1
EXHIBIT 10.1
CHANGE OF CONTROL AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT (the "Agreement") is made as of
__________, 1998, between STAC, INC., a Delaware corporation (the "Company"),
and _____________ ("Executive").
WHEREAS Executive is an Executive of the Company, and currently holds
(i) shares of the Company's capital stock ("Shares") and/or (ii) options or
other rights to purchase shares of the Company's capital stock ("Options")
(Shares and Options are hereinafter collectively referred to as "Securities")
which are subject to certain vesting restrictions and rights of repurchase in
favor of the Company; and
WHEREAS in order to ensure Executive has an opportunity to acquire
and/or maintain an equity interest in the Company as an incentive for Executive
to participate actively in the affairs and maximize the value of the Company,
the Company is willing to provide Executive with an accelerated vesting schedule
for those Securities currently held or hereafter acquired by Executive according
to the terms and conditions contained herein.
NOW THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the Executive and the Company (each, a "Party,"
and collectively, the "Parties") agree as follows:
1. ACCELERATED VESTING OF THE SECURITIES.
(a) In the event of a Change of Control (as defined in Section 1(b)(i)
below) of the Company and if Executive's employment with the surviving company
is Involuntarily Terminated (as defined in Section 1(b)(ii) below) during the
period beginning sixty (60) days prior to such Change of Control and ending
thirteen (13) months following such Change of Control, (i) fifty percent (50%)
of those unvested Securities then held by Executive which are Options, if any,
shall automatically be accelerated such that Executive shall have the right to
exercise in accordance with their terms all or any portion of such Securities
and (ii) the Company's repurchase right shall automatically lapse with respect
to fifty percent (50%) of the Shares then held by Executive which are subject to
such repurchase right.
(b) (i) A "Change of Control" shall, for purposes of the foregoing,
mean: (1) a dissolution or liquidation of the Company; (2) any sale or transfer
of all or substantially all of the assets of the Company; (3) any merger or
consolidation in which the holders of the Company's outstanding voting
securities immediately prior to such transaction do not hold, immediately
following such transaction, securities representing fifty percent (50%) or more
of the combined voting power of the outstanding securities of the surviving
entity; or (4) the acquisition by any person (within the meaning of Section
13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), of beneficial ownership (within the meaning of Rule 13d-3
or any successor rule or regulation promulgated under the Exchange Act) of
1.
2
securities representing fifty percent (50%) or more of the combined voting power
of the then-outstanding securities of the Company.
(ii) An "Involuntary Termination" shall mean (1) a termination
initiated by the surviving company, other than a termination due to material
acts of dishonesty, conviction of a felony or willful misconduct by Executive or
(2) a termination initiated by Executive as a result of a material diminution in
salary, a material change in responsibility or a change in work location of more
than 30 miles from the then current job location.
(c) Notwithstanding the foregoing, with respect to any Change in Control
prior to the second anniversary of the adoption of this Agreement by the Board
of Directors of the Company (the "Board") that would otherwise be eligible to be
accounted for as a "pooling of interests" accounting transaction, if: (A) either
the adoption of this Agreement by the Board or the execution, delivery or any
provision of this Agreement would by itself result in such a Change in Control
becoming ineligible for such accounting treatment; and (B) the potential
acquiror of the Company in such transaction desires to account for such Change
in Control as a "pooling of interests" transaction, then the provisions of
Section 1(a) of this Agreement shall not apply with respect to such Change in
Control. Additionally, in the event that the provisions of the immediately
preceding sentence by themselves would result in a contemplated Change in
Control to become ineligible to be accounted for as a "pooling of interests"
transaction, then such provisions shall be deemed inoperative. Accounting issues
shall be determined by the Company's independent public accountants applying
generally accepted accounting principles.
2. ADJUSTMENT FOR CHANGES IN CAPITAL STOCK. All references to the number of
Securities in this Agreement shall be appropriately adjusted by the Company to
reflect any stock split, stock dividend, stock combination or other change in
the Shares which may be made by the Company after the date of this Agreement.
