EXECUTIVE SEVERANCE AGREEMENT
February 8, 2000
Xxxxxxxx X. Xxxxx
0000 XX 000xx Xxxxx
Xxxxxxxx, Xxxxxx 00000 EXECUTIVE
RadiSys Corporation
an Oregon corporation
0000 XX Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxx 00000 THE COMPANY
1. EMPLOYMENT RELATIONSHIP. Executive is currently employed by the Company
as President and Chief Executive Officer. Executive also is currently Chairman
of the Board of Directors. Executive and the Company acknowledge that either
party may terminate this employment relationship at any time and for any or no
reason, provided that each party complies with the terms of this Agreement.
2. RELEASE OF CLAIMS. In consideration for and as a condition precedent to
receiving the severance benefits outlined in this Agreement, Executive agrees to
execute a Release of Claims in the form attached as EXHIBIT A ("Release of
Claims"). Executive promises to execute and deliver the Release of Claims to the
Company within the later of (a) 45 days from the date Executive receives the
Release of Claims or (b) the last day of Executive's active employment.
3. ADDITIONAL COMPENSATION UPON CERTAIN TERMINATION EVENTS.
3.1 GENERAL. In the event of a Termination of Executive's Employment
(as defined in Section 6.1 of this Agreement) other than for Cause (as
defined in Section 6.2 of this Agreement), death, or Disability (as defined
in Section 6.3 of this Agreement), or in the circumstances described in
Section 3.2, and contingent upon Executive's execution of the Release of
Claims and compliance with Section 8, Executive shall be entitled to the
following benefits:
(a) As severance pay and in lieu of any other compensation for
periods subsequent to the date of termination, the Company shall pay
Executive, in a single payment after employment has ended and eight days have
passed following execution of the Release of Claims without revocation, an
amount in cash equal to 12 months of Executive's annual base pay at the rate
in effect immediately prior to the date of termination.
(b) Executive is entitled to extend coverage under any group
health plan in which Executive and Executive's dependents are enrolled at the
time of termination of employment under the COBRA continuation laws for the
18-month statutory period, or so long as Executive remains eligible under
COBRA. The Company will pay Executive a lump sum payment in an amount
equivalent to the reasonably estimated cost Executive may incur to extend for
a period of 12 months under the COBRA continuation laws Executive's group
health and dental plan coverage in effect at the time of termination.
Executive may use this payment, as well as any payment made under Section
3.1(a), for such COBRA continuation coverage or for any other purpose.
(c) Executive will be entitled to receive an amount equal to a
prorated portion of the Executive's target bonus amount under any cash
incentive plans in effect at the time of a Termination of Executive's
Employment. For example, if there is a target annual bonus amount and a
target semi-annual bonus amount in place, the Executive will be entitled to
receive a pro rata portion of the annual target bonus amount for the year in
which the Termination occurred and a pro rata portion of the semi-annual
target bonus amount for the six-month period in which the Termination
occurred. The proration will be calculated based on the number of days in the
applicable period divided by the number of days the Executive was employed in
the applicable period up to and including the date of the Termination of
Executive's Employment. The amount payable pursuant to this section shall be
paid on the same date that the Section 3.1(a) payment is payable.
(d) All stock options granted to the Executive under the
Company's 1995 Stock Incentive Plan or any other equity plan that would vest
during the 12-month period following the date of Termination shall become
immediately exercisable in full in accordance with the applicable provisions
of the relevant option agreement and plan.
3.2. CHANGE OF CONTROL. In the event of a Termination of Executive's
Employment (including solely for this Section 3.2 a termination by the
Executive for Good Reason as defined in Section 6.1) other than for Cause,
death or Disability, within 18 months following a Change of Control (as
defined in Section 6.4 of this Agreement) and contingent upon Executive's
execution of the Release of Claims and compliance with Section 8, Executive
shall be entitled to the following benefits in lieu of and not in addition to
the benefits described in Section 3.1:
(a) As severance pay and in lieu of any other compensation for
periods subsequent to the date of termination, the Company shall pay
Executive, in a single payment after employment has ended and eight days have
passed following execution of the Release of Claims without revocation, an
amount in cash equal to 24 months of Executive's annual base pay at the rate
in effect immediately prior to the date of termination.
