Exhibit 99.9
AMENDED AND RESTATED
EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT dated May 24, 2001 is made by and between PictureTel
Corporation, a Delaware Corporation, (the "Company") and Xxxxx Xxxx
("Executive").
WHEREAS, the Company, Pharaoh Acquisition Corporation and Polycom, Inc.
("Polycom") have entered into an Agreement and Plan of Merger (the "Merger
Agreement"), which requires, among other things, that Executive enter into this
Amended and Restated Executive Change in Control Agreement as a condition to the
closing of the merger contemplated by the Merger Agreement (the "Merger") (the
"Closing");
WHEREAS, Polycom has, in the Merger Agreement, expressly agreed to
assume PictureTel's obligations under this Agreement and agreed to perform under
this Agreement in the same manner and to the same extent that PictureTel would
be required to perform if the Merger had not occurred;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
Company and the Executive hereby agree as follows:
1.0 DEFINED TERMS. The definition of capitalized terms used in this
Agreement is provided in the last Section hereof and throughout the document
enclosed in quotation marks inside parentheses.
2.0 TERM OF AGREEMENT. This Agreement shall be effective immediately
prior to the signing by all the parties thereto of the Merger Agreement and
shall continue in effect from such time until three years following the Closing;
provided, however, that if the Merger is not consummated within one year
following the signing of the Merger Agreement or if, earlier, the Company is
acquired by an entity not affiliated with Polycom then this Amended and Restated
Agreement shall become void and without further force and effect and the terms
of the prior Executive Officer Change in Control Agreement shall be reinstated
in their entirety and shall govern.
3.0 COMPANY'S COVENANTS SUMMARIZED. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4.0 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the "Severance Payments"
described in Section 6.1 hereof and the other payments and benefits described
herein in the event the Executive's employment with the Company is terminated
following a Change in Control and during the term of this Agreement. No amount
or benefit shall be payable under this Agreement unless there shall have been
(or, under the terms hereof, there shall be deemed to have been) a termination
of the Executive's employment with the Company following a Change in Control.
This Agreement shall not be construed as creating an express or implied contract
of employment prior to the date of a Change in Control and, except as otherwise
agreed in writing between the Executive and the Company, including the
Employment Agreement dated
___________________, the Executive shall not have any right to be retained in
the employ of the Company.
3.1 As consideration for entering into this Amended and Restated
Change in Control Agreement, the Company agrees to pay Executive the sum of
$2,500.00 prior to the Merger.
4.0 THE EXECUTIVE'S COVENANTS. The Executive agrees that, subject to
the terms and conditions of this Agreement, in the event of a Potential Change
in Control during the term of this Agreement, the Executive will remain in the
employ of the Company until the earliest of (A) a date which is six (6) months
from the date of such Potential Change of Control, (B) the date of a Change in
Control, (C) the date of termination by the Executive of the Executive's
employment for Good Reason (determined by treating the Potential Change in
Control as a Change in Control in applying the definition of Good Reason), by
reason of death or Disability, or (D) the termination by the Company of the
Executive's employment for any reason.
5.0 COMPENSATION OTHER THAN SEVERANCE PAYMENTS.
5.1 Following a Change in Control during the term of this
Agreement, during any period that the Executive fails to perform the Executive's
full-time duties with the Company as a result of incapacity due to physical or
mental illness, the Company shall pay the Executive's full salary to the
Executive at the rate in effect at the commencement of any such period, together
with all compensation and benefits payable to the Executive under the terms of
any compensation or benefit plan, program or arrangement maintained by the
Company during such period, until the Executive's employment is terminated by
the Company for Disability.
5.2 If the Executive's employment shall be terminated for any
reason following a Change in Control during the term of this Agreement, the
Company shall pay the Executive's full salary to the Executive through the Date
of Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company prior to the Date of
Termination.
5.3 If the Executive's employment shall be terminated for any
reason following a Change in Control during the term of this Agreement, the
Company shall pay the Executive's normal post-termination compensation and
benefits to the Executive as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, the Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements; provided however, that the Severance Payments
under Section 6.0 of this Agreement shall be the only severance paid to
Executive during the term of this Agreement.
