FORM OF CHANGE OF CONTROL AGREEMENT
Exhibit
10.1
FORM
OF CHANGE OF CONTROL AGREEMENT
This
CHANGE OF CONTROL AGREEMENT (this "Agreement") is dated as of September __, 2008
and is entered into by and between _______________ ("Executive") and Adept
Technology, Inc., a Delaware corporation (the "Company").
BACKGROUND
WHEREAS,
Executive is presently an officer and key employee of the Company;
WHEREAS,
the Board of Directors (the “Board”) of the Company has determined that it is in
the best interests of the Company and its stockholders to ensure the Executive’s
continued dedication and active participation in the business of the Company;
and
WHEREAS,
in order to induce Executive to remain in the employ of the Company and in
consideration of Executive’s agreeing to remain in the employ of the Company,
the parties desire to specify the equity vesting acceleration which shall be due
to Executive in the event that his employment with the Company is terminated
under specified circumstances; and
NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration the receipt of which is hereby acknowledged, it is hereby agreed
as follows:
AGREEMENT
1. Term of
Agreement. This Agreement shall be effective from the date
first written above and, subject to Section 4, shall extend to and automatically
terminate one day after Executive's termination of employment with the Company
for any reason (but shall not terminate any obligations then owed
hereunder). No termination of this Agreement shall limit, alter or
otherwise affect Executive's rights hereunder with respect to a Change of
Control which has occurred prior to such termination, including without
limitation Executive's right to receive the various benefits
hereunder.
2. Purpose of
Agreement. The purpose of this Agreement is to provide that,
in the event of a "Change of Control," Executive may become entitled to receive
certain additional benefits, as described herein, in the event of his
termination under specified circumstances.
3. Change of
Control. As used in this Agreement, the phrase "Change of
Control" shall mean the consummation of any of the following after the date of
this Agreement:
(i) any
merger or consolidation in which the voting securities of the Company owned by
the shareholders of the Company immediately prior to such merger or
consolidation do not represent, after conversion if applicable, more than fifty
percent (50%) of the total voting power of the surviving controlling entity
outstanding immediately after such merger or consolidation; provided that any
person who (1) was a
beneficial
owner (within the meaning of Rules 13d-3 and 13d-5 promulgated under the
Exchange Act) of the voting securities of the Company immediately prior to such
merger or consolidation, and (2) is a beneficial owner (or is part of a group of
related persons that is a beneficial owner) of more than 20% of the voting
securities of the Company immediately after such merger or consolidation (other
than Special Situations Funds and its affiliates), shall be excluded from the
list of "shareholders of the Company" immediately prior to such merger or
consolidation" for purposes of the preceding calculation)."
(ii) the
sale of all or substantially all of the Company's assets to any other person or
entity (other than a wholly-owned subsidiary),
(iii) any
"person" (as such term is used in sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the "beneficial owner" (as defined in
Rule 13d-3 of that Act), directly or indirectly, of securities of the Company
representing more than forty percent (40%) of the total voting power represented
by the Company's then outstanding voting securities (other than Special
Situations Funds and its affiliates),
(iv) the
dissolution or liquidation of the Company,
(v) a
change in the composition of the Board occurring within a two-year period, as a
result of which fewer than a majority of the directors are Incumbent Directors
("Incumbent Directors" means directors who either (A) are directors of the
Company as of the date of this Agreement or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination, but will not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Board), or
(vi) any
other event substantially similar in substance and result to an event set forth
in clauses (i) through (v) as determined by the Compensation Committee of the
Board of Directors of the Company.
4. Effect of a Change of
Control. In the event of a Change of Control, Sections 5 through 13 of
this Agreement shall become applicable to Executive. These Sections shall
continue to remain applicable until the second anniversary of the date upon
which the Change of Control occurs. On such second anniversary date, and
provided that the employment of Executive has not been terminated on account of
a Qualifying Termination (as defined in Section 5 below), this Agreement shall
terminate and be of no further force or effect.
5. Qualifying
Termination. If within two years following a Change of Control
Executive's employment with the Company is terminated by the Company or
Executive resigns for good reason such termination shall be conclusively
considered a "Qualifying Termination" unless:
(a) Executive
voluntarily terminates his employment with the Company. Executive,
however, shall not be considered to
have voluntarily terminated his employment with the Company if he elects to
terminate his employment because his overall compensation plan is not
substantially similar and in all events at least as favorable as his
compensation prior to the Change of Control or his authority or duties are not
substantially similar taking into consideration that the Executive is likely to
know longer be a senior executive officer of a public company and may not be a
senior executive officer of the surviving corporation although remaining a
leader of the acquired business. For such purposes, Executive’s
authority or duties shall be considered to not be "substantially the same" if,
without Executive’s express and voluntary written consent, (i) there is any
substantial diminution or adverse modification in Executive's overall position
or responsibilities; (ii) the Company fails to timely pay or provide to
Executive any portion of Executive’s compensation or benefits then due to
Executive, and such failure is not remedied by the Company within ten business
days after the Company's receipt of written notice from Executive of such
failure; and (iii) there is a relocation of Executive’s principal place of
employment that will result in an increase of more than thirty miles in
Executive’s one-way commute as compared to Executive’s one-way commute prior to
the Change of Control.
