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EXHIBIT 10.67
SYMANTEC CORPORATION
00000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
April 11, 1999
Xx. Xxxx X. Xxxxxxxx
00 Xxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Via Fax: 000-000-0000
Employment Agreement
Dear Xxxx:
On behalf of the Board of Directors of Symantec Corporation, I am pleased
to offer you the position of President and Chief Executive Officer of Symantec
on the terms set forth below.
1. Position. You will be employed by Symantec as its President and Chief
Executive Officer effective commencing upon the date of your resignation from
your current employer (the "Commencement Date"). As such you will have overall
responsibility for the management of Symantec and will report directly to its
Board of Directors. During your term, you will also be appointed to the Board of
Directors and serve as Chairman of the Board. During the term of your
employment, you will be expected to devote your full working time and attention
to the business of Symantec, and you will not render services to any other
business without the prior approval of the Board of Directors or, directly or
indirectly, engage or participate in any business that is competitive in any
manner with the business of Symantec. Notwithstanding the foregoing, you may
remain a director of businesses with respect to which you are a director on the
Commencement Date and you may serve on boards of charitable organizations or
own up to 1% of the outstanding equity securities of any corporation whose
stock is listed on a national stock exchange. You will also be expected to
comply with and be bound by the Company's operating policies, procedures and
practices that are from time to time in effect during the term of your
employment.
2. Base Salary. Your initial base annual salary will be $600,000,
payable in accordance with Symantec's normal payroll practices with such
payroll deductions and withholdings as are required by law. Your base salary
will be reviewed on an annual basis by the Compensation Committee of the Board
of Directors and increased from time to time, in the discretion of the Board of
Directors, but in any event such compensation shall not be reduced below
$600,000, during your term of employment.
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3. Bonus. (a) For the balance of the calendar year 1999, you will be
eligible to receive a prorated portion of a target bonus equal to 100% of your
base annual salary in accordance with Symantec's CY 1999 President and CEO
Variable Compensation Plan ("VCP"), a copy of which is attached to this letter
as Exhibit A. The plan includes (i) quarterly bonus targets of 12.5% of base
annual salary each quarter based on achievement of quarterly metrics for total
revenue and earnings per share and (ii) an annual bonus target of 50% of base
annual salary based on achievement of overall calendar year revenue growth and
EPS results. Achieving results greater than planned performance can yield up to
an additional 50% of base annual salary. Your maximum bonus potential for the
combined quarterly and annual bonus is 150% of base annual salary, prorated for
the portion of the year that you are employed by Symantec. Because you will be
starting during the second quarter of the year, your target bonus of $75,000
for the quarter ending June 30, 1999 will be guaranteed and paid regardless of
whether the quarterly metrics are achieved, and you will receive a guaranteed
annual bonus for calendar year 1999 equal to $75,000 plus one half of the
amount that would have been payable if you had been employed by Symantec for
the full year based on the annual revenue growth and EPS results; it being
understood that if the actual calendar 1999 results for Symantec result in a
higher bonus entitlement for you under the terms of the VCP, you shall be
entitled to the maximum bonus potential otherwise payable to you under the VCP.
(b) Notwithstanding any other provision of this agreement to the
contrary, you will, during the term of your employment, be provided with the
maximum bonus and incentive opportunity offered to any senior executive of
Symantec and to the extent that any other individual is offered a more
favorable bonus or incentive opportunity (whether in connection with
recruitment or ongoing employment) your incentive and bonus opportunity for the
year in question shall be adjusted retroactively to give effect to such changes.
4. Stock Options and Restricted Stock.
(a) On the Commencement Date, the Compensation Committee of the
Board of Directors shall grant you options to purchase 1,000,000 shares of
Symantec common stock at an exercise price equal to its closing price on the
last trading day prior to the Commencement Date. These options will vest and
become exercisable over a five year period, with 200,000 shares vesting and
becoming exercisable on the first anniversary of your employment and the
remaining 800,000 shares vesting and becoming exercisable ratably on a monthly
basis as of the first day of each month over the following four years. Except
as otherwise indicated in this agreement, the vested portion of the options may
be exercised at any time until the earlier of one year after the termination of
your employment or ten years after the grant of such options. A portion of
these stock options will be designated as "incentive stock options" under
Symantec's stock options plan to the extent permitted by the Internal Revenue
Code (up to $100,000 in aggregate amount exercisable per year), and the balance
of the options will be nonqualified stock options. You should consult a tax
advisor concerning your income tax consequences before exercising any of the
options. Notwithstanding any other provision of this Section 4(a) to the
contrary, upon "Involuntary Termination," "Termination without Cause," or
"Termination for Death or Disability," unvested options and shares of
restricted stock shall immediately vest as provided below. Symantec shall
register the shares issuable under the options and the shares of
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restricted stock on a Form S-8 registration statement prior to the initial
vesting date for such options and shares and shall keep such registration
statement in effect for the entire period the options and shares remain
outstanding.
