LIMELIGHT NETWORKS, INC. AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 99.5
AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amendment to the Amended and Restated Employment Agreement (the “Amendment”) is made as
of December 30, 2008, by and between Limelight Networks, Inc. (the “Company”), and Xxxxxxx Xxxx
(the “Executive”).
RECITALS
WHEREAS, the Company and Executive entered into that certain Amended and Restated
Employment Agreement dated as of July 9, 2008 (the “Agreement”).
WHEREAS, the Company and Executive desire to amend the Agreement to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, the Company and Executive agree that in consideration of the foregoing and the
promises and covenants contained herein, the parties agree as follows:
AGREEMENT
1. Annual Incentive. Section 3(c) of the Agreement, entitled “Annual
Incentive,” is hereby amended to read in its entirety as follows:
(c) Annual Incentive. Executive will be eligible to receive annual cash
incentives payable for the achievement of performance goals established by the Board
or by the Compensation Committee of the Board (the “Committee”). During calendar
year 2008, Executive’s target annual incentive (“Target Annual Incentive”) will be
$100,000. The actual earned annual cash incentive, if any, payable to Executive for
any performance period will depend upon the extent to which the applicable
performance goal(s) specified by the Committee are achieved. Any annual cash
incentives earned pursuant to this Section 3(c) will be paid to Executive as soon as
reasonably practicable following the date on which such annual cash incentives are
earned, but in no event will be paid later than March 15 of the year following the
year in which such annual cash incentives are earned.”
2. Termination of Employment. Section 7 of the Agreement, entitled “Termination
of Employment,” is hereby amended to read in its entirety as follows:
“7. Termination of Employment. In the event Executive’s employment with the
Company terminates for any reason, Executive will be entitled to any (a) unpaid Base
Salary accrued up to the effective date of termination; (b) unpaid Annual Bonus
accrued up to the effective date of termination; (c) unpaid, but earned and accrued
annual incentive for any completed fiscal year as of his termination of employment;
(d) pay for accrued but unused vacation; (e) benefits or compensation as provided
under the terms of any employee benefit and compensation agreements or plans
applicable to Executive; (f) unreimbursed business expenses required to be reimbursed
to Executive; and (g) rights to indemnification Executive may have under the
Company’s Certificate of Incorporation, Bylaws, this Agreement, and/or separate
indemnification agreement, as applicable. In the event Executive’s employment with
the Company terminates for any reason (other than Cause), Executive will be entitled
to exercise any outstanding vested stock options until the first to occur of: (i)
the date that is twenty-four (24) months after the later of such termination of
employment or the date upon which Executive ceases to provide any other services to
the Company or any of its affiliates, whether as a director, independent contractor
or otherwise, (ii) the applicable scheduled expiration date of such award (in the
absence of any termination of employment) as set forth in the award agreement, or
(iii) the ten (10) year anniversary of the award’s original date of grant. For
purposes of clarity, the term “expiration date” shall be the scheduled expiration of
the option agreement and not the period that Executive shall be entitled to exercise
such option. In addition, if the termination is by the Company without Cause or
Executive resigns for Good Reason, Executive will be entitled to the amounts and
benefits specified in Section 8.”