6.0 SEVERANCE PAYMENTS.
6.1 Subject to Section 6.2 hereof and subject to Executive
entering into a release of claims in substantially the form attached hereto as
Appendix I, the Company shall pay the Executive the payments and provide the
benefits described in this Section 6.1 ("Severance Payments") upon the
termination of the Executive's employment following a Change in Control
during the term of this Agreement, in addition to the payments and benefits
described in Section 5.0 hereof, unless such termination is (A) by the Company
for Cause, (B) by reason of death or Disability, or (C) by the Executive without
Good Reason. The Executive's employment shall be deemed to have been terminated
following a Change in Control by the Company without Cause or by the Executive
with Good Reason if the Executive's employment is terminated prior to a Change
in Control without Cause at the direction (or action which constitutes a
direction) of a Person who has entered into an agreement with the Company the
consummation of which will constitute a Change in Control or if the Executive
terminates his employment with Good Reason prior to a Change in Control
(determined by treating a Potential Change in Control as a Change in Control in
applying the definition of Good Reason) if the circumstance or event which
constitutes Good Reason occurs at the direction (or action which constitutes a
direction) of such Person.
(i) Subsequent to the Date of Termination, the Company shall
make cash severance payments to the Executive over a twenty-four (24) month
period in substantially equal bi-weekly installments, in an amount equal to two
(2) times the sum of (a) the higher of the Executive's annual base salary in
effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based or in effect immediately prior to the
Change in Control, and (b) the higher of the highest annual bonus paid to the
Executive in the three years preceding the year in which the Date of Termination
occurs or paid in the three years preceding the year in which the Change in
Control occurs.
(ii) For a twenty-four (24) month period after the Date of
Termination, the Company shall arrange to provide the Executive with medical and
dental insurance benefits substantially similar to those which the Executive is
receiving immediately prior to the Notice of Termination (without giving effect
to any reduction in such benefits subsequent to a Change in Control which
reduction constitutes Good Reason). Benefits otherwise receivable by the
Executive pursuant to this Section 6.1(ii) shall be reduced to the extent
comparable benefits are actually received by or made available to the Executive
without cost during the twenty-four (24) month period following the Executive's
termination of employment (and any such benefits actually received by the
Executive shall be reported to the Company by the Executive). If the benefits
provided to the Executive under this Section 6.1(ii) shall result in a decrease,
pursuant to Section 6.2, in the Change in Control Payments and these Section
6.1(ii) benefits are thereafter reduced pursuant to the immediately preceding
sentence because of the receipt of comparable benefits, the Company shall, at
the time of such reduction, pay to the Executive the lesser of (a) the amount of
the decrease made in the Severance Payments pursuant to Section 6.2, or (b) the
maximum amount which can be paid to the Executive without being, or causing any
other payment to be, nondeductible by reason of section 280G of the Code.
6.2 Notwithstanding any other provisions of this Agreement, in the
event that any payment or benefit received or to be received by the Executive in
connection with a Change in Control or the termination of the Executive' s
employment (whether or not received pursuant to the terms of this Agreement)
(all such payments and benefits, including but not limited to the Severance
Payments, being hereinafter called the "Total Payments") would be subject in
whole or in part to the Excise Tax, then the Severance Payments shall be reduced
to the extent, but only to the extent, necessary so that no portion of the Total
Payments is subject to the Excise Tax; provided, that no such reduction shall be
effected unless the net amount of the Total Payments after such reduction in
the Severance Payments and after deduction of the net amount of federal, state
and local income taxes on such reduced Total Payments would be greater than the
excess of (a) the net amount of the Total Payments without such reduction in the
Severance Payments but after deduction of the net amount of federal, state and
local income taxes (other than the Excise Tax) on such unreduced Total Payments,
over (b) the Excise Tax to which the Total Payments are subject. The
determination as to whether a reduction in Severance Payments is to be made
under this Section 6.2 and, if so, the amount of any such reduction shall be
made by the Company's auditors or by such other firm of certified public
accountants, benefits consulting firm or legal counsel as the Board may
designate prior to the Change in Control.
