued services as a director pursuant to Section 2(b) shall not be offset against amounts owed to him under Sections 3(c) or 3(d).


4. Options.


(a) Vesting. The Company, the Fund and Executive each hereby acknowledges and agrees that (i) as of the Termination Date, 1,080,600 shares subject to the Initial Options and 30,000 shares subject to the Subsequent Options (collectively, the "Aggregate Options") are or will become vested or exercisable (the "Vested Options") and (ii) 45,000 shares subject to the Subsequent Options are not and will not become vested or exercisable (the "Unvested Options"). All of the Unvested Options will be canceled and forfeited on and as of the Termination Date without the payment of any consideration or amount in respect thereof.


(b) Termination.


(i) Each of the Vested Options which is an Initial Option shall
terminate, and unless earlier exercised in accordance with its
terms, be canceled on the earlier of: (x) its original
termination date and (y) the later of (A) the six month
anniversary of the date of the expiration of any initial lock-up
period imposed on sales of Common Stock in connection with the
first Public Offering and (B) the third anniversary of the
Termination Date. Notwithstanding the foregoing all Vested
Options which are intended to qualify as incentive stock options
under the Internal Revenue Code of 1986, as amended, shall
continue to be governed by the terms of their granting
documents.


(ii) Each of the Vested Options which is a Subsequent Option
shall terminate, and unless earlier exercised in accordance with
its terms, be canceled on the earlier of: (x) its original
termination date and (y) the one year anniversary of the death of
the Executive.


(c) Repurchase.


(i) The Company and, by signing the acknowledgment of this
Agreement where noted below, the Fund each waives its rights
under the Equity Agreement to purchase any Covered Securities (as
defined in the Equity Agreement).


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(ii) The Company and, by signing the acknowledgement of this Agreement
where noted below, the Fund each waives its rights under the Stock
Option Plan to purchase any of the vested Subsequent Options.


5. Transfer Restrictions. All transfer restrictions in Sections 5(a) and 5(b) of the Equity Agreement shall lapse on February 28, 2002.


6. Termination of Agreements.


Effective as of the Termination Date, the Employment Agreement will terminate in its entirety without any further liability or obligation on the part of the Company or any of its respective subsidiaries or affiliates or Executive thereunder, except that the provisions of Sections 9, 10, and 11 of the Employment Agreement relating to non-competition and non-solicitation shall survive Executive's termination and thereafter shall remain in full force and effect as though incorporated herein and made a part hereof, with the restrictive periods commencing on the Termina ...