EXHIBIT 10.14
SENIOR EXECUTIVE TERMINATION BENEFITS AGREEMENT
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AGREEMENT, dated as of the 2nd day of September, 1997, between BANYAN
SYSTEMS INCORPORATED, a Massachusetts corporation ("Banyan" or "the Company"),
and XXXXXXX XXXXXXXXX, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (the
"Executive").
RECITALS
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A. Banyan considers it essential and in the best interests of the Company
and its stockholders to provide protection to its executive management in the
event of a merger/acquisition or termination. Banyan also considers it
essential and in the best interests of the Company and its stockholders that its
management be encouraged to remain with the Company and to continue to devote
full attention to its business in the event that an effort is made to obtain
control of Banyan through tender offer or otherwise. In this connection, the
Company recognizes that the possibility of a change in control and the
uncertainty and questions which it may raise among management may result in the
departure or distraction of management personnel to the detriment of Banyan and
its stockholders. Accordingly, Banyan's board of directors (the "Board") has
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the Company's management to
their assigned duties without distraction in the face of the potentially
disturbing circumstances arising from the possibility of a change in control of
the Company.
B. The Executive is a key executive of Banyan, and the Company believes
that the Executive has made valuable contributions to the business.
C. In the event that the Company receives any proposal from a third person
concerning a possible business combination with, or acquisition of equity
securities of the Company, the Board believes it imperative that Banyan and the
Board be able to rely upon the Executive to continue in his position and that
the Company be able to receive and rely upon his advice, if so requested, in the
best interests of Banyan and its stockholders without concern that he might be
distracted by the personal uncertainties and risks created by such a proposal.
NOW THEREFORE, to assure the Company that it will have the continued
undivided attention and services of the Executive and the availability of his
advice and counsel notwithstanding the possibility, threat or occurrence of a
bid to take over control of Banyan, and to induce the Executive to remain in the
employ of the Company, and for other good and valuable consideration, Banyan and
the Executive agree as follows:
1. SERVICES DURING CERTAIN EVENTS
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In the event that a third person begins a tender or exchange offer,
circulates a proxy to stockholders, or takes other steps seeking to effect a
Change in Control (as hereafter defined), the Executive agrees that he will not
voluntarily leave the employ of the Company, and will render the services
contemplated in the recitals to this Agreement, until the third person has
abandoned or terminated its efforts to effect a Change in Control or until after
such a Change in Control has been effected. In the event the Executive does
leave voluntarily either before or after a Change in Control, the benefit
provisions set forth in Section 3 will not be applicable.
2. CIRCUMSTANCES TRIGGERING RECEIPT OF SEVERANCE BENEFITS
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Banyan shall provide the Executive with the benefits set forth in Sections
3 and 5 upon any termination of the Executive's employment by Banyan within one
year following a Change in Control or termination of employment for any reason
except the following:
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(I) Termination by reason of the Executive's death;
(II) Termination by reason of the Executive's disability. For the
purposes hereof, "disability" shall be defined as the Executive's inability
by reason of illness or other physical or mental disability to perform the
duties required by his employment for any consecutive period of 180
calendar days, provided that notice of any termination by Banyan because of
the Executive's disability shall have been given to the Executive prior to
the full resumption by him of the performance of such duties;
(III) Termination for cause.
(IV) Voluntary termination by the Executive.
3. TERMINATION BENEFITS
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Subject to the provisions set forth in Section 2, the following benefits
(subject to any applicable taxes required to be withheld) shall be paid monthly,
or in the case of fringe benefits shall continue to be provided monthly, to the
Executive:
(A) PROTECTION IN THE EVENT OF TERMINATION OR MATERIAL REDUCTION IN
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RESPONSIBILITIES
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TERMINATION BY BANYAN
If your employment is terminated by Banyan for any reason (including Change in
Control), except For Cause, Banyan will provide you the following payments and
benefits:
. Banyan will pay you on a biweekly basis the difference between any outside
earnings and your Banyan base salary for six months from the effective date
of your termination. Such payments shall be made at the Executive's then
current base, bi-weekly gross salary rate, less applicable deductions for
medical, dental, prescription and life insurance contributions and/or
withholdings for taxes or similar governmental payments or charges.
. Banyan will provide six months of continued medical, dental, and life
insurance for you and your family from the effective date of your
termination, subject to the payment of any applicable employee
contributions.
MATERIAL REDUCTION IN RESPONSIBILITIES
You may, within 60 days from the occurrence of any change in control or
"Material Reduction of Responsibilities" (defined below) and upon 60 days prior
written notice to Banyan, voluntarily terminate your employment with Banyan and
receive the following payments and benefits:
. Banyan will pay you on a biweekly basis the difference between any outside
earnings and your Banyan base salary for six months from the effective date
of your termination.
. Banyan will provide six months of continued medical, dental, and life
insurance for you and your family from the effective date of your
termination, subject to the payment of any applicable employee
contributions.
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4. CONTRACT TERM
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This contract is valid for the duration of your employment with the Company
subject to a 60-day notice period for termination of employment by either party
via written notification.