The Company shall provide the executive with its calculations of the
amounts referred to in this Section 6.2 and such supporting materials as are
reasonably necessary for the Executive to evaluate the Company's calculations.
6.3 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive as a result of a termination which entitles
the Executive to the Severance Payments (including all such fees and expenses,
if any, incurred in disputing any such termination or in seeking in good faith
to obtain or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable to the
application of section 4999 of the Code to any payment or benefit provided
hereunder). Such payments shall be made within five (5) business days after
delivery of the Executive's written requests for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably may require.
7.0 TERMINATION PROCEDURES AND COMPENSATION DURING DISPUTE.
7.1 NOTICE OF TERMINATION. After a Change in Control and during
the term of this Agreement, any purported termination of the Executive's
employment (other than by reason of death) shall be communicated by written
Notice of Termination from one party hereto to the other party hereto in
accordance with Section 10.0 hereof. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
Further, a Notice of Termination for Cause is required to include a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting of the Board which was
called and held for the purpose of considering such termination (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, the Executive was guilty of
conduct set forth in clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.2 DATE OF TERMINATION. "Date of Termination", with respect to
any purported termination of the Executive's employment after a Change in
Control during the term of this Agreement, shall mean:
(A) If the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and
(B) If the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) days (except in
the case of a termination for Cause) and, in the case of a termination by the
Executive, shall not be less than fifteen (15) days nor more than sixty (60)
days, respectively, from the date such Notice of Termination is given).
7.3 DISPUTE CONCERNING TERMINATION. If within fifteen (15) days
after any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the date on
which the dispute is finally resolved, either by mutual written agreement of the
parties, by arbitrator's award, or, to the extent permitted by Section 14.0, by
a final judgment, order or decree of a court of competent jurisdiction on the
arbitrator's award (which is not appealable or with respect to which the time
for appeal therefrom has expired and no appeal has been perfected); provided
further that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
7.4 COMPENSATION DURING DISPUTE. If a purported termination occurs
following a Change in Control and during the term of this Agreement and such
termination is disputed in accordance with Section 7.3 hereof, the Company shall
continue to pay the Executive the full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation, benefit and
insurance plans in which the Executive was participating when the notice giving
rise to the dispute was given, until the dispute is finally resolved in
accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in
addition to all other amounts due under this Agreement (other than those due
under Section 5.2 hereof) and shall not be offset against or reduce any other
amounts due under this Agreement.
8.0 NO MITIGATION. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section
6.0 or Section 7.4. Further, the amount of any payment or benefit provided for
in Section 6.0 (other than Section 6.1(ii)) or Section 7.4 shall not be reduced
by any compensation earned by the Executive as the result of employment by
another employer, by retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9.0 SUCCESSORS; BINDING AGREEMENT.
9.1 In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and / or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation from the Company in the same amount and on the same terms as the
Executive would be entitled to hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in Control, except that,
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. In any
event this agreement shall be binding upon the Company and any successors or
assignee.
9.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death of
the Executive) if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive's estate.
10.0 NOTICES. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered in hand or when delivered or
mailed by United States certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
PictureTel Corporation
000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
cc:
Polycom, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
To the Executive:
Xxxxx Xxxx
00 Xxxxxxxx Xx.
Xxxxxxx, XX 00000
11.0 MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. The Amendment and Restatement of this Agreement
(including the appendix hereto) supersedes and replaces in its entirety the
Executive Officer Change in Control Agreement in effect prior to the parties
hereto entering into this Amended and Restated Agreement; subject to the
reinstatement of the prior agreement as provided in Section 2. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The laws of the Commonwealth of Massachusetts shall
govern the validity, interpretation, construction and performance of this
Agreement and the Agreement shall be an instrument under seal. All references to
sections of the Exchange Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments provided for hereunder shall
be paid net of any applicable withholding required under federal, state or local
law and any additional withholding to which the Executive has agreed. The
obligations of the Company and the Executive under Sections 6.0, 7.0, 8.0 and
14.0 shall survive the expiration of the term of this Agreement.
