Vice President, Business Development Employment Agreement

EMPLOYMENT AGREEMENT
OF ARNON KOHAVI
WITH
PHASECOM, INC.


THIS EMPLOYMENT AGREEMENT (this "Agreement"), made and entered into effective as of the 22nd day of November, 1999, by and between PHASECOM, INC., a Delaware corporation (hereinafter the "Corporation"), and ARNON KOHAVI (hereinafter "Kohavi").


RECITALS


A. The Corporation has offered employment to Kohavi as Senior Vice President for Business Development.


B. In connection with Kohavi's employment with the Corporation, the Corporation and Kohavi desire to enter into this Employment Agreement according to the terms and conditions set forth below.


AGREEMENT


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


a. EMPLOYMENT DUTIES.


a. GENERAL. The Corporation hereby agrees to employ Kohavi, and Kohavi hereby agrees to accept employment with the Corporation, on the terms and conditions hereinafter set forth.


b. CORPORATION'S DUTIES. The Corporation shall allow Kohavi to, and Kohavi shall, perform responsibilities normally incident to the position of Senior Vice President, Business Development of the Corporation, commensurate with his background, education, experience and professional standing. The Corporation shall provide Kohavi with such office equipment, supplies, customary services and cooperation suitable for the performance of his duties. Kohavi also shall be responsible for overseeing investor relations.


c. KOHAVI'S DUTIES. Unless otherwise agreed to by the parties, Kohavi shall serve as Senior Vice President, Business Development of the Corporation. Kohavi shall devote all of his productive time, attention, energy and skill to the business of the Corporation, and shall not become engaged to render similar services on behalf of any other entity while employed hereunder which is in any way competitive to the Corporation, without the consent of the Corporation's Chairman of the Board. Kohavi shall report directly to the Chairman of the Board of the Corporation. Kohavi shall inform the Chairman of the Board of any other positions that he takes with any other entity. Kohavi's duties shall be performed primarily in Cupertino, California.


a. TERM. The initial term of this employment is eighteen (18) months. Thereafter, this Agreement may be renewed by Kohavi and the Corporation on such terms as the parties may agree to in writing. Absent written notice to the contrary, thirty (30) days prior to the end of the initial eighteen (18) month employment term, this Agreement will be renewed for consecutive six (6) month extensions. Should the term of employment not be renewed after the expiration of the first eighteen (18) month term, Kohavi shall be entitled to six (6) months salary as severance, in exchange for a release as to any and all claims Kohavi may have against the Corporation.


b. COMPENSATION. Kohavi shall be compensated as follows:


a. FIXED SALARY. Kohavi shall receive a fixed annual salary of One Hundred Fifty-five Thousand Dollars ($155,000). The Corporation agrees to review the fixed salary on, or before, January 1, 2001, and thereafter at the end of each calendar year during the employment term based upon Kohavi's services and the financial results of the Corporation, and to make such increases as may be determined appropriate in the sole discretion of the Corporation.


b. PAYMENT. Kohavi's fixed salary shall be payable on a semi-monthly basis, in accordance with the Corporation's usual payroll practices.


c. BONUS COMPENSATION. During the Employment Term, Kohavi shall participate in each bonus plan adopted by the Corporation's Board of Directors. Commencing in 2000, Kohavi shall be entitled to receive an annual bonus equal to (i) twenty-five percent (25%) of his annual base salary should the Corporation meet eighty percent (80%) of its plan as presented to the Board in January of each year, during the term of Kohavi's employment ("Yearly Plan"); (ii) seventy-five percent (75%) of his annual base salary should the Corporation meet its Yearly Plan; and (iii) one hundred twenty-five percent (125%) of his annual base salary should the Corporation meet one hundred twenty percent (120%) of its Yearly Plan, with the bonus prorated if the Yearly Plan is met between eighty percent (80%) and one hundred percent (100%); or between one hundred percent (100%) and one hundred twenty percent (120%). For purposes of this Section, the meeting of the Yearly Plan shall be based upon the actual revenues and earnings per share for each applicable year (each weighted fifty percent (50%)) compared to the revenues and earnings per share projected in the Yearly Plan (with each item weighted fifty percent (50%)), and no item shall be counted if it is not at least eighty percent (80%) met. The bonus shall be payable only if Kohavi's employment extends for the full calendar year. It may be prorated at the discretion of the Chairman of the Board should Kohavi's employment terminate prior to the full calendar year.


d. STOCK OPTIONS. Kohavi shall be eligible for certain stock option that may be awarded by the Corporation, from time to time, in recognition of Kohavi's contribution to the Corporation's success. The initial option grant shall vest as follows: 25% immediately; 25% in six (6) months; 25% in twelve (12) months; and the balance within eighteen (18) months from issuance, subject to the approval of the Corporation's Board of Directors or Compensation


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Committee, as appropriate.


e. VACATION. Kohavi shall accrue paid vacation at the rate of twenty (20) days for each twelve (12) months of employment. Kohavi shall be compensated at his usual rate of compensation during any such vacation. Kohavi shall be entitled to paid holidays as generally given by the Corporati ...