3. GOLDEN PARACHUTE TAXES. In the event that any payment or distribution by
the Company, or the grant of any benefit by the Company, to or for the benefit
of Executive (whether paid or payable, distributed or distributable or granted
or to be granted pursuant to the terms of this Agreement or otherwise)
(collectively, "Benefits") would be nondeductible by the Company for federal
income tax purposes because of Section 280G of the Internal Revenue Code (the
"Code") and/or would cause Executive to be liable for an excise tax pursuant to
Section 4999 of the Code, then the Benefits paid, distributed or granted to
Executive under this Agreement shall equal (i) the full amount of such Benefits
or (ii) the Reduced Amount (as defined below), whichever of the foregoing
amounts is determined by the Company to result, on an after-tax basis, in the
receipt by Executive of the greatest amount of such Benefits, notwithstanding
that all or some portion of the Benefits may be taxable under Section 4999 of
the Code. In making its determination pursuant to the preceding sentence, the
Company shall take into account all applicable Federal, state, and local
employment and income taxes, as well as the excise tax imposed by Section 4999
of the Code. For purposes of this Section 3, the "Reduced Amount" shall be the
maximum amount payable to Executive that would result in no portion of the
Benefits being (i) nondeductible by the Company under Section 280G of the Code
or (ii) subject to an excise tax liability under Section 4999 of the Code.
Notwithstanding the foregoing and any other provision contained herein, in the
event (as a result of Benefits to be received under this Agreement or any other
plan or arrangement between the Executive and the
2.
3
Company) of any required reduction, as a result of Section 4999 of the Code, of
Benefits to be received by Executive, reduction shall be made from such other
plan or arrangement prior to any reduction relating to Benefits to be received
by Executive under this Agreement.
4. GENERAL PROVISIONS.
(a) This Agreement shall be governed by the laws of the State of
California (without regard to principles of conflict of laws).
(b) Any notice, demand or request required or permitted to be given by
either the Company or Executive pursuant to the terms of this Agreement shall be
in writing and shall be deemed given when delivered personally or deposited in
the U.S. mail, First Class with postage prepaid, and addressed to the parties at
such addresses as have been previously furnished by the Parties or such other
address as a Party may request by notifying the other in writing.
(c) The rights and obligations of Executive under this Agreement may not
be transferred or assigned without the prior written consent of the Company.
(d) This Agreement is meant to supplement the terms of the restricted
stock purchase agreement, stock option agreement or other agreement pursuant to
which Executive acquired the Securities. To the extent that the terms and
conditions of this Agreement are inconsistent with those found in the restricted
stock purchase agreement, stock option agreement or other agreement, the terms
and conditions of this Agreement shall be controlling.
(e) Any Party's failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent any Party from thereafter enforcing each and every other
provision of this Agreement. The rights granted the Parties herein are
cumulative and shall not constitute a waiver of any Party's right to assert all
other legal remedies available to it under the circumstances.
(f) Executive agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.
(g) In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired.
(h) This Agreement, in whole or in part, may be modified, waived or
amended upon the written consent of the Company and Executive.
(i) By Executive's signature below, Executive represents that he is
familiar with the terms and provisions of this Agreement, and hereby accepts
this Agreement subject to all of the terms and provisions set forth herein.
Executive has reviewed this Agreement in its entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Executive agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board of
Directors of the Company upon any questions arising under this Agreement.
3.
4
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one
instrument.
EXECUTIVE STAC, INC.
_______________________________ _______________________________
Signature By
_______________________________ _______________________________
Print Name Title
4.
5
EXHIBIT A
CONSENT OF SPOUSE
I, ______________, spouse of Executive, have read and approve the foregoing
Agreement. In consideration of granting to my spouse the rights and benefits,
subject to the obligations, set forth in this Agreement, I hereby consent to
this Agreement, appoint my spouse as my attorney-in-fact in respect to the
exercise of any rights under this Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
and/or the Securities covered thereunder under any community property laws or
similar laws relating to marital property.
Dated:_________________
__________________________________
1.
