AKAMAI TECHNOLOGIES, INC. FORM OF CHANGE OF CONTROL AND SEVERANCE AGREEMENT
EXHIBIT 10.35
AKAMAI TECHNOLOGIES, INC.
This Change of Control and Severance Agreement (the “Agreement”) is made and entered into
by and between __________________ (the “Executive”) and Akamai Technologies, Inc. (the
“Company”), effective as of the last date set forth by the signatures of the parties below (the
“Effective Date”).
RECITALS
A. It is expected that the Company from time to time will consider the possibility of its
acquisition by another company or another Change of Control Event (as defined below). The Board of
Directors of the Company (the “Board”) recognizes that such consideration, and the possibility that
the Executive’s employment could be terminated by the Company for a reason other than for cause,
can be distractions to the Executive and can cause the Executive to consider alternative employment
opportunities. The Board has determined that it is in the best interests of the Company and its
stockholders to assure that the Company will have the continued dedication and objectivity of the
Executive, notwithstanding the possibility, threat or occurrence of a Change of Control Event of
the Company or the termination by the Company of the Executive’s employment for a reason other than
for Cause (as defined below).
B. The Board believes that it is in the best interests of the Company and its stockholders to
provide the Executive with an incentive to continue his or her employment with the Company, or a
wholly-owned subsidiary of the Company, as the case may be, and to motivate the Executive to
maximize the value of the Company upon a Change of Control Event for the benefit of its
stockholders.
C. The Board believes that it is imperative to provide the Executive with certain benefits
upon a Change of Control Event or upon the termination of the Executive’s employment following a
Change of Control Event for a reason other than Cause, thereby encouraging the Executive to remain
with the Company notwithstanding the possibility of a Change of Control Event or termination of
employment for a reason other than for Cause.
The Company and the Executive hereby agree as follows:
1. Term of Agreement. This Agreement shall terminate upon the date that all
obligations of the Company and the Executive with respect to this Agreement have been satisfied.
2. At-Will Employment. The Company and the Executive acknowledge that the Executive’s
employment is and shall continue to be at-will, as defined under applicable law, and may be
terminated at any time by either party, with or without cause.
3. Change of Control Event. If: (i) the Executive is employed by the Company as of
the date of a Change of Control Event; and (ii) within one year of the Change of Control Event the
Executive’s employment is terminated by the surviving entity for any reason other than for Cause,
including the Executive’s voluntary termination for Good Reason, then the Executive shall be
entitled to:
(a) full acceleration of the vesting of the Executive’s stock options so that such stock
options become 100% vested; and
(b) severance pay and benefits, all of which shall be paid less applicable withholdings for
taxes and other deductions required by law, consisting of:
(i) A lump sum payment equal to one year of the Executive’s then-current base salary;
(ii) A lump sum payment equal to the annual incentive bonus at target that would have been
payable to the Executive under the Company’s Executive Bonus Plan in effect immediately before the
Change of Control Event, if any, in the year of the Executive’s termination had both the Company
and the Executive achieved the target bonus objectives set forth in such Executive’s Bonus Plan
during such year; and
(iii) Reimbursement for up to 12 months of the amount paid by the Executive for continued
health and dental insurance coverage under the Consolidated Omnibus Budget Reconciliation Act
(COBRA). In order to receive this benefit, the Executive must timely elect COBRA continuation
coverage in accordance with the Company’s or surviving entity’s usual COBRA procedures.
All payments and benefits under this Section 3 are conditioned upon the Executive’s execution
of a separation agreement acceptable to and provided by the surviving entity that contains, among
other provisions, a full release of claims and, where permitted by applicable law, an agreement not
to compete with the surviving entity for one year following the Executive’s termination.
4. Definitions.
(a) For the purposes of this Agreement, “Change of Control Event” is defined as set forth in
Section 9(c)(1)(b) of the Akamai Technologies, Inc. 2006 Stock Incentive Plan, which definition is
incorporated herein by reference.
(b) For the purposes of this Agreement, “Cause” is defined as set forth in Section 3 of the
Akamai Technologies, Inc. 2006 Executive Severance Pay Plan and Summary Plan Description, which
definition is incorporated herein by reference.
