EXHIBIT 10.1
CORILLIAN CORPORATION
CHANGE OF CONTROL SEVERANCE AGREEMENT
This Change of Control Severance Agreement (the "Agreement") is made and entered
into by and between __________________ (the "Employee") and Corillian
Corporation (the "Company"), effective as of the latest date set forth by the
signatures of the parties hereto below.
R E C I T A L S
A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control as a
means of enhancing shareholder value. The Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board") recognizes
that such consideration can be a distraction to the Employee and can cause the
Employee to consider alternative employment opportunities. The Committee has
determined that it is in the best interests of the Company and its shareholders
to assure that the Company will have the continued dedication and objectivity of
the Employee, notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined below) of the Company.
B. The Committee believes that it is in the best interests of the
Company and its shareholders to provide the Employee with an incentive to
continue his employment and to motivate the Employee to maximize the value of
the Company upon a Change of Control for the benefit of its stockholders.
C. The Committee believes that it is imperative to provide the Employee
with certain severance benefits upon the Employee's termination of employment
following a Change of Control that provides the Employee with enhanced financial
security and provides incentive and encouragement to the Employee to remain with
the Company notwithstanding the possibility of a Change of Control.
D. Certain capitalized terms used in the Agreement but not defined when
first used are defined in Section 6 below.
NOW, THEREFORE, the parties hereto agree as follows:
1. TERM OF AGREEMENT. This Agreement shall terminate upon the date that all
obligations of the parties hereto with respect to this Agreement have been
satisfied.
2. AT-WILL EMPLOYMENT. The Company and the Employee acknowledge that,
unless there is a written employment agreement between the Company and the
Employee, which this Agreement is acknowledged by the Employee not to be, the
Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason,
including (without limitation) any termination prior to the announcement of a
Change of Control, the Employee shall not be entitled to any payments, benefits,
damages, awards or compensation except for those payments that may be available
in accordance with the Company's established employee plans and practices or
pursuant to other agreements with the Company.
3. SEVERANCE BENEFITS.
(a) Termination in Connection with a Change of Control. If the
Employee's employment terminates as a result of Involuntary Termination
(as defined below) other than for Cause at any time after the
announcement of a Change of Control or twelve (12) months following a
Change of Control or the announcement of a Change of Control, whichever
comes later (a "Severance Termination"), then, subject to Section 5, the
Employee shall be entitled to receive the following severance benefits:
(1) Severance Payment. A cash payment in an amount equal to the
Severance Payment;
(2) Employee Benefits. For purposes of Title X of the
Consolidated Budget Reconciliation Act of 1985 ("COBRA"), the date of
the "Qualifying Event" for the Employee and his or her dependents shall
be the Termination Date.
(3) Timing of Severance Payments. Any severance payment to which
the Employee is entitled under Section 3(a)(1) shall be paid by the
Company to the Employee (or to the Employee's successor in interest,
pursuant to Section 7(b)) in cash and in full, not later than thirty
(30) calendar days following the Termination Date, subject to Section
9(f).
(b) Voluntary Resignation; Termination for Cause. If the Employee's
employment terminates by reason of the Employee's voluntary resignation
(and is not an Involuntary Termination), or if the Employee is
terminated for Cause, then the Employee shall not be entitled to receive
severance or other benefits except for those (if any) as may then be
established under the Company's then existing option, severance and
benefits plans and practices or pursuant to other agreements with the
Company.
(c) Disability; Death. If the Company terminates the Employee's
employment as a result of the Employee's Disability, or the Employee's
employment is terminated due to the death of the Employee, then the
Employee shall not be entitled to receive severance or other benefits
except for those (if any) as may then be established under the Company's
then existing severance and benefits plans and practices or pursuant to
other agreements with the Company.
(d) Termination apart from Change of Control. In the event the
Employee's employment is terminated for any reason, either prior to the
announcement of a Change of Control or after the twelve (12)-month
period following a Change of Control, then the Employee shall be
entitled to receive severance and any other benefits only as may then be
established under the Company's existing severance and benefits plans
and practices or pursuant to other agreements with the Company.
4. ATTORNEY FEES, COSTS AND EXPENSES. The Company shall reimburse the
Employee for the reasonable attorney fees, costs and expenses incurred by the
Employee in connection with any action brought by the Employee to enforce his or
her rights hereunder, provided such action is not decided in favor of the
Company.
5. LIMITATION ON PAYMENTS.
(a) In the event that the severance and other benefits provided for in
this Agreement or otherwise payable to the Employee (i) constitute
"parachute payments" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code") and (ii) but for this
Section 5, would be subject to the excise tax imposed by Section 4999 of
the Code, then the Employee's severance benefits under Section 3(a)(1)
shall be either
(1) delivered in full, or
(2) delivered as to such lesser extent which would result in no
portion of such severance benefits being subject to excise tax under
Section 4999 of the Code, whichever of the foregoing amounts, taking
into account the applicable federal, state and local income taxes and
the excise tax imposed by Section 4999, results in the receipt by the
Employee on an after-tax basis, of the greatest amount of severance
benefits, notwithstanding that all or some portion of such severance
benefits may be taxable under Section 4999 of the Code. Any taxes due
under Section 4999 shall be the responsibility of the Employee.