(b) The
termination is on account of Executive's death or Disability. For
such purposes, "Disability" shall mean a physical or mental incapacity as a
result of which Executive becomes unable to continue the performance of his
responsibilities for the Company for a period of three months.
(c) Executive
is involuntarily terminated for "Cause." For this purpose, "Cause" shall mean: a
good faith determination by the Board that Executive (i) committed a felony or a
crime involving fraud, dishonesty or moral turpitude under the laws of the
United States, any state thereof, or any other jurisdiction where Executive may
reside full- or part-time; (ii) committed, or participated in, a fraud or act of
dishonesty against the Company; (iii) willfully and deliberately refused to
comply with a lawful instruction of the Board of Directors, which refusal is not
remedied by Executive within a reasonable period of time after his receipt of
written notice from the Company identifying the refusal, so long as the
instruction is consistent with the scope and responsibilities of Executive's
position; or (iv) intentionally and materially violated any material contract or
agreement between Executive and the Company or the Company’s Code of Business
Conduct or any of the Company’s policies or any statutory duty owed to the
Company; provided,
however, that no act or failure to act by Executive shall be deemed to
constitute Cause under this subsection (iv) if done, or omitted to be done, in
good faith and with the reasonable belief that the action or omission was legal
and in the best interests of the Company.
6. Vesting
Acceleration. If Executive's employment is terminated as a
result of a Qualifying Termination, subject to this Section 6, all of
Executive's unvested stock options, restricted shares or other equity
compensation granted under the Company’s equity compensation plans other than
its employee stock purchase plan shall immediately become fully vested and
exercisable, provided
that such automatic acceleration shall be contingent upon execution and
delivery by Executive of a release and waiver of claims in a form substantially
similar to the form generally used by the Company to the Company.
7. Section 409A
Compliance.
(a) Notwithstanding any provision of this Agreement to the
contrary, if, at the time of Executive’s termination of employment with the
Company, he is a “specified employee” as defined in Section 409A of the Internal
Revenue Code (the “Code”), and one or more of the payments or benefits received
or to be received by Executive pursuant to this Agreement would constitute
deferred compensation under Section 409A payable on account of a
“separation from service” that is not exempt from Section 409A as involuntary
separation pay or a short-term deferral (or otherwise), such payment or benefit (a “Deferred Payment”) will be
provided under this Agreement at the date which is the earlier of (A) the date which is six months after his “separation
from service” or (B) the date of his death . The provisions of this
Section shall only apply to the extent required to avoid Executive’s incurrence
of any penalty tax or interest under Section 409A of the Code or any regulations
or Treasury guidance promulgated thereunder. In addition, if any provision
of this Agreement would cause Executive to incur any penalty tax or interest
under Section 409A of the Code or any regulations or Treasury guidance
promulgated thereunder, the Company shall reform such provision to maintain to
the maximum extent practicable the original intent of the applicable provision
without violating the provisions of Section 409A of the
Code.
(b) In the event the six-month delay described in this
Section applies, the Company shall make an irrevocable contribution in the
amount of the Deferred Payment to a rabbi trust which shall take the form
of the model rabbi trust described in Internal Revenue Service Revenue Procedure
92-64, which amount (along with any net income received by the trust) shall be
paid by the trust to Executive on the six-month anniversary of his termination
of employment, and the trust shall terminate at such time. The trustee
shall be chosen by the Company in its reasonable discretion. The Company
shall pay the reasonable expenses of establishing and maintaining the
trust.
8. Excise Tax
Reduction. Anything in this Agreement to the contrary
notwithstanding, if any benefit Executive would receive from the Company
pursuant to this Agreement or otherwise (a “Payment”)
would (i) constitute a “parachute payment” within the meaning of Section 280G of
the Code, and (ii) but for this sentence, be subject to the excise tax imposed
by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal
to the Reduced Amount. The “Reduced Amount” shall be either (x) the
largest portion of the Payment that would result in no portion of the Payment
being subject to the Excise Tax or (y) the largest portion of the Payment, up to
and including the total Payment, whichever amount, after taking into account all
applicable federal, state and local employment taxes, income taxes, and the
Excise Tax (all computed at the highest applicable marginal rate), results in
the Executive’s receipt, on an after-tax basis, of the greater amount of the
Payment notwithstanding that all or some portion of the Payment may be subject
to the Excise Tax. Where acceleration of vesting of stock award
compensation is reduced so that the Payment equals the Reduced Amount, such
acceleration of vesting shall be cancelled in the reverse order of the date of
grant of Executive’s stock option or stock awards unless Executive elects in
writing a different order for cancellation.
9. Amendment to Offer Letter
Agreement and Option Agreements. All option and other equity
compensation agreements entered into by Executive and the Company are
supplemented with the provisions hereof regarding acceleration of vesting.