(b) Executive is entitled to extend coverage under any group
health plan in which Executive and Executive "s dependents are enrolled at
the time of termination of employment under the COBRA continuation laws for
the 18-month statutory period, or so long as Executive remains eligible under
COBRA. The Company will pay Executive a lump sum
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payment in an amount equivalent to the reasonably estimated cost Executive
may incur to extend for a period of 24 months under the COBRA continuation
laws Executive's group health and dental plan coverage in effect at the time
of termination. Executive may use this payment, as well as any payment made
under Section 3.2(a), for such COBRA continuation coverage or for any other
purpose.
Executive will be entitled to receive an amount equal to the Executive's full
target bonus amount for the year and any partial year period in which the
Termination occurred under any cash incentive plans in effect at the time of
a Termination of Executive's Employment. For example, if there is a target
annual bonus amount and a target semi-annual bonus amount in place, the
Executive will be entitled to receive the full annual target bonus amount for
the year in which the Termination occurred and the full semi-annual target
bonus amount for the six-month period in which the Termination occurred. The
amount payable pursuant to this section shall be paid on the same date that
the Section 3.2(a) payment is payable.
(d) All stock options granted to the Executive under the
Company's 1995 Stock Incentive Plan or any other equity plan shall become
immediately exercisable in full in accordance with the applicable provisions
of the relevant option agreement and plan.
3.3 Notwithstanding the foregoing, if the total payments and benefits
to be paid to or for the benefit of Executive under this Agreement would
cause any portion of those payments and benefits to be "parachute payments"
as defined in section 280G(b)(2) of the Internal Revenue Code of 1986, as
amended, or any successor provision, the total payments and benefits to be
paid to or for the benefit of Executive under this Agreement shall be reduced
to an amount that would not cause any portion of those payments and benefits
to constitute "parachute payments."
4. WITHHOLDING; SUBSEQUENT EMPLOYMENT.
4.1 WITHHOLDING. All payments provided for in this Agreement are
subject to applicable withholding obligations imposed by federal, state and
local laws and regulations.
4.2 OFFSET. The amount of any payment provided for in this Agreement
shall not be reduced, offset or subject to recovery by the Company by reason
of any compensation earned by Executive as the result of employment by
another employer after termination.
5. OTHER AGREEMENTS. If that severance benefits are payable to Executive
under any other agreement with the Company in effect at the time of
termination (including but not limited to any employment agreement, but
excluding for this purpose any stock option agreement that may provide for
accelerated vesting or related benefits upon the occurrence of a change in
control), the benefits provided in this Agreement shall not be payable to
Executive. Executive may, however, elect to receive all of the benefits
provided for in this Agreement in lieu of all of the benefits provided in all
such other agreements. Any such election shall be
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made with respect to the agreements as a whole, and Executive cannot select
some benefits from one agreement and other benefits from this Agreement.
6. DEFINITIONS.
6.1 TERMINATION OF EXECUTIVE'S EMPLOYMENT. For the purposes of
Section 3.1, Termination of Executive's Employment means that the Company has
terminated Executive's employment with the Company (including any subsidiary
of the Company). Solely for purposes of Section 3.2, Termination of
Executive's Employment shall include termination by Executive by written
notice to the Company also for "Good Reason" based on:
(a) a significant reduction by the Company or the surviving company
in Executive's base pay as in effect immediately prior to the Change of
Control, other than a salary reduction that is part of a general salary
reduction affecting employees generally:
(b) a significant reduction by the Company or the surviving company
in total benefits available to Executive under cash incentive, stock
incentive and other employee benefit plans after the Change of Control
compared to the total package of such benefits as in effect prior to the
Change of Control;
(c) The Company or the surviving company requires Executive to be
based more than 50 miles from where Executive's office is located
immediately prior to the Change of Control except for required travel on
company business to an extent substantially consistent with the business
travel obligations which Executive undertook on behalf of the Company
prior to the Change of Control; or
(d) The assignment of Executive to a different title, job or
responsibilities that results in a material decrease in the level of
responsibility of Executive with respect to the surviving company after
the Change of Control when compared to Executive's level of
responsibility for the Company's operations prior to the Change of
Control; PROVIDED, that Good Reason shall not exist if Executive
continues to have substantially the same or a greater general level of
responsibility with respect to the former operations of the Company after
the Change of Control as Executive had prior to the Change of Control
even if the former such operations are a subsidiary or division of the
surviving company.