3. Separation Agreement and Release of Claims. Section 9(a) of the Agreement,
entitled “Separation Agreement and Release of Claims” is hereby amended to read in its
entirety as follows:
“(a) Separation Agreement and Release of Claims. The receipt of any
severance or other benefits pursuant to Section 8 will be subject to Executive
signing and not revoking a separation agreement and release of claims in a form
attached hereto as Exhibit A and provided that such release of claims becomes
effective and irrevocable no later than sixty (60) days following the termination
date (such deadline, the “Release Deadline”). The Company shall deliver such form to
Executive within five (5) business days after the date of termination. No severance
or other benefits pursuant to Section 8 will be paid or provided until the separation
agreement and release of claims becomes effective and irrevocable. If the separation
agreement and release of claims does not become effective by the Release Deadline,
Executive will forfeit any rights to severance or benefits under this Agreement. Any
severance payments or benefits under this Agreement that would be considered Deferred
Compensation Severance Benefits (as defined in Section 25), will be paid on, or, in
the case of installments, will not commence until, the sixtieth (60th) day
following Executive’s “separation from service”, or, if later, such time as required
by Section 25. Any installment payments that would have been made to Executive
during the sixty (60) day period immediately following Executive’s “separation from
service” but for the preceding sentence will be paid to Executive on the sixtieth
(60th) day following Executive’s “separation from service” and the
remaining payments will be
made as provided in this Agreement. If Executive should die before all of the
severance amounts have been paid, such unpaid amounts will be paid in a lump-sum
payment promptly following such event to Executive’s designated beneficiary, if
living, or otherwise to the personal representative of Executive’s estate.”
4. Excise Tax. Section 10 of the Agreement, entitled “Excise Tax,” is hereby
amended to read in its entirety as follows:
“10. Excise Tax. In the event that the benefits provided for in this
Agreement constitute “parachute payments” within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”) and will be subject to the
excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then Executive’s
severance benefits payable under the terms of this Agreement will be either (a)
delivered in full, or (b) delivered as to such lesser extent which would result in no
portion of such severance benefits being subject to the Excise Tax, whichever of the
foregoing amounts, taking into account the applicable federal, state and local income
taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis,
of the greatest amount of severance benefits. Any reduction in payments and/or
benefits required by this Section 10 will occur in the following order: (1) reduction
of cash payments; (2) reduction of vesting acceleration of equity awards; and (3)
reduction of other benefits paid or provided to Executive. In the event that
acceleration of vesting of equity awards is to be reduced, such acceleration of
vesting will be cancelled in the reverse order of the date of grant for Executive’s
equity awards. If two or more equity awards are granted on the same date, each award
will be reduced on a pro-rata basis.”
5. Good Reason. Section 11(e) of the Agreement, entitled “Good Reason” is
hereby amended to read in its entirety as follows:
“(e) Good Reason. For purposes of this Agreement, “Good Reason” means
Executive’s termination of employment within twelve (12) months following the initial
existence of any of the following that constitutes “Good Reason” and following the
expiration of any cure period (as discussed below), without Executive’s express
written consent:
(i) An adverse change in Executive’s title or reporting relationship, or a
significant reduction of Executive’s duties, position, or
responsibilities, relative to Executive’s duties, position, or
responsibilities in effect immediately prior to such reduction, so that
there is a material reduction in Executive’s authority, duties or
responsibilities;
(ii) A material reduction in Executive’s base compensation as in effect
immediately prior to such reduction. Notwithstanding the foregoing, a
one-time reduction that also is applied to substantially all other
executive officers of the Company and which one-time reduction
reduces the base compensation by a percentage reduction of 10% or less in
the aggregate will not constitute “Good Reason”;
(iii) A material change in geographic location at which Executive must
perform services (that is, the relocation of Executive to a facility or
location more than thirty-five (35) miles from the location of the
Company’s executive offices as of the Effective Date); or
(iv) Any material breach by the Company of any material contractual
obligation owed Executive pursuant to this Agreement (including, without
limitation, the failure of the Company to obtain the assumption of this
Agreement by a successor).
It being understood that the entry into this Agreement and the execution of the terms
herein shall not be deemed to constitute Good Reason.
Executive will not resign for Good Reason without first providing the Company with
written notice within ninety (90) days of the event that Executive believes
constitutes “Good Reason” specifically identifying the acts or omissions constituting
the grounds for Good Reason and a reasonable cure period of not less than thirty (30)
days.”
6. Section 409A. Section 25 of the Agreement, entitled “Code Section 409A,”
is hereby amended to read in its entirety as follows:
“25. Code Section 409A.
