AMENDMENT TO SEVERANCE AGREEMENT
EXHIBIT 10.1
AMENDMENT TO SEVERANCE AGREEMENT
This Amendment to the Severance Agreement between Xxxxx Xxxxxx and Novell, Inc., dated April 30, 2007, as amended and in effect (the “Severance Agreement”) confirms and sets forth the parties’ agreement to the following modifications to the Severance Agreement:
1. | Line numbers shall be added for convenience to the Severance Agreement and its Annex A, as set forth in the copy attached hereto, for purposes of effectuating the foregoing modifications. |
2. | Page 8, line 10, shall be amended to include the subheader (a) at the beginning of the line. |
3. | Page 8, line 14, shall be amended to include the subheader (b) at the beginning of the line. |
4. | Page 8, line 18 shall be amended to replace “100%” with “150%.” |
5. | Page 9, line 39 shall be amended to include the subheader (a) at the beginning of the line. |
6. | Page 10, line 20 shall be amended to include the subheader (b) at the beginning of the line. |
7. | Page 10, line 24 shall be amended to replace “(A) one times Base Pay,” with “(A) two (2) times Base Pay.” |
8. | Page 10, lines 24-25 shall be amended to replace “(B) one times Incentive Pay” with “(B) two (2) times Incentive Pay.” |
9. | Page 10, line 39 shall be amended to replace “twelve (12) month period” with “twenty-four (24) month period.” |
10. | Page 11, line 8 shall be amended to replace “twelve (12) month period” with “twenty-four (24) month period.” |
11. | Page 11, line 14 shall be amended to replace “twelve (12) month period” with “twenty-four (24) month period.” |
12. | Page 11, line 23 shall be amended to replace “twelve (12) month period” with “twenty-four (24) month period.” |
13. | Page 11, line 26 shall be amended to replace “twelve (12) month period” with “twenty-four (24) month period.” |
14. | Page 12, line 14 shall be amended to replace “twelve (12) month period” with “twenty-four (24) month period.” |
15. | Page 15, line 44 shall be amended to replace “six (6) months” with “nine (9) months.” |
16. | Page A-3 of Annex A, line 7 shall be amended to replace “100%” with “150%.” |
17. | Page A-4 of Annex A, lines 33-34 shall be amended to replace “(A) one times Base Pay” with “(A) two (2) times Base Pay.” |
18. | Page A-4 of Annex A, lines 34-35 shall be amended to replace “(B) one times Incentive Pay” with “(B) two (2) times Incentive Pay.” |
19. | Page A-5 of Annex A, line 3 shall be amended to replace “twelve (12) months” with “twenty-four (24) months.” |
20. | Page A-5 of Annex A, line 10 shall be amended to replace “twelve (12) month period” with “twenty-four (24) month period.” |
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21. | Page A-5 of Annex A, line 15 shall be amended to replace “twelve (12) month period” with “twenty-four (24) month period.” |
22. | Page A-5 of Annex A, line 22 shall be amended to replace “twelve (12) month period” with “twenty-four (24) month period.” |
23. | Page A-5 of Annex A, lines 30-31 shall be amended to replace “twelve (12) month period” with “twenty-four (24) month period.” |
24. | Page A-6 of Annex A, line 11 shall be amended to replace “twelve (12) months” with “twenty-four (24) months.” |
IN WITNESS WHEREOF, the parties have caused this Amendment to Severance Agreement to be duly executed and delivered as of the date below.