(b) If a reduction in the payments and benefits that would otherwise be
paid or provided to the Employee under the terms of this Agreement is
necessary to comply with the provisions of Section 5(a), the Employee
shall be entitled to select which payments or benefits will be reduced
and the manner and method of any such reduction of such payments or
benefits subject to reasonable limitations (including, for example,
express provisions under the Company's benefit plans) (so long as the
requirements of Section 5(a) are met). Within thirty (30) days after the
amount of any required reduction in payments and benefits is finally
determined in accordance with the provisions of Section 5(c), the
Employee shall notify the Company in writing regarding which payments or
benefits are to be reduced. If no notification is given by the Employee,
the Company will determine which amounts to reduce. If, as a result of
any reduction required by Section 5(a), amounts previously paid to the
Employee exceed the amount to which the Employee is entitled, the
Employee will promptly return the excess amount to the Company.
(c) Unless the Company and the Employee otherwise agree in writing, any
determination required under this Section 5 shall be made in writing by
the Company's Accountants immediately prior to Change of Control, whose
determination shall be conclusive and binding upon the Employee and the
Company for all purposes. For purposes of making the calculations
required by this Section 5, the Accountants may, after taking into
account the information provided by the Employee, make reasonable
assumptions and approximations concerning applicable taxes and may rely
on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and the Employee shall
furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination
under this Section. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by
this Section 5.
6. DEFINITION OF TERMS. The following terms referred to in this Agreement
shall have the following meanings:
(a) "ANNUAL COMPENSATION" means an amount equal to the greater of (i)
the Employee's Company salary for the twelve (12) months preceding the
Change of Control or (ii) the Employee's Company Salary on an annualized
basis.
(b) "CAUSE" means (i) any act of personal dishonesty taken by the
Employee in connection with his responsibilities as an employee and
intended to result in substantial personal enrichment of the Employee,
(ii) the conviction of a felony, (iii) a willful act by the Employee
that constitutes gross misconduct and that is injurious to the Company,
or (iv) for a period of not less than thirty (30) days following
delivery to the Employee of a written demand for performance from the
Company that describes the basis for the Company's belief that the
Employee has not substantially performed his duties, continued
violations by the Employee of the Employee's obligations to the Company
that are demonstrably willful and deliberate on the Employee's part. Any
dismissal for cause in accordance with Subsection (iv) of this Section
6(b) must be approved by the Company's Board of Directors prior to the
dismissal date.
(c) "CHANGE OF CONTROL" means the occurrence of any of the following
events:
(1) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly
or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company's
then outstanding voting securities;
(2) A change in the composition of the Board occurring within a
twelve-month period, as a result of which fewer than a majority of the
directors are Incumbent Directors. "Incumbent Directors" shall mean
directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected,
or nominated for election, to the Board with the affirmative votes of at
least a majority of the Incumbent Directors at the time of such election
or nomination (but shall not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest
relating to the election of directors to the Company);
(3) The consummation of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation that
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 or such surviving entity's parent) at least fifty
percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or such surviving
entity's parent outstanding immediately after such merger or
consolidation;
(4) The consummation of the sale or disposition by the Company of
all or seventy-five percent (75%) or more of the Company's assets.
(d) "DISABILITY" shall mean that the Employee has been unable to perform
his or her Company duties as the result of incapacity due to physical or
mental illness, and such inability, at least twenty-six (26) weeks after
its commencement, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Employee
or the Employee's legal representative (such Agreement as to
acceptability not to be unreasonably withheld). Termination resulting
from Disability may only be effected after at least thirty (30) days'
written notice by the Company of its intention to terminate the
Employee's employment. In the event that the Employee resumes the
performance of substantially all of his or her duties hereunder before
the termination of employment becomes effective, the notice of intent to
terminate shall automatically be deemed to have been revoked.
