LIMELIGHT NETWORKS, INC. AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit 99.6
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to the Employment Agreement (the “Amendment”) is made as of December 30, 2008,
by and between Limelight Networks, Inc. (the “Company”), and
Xxxxx Xxxxxxxx (the “Executive”).
RECITALS
WHEREAS, the Company and Executive entered into that certain Employment Agreement
dated as of March 27, 2007 (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(b) of the Agreement, entitled “Annual
Incentive,” is hereby amended to read in its entirety as follows:
“(b) Annual Incentive. Executive will be eligible to receive annual cash
incentives payable for the achievement of performance goals (i) established by the
Board of Directors of the Company (the “Board”) or by the Compensation Committee of
the Board (the “Committee”) and (ii) reasonably acceptable to Executive. During
calendar year 2007, Executive’s target annual incentive (“Target Annual Incentive”)
will be $200,000. 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 with the input of
Executive are achieved. Any annual cash incentives earned pursuant to this Section
3(b) 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 6 of the Agreement, entitled “Termination
of Employment,” is hereby amended to read in its entirety as follows:
“6. 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, but
earned and accrued annual incentive for any completed fiscal year as of his
termination of employment; (c) pay for accrued but unused vacation; (d) benefits or
compensation as provided under the terms of any employee benefit and compensation
agreements or plans applicable to Executive; (e) unreimbursed business expenses
required to be reimbursed to Executive; and (f) 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 7.”
3. Separation Agreement and Release of Claims. Section 8(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 7 will be subject to Executive
signing and not revoking a separation agreement and release of claims in a form
reasonably acceptable to the Company. The Company shall deliver such form to
Executive within five (5) five business days after the date of termination. Such
release of claims shall become effective and irrevocable no later than sixty (60)
days following the termination date (such deadline, the “Release Deadline”). Such
agreement shall not require Executive to release claims to the indemnification
contemplated by Section 11. No severance or other benefits pursuant to Section 7
will be paid or provided until such separation agreement and release of claims
becomes effective and irrevocable. If Executive fails to sign, or revokes, such
separation agreement and release of claims prior to 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 24), 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 24. 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 9 of the Agreement, entitled “Excise Tax,” is hereby
amended to read in its entirety as follows:
“9. 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 9 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 10(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 after one of the
following conditions comes into existence 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 such 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 that is more than thirty-five (35) miles from the Company’s
offices in Tempe or San Francisco); 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).
A condition shall not be considered “Good Reason” unless (A) Executive gives the
Company written notice of such condition within ninety (90) days after such
condition comes into existence and (B) the Company fails to remedy such condition
within thirty (30) days after receiving Executive’s written notice.”
6. Section 409A. Section 24 of the Agreement, entitled “Code Section 409A,”
is hereby amended to read in its entirety as follows:
“24. 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.
XXXXX XXXXXXXX
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LIMELIGHT NETWORKS, INC. | |
/s/ Xxxxx Xxxxxxxx
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/s/ Xxxx Xxxxxxxx | |
Signature
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Signature | |
Xxxxx Xxxxxxxx
|
Xxxx Xxxxxxxx | |
Print Name
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Print Name | |
| CEO | ||
| Print Title |
(Signature page to Amendment to Xxxxx Xxxxxxxx Employment Agreement)