Except as may otherwise be provided herein, this Agreement contains the
complete, final and exclusive agreement of the parties relating to the terms and
conditions contained herein, and supersedes all prior and contemporaneous oral
and written agreements or arrangements between the parties relating to the
matters agreed to in this Agreement. Notwithstanding the foregoing,
except as specified in this Section 9, this Agreement shall not have any effect
upon any other employment agreement, severance agreement, employee agreement,
indemnification agreement, confidentiality agreement, bonus plans, benefit plans
and other agreements or arrangements in effect between the Company and the
Executive. No provision of any future award of an option or other
equity compensation, equity incentive plan or other agreement between the
Company and Executive shall constitute a modification to any provision of this
Agreement, even if such future provision is inconsistent with a provision of
this Agreement, unless and only to the extent that such future provision
specifically refers to this Agreement and includes a statement that the parties
expressly intend to modify a provision of this Agreement.
10. Non-Exclusivity of
Rights. Subject to Sections 6 and 9 hereof, nothing in this
Agreement shall prevent or limit Executive's continuing or future participation
in any benefit, bonus, incentive or other plan or program provided by the
Company or any of its affiliates and for which Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as Executive may have
under any stock option or other agreements with the Company or any of its
affiliates. Except as otherwise provided in Sections 6 or 9 hereof,
amounts which are vested benefits or which Executive is otherwise entitled to
receive under any plan or program of the Company or any of its affiliated
companies at or subsequent to the date of any Qualified Termination shall be
payable in accordance with such plan or program.
11. Tax
Matters. Subject to the terms of this Agreement, all payments
required to be made by the Company under this Agreement to Executive shall be
subject to the withholding of such amounts, if any, relating to tax and other
payroll deductions as the Company may reasonably determine should be withheld
pursuant to any applicable law or regulation.
12. Successors.
(a) This
Agreement is personal to Executive, and without the prior written consent of the
Company shall not be assignable by Executive other than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by Executive's legal representatives.
(b) The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the
Company.
13. Governing Law; Waiver of
Jury Trial. This Agreement is made and entered into in the
State of California, and the internal laws of California shall govern its
validity and interpretation in the performance by the parties hereto of their
respective duties and obligations hereunder. Each of the parties
irrevocably consents to the jurisdiction of the state courts in San Francisco
City and County, California and the federal courts in the Northern District of
California in any and all actions between the parties arising
hereunder. THE PARTIES IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY
AS TO ALL CLAIMS UNDER THIS AGREEMENT.
14. Modifications;
Waivers. This Agreement may be amended or modified only by an
instrument in writing executed by all of the parties hereto. No term,
covenant or condition of this Agreement or any breach thereof shall be deemed
waived, except with the written consent of the party against whom the waiver is
claimed, and any waiver or any such term, covenant, condition or breach shall be
narrowly construed to apply only to the specific circumstances in which it is
given and shall not be deemed to be a waiver of any preceding or succeeding
breach of the same or any other term, covenant, condition or
breach. No failure to exercise or delay in exercising any power,
right, privilege or remedy under this Agreement, and no course of dealing
between the parties with respect to any power, right, privilege or remedy under
this Agreement, shall operate as a waiver of such power, right, privilege or
remedy; and no single or partial exercise of any such power, right, privilege or
remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy under this Agreement.
15. Notices. Any
notice or communications required or permitted to be given to the parties hereto
shall be delivered personally or be sent by United States registered or
certified mail, postage prepaid and return receipt requested, and addressed or
delivered as follows, or at such other addresses the party addressed may have
substituted by notice pursuant to this Section:
|
Adept
Technology
0000
Xxxxx Xxxxx
Xxxxxxxxx,
XX 00000
Attention: Chairman
of the Board
|
[Executive]
|
16. Captions. The
captions of this Agreement are inserted for convenience and do not constitute a
part hereof.
17. Severability. In
case any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein and there shall be deemed substituted for such
invalid, illegal or unenforceable provision such other provision as will most
nearly accomplish the intent of the parties to the extent permitted by the
applicable law. In case this Agreement, or any one or more of the
provisions hereof, shall be held to be invalid, illegal or unenforceable within
any governmental jurisdiction or subdivision thereof, this Agreement or any such
provision thereof shall not as a consequence thereof be deemed to be invalid,
illegal or unenforceable in any other governmental jurisdiction or subdivision
thereof.
18. Interpretation. The
Executive has been encouraged to consult with the Executive’s own
independent counsel and tax advisors with respect to the terms of this
Agreement. The Parties acknowledge that each party or its counsel has
reviewed and revised, or had an opportunity to review and revise, this
Agreement, and any rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.
19. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which shall together constitute one in the same
Agreement.
[Signature
page follows]
IN
WITNESS HEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first written above in Livermore,
California.
Dated: September
___,
2008
ADEPT TECHNOLOGY, INC.
By: ____________________________
Dated:
September ___,
2008 EXECUTIVE
By: ____________________________