(b) You will be granted 100,000 shares of restricted common stock on
your first date of employment for a purchase price equal to the par value of
the common stock of $0.01 per share. These shares of restricted stock will vest
over a two-year period, with 50,000 shares vesting on the first anniversary of
your employment and the remaining 50,000 shares vesting on the second
anniversary of your employment. These shares of restricted stock will not be
transferable by you until they are vested. Unvested shares will be subject to
repurchase by Symantec at $0.01 per share upon termination or your employment,
except as otherwise provided below. Unless you elect to be taxed upon receipt
of the restricted stock (by filing a special Section 83(b) election with the
IRS within 30 days), you will be taxed (and subject to income tax withholding)
on the value of the restricted stock as the shares vest. Again, you should
consult a tax advisor concerning the tax consequences.
5. Other Benefits. You will be entitled to the following additional
benefits:
(a) You will be eligible for the normal vacation, health insurance,
401(k), Employee Stock Purchase Plan and other benefits offered to all Symantec
senior executives of similar rank and status.
(b) As President and Chief Executive Officer, you will be eligible
for the following executive benefits: participation in Symantec's Nonqualified
Deferred Compensation Plan, which permits you to defer receipt of up to 50% of
your annual base salary and bonus on a tax deferred basis; a company car or car
allowance in accordance with Symantec's company car policy; reimbursement for
up to $3,000 per year for tax preparation services; reimbursement for up to
$2,000 per year for membership in professional organizations related to
Symantec's business; and reimbursement for up to $1,000 per year for an annual
physical examination.
(c) You will be eligible for reimbursement for certain expenses
incurred in connection with your relocation to California as set forth in the
Relocation Agreement attached to this letter as Exhibit B; provided that no
repayment will be required upon an Involuntary Termination, a Termination
without Cause, or a Termination for Death or Disability.
(d) Symantec will provide you with a recourse loan in an amount
equal to your existing equity in your Connecticut home on an interest-free
basis for a period of one year in order to assist you in financing your
residence in the Bay Area. This loan shall be secured by a second mortgage on
such new residence. This loan shall be due and payable one year from the date
of such loan (two years from the date of such loan in the case of your
termination of employment, other than a Voluntary Termination or Termination
for Cause, within such one-year period).
6. At-Will Employment and Termination. Your employment with Symantec
will be at-will and may be terminated by you or by Symantec at any time for any
reason as follows:
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(a) You may terminate your employment upon written notice to the
Board of Directors at any time for "Good Reason," as defined below (an
"Involuntary Termination");
(b) You may terminate your employment upon written notice to the Board
of Directors at any time in your discretion without Good Reason ("Voluntary
Termination");
(c) Symantec may terminate your employment upon written notice to you
at any time following a determination by two-thirds (2/3) vote of the entire
Board of Directors that there is "Cause," as defined below, for such termination
("Termination for Cause");
(d) Symantec may terminate your employment upon written notice to you
at any time in the sole discretion of two-thirds (2/3) of the entire Board of
Directors without a determination that there is Cause for such termination
("Termination without Cause");
(e) Your employment will automatically terminate upon your death or
upon your disability as determined by the Board of Directors ("Termination for
Death or Disability"); provided that "disability" shall mean your complete
inability to perform your job responsibilities for a period of 180 consecutive
days or 180 days in the aggregate in any 12-month period.