(c) For the purposes of this Agreement, “Good Reason” is defined as (i) a material reduction
in the Executive’s compensation and benefits (including without limitation any bonus plan or
indemnity agreement) not agreed to in writing by the Executive; (ii) the assignment to the
Executive of duties and/or responsibilities that are materially inconsistent with those associated
with the Executive’s position; or (iii) a requirement, not agreed to in writing by the Executive,
that the Executive relocate to, or perform his or her principal job functions at, an office that is
more than twenty-five (25) miles from the office at which the Executive was previously performing
his or her principal job functions.
5. Golden Parachute Excise Taxes. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or distribution, or any
acceleration of vesting of any benefit or award, by the Company or its affiliated companies to or
for the benefit of the Executive, payable within the meaning of Section 280G of the Internal
Revenue Code (the “Code”) (whether paid or payable, distributed or distributable or accelerated or
subject to acceleration pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this Section 5) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are
incurred by the Executive with respect to such excise tax
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(such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the
Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) on an amount
such that after payment by the Executive of all taxes imposed upon the Gross-Up Payment and any
interest or penalties imposed with respect to such taxes, the Executive retains an amount of the
Gross-Up Payment equal to the sum of: (a) the Excise Tax imposed upon the Payments; and (b) the
product of any deductions disallowed because of the inclusion of the Gross-Up Payment in the
Executive’s adjusted gross income and the highest applicable marginal rate of federal income
taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to have: (a) paid
federal income taxes at the highest marginal rates of federal income taxation for the calendar year
in which the Gross-Up Payment is to be made; (b) paid applicable state and local income taxes at
the highest rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net
of the maximum reduction in federal income taxes which could be obtained from deduction of such
state and local taxes; and (c) otherwise allowable deductions for federal income tax purposes at
least equal to those which would be disallowed because of the inclusion of the Gross-Up Payment in
the Executive’s adjusted gross income. The payment of a Gross-Up Payment under this Section 5
shall in no event be conditioned upon the Executive’s termination of employment or the receipt of
severance benefits under this Agreement.
6. Successors.
(a) Company’s Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially
all of the Company’s business and/or assets shall assume the obligations under this Agreement and
agree expressly to perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the absence of a succession.
For all purposes under this Agreement, the term “Company” shall include any successor to the
Company’s business and/or assets which executes and delivers the assumption agreement described in
this Section 7(a), or which becomes bound by the terms of this Agreement by operation of law.
(b) Executive’s Successors. The terms of this Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personal
or legal representatives, executors, administrators, heirs, distributees, devisees and legatees.
7. Miscellaneous Provisions.
(a) Waiver. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Executive
and by an authorized officer of the Company (other than the Executive). No waiver by either party
of any breach of, or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the same condition or
provision at another time.
(b) Whole Agreement. No agreements, representations or understandings (whether oral
or written and whether express or implied) which are not expressly set forth in this Agreement have
been made or entered into by either party with respect to the subject matter hereof. This
Agreement represents the entire understanding of the Company and the Executive with respect to the
subject matter of this Agreement and this Agreement supersedes all prior agreements, arrangements
and understandings regarding the subject matter of this Agreement; provided, however, that this
Plan shall not be deemed to terminate or replace, but shall be deemed to supplement, (a) provisions
in restricted stock unit agreements entered into with Executives that relate to the effect of a
termination of employment or (b) provisions in stock option agreements or the Company’s Stock
Incentive Plans that that provide for the automatic
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acceleration of vesting of options upon a
Change of Control Event. If stock option vesting acceleration is triggered and severance is paid
pursuant to this Agreement, the Executive acknowledges and agrees that he or she shall not be
entitled to any additional stock option vesting or severance payment pursuant to any prior
agreement, arrangement or understanding or pursuant to any other severance pay plan, including, but
not limited to, the Akamai Technologies, Inc. 2006 Executive Severance Pay Plan and Summary Plan
Description.
(c) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the Commonwealth of Massachusetts.
(d) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
(e) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year set forth below.
| AKAMAI TECHNOLOGIES, INC. | EXECUTIVE | |
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| Dated: _____________________, 2006 | Dated: _____________________, 2006 |
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