FOR PURPOSES OF THIS LETTER, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
RESPECTIVE MEANINGS:
1. Termination of employment for cause ("For Cause") shall mean
termination by reasons of (a) any act or omission involving
dishonesty, gross negligence or serious misconduct, or (b) your
conviction of, or the entry of a pleading of guilty or nolo contendere
by you to, any crime involving sexual harassment or any felony.
Termination of Employment For Cause will be presented in writing,
accompanied by a written statement of reasons. Disagreements will be
resolved by a process of binding arbitration.
2. A material reduction in responsibilities ("Material Reduction in
Responsibilities") shall be deemed to occur if: (I) your
responsibilities are reduced, for reasons other than For Cause, from
managing Finance or you are no longer an Officer of the Company; or,
(ii) Banyan removes you from the position of Vice President and Chief
Financial Officer for reasons other than For Cause; or, (iii) Banyan
reduces your base salary and Executive Bonus, for reasons other than
For Cause; or, (iv) you are no longer a direct report of the President
and CEO of Banyan.
3. A change in control ("Change in Control") of the Company shall be
deemed to occur if and only if (a) any person or entity (other than
the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, or any corporation owned
directly or indirectly by the stockholders of the Company is
substantially the same proportion as their ownership of stock of the
Company) is or becomes the "beneficial owner" (as defined in Rule 13d-
3 under the Securities and Exchange of 1934, as amended), directly or
indirectly, of securities of the company representing more than 50% of
the combined voting power of the Company's then outstanding voting
securities (b) a merger of consolidation of the Company following
which the voting securities of the Company outstanding immediately
prior thereto do not continue to represent more than 50% of the
combined voting power of the voting securities of the Company or the
entity outstanding immediately after such merger of consolidation, or
(c) a sale of all or substantially all of the assets of the Company.
5. STOCK OPTIONS
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In the event of a Change in Control, 50% of your unvested incentive and non-
qualified stock options in a given vesting schedule will become fully vested and
immediately available for exercise in accordance with the applicable terms and
conditions of Banyan's 1992 Stock Incentive Plan.
6. CONTINUING OBLIGATIONS
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In order to induce Banyan to enter into this Agreement, the Executive hereby
ratifies and confirms his Employee Patent and Confidential Information Agreement
with Banyan. Without limiting the generality of the foregoing, the Executive
agrees that all documents, records, techniques, business secrets and other
information which have come into his possession from time to time during his
employment hereunder shall be deemed to be confidential and proprietary to
Banyan and he shall retain in confidence any confidential information known to
him concerning Banyan and its subsidiaries and their respective businesses and
such information shall not be disclosed.
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7. NOTICES
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For the purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
IF TO THE EXECUTIVE: Xx. Xxxxxxx Xxxxxxxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
IF TO BANYAN:
Xxxxxxx X. Xxxxxxxxxxx, Vice President, Human Resources
Banyan Systems Incorporated
000 Xxxxxxxx Xxxx, P. O. Xxx 0000
Xxxxxxxx, XX 00000-0000
or to such other address as either party may have furnished to the other in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
8. GOVERNING LAW
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This Agreement is entered into and shall be construed under the laws of the
Commonwealth of Massachusetts. In the event any provision of this Agreement is
determined to be illegal or unenforceable by a duly authorized court of
competent jurisdiction, then the remainder of this Agreement shall not be
affected thereby, it being the intention of the parties that each provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
9. ARBITRATION
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Any controversy or claim arising out of or relating to this Agreement or the
breach thereof shall be settled by arbitration to be conducted in Boston,
Massachusetts, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
10. MISCELLANEOUS
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No provisions of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by the
Executive and on behalf of Banyan. No waiver by either party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of the same or any other provisions or
conditions at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement.
11. SEPARABILITY
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The invalidity or unenforceability of any provisions of this Agreement shall
not affect the validity or enforceability of any other provisions of this
Agreement, all of which shall remain in full force and effect.
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12. NON-ASSIGNABILITY
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This agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder. Without limiting the foregoing, the
Executive's right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or otherwise,
other than a transfer by his will or by the laws of descent or distribution, and
in the event of any attempted assignment or transfer contrary to this Section
Banyan shall have no liability to pay any amount so attempted to be assigned or
transferred.
13. CONFIDENTIALITY
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The Executive agrees that the existence and the terms of this Agreement are
confidential and shall not be disclosed to any person, except that the Executive
may disclose this Agreement to his immediate family or professional tax,
financial and/or legal advisors.
14. PRIOR AGREEMENTS SUPERCEDED
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This agreement supercedes any prior written or oral agreements or
understandings between the parties related to the subject matter hereof,
including your agreement dated as of the 15th day of January, 1997, and any such
agreements or understanding shall be void and of no further effect. This
Agreement specifically supercedes any prior written or oral agreements or
understandings of a similar nature which may have existed between the Executive
and Banyan, and such agreements or understandings shall be void and of no
further effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.
BANYAN SYSTEMS INCORPORATED
BY: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
President and Chief
Executive Officer
BY: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx
Vice President and Chief
Financial Officer
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