(e) "INVOLUNTARY TERMINATION" shall mean (i) without the Employee's
express written consent, the significant reduction of the Employee's
duties, authority or responsibilities, relative to the Employee's
duties, authority or responsibilities as in effect immediately prior to
such reduction, or the assignment to the Employee of such significantly
reduced duties, authority or responsibilities; (ii) without the
Employee's express written consent, a substantial reduction of the
facilities and perquisites (including office space and location)
available to the Employee immediately prior to such reduction; (iii) a
reduction by the Company in the base salary or target bonus of the
Employee as in effect immediately prior to such reduction; (iv) a
material reduction by the Company in the kind or level of employee
benefits, including bonuses, to which the Employee was entitled
immediately prior to such reduction with the result that the Employee's
overall benefits package is significantly reduced; (v) the relocation of
the Employee to a facility or a location more than twenty-five (25)
miles from the Employee's then present location, without the Employee's
express written consent; (vi) any purported
termination of the Employee by the Company that is not effected for
Disability or for Cause, or any purported termination for which the
grounds relied upon are not valid; (vii) the failure of the Company to
obtain the assumption of this Agreement by any successors contemplated
in Section 7(a) below; or (viii) any act or set of facts or
circumstances that would, under Oregon case law or statute constitute a
constructive termination of the Employee.
(f) "SEVERANCE PAYMENT" means the Employee's Annual Compensation for the
Severance Period.
(g) "SEVERANCE PERIOD" means the number of weeks determined by
multiplying (A) the Term of Service Quotient by (B) 18 if Employee is a
Vice President or lower level employee, 24 if Employee is a Senior Vice
President or Executive Vice President, or 48 if Employee is an Executive
Officer (e.g. CEO, CFO, COO, CMO, or CTO). In no event may the Severance
Period exceed 26 weeks if Employee is a Vice President or lower level
employee, 39 weeks if Employee is a Senior Vice President or Executive
Vice President, or 104 weeks if Employee is an Executive Officer.
Employee's title at the time of termination applies in determining the
Severance Period pursuant to this paragraph.
(h) "TERMINATION DATE" shall mean (i) if this Agreement is terminated by
the Company for Disability, thirty (30) days after notice of termination
is given to the Employee (provided that the Employee shall not have
returned to the performance of the Employee's duties on a full-time
basis during such thirty (30)-day period), (ii) if the Employee's
employment is terminated by the Company for any other reason, the date
on which a notice of termination is given, provided that if within
thirty (30) days after the Company gives the Employee notice of
termination, the Employee notifies the Company that a dispute exists
concerning the termination or the benefits due pursuant to this
Agreement, then the Termination Date shall be the date on which such
dispute is finally determined, either by mutual written agreement of the
parties, or a by final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal
having been perfected), or (iii) if the Agreement is terminated by the
Employee, the date on which the Employee delivers the notice of
termination to the Company.
(i) "TERM OF SERVICE QUOTIENT" means the quotient obtained by dividing
the number of full calendar months of the Employee's employment with the
Company by twelve.
7. SUCCESSORS.
(a) Company's Successors. Any successor to the Company (whether direct
or indirect and whether by purchase, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company's business
and/or assets shall assume the obligations under this Agreement and
agree expressly to perform the obligations under this Agreement in the
same manner and to the same extent as the Company
would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Company"
shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this
Section 7(a) or which becomes bound by the terms of this Agreement by
operation of law.
(b) Employee's Successors. The terms of this Agreement and all rights of
the Employee hereunder shall inure to the benefit of, and be enforceable
by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
8. NOTICE.
(a) General. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the
case of the Employee, mailed notices shall be addressed to him or her at
the home address which he or she most recently communicated to the
Company in writing. In the case of the Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be
directed to the attention of its Secretary.
(b) Notice of Termination. Any termination by the Company for Cause or
by the Employee as a result of a voluntary resignation or an Involuntary
Termination shall be communicated by a notice of termination to the
other party hereto given in accordance with Section 8(a) of this
Agreement. Such notice shall indicate the specific termination provision
in this Agreement relied upon, shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination under
the provision so indicated, and shall specify the termination date
(which shall be not more than thirty (30) days after the giving of such
notice). The failure by the Employee to include in the notice any fact
or circumstance which contributes to a showing of Involuntary
Termination shall not waive any right of the Employee hereunder or
preclude the Employee from asserting such fact or circumstance in
enforcing his rights hereunder.
9. MISCELLANEOUS PROVISIONS.
(a) No Duty to Mitigate. The Employee shall not be required to mitigate
the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Employee may receive
from any other source.
(b) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by an authorized officer of the
Company (other than the Employee). No waiver by either party of any
breach of, or of compliance with,
any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same
condition or provision at another time.
(c) Whole Agreement. This Agreement and any outstanding stock option
agreements represent the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
arrangements and understandings regarding same. Other than the
agreements described in the preceding sentence, no agreements,
representations or understandings (whether oral or written and whether
express or implied) which are not expressly set forth in this Agreement
have been made or entered into by either party with respect to the
subject matter hereof.
(d) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the
laws of the State of Oregon without regard to principles of conflicts of
laws.
(e) Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full
force and effect.
(f) Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable income and employment taxes.
(g) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
set forth below.
"Company"
CORILLIAN CORPORATION
By:
--------------------------------
Title:
-----------------------------
Name:
------------------------------
"Employee"
-----------------------------------
Print Name:
------------------------