12.0 VALIDITY. The invalidity or unenforceability or any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. In
addition, if any provision of this Agreement is held invalid or unenforceable by
a court of competent jurisdiction, then such provision shall be deemed modified
to the extent necessary to enable such provision to be valid and enforceable.
13.0 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14.0 SETTLEMENT OF DISPUTES; ARBITRATION. All claims by the Executive
for benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board then shall afford a reasonable opportunity to the Executive for
a review of the decision denying a claim and shall further allow the Executive
to appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been denied. Any
further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston, Massachusetts
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that the Executive shall be entitled to seek
specific performance of the Executive's right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement in such
arbitration or by a proceeding in the federal court in Boston or the
Massachusetts state court in Essex County.
15.0 DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings indicated below:
(A) "Base Amount" shall have the meaning defined in section
280G(b)(3) of the Code.
(B) "Beneficial Owner" shall have the meaning defined in Rule
13d-3 under the Exchange Act.
(C) "Board" shall mean the Board of Directors of the Company.
(D) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean:
(i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other than any
such failure resulting from the Executive's incapacity due to physical or mental
illness or any such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section 7.1) after a
written demand for substantial performance is delivered to the Executive by the
Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the Executive's
duties, or
(ii) the willful engaging by the Executive in conduct which
is demonstrably and materially injurious to the Company or its subsidiaries,
monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, no act, or failure to
act, on the Executive's part shall be deemed "Willful" unless done, or omitted
to be done, by the Executive not in good faith and without reasonable belief
that the Executive's act, or failure to act, was in the best interest of the
Company.
(E) A "Change in Control", shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) any Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing twenty-five (25)
percent or more of the combined voting power of the Company's then outstanding
securities; or
(ii) during any period of not more than two consecutive years
(not including any period prior to the execution of this Agreement), individuals
who at the beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into an agreement
with the Company to effect a transaction described in clause (i), (ii) or
(iii) of this Section 15(E)) whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (a) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) sixty (60) percent or more of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (b) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no Person acquires twenty-five (25) percent or more of the combined
voting power of the Company's then outstanding securities; or
(iv) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets.
(F) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(G) "Company" shall mean PictureTel Corporation and any successor
to its business and/or assets which assumes and agrees to perform this Agreement
by operation of law, or otherwise (except in determining, under Section 15(E)
hereof, whether or not any Change in Control of the Company has occurred in
connection with such succession).
(H) "Date of Termination" shall have the meaning stated in Section
7.2 hereof.
(I) "Disability" shall be deemed the reason for the termination by
the Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the Company
for a period of six (6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within thirty (30) days
after such Notice of Termination is given, the Executive shall not have returned
to the full-time performance of the Executive's duties.
(J) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(K) "Excise Tax" shall mean any excise tax imposed under section
4999 of the Code.
(L) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(M) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any
act or failure to act described in paragraph (i), (ii), (iii), (iv), (v), (vi),
or (vii), below, such act or failure to act is corrected prior to the Date of
Termination specified in the Notice of Termination given in respect thereof:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's status as a senior executive officer of the
Company or a substantial adverse alteration in the nature or status of the
Executive's responsibilities from those in effect immediately prior to the
Change in Control; provided, however that Executive's continuing position as
Executive Vice President, Worldwide Sales and Strategic Initiatives following
the signing of the Merger Agreement, and the assignment of duties consistent
with such position shall not constitute Good Reason hereunder;
(ii) a reduction by the Company in the Executive's annual
base salary as in effect on the date hereof or as the same may be increased from
time to time;
(iii) the relocation of the Company's principal executive
offices to a location more than thirty (30) miles from the location of such
offices immediately prior to the Change in Control or the Company's requiring
the Executive to be based anywhere other than the Company's principal executive
offices, except for required travel on the Company's business to an extent
substantially consistent with the Executive's present business travel
obligations;
(iv) the failure by the Company, without the Executive's
consent, to pay to the Executive any portion of the Executive's current
compensation, or to pay to the Executive any portion of an installment of
deferred compensation under any deferred compensation program of the Company,
within seven (7) days of the date such compensation is due;
(v) the failure by the Company to continue in effect any
compensation plan in which the Executive participates immediately prior to the
Change in Control which is material to the Executive's total compensation, or
any substitute plans adopted prior to the Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or alternative plan) on
a basis not materially less favorable, both in terms of the amount of benefits
provided and the level of the Executive's participation relative to other
participants, as existed at the time of the Change in Control; provided; however
that the termination of the Company Employee Stock Purchase Plans and other
equity compensation plans of the Company pursuant to the Merger Agreement shall
not constitute Good Reason;
(vi) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by the Executive
under any of the Company's pension, life insurance, medical, health and
accident, or disability plans in which the Executive was participating at the
time of the Change in Control, the taking of any action by the Company which
would directly or indirectly materially reduce any of such benefits or deprive
the Executive of any material fringe benefit enjoyed by the Executive at the
time of the Change in Control, or the failure by the Company to provide the
Executive with the number of paid vacation days to which the Executive is
entitled on the basis of years of service with the Company in accordance with
the Company's normal vacation policy in effect at the time of the Change in
Control; or
(vii) any purported termination of the Executive's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 7.1; for purposes of this Agreement, no such purported
termination shall be effective.