7. DEFINITIONS. As used in this agreement, the following terms have the
following meanings:
(a) "Good Reason" means (i) a material reduction in your duties that is
inconsistent with your position as President and Chief Executive Officer of
Symantec or a change in your reporting relationship such that you no longer
report directly to the Board of Directors; (ii) your no longer being President
and Chief Executive Officer of Symantec or, in the case of a Change in Control,
of the surviving entity or acquiror that results from any Change in Control;
(iii) any reduction in your base annual salary or target quarterly or annual
bonus (other than in connection with a general decrease in the salary or target
bonuses for all officers of Symantec without your consent or material breach by
Symantec of any of its obligations hereunder after providing Symantec with
written notice and an opportunity to cure within seven (7) business days; (iv) a
requirement by Symantec that you relocate your principal office to a facility
more than 50 miles from Symantec's current headquarters; or (v) failure of any
successor to assume this agreement pursuant to Section 13(d) below.
(b) "Cause" means (i) gross negligence or willful misconduct in the
performance of your duties to Symantec (other than as a result of a disability)
that has resulted or is likely to result in substantial and material damage to
Symantec, after a demand for substantial performance is delivered to you by the
Board of Directors which specifically identifies the manner in which the Board
believes you have not substantially performed your duties and you have been
provided with a reasonable opportunity to cure any alleged gross negligence or
willful misconduct; (ii) commission of any act of fraud with respect to
Symantec; or (iii) conviction of a felony or a crime involving moral turpitude
causing material harm to the business and affairs of Symantec. No act or failure
to act by you shall be considered "willful" if done or omitted by you
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in good faith with reasonable belief that your action or omission was in the
best interest of Symantec.
(c) "Change in Control" means (i) any person or entity becoming the
beneficial owner, directly or indirectly, of securities of Symantec representing
forty (40%) percent of the total voting power of all its then outstanding voting
securities, (ii) a merger or consolidation of Symantec in which its voting
securities immediately prior to the merger or consolidation do not represent, or
are not converted into securities that represent, a majority of the voting power
of all voting securities of the surviving entity immediately after the merger or
consolidation, (iii) a sale of substantially all of the assets of Symantec or a
liquidation or dissolution of Symantec, or (iv) individuals who, as of the
Commencement Date, constitute the Board of Directors (the "Incumbent Board")
cease for any reason to constitute at least a majority of such Board; provided
that any individual who becomes a director of Symantec subsequent to the
Commencement Date, whose election, or nomination for election by Symantec
stockholders, was approved by the vote of at least a majority of the directors
then in office shall be deemed a member of the Incumbent Board.
8. Separation Benefits. Upon termination of your employment with Symantec
for any reason, you will receive payment for all salary, prorated quarterly
bonus and annual bonus and unpaid vacation accrued to the date of your
termination of employment; your benefits will be continued under Symantec's then
existing benefit plans and policies for so long as provided under the terms of
such plans and policies and as required by applicable law; except as otherwise
provided below, you will have until one year (three months in the case of
Termination for Cause or a Voluntary Termination) after the effective date of
your termination to exercise any stock options that were vested as of the
effective date of your termination; and, except as otherwise provided below, all
unvested shares of restricted stock will be repurchased by Symantec at $0.01 per
share. Under certain circumstances, you will also be entitled to receive
severance benefits as set forth below, but you will not be entitled to any other
compensation, award or damages with respect to your employment or termination.
(a) In the event of your Voluntary Termination or Termination for
Cause, you will not be entitled to any cash severance benefits or additional
vesting of shares of restricted stock or options.
(b) In the event of your Involuntary Termination or Termination
without Cause, you will be entitled to a single lump sum severance payment equal
to twice your then current annual base salary (less applicable deductions and
withholdings) payable within 30 days after the effective date of your
termination; the vesting of your unvested shares of restricted stock shall be
accelerated in full; the vesting and exercisability of your outstanding options
to purchase Symantec common stock shall be immediately accelerated by two years,
and you will have until one year after the effective date of your termination to
exercise any options that were vested, including those that were accelerated as
of the effective date of your termination. Symantec shall reimburse you for all
COBRA premiums paid by you for the full extension period permitted by law.
Notwithstanding the foregoing, if your Involuntary Termination or Termination
without Cause occurs within twelve months after a Change in Control, the vesting
and exercisability of
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all your outstanding options to purchase Symantec common stock (or securities of
the surviving entity that are issuable upon exercise of such options following
the Change in Control) will be immediately accelerated in full and you will
have until one year after the effective date of your termination to exercise
such options.
