EXECUTIVE CHANGE OF CONTROL AGREEMENT
December 27, 2000
Xxxx Xxxxxx Executive
00000 XX Xxxxxxx Xxx
Xxxxxxxxx, XX 00000
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 Senior Vice President and General Manager of one of the Company's divisions.
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 Change of Control. In the event of a Termination of Executive's
Employment (as defined in Section 6.1) other than for Cause (as defined in
Section 6.2), death or Disability (as defined in Section 6.4), within 12 months
following a Change of Control (as defined in Section 6.3 of this Agreement) or
within three months preceding a Change of Control, and contingent upon
Executive's execution of the Release of Claims without revocation 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 hump 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) 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, and such stock options that are not
Incentive Stock Options under the Internal Revenue Code or 1986, as amended,
shall also be amended to permit the Executive to exercise such stock options for
a period of 90 days after the effective date of the Executive's termination.
3.2 Certain Limitations. 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 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 made with respect to the agreements as a whole, and Executive
cannot select some benefits from one agreement and other benefits from this
Agreement.
2
6. Definitions.
6.1 Termination of Executive's Employment. Termination of
Executive's Employment means that the Company has terminated Executive's
employment with the Company (including any subsidiary of the Company).
Termination of Executive's Employment shall also 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.
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
3
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 offeror 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.
(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.
4
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.
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/ Xxxxxxxx X. Xxxxx /s/ Xxxx Xxxxxx 1/3/2001
--------------------------------- ------------------------------
Xxxxxxxx X. Xxxxx Xxxx Xxxxxx
Chief Executive Officer and President
5
EXHIBIT A
RELEASE OF CLAIMS
1. Parties.
The parties to Release of Claims (hereinafter "Release") are Xxxx Xxxxxx
and RadiSys Corporation, an Oregon corporation, as hereinafter defined.
1.1 Executive.
For the purposes of this Release, "Executive" means Xxxx Xxxxxx and
his 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 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 as reserved by this Release or where expressly prohibited by law)
that relates in any way to
A-1
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
state 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, state 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 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.
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
A-2
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.
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,
A-3
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.
A-4
14. Revocation.
As provided by the Older Workers Benefit Protection Act, Executive
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: __________ ____, ______
Xxxx Xxxxxx
STATE OF OREGON )
) 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"
A-5