The Executive's right to terminate the Executive's employment for Good Reason
shall not be affected by the Executive's incapacity due to physical or mental
illness. The Executive's continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
(N) "Notice of Termination" shall have the meaning stated in
Section 7.1 hereof.
(O) "Person" shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include:
(i) the Company,
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or
(iii) a Corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(P) "Potential Change in Control', shall be deemed to have
occurred if the conditions set forth in any one of the following paragraphs
shall have been satisfied:
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.
(Q) "Severance Payments" shall mean those payments described in
Section 6.1 hereof.
(R) "Total Payments" shall mean those payments described in
Section 6.2 hereof.
PictureTel Corporation
By /s/ Xxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chairman of the Board of Directors,
President and Chief Executive Officer
/s/ Xxxxx Xxxx
----------------------------------------
Executive
APPENDIX I
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release ("Agreement") is made by and
between Polycom, Inc. (the "Company"), and Xxxxx Xxxx ("Employee").
WHEREAS, Pursuant to the Agreement and Plan of Merger (the "Merger")
between the Company and PictureTel Corporation ("PictureTel"), the Company has
agreed to assume and to perform in the same manner and to the same extent as
PictureTel would have been required to perform had the Merger not been
consummated, the amended and restated Executive Change in Control Agreement
effective immediately prior to the execution of the Merger Agreement;
NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (collectively referred to as "the Parties") hereby agree as
follows:
16.0 TERMINATION. Employee's employment from the Company terminated on
________________.
17.0 CONSIDERATION. The Company agrees to pay Employee the Severance
Payments described in such Employee's amended and restated Executive Change in
Control Agreement, pursuant to the terms and conditions of such Executive Change
in Control Agreement.
18.0 NO OTHER SEVERANCE PAYABLE. Employee acknowledges that he shall
only be entitled to the Severance Payments in such Employee's amended and
restated Executive Change in Control Agreement. Employee waives any and all
other severance payments in any other agreements entered into between the
Employee and PictureTel, any predecessor corporation thereto, or the Company.
19.0 CONFIDENTIAL INFORMATION. Employee shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall continue to comply with the terms and conditions of the
Confidentiality Agreement between Employee and the Company. Employee shall
return all the Company property and confidential and proprietary information in
his possession to the Company on the Effective Date of this Agreement.
20.0 PAYMENT OF SALARY. Employee acknowledges and represents that the
Company has paid all salary, wages, bonuses, accrued vacation, commissions and
any and all other benefits due to Employee.