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6.2 CAUSE. Termination of Executive's Employment for "Cause" shall mean
termination upon (a) the willful and continued failure by Executive to
perform substantially Executive's reasonably assigned duties with the Company
(other than any such failure resulting from Executive's incapacity due to
physical or mental illness) after a demand for substantial performance is
delivered to Executive by the Board of Directors, the Chief Executive Officer
or the President of the Company which specifically identifies the manner in
which the Board of Directors or the Company believes that Executive has not
substantially performed Executive's duties or (b) the willful engaging by
Executive in illegal conduct which is materially and demonstrably injurious
to the Company. No act, or failure to act, on Executive's part shall be
considered "willful" unless done, or omitted to be done, by Executive without
reasonable belief that Executive's action or omission was in, or not opposed
to, the best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board of
Directors shall be conclusively presumed to be done, or omitted to be done,
by Executive in the best interests of the Company.
6.3 CHANGE OF CONTROL. A Change of Control shall mean that one of the
following events has taken place:
(a) The shareholders of the Company approve one of the following:
(i) Any merger or statutory plan of exchange involving the
Company ("Merger") in which the Company is not the continuing or
surviving corporation or pursuant to which Common Stock would be
converted into cash, securities or other property, other than a
Merger involving the Company in which the holders of Common Stock
immediately prior to the Merger continue to represent more than
50 percent of the voting securities of the surviving corporation
after the Merger; or
(ii) Any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company.
(b) A tender or exchange offer, other than one made by the Company,
is made for Common Stock (or securities convertible into Common Stock)
and such offer results in a portion of those securities being purchased
and the offer or after the consummation of the offer is the beneficial
owner (as determined pursuant to Section 13(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), directly or indirectly, of
securities representing more than 50 percent of the voting power of
outstanding securities of the Company.
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(c) The Company receives a report on Schedule 13D of the Exchange Act
reporting the beneficial ownership by any person of securities
representing more than 50 percent of the voting power of outstanding
securities of the Company, except that if such receipt shall occur during
a tender offer or exchange offer described in (b) above, a Change of
Control shall not take place until the conclusion of such offer.
Notwithstanding anything in the foregoing to the contrary, no Change of Control
shall be deemed to have occurred for purposes of this Agreement by virtue of any
transaction which results in Executive, or a group of persons which includes
Executive, acquiring, directly or indirectly, securities representing
20 percent or more of the voting power of outstanding securities of the Company.
6.4 DISABILITY. "Disability" means Executive's absence from
Executive's full-time duties with the Company for 180 consecutive days as a
result of Executive's incapacity due to physical or mental illness, unless
within 30 days after notice of termination by the Company following such
absence Executive shall have returned to the full-time performance of
Executive's duties. This Agreement does not apply if the Executive is
terminated due to Disability.
7. SUCCESSORS; BINDING AGREEMENT. This Agreement shall be binding on and
inure to the benefit of the Company and its successors and assigns. This
Agreement shall inure to the benefit of and be enforceable by Executive and
Executive's legal representatives, executors, administrators and heirs.
8. RESIGNATION OF CORPORATE OFFICES; REASONABLE ASSISTANCE. Executive will
resign Executive's office, if any, as a director, officer or trustee of the
Company, its subsidiaries or affiliates and of any other corporation or trust of
which Executive serves as such at the request of the Company, effective as of
the date of termination of employment. Executive further agrees that, if
requested by the Company or the surviving company following a Change of Control,
Executive will continue his employment with the Company or the surviving company
for a period of up to six months following the Change of Control in any capacity
requested, consistent with Executive's area of expertise, provided that the
Executive receives the same salary and substantially the same benefits as in
effect prior to the Change of Control. Executive agrees to provide the Company
such written resignation(s) and assistance upon request and that no severance
will be paid until after such resignation(s) or services are provided.
9. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Oregon
10. AMENDMENT. No provision of this Agreement may be modified unless
such modification is agreed to in a writing signed by Executive and the
Company.
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11. SEVERABILITY. If any of the provisions or terms of this Agreement
shall for any reason be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other terms of this Agreement, and this
Agreement shall be construed as if such unenforceable term had never been
contained in this Agreement.
RADISYS CORPORATION
By: /s/ XXXXX X. XXXXXXXX XXXXXXXX X. XXXXX 2-24-2000
--------------------------- ------------------------------------
Xxxxx Xxxxxxxx 2-28-00 Xxxxxxxx X. Xxxxx
VICE PRESIDENT
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EXHIBIT A
RELEASE OF CLAIMS
1. PARTIES.
The parties to Release of Claims (hereinafter "Release") are Xxxxxxxx X.
Xxxxx and RadiSys Corporation, an Oregon corporation, as hereinafter defined.
1.1 EXECUTIVE.
For the purposes of this Release, "Executive" Xxxxxxxx X. Xxxxx and
his or her attorneys, heirs, executors, administrators, assigns, and spouse.
1.2 THE COMPANY.
For purposes of this Release the "Company" means RadiSys
Corporation, an Oregon corporation, its predecessors and successors,
corporate affiliates, and all of each corporation's officers, directors,
employees, insurers, agents, or assigns, in their individual and
representative capacities.
2. BACKGROUND AND PURPOSE.
Executive was employed by Company. Executive's employment is ending
effective __________ under the conditions described in Section [3.1] [3.2] of
the Executive Severance Agreement ("Agreement").
The purpose of this Release is to settle, and the parties hereby settle,
fully and finally, any and all claims Executive may have against Company,
whether asserted or not, known or unknown, including, but not limited to, claims
arising out of or related to Executive's employment, any claim for reemployment,
or any other claims whether asserted or not, known or unknown, past or future,
that relate to Executive's employment, reemployment, or application for
reemployment.
3. RELEASE.
Executive waives, acquits and forever discharges Company from any
obligations Company has and all claims Executive may have including but not
limited to obligations and/or claims arising from the Agreement or any other
document or oral agreement relating to employment compensation, benefits
severance or post-employment issues. Executive hereby releases Company from any
and all claims, demands, actions, or causes of action, whether known or unknown,
arising from or related in any way to any employment of or past or future
failure or refusal to employ Executive by Company, or any other past or future
claim (except
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as reserved by this Release or where expressly prohibited by law) that
relates in any way to Executive's employment, compensation, benefits,
reemployment, or application for employment, with the exception of any claim
Executive may have against Company for enforcement of this Release. This
release includes any and all claims, direct or indirect, which might
otherwise be made under any applicable local, state or federal authority,
including but not limited to any claim arising under the Oregon statutes
dealing with employment, discrimination in employment, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Americans With
Disabilities Act, the Family and Medical Leave Act of 1993, the Equal Pay Act
of 1963, Executive Order 11246, the Rehabilitation Act of 1973, the Uniformed
Services Employment and Reemployment Rights Act of 1994, the Age
Discrimination in Employment Act, the Fair Labor Standards Act, Oregon wage
and hour statutes, all as amended, any regulations under such authorities,
and any applicable contract, tort, or common law theories.
3.1 RESERVATIONS OF RIGHTS.
This Release shall not affect any rights which Executive may have
under any medical insurance, disability plan, workers' compensation,
unemployment compensation, applicable company stock incentive plan(s),
indemnifications, or the 401(k) plan maintained by the Company.
3.2 NO ADMISSION OF LIABILITY.
It is understood and agreed that the acts done and evidenced hereby
and the release granted hereunder is not an admission of liability on the
part of Executive or Company, by whom liability has been and is expressly
denied.
4. CONSIDERATION TO EXECUTIVE.
After receipt of this Release signed by Executive, and the
expiration of the seven-day revocation period provided by the Older Workers
Benefit Protection Act without Executive's revocation, Company shall pay the
Executive the severance benefits as provided in Section [3.1] [3.2] of the
Agreement.