(c) In the event of your Termination for Death or Disability, the vesting
of your unvested shares of restricted stock and the vesting and exercisability
of your outstanding options to purchase Symantec common stock shall be
immediately accelerated by two years and your designated beneficiary or, in the
absence of such designation, your estate will be entitled to a single lump sum
death benefit equal to $5,000,000 in accordance with Symantec's life insurance
plan in the case of your death, or you will be entitled to disability payments
of up to $20,000 per month after 180 days of continuous disability in
accordance with Symantec's long term disability plan, and you or your estate
will have until one year after the effective date of your death or disability to
exercise any options that were vested as of the effective date of your
termination, including those that were accelerated as of the effective date of
your death or disability. Symantec agrees to maintain during the course of your
employment insurance and disability coverage on your life in the amounts set
forth above.
(d) If your severance and other benefits provided for in this Section 8
constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code and, but for this subsection, would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code, then your
severance and other benefits under this Section 8 will be payable, at your
election, either in full or in such lesser amount as would result, after taking
into account the applicable federal, state and local income taxes and the
excise tax imposed by Section 4999, in your receipt on an after-tax basis of
the greatest amount of severance and other benefits.
(e) No payments due you hereunder shall be subject to mitigation or
offset.
9. Indemnification Agreement. Upon your commencement of employment with
Symantec, Symantec will enter into its standard form of indemnification
agreement for officers and directors, a copy of which is attached to this letter
as Exhibit C, to indemnify you against certain liabilities you may incur as an
officer or director of Symantec.
10. Confidential Information and Invention Assignment Agreement. Upon
your commencement of employment with Symantec, you will be required to sign its
standard form of Employee Agreement, a copy of which is attached to this letter
as Exhibit D, to protect Symantec's confidential information and intellectual
property.
11. Nonsolicitation. During the term of your employment with Symantec and
for one year thereafter, you will not, on behalf of yourself or any third
party, solicit or attempt to induce any employee of Symantec to terminate his
or her employment with Symantec.
12. Arbitration. The parties agree that any dispute regarding the
interpretation or enforcement of this agreement shall be decided by
confidential, final and binding arbitration
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conducted by Judicial Arbitration and Mediation Services ("JAMS") under the
then existing JAMS rules rather than by litigation in court, trial by jury,
administrative proceeding or in any other forum.
13. Miscellaneous.
(a) Authority to Enter into Agreement. Symantec represents that its
Chairman of the Board has due authority to execute and deliver this agreement
on behalf of Symantec.
(b) Absence of Conflicts. You represent that upon the Commencement
Date your performance of your duties under this agreement will not breach any
other agreement as to which you are a party.
(c) Attorneys Fees. If a legal action or other proceeding is brought
for enforcement of this agreement because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and costs incurred, both before and after judgment,
in addition to any other relief to which they may be entitled.
(d) Successors. This agreement is binding on and may be enforced by
Symantec and its successors and assigns and is binding on and may be enforced
by you and your heirs and legal representatives. Any successor to Symantec or
substantially all of its business (whether by purchase, merger, consolidation
or otherwise) will in advance assume in writing and be bound by all of
Symantec's obligations under this agreement.
(e) Notices. Notices under this agreement must be in writing and
will be deemed to have been given when personally delivered or two days after
mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid. Mailed notices to you will be addressed to you at the home
address which you have most recently communicated to Symantec in writing.
Notices to Symantec will be addressed to its General Counsel at Symantec's
corporate headquarters.
(f) Waiver. No provision of this agreement will be modified or
waived except in writing signed by you and an officer of Symantec duly
authorized by its Board of Directors. No waiver by either party of any breach
of this agreement by the other party will be considered a waiver of any other
breach of this agreement.
(g) Entire Agreement. This agreement, including the attached
exhibits, represents the entire agreement between us concerning the subject
matter of your employment by Symantec and supersedes any agreements prior to
April 11, 1999.
(h) Governing Law. This agreement will be governed by the laws of
the State of California without reference to conflict of laws provisions.
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(i) Legal Expenses. Symantec shall reimburse your reasonable and
documented legal expenses in connection with this agreement in an amount not to
exceed $15,000.
Xxxx, we are very pleased to extend this offer of employment to you and
look forward to your joining Symantec as its President and Chief Executive
Officer. Please indicate your acceptance of the terms of this agreement by
signing in the place indicated below.
Very truly yours, Accepted April 11, 1999
/s/ XXXX X. XXXXXX /s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxx Xxxx X. Xxxxxxxx
Chairman of the Board of Directors
Symantec Corporation
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