21.0 RELEASE OF CLAIMS. Employee agrees that the foregoing
consideration represents settlement in full of all outstanding obligations owed
to Employee by the Company. Employee, on behalf of himself, and his respective
heirs, family members, executors and assigns, hereby fully and forever releases
the Company and its past, present and future officers, agents, directors,
employees, investors, shareholders, administrators, affiliates, divisions,
subsidiaries, parents, predecessor and successor corporations, and assigns,
from, and agrees not to xxx or otherwise institute or cause to be instituted any
legal or administrative proceedings concerning any claim, duty, obligation or
cause of action relating to any matters of any kind, whether presently known or
unknown, suspected or unsuspected, that he may possess arising from any
omissions, acts or facts that have occurred up until and including the Effective
Date of this Agreement including, without limitation,
21.1 any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship;
21.2 any and all claims relating to, or arising from,
Employee's right to purchase, or actual purchase of shares of stock of the
Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable
state corporate law, and securities fraud under any state or federal law;
21.3 any and all claims for wrongful discharge of employment;
termination in violation of public policy; discrimination; breach of
contract, both express and implied; breach of a covenant of good faith and
fair dealing, both express and implied; promissory estoppel; negligent or
intentional infliction of emotional distress; negligent or intentional
misrepresentation; negligent or intentional interference with contract or
prospective economic advantage; unfair business practices; defamation; libel;
slander; negligence; personal injury; assault; battery; invasion of privacy;
false imprisonment; and conversion;
21.4 any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair
Labor Standards Act, the Employee Retirement Income Security Act of 1974, The
Worker Adjustment and Retraining Notification Act, the California Fair
Employment and Housing Act, and Labor Code section 201, ET SEQ. and section
970, ET SEQ. and all amendments to each such Act as well as the regulations
issued thereunder;
21.5 any and all claims for violation of the federal, or any
state, constitution;
21.6 any and all claims arising out of any other laws and
regulations relating to employment or employment discrimination; and
21.7 any and all claims for attorneys' fees and costs.
Employee agrees that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters
released. This release does not extend to any obligations incurred under this
Agreement or severance payments and benefits due to Employee pursuant to the
Amended and Restated Change in Control Agreement entered into by and between the
Company and PictureTel, and assumed by Polycom. Employee acknowledges and agrees
that any breach of this paragraph shall constitute a material breach of the
Agreement and in the case of a breach by Employee, shall entitle the Company
immediately to recover the monetary consideration discussed in paragraph 2
above. Employee shall also be responsible to the Company for all costs,
attorneys' fees and any and all damages incurred by the Company (a) enforcing
the obligation, including the bringing of any suit to recover the monetary
consideration, and (b) defending against a claim or suit brought or pursued by
Employee in violation of this provision.
22.0 ACKNOWLEDGMENT OF WAIVER OF CLAIMS UNDER ADEA. Employee
acknowledges that he/she is waiving and releasing any rights he/she may have
under the Age Discrimination in Employment Act of 1967 ("ADEA") and that this
waiver and release is knowing and voluntary. Employee and the Company agree that
this waiver and release does not apply to any rights or claims that may arise
under the ADEA after the Effective Date of this Agreement. Employee acknowledges
that the consideration given for this waiver and release Agreement is in
addition to anything of value to which Employee was already entitled. Employee
further acknowledges that he/she has been advised by this writing that (a)
he/she should consult with an attorney PRIOR to executing this Agreement; (b)
he/she has twenty-one (21) days within which to consider this Agreement; (c)
he/she has seven (7) days following the execution of this Agreement by the
parties to revoke the Agreement; and (d) this Agreement shall not be effective
until the revocation period has expired. Any revocation should be in writing and
delivered to the Chief Financial Officer at Polycom, Inc. by close of business
on the seventh day from the date that Employee signs this Agreement.
23.0 CIVIL CODE SECTION 1542. Employee represents that he is not aware
of any claims against the Company other than the claims that are released by
this Agreement. Employee acknowledges that he has been advised by legal counsel
and is familiar with the provisions of California Civil Code Section 1542, which
provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Employee, being aware of said code section, agrees to expressly waive
any rights he may have thereunder, as well as under any other statute or common
law principles of similar effect.
24.0 NO PENDING OR FUTURE LAWSUITS. Employee represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Employee also represents that he does not intend to bring any claims on
his own behalf or on behalf of any other person or entity against the Company or
any other person or entity referred to herein.