5. NO DISPARAGEMENT.
Executive agrees that henceforth Executive will not disparage or
make false or adverse statements about Company. The Company should report to
Executive any actions or statements that are attributed to Executive that the
Company believes are disparaging. The Company may take actions consistent
with breach of this Release should it determine that Executive has disparaged
or made false or adverse statements about Company. The Company agrees to
follow the applicable policy(ies) regarding release of employment reference
information.
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6. CONFIDENTIALITY, PROPRIETARY, TRADE SECRET AND RELATED INFORMATION.
Executive acknowledges the duty and agrees not to make unauthorized
use or disclosure of any confidential, proprietary or trade secret
information learned as an employee about Company, its products, customers and
suppliers, and covenants not to breach that duty. Moreover, Executive
acknowledges that, subject to the enforcement limitations of applicable law,
the Company reserves the right to enforce the terms of Executive's Employee
Agreement with Company and any paragraph(s) therein. Should Executive,
Executive's attorney or agents be requested in any judicial, administrative,
or other proceeding to disclose confidential, proprietary or trade secret
information Executive learned as an employee of Company, Executive shall
promptly notify the Company of such request by the most expeditious means in
order to enable the Company to take any reasonable and appropriate action to
limit such disclosure.
7. SCOPE OF RELEASE.
The provisions of this Release shall be deemed to obligate, extend
to, and inure to the benefit of the parties; Company's parents, subsidiaries,
affiliates, successors, predecessors, assigns, directors, officers, and
employees; and each parties insurers, transferees, grantees, legatees, agents
and heirs, including those who may assume any and all of the above-described
capacities subsequent to the execution and effective date of this Release.
8. OPPORTUNITY FOR ADVICE OF COUNSEL.
Executive acknowledges that Executive has been encouraged to seek
advice of counsel with respect to this Release and has had the opportunity to
do so.
9. ENTIRE RELEASE.
This Release and the Agreement signed by Executive contain the
entire agreement and understanding between the parties and, except as
reserved in paragraph 3, supersede and replace all prior agreements, written
or oral, prior negotiations and proposed agreements, written or oral.
Executive and Company acknowledge that no other party, nor agent nor attorney
of any other party, has made any promise, representation, or warranty,
express or implied, not contained in this Release concerning the subject
matter of this Release to induce this Release, and Executive and Company
acknowledge that they have not executed this Release in reliance upon any
such promise, representation, or warranty not contained in this Release.
10. SEVERABILITY.
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Every provision of this Release is intended to be severable. In the
event any term or provision of this Release is declared to be illegal or
invalid for any reason whatsoever by a court of competent jurisdiction or by
final and unappealed order of an administrative agency of competent
jurisdiction, such illegality or invalidity should not affect the balance of
the terms and provisions of this Release, which terms and provisions shall
remain binding and enforceable.
11. PARTIES MAY ENFORCE RELEASE.
Nothing in this Release shall operate to release or discharge any
parties to this Release or their successors, assigns, legatees, heirs, or
personal representatives from any rights, claims, or causes of action arising
out of, relating to, or connected with a breach of any obligation of any
party contained in this Release.
12. COSTS AND ATTORNEY'S FEES.
In the event of any administrative or civil action to enforce the
provisions of this Release, the Company shall pay Executive's reasonable
attorneys' fees through trial and/or on appeal.
13. ACKNOWLEDGMENT.
Executive acknowledges that the Release provides severance pay and
benefits which the Company would otherwise have no obligation to provide.
14. REVOCATION.
As provided by the Older Workers Benefit Protection Act,
Executive's is entitled to have forty-five (45) days to consider this
Release. For a period of seven (7) days from execution of this Release,
Executive may revoke this Release. Upon receipt of Executive's signed Release
and the end of the revocation period, payment by Company as described in
paragraph 4 above will be forwarded by mail in a timely manner as provided
herein.
____________________________ Dated:__________________ _____, ____
[Name of Executive]
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XXXXX XX XXXXXX - )
) ss.
County of_________)
Personally appeared the above named _____________________________ and
acknowledged the foregoing instrument to be his or her voluntary act and deed.
Before me: _______________________________________
Notary Public for______________________
My commission expires:_________________
COMPANY
By:________________________________ Dated:_________________________________
Its:_______________________________
On Behalf of "Company"
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