SENIOR EXECUTIVE TERMINATION BENEFITS AGREEMENT
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AGREEMENT, dated as of the 28th day of January, 1997 between BANYAN
SYSTEMS INCORPORATED, a Massachusetts corporation ("Banyan"), and XXX XXXXX,
VICE PRESIDENT, HUMAN RESOURCES (the "Executive").
RECITALS
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A. Banyan considers it essential to the best interests of Banyan and its
stockholders to provide protection to its executive management in the event of a
merger/acquisition or termination. Banyan also considers it essential to the
best interests of Banyan and its stockholders that its management be encouraged
to remain with Banyan and to continue to devote full attention to Banyan's
business in the event that an effort is made to obtain control of Banyan through
tender offer or otherwise. In this connection, Banyan recognizes that the
possibility of a change in control and the uncertainty and questions which it
may raise among management may result in the departure or distraction of
management personnel to the detriment of Banyan and its stockholders.
Accordingly, Banyan's board of directors (the "Board") has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of Banyan's management to their assigned
duties without distraction in the face of the potentially disturbing
circumstances arising from the possibility of a change in control of Banyan.
B. The Executive is a key executive of Banyan, and Banyan believes that
the Executive has made valuable contributions to the productivity and
profitability of Banyan.
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C. In the event that Banyan receives any proposal from a third person
concerning a possible business combination with, or acquisition of equity
securities of, Banyan, the Board believes it imperative that Banyan and the
Board be able to rely upon the Executive to continue in her position and that
Banyan be able to receive and rely upon her advice, if so requested, as to the
best interests of Banyan and its stockholders without concern that he might be
distracted by the personal uncertainties and risks created by such a proposal.
D. In the event that the Executive's employment with Banyan is terminated,
except for cause, Bayan shall provide the Executive with the benefits set forth
in Sections 5 and 6.
NOW THEREFORE, to assure Banyan that it will have the continued undivided
attention and services of the Executive and the availability of her advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of Banyan, and to induce the Executive to remain in the employ of
Banyan, and for other good and valuable consideration, Banyan and the Executive
agree as follows:
1. SERVICES DURING CERTAIN EVENTS
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In the event that a third person begins a tender or exchange offer,
circulates a proxy to stockholders, or takes other steps seeking to effect a
Change in Control (as hereafter defined), the Executive agrees that she will not
voluntarily leave the employ of Banyan, and will render the services
contemplated in the recitals to this Agreement, until the third person has
abandoned or terminated its efforts to effect a Change in Control or until after
such a Change in Control has been effected. In the event the Executive does
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leave voluntarily either before or after a Change in Control, the benefit
provisions set forth in Section 5 will not be applicable.
2. CHANGE IN CONTROL
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For purposes of this Agreement, a Change in Control of Banyan shall be
deemed to have taken place if the stockholders of Banyan approve a definitive
agreement for the sale or other disposition of all or substantially all of the
assets of Banyan, the merger or other business combination of Banyan with or
into another corporation pursuant to which Banyan will not survive or will
survive only as a subsidiary of another corporation. Any decision by the Board
that a third person has abandoned or terminated their efforts to effect a Change
in Control shall be conclusive and binding on the Executive.
3. CIRCUMSTANCES TRIGGERING RECEIPT OF SEVERANCE BENEFITS
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Banyan shall provide the Executive with the benefits set forth in Sections
5 and 6 upon any termination of the Executive's employment by Banyan or
termination of employment for any reason except the following:
(A) TERMINATION FOR CAUSE. For the purposes hereof, "cause" shall be
defined as the willful and continued failure of the Executive to perform
substantially her duties, or action by the Executive involving willful
misfeasance, gross negligence or the commission of any felonious action;
provided, however, that termination for cause based on the Executive's
willful and continued failure to substantially perform her duties shall not
be effective unless the Executive shall have received written notice from
Banyan of such failure (specifying in detail the facts and circumstances on
which Banyan is relying) and a demand for substantial
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performance 30 days prior to such termination and Banyan determines that
the Executive shall have failed during such 30-day period to resume the
diligent performance of her duties.
4. NOTICE OF TERMINATION
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Any termination of the Executive's employment by Banyan as referred to in
Section 3 shall be communicated by written notice of termination to the
Executive.
5. TERMINATION BENEFITS
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Subject to the provisions set forth in Section 3, the following benefits
(subject to any applicable taxes required to be withheld) shall be paid to the
Executive:
(A) COMPENSATION. Pay the sum of six months of On Target Earnings ("OTE")
which consists of base salary plus bonuses at the Executive's then current
effective compensation plan on the termination date, less any applicable
deductions and taxes required to be withheld. If after six months the
Executive has not found employment, the Executive will be paid the
difference between any outside earnings and the Executive's OTE, as defined
in the compensation plan in effect at that time, for an additional six
months.
(B) INSURANCE BENEFITS, ETC. The Executive's participation (including
dependent coverage) in the life, health and dental insurance plans
(excluding further participation in the existing 401K Plan) of Banyan in
effect shall be continued, or equivalent benefits provided, by Banyan, at
the Executive's then current contribution rate for such benefits for a
period of up to 12 months commencing on the termination date.
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6. STOCK OPTIONS
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In the event of a Change in Control or termination, 50% (15,000 shares) of
the Executive's November 6, 1996 stock option grant will vest. Vested options
may be exercised up to 12 months following termination.
7. CONTINUING OBLIGATIONS
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In order to induce Banyan to enter into this Agreement, the Executive
hereby ratifies and confirms her Employee Patent and Confidential Information
Agreement with Banyan. Without limiting the generality of the foregoing, the
Executive agrees that all documents, records, techniques, business secrets and
other information which have come into her possession from time to time during
her employment hereunder shall be deemed to be confidential and proprietary to
Banyan and he shall retain in confidence any confidential information known to
her concerning Banyan and its subsidiaries and their respective businesses and
such information shall not be disclosed.
8. NOTICES
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For the purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
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IF TO THE EXECUTIVE: Xx. Xxx Xxxxx
0 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
IF TO BANYAN: Banyan Systems Incorporated
Attention: Xxxxxxx X. Xxxxxxx
President and COO (Acting)
000 Xxxxxxxx Xxxx, X. X. Xxx 0000
Xxxxxxxx, XX 00000-0000
or to such other address as either party may have furnished to the other in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
9. GOVERNING LAW
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The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the Commonwealth of Massachusetts.
10. ARBITRATION
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Any controversy or claim arising out of or relating to this Agreement or
the breach thereof shall be settled by arbitration to be conducted in Boston,
Massachusetts, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
11. MISCELLANEOUS
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No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
the Executive and on behalf of Banyan. No waiver by either 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 the same or any other provisions or
conditions at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied,
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with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement.
12. SEPARABILITY
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The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provisions of this
Agreement, all of which shall remain in full force and effect.
13. NON-ASSIGNABILITY
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This agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder. Without limiting the foregoing, the
Executive's right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or otherwise,
other than a transfer by her will or by the laws of descent or distribution, and
in the event of any attempted assignment or transfer contrary to this Section
Banyan shall have no liability to pay any amount so attempted to be assigned or
transferred.
14. CONFIDENTIALITY
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The Executive agrees that the existence and the terms of this Agreement are
confidential and shall not be disclosed to any person, except that the Executive
may disclose this Agreement to her immediate family or professional tax
advisors.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.
BANYAN SYSTEMS INCORPORATED
BY: /s/ Xxx Xxxxx
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BY: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President and COO (Acting)
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