25.0 APPLICATION FOR EMPLOYMENT. Employee understands and agrees that,
as a condition of this Agreement, he shall not be entitled to any employment
with the Company, its subsidiaries, or any successor, and he hereby waives any
right, or alleged right, of employment or re-employment with the Company.
Employee further agrees that he will not apply for employment with the Company,
its subsidiaries, its parents, or related companies, or any successor and will
not apply to work as an independent contractor for the Company, its parents, its
subsidiaries or any successor.
26.0 CONFIDENTIALITY. Employee agrees to use his best efforts to
maintain in confidence the existence of this Agreement, the contents and terms
of this Agreement, and the consideration for this Agreement (hereinafter
collectively referred to as "Settlement Information"). Employee agrees to take
every reasonable precaution to prevent disclosure of any Settlement Information
to third parties, and agrees that there will be no publicity, directly or
indirectly, concerning any Settlement Information. Employee agrees to take every
precaution to disclose Settlement Information only to those attorneys,
accountants, governmental entities, and family members who have a reasonable
need to know of such Settlement Information.
27.0 NO COOPERATION. Employee agrees he will not act in any manner that
might damage the business of the Company. Employee agrees that he will not
counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against the Company and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so.
28.0 NON-DISPARAGEMENT. Employee agrees to refrain from any defamation,
libel or slander of the Company and its respective officers, directors,
employees, investors, shareholders, administrators, affiliates, divisions,
subsidiaries, predecessor and successor corporations, and assigns or tortious
interference with the contracts and relationships of the Company and its
respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns.
29.0 NO ADMISSION OF LIABILITY. No action taken by the Company, either
previously or in connection with this Agreement shall be deemed or construed to
be (a) an admission of the truth or falsity of any claims heretofore made or (b)
an acknowledgment or admission by the Company of any fault or liability
whatsoever to the Employee or to any third party.
30.0 COSTS. The Parties shall each bear their own costs, expert fees,
attorneys' fees and other fees incurred in connection with this Agreement.
31.0 ARBITRATION. To the extent permitted by law, the Parties agree
that any and all disputes arising out of the terms of this Agreement, their
interpretation, and any of the matters herein released, including any potential
claims of harassment, discrimination or wrongful termination shall be subject to
binding arbitration, to the extent permitted by law, in Boston, Massachusetts,
before the American Arbitration Association under its National Rules for the
Resolution of Employment Disputes. Employee agrees and hereby waives his right
to jury trial as to matters arising out of the terms of this Agreement and any
matters herein released to the extent permitted by law. The Parties
agree that the prevailing party in any arbitration shall be entitled to
injunctive relief in any court of competent jurisdiction to enforce the
arbitration award.
32.0 AUTHORITY. Employee represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through
him to bind them to the terms and conditions of this Agreement.
33.0 NO REPRESENTATIONS. Employee represents that he has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither party has
relied upon any representations or statements made by the other party hereto
which are not specifically set forth in this Agreement.
34.0 SEVERABILITY. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
35.0 ENTIRE AGREEMENT. This Agreement and the Confidentiality Agreement
represent the entire agreement and understanding between the Company and
Employee concerning Employee's separation from the Company, and supersede and
replace any and all prior agreements and understandings concerning Employee's
the subject matter of this Agreement.
36.0 NO ORAL MODIFICATION. This Agreement may only be amended in
writing signed by Employee and the President of the Company.
37.0 GOVERNING LAW. This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules, of the State of California.
38.0 EFFECTIVE DATE. This Agreement is effective eight days after it
has been signed by both Parties.
39.0 COUNTERPARTS. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
40.0 VOLUNTARY EXECUTION OF AGREEMENT. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
40.1 They have read this Agreement;
40.2 They have been represented in the preparation, negotiation,
and execution of this Agreement by legal counsel of their own choice or that
they have voluntarily declined to seek such counsel;
40.3 They understand the terms and consequences of this Agreement
and of the releases it contains;
40.4 They are fully aware of the legal and binding effect of this
Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.
POLYCOM, INC.
Dated: , 2001 By
---------------- ---------------------------------
NAME
Xxxxx Xxxx, an individual
Dated: , 2001
---------------- ------------------------------------
Xxxxx Xxxx