(a) Notwithstanding anything to the contrary in this Agreement, no severance
payable to Executive, if any, pursuant to this Agreement, when considered together
with any other severance payments or separation benefits that are considered deferred
compensation under Section 409A of the Code and the final regulations and any
guidance promulgated thereunder (“Section 409A”) (together, the “Deferred
Compensation Separation Benefits”) will be payable until Executive has a “separation
from service” within the meaning of Section 409A.
(b) Notwithstanding anything to the contrary in this Agreement, if Executive is
a “specified employee” within the meaning of Section 409A at the time of Executive’s
termination (other than due to death), then the Deferred Compensation Separation
Benefits that are payable within the first six (6) months following Executive’s
separation from service, will become payable on the first payroll date that occurs on
or after the date six (6) months and one (1) day following the date of Executive’s
separation from service. All subsequent Deferred Compensation Separation Benefits,
if any, will be payable in accordance with the payment schedule applicable to each
payment or benefit. Notwithstanding anything herein to the contrary, if Executive
dies following Executive’s separation from service but prior to the six (6) month
anniversary of the separation, then any payments delayed in
accordance with this paragraph will be payable in a lump sum as soon as
administratively practicable after the date of Executive’s death and all other
Deferred Compensation Separation Benefits will be payable in accordance with the
payment schedule applicable to each payment or benefit. Each payment and benefit
payable under this Agreement is intended to constitute separate payments for purposes
of Section 1.409A-2(b)(2) of the Treasury Regulations.
(c) Any amount paid under this Agreement that satisfies the requirements of the
“short-term deferral” rule set forth in
Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above.
Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above.
(d) Any amount paid under this Agreement that qualifies as a payment made as a
result of an involuntary separation from service pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations that do not exceed the Section 409A
Limit will not constitute Deferred Compensation Separation Benefits for purposes of
clause (i) above. For purposes of this Agreement, “Section 409A Limit” will mean the
lesser of two (2) times: (i) Executive’s annualized compensation based upon the
annual rate of pay paid to Executive during the Company’s taxable year preceding the
Company’s taxable year of Executive’s termination of employment as determined under
Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service
guidance issued with respect thereto; or (ii) the maximum amount that may be taken
into account under a qualified plan pursuant to Section 401(a)(17) of the Code for
the year in which Executive’s employment is terminated.
(e) The foregoing provisions are intended to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and any
ambiguities herein will be interpreted to so comply. The Company and Executive agree
to work together in good faith to consider amendments to this Agreement and to take
such reasonable actions which are necessary, appropriate or desirable to avoid
imposition of any additional tax or income recognition prior to actual payment to
Executive under Section 409A.”
7. Full Force and Effect. To the extent not expressly amended hereby, the Agreement
shall remain in full force and effect.
8. Entire Agreement. This Amendment and the Agreement constitute the full and entire
understanding and agreement between the parties with regard to the subjects hereof and thereof.
9. Successors and Assigns. This Amendment and the rights and obligations of the
parties hereunder shall inure to the benefit of, and be binding upon, their respective successors,
assigns, and legal representatives.
10. Counterparts. This Amendment may be executed in counterparts, all of which
together shall constitute one instrument, and each of which may be executed by less than all of the
parties to this Amendment.
11. Governing Law. This Amendment shall be governed in all respects by the internal
laws of Arizona, without regard to principles of conflicts of law.
12. Amendment. Any provision of this Amendment may be amended, waived or terminated
by a written instrument signed by the Company and Executive.
(Signature page follows)
IN WITNESS WHEREOF, the undersigned parties have caused this Amendment to be executed as of
the date first set forth above.
XXXXXXX XXXX
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LIMELIGHT NETWORKS, INC. | |
/s/ Xxxxxxx Xxxx
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/s/ Xxxx Xxxxxxxx | |
Signature
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Signature | |
Xxxxxxx Xxxx
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Xxxx Xxxxxxxx | |
Print Name
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Print Name | |
| CEO | ||
| Print Title |
(Signature page to Amendment to Xxxxxxx Xxxx Amended and Restated Employment Agreement)