NOVELL, INC. | EXECUTIVE | |||||
By: | ||||||
/s/ XXXXXXX XXXXX |
/s/ XXXXX XXXXXX | |||||
Xxxxxxx Xxxxx | Xxxxx Xxxxxx | |||||
Xx. Vice President-Human Resources | ||||||
Date: June 30, 2010 | Date: June 30, 2010 |
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EXHIBIT B |
GROUP II |
SEVERANCE AGREEMENT | ||
1. | THIS SEVERANCE AGREEMENT (this “Agreement”), dated as of April | |
2. | 30, 2007, is made and entered by and between Novell, Inc., a Delaware corporation | |
3. | (the “Company”), and Xxxxx X. Xxxxxx the “Executive”). | |
WITNESSETH: | ||
4. | WHEREAS, the Executive is an employee of the Company and is expected to | |
5. | make major contributions to the short- and long-term profitability, growth and financial | |
6. | strength of the Company; | |
7. | WHEREAS, the Board (as defined below) has determined that appropriate | |
8. | arrangements should be taken to encourage the continued attention and dedication of the | |
9. | Executive to his assigned duties without distraction; and | |
10. | WHEREAS, in consideration of the Executive’s employment with the Company, | |
11. | the Company desires to provide the Executive with certain compensation and benefits set | |
12. | forth in this Agreement in order to ameliorate the financial and career impact on the | |
13. | Executive in the event the Executive’s employment with the Company is terminated for | |
14. | reason related to, or unrelated to, a Change in Control (as defined below) of the | |
15. | Company. | |
16. | NOW, THEREFORE, in consideration of the foregoing and the mutual covenants | |
17. | and agreements hereinafter set forth and intending to be legally bound hereby, the | |
18. | Company and the Executive agree as follows: | |
19. | 1. Certain Defined Terms. In addition to terms defined elsewhere herein, the | |
20. | following terms have the following meanings when used in this Agreement with initial | |
21. | capital letters: | |
22. | (a) “Base Pay” means the greater of (i) the Executive’s annual base salary rate, | |
23. | exclusive of bonuses, commissions and other Incentive Pay, as in effect immediately | |
24. | preceding the Executive’s Termination Date, or (ii) the Executive’s highest annual base | |
25. | salary rate, exclusive of bonuses, commissions and other Incentive Pay, as in effect in | |
26. | any of the three (3) full calendar years preceding the Executive’s Termination Date. | |
27. | (b) “Board” means the Board of Directors of the Company. | |
28. | (c) “Cause:” | |
29. | (i) For purposes of Involuntary Termination Prior to a Change in Control, means a | |
30. | determination by the Company’s Chief Executive Officer or Senior Vice President- |
1. | continued violations of the Executive’s obligations which are demonstrably willful or | |
2. | deliberate on the Executive’s part after there has been delivered to the Executive a written | |
3. | demand for performance from the Company which describes the basis for the Company’s | |
4. | belief that the Executive has willfully or deliberately violated his obligations to the | |
5. | Company; | |
6. | engaging in willful misconduct which is injurious to the Company or any Subsidiary; | |
7. | committing a felony, an act of fraud against or the misappropriation of property | |
8. | belonging to the Company or any Subsidiary; | |
9. | breaching, in any material respect, terms of any confidentiality or proprietary information | |
10. | agreement between the Executive and the Company; or | |
11. | committing a material violation of the Company’s Code of Business Ethics or Employee | |
12. | Conduct and Standards Policy, as either or both are in effect from time to time by the | |
13. | Company. | |
14. | For purposes of Involuntary Termination Associated With a Change in Control, means a | |
15. | determination by the Board that the Executive has committed any of the following acts: | |
16. | the Executive has been convicted of a criminal violation involving fraud, embezzlement | |
17. | or theft in connection with his duties or in the course of his employment with the | |
18. | Company or any Subsidiary; or | |
19. | the Executive has committed intentional wrongful disclosure of secret processes or | |
20. | confidential information of the Company or any Subsidiary; and any such act has been | |
21. | demonstrably and materially harmful to the Company. For purposes of this subparagraph | |
22. | (B), no act on the part of the Executive will be deemed “intentional” if it was due | |
23. | primarily to an error in judgment or negligence, but will be deemed “intentional” if done | |
24. | by the Executive not in good faith and without reasonable belief that the Executive’s | |
25. | action was in the best interest of the Company. | |
26. | Notwithstanding the foregoing, the Executive will not be deemed to have been terminated | |
27. | for “Cause” under this clause (ii) unless and until there has been delivered to the | |
28. | Executive a copy of a resolution duly adopted by the affirmative vote of not less than | |
29. | three-quarters of the members of the Board then in office at a meeting of the Board, | |
30. | finding that, in the good faith opinion of the Board, the Executive has committed an act | |
31. | constituting “Cause,” as herein defined, and specifying the particulars thereof in detail. | |
32. | Prior to any such determination, the Executive shall be provided with reasonable notice | |
33. | of such pending determination and the Executive, together with his counsel (if the | |
34. | Executive chooses to have counsel present at such meeting), shall be provided with the | |
35. | opportunity to be heard before the Board makes any such determination. Nothing herein | |
36. | will limit the right of the Executive or his beneficiaries to contest the validity or propriety | |
37. | of any such determination. | |
38. | “Change in Control” means the occurrence of any of the following events: |
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1. | the acquisition by any individual, entity or group (within the meaning of section 13(d)(3) | |
2. | or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the | |
3. | meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the | |
4. | combined voting power of the then outstanding Voting Stock of the Company; provided, | |
5. | however, that for purposes of this Section 1(d)(i), the following acquisitions will not | |
6. | constitute a Change in Control: (A) any issuance of Voting Stock of the Company | |
7. | directly from the Company that is approved by the Incumbent Board (as defined in | |
8. | Section 1(d)(ii), below), (B) any acquisition by the Company of Voting Stock of the | |
9. | Company, (C) any acquisition of Voting Stock of the Company by any employee benefit | |
10. | plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (D) | |
11. | any acquisition of Voting Stock of the Company by any Person pursuant to a Business | |
12. | Combination that complies with clauses (A), (B) and (C) of Section l(d)(iii), below; and | |
13. | provided, further, that a Change in Control will not occur if any Person becomes the | |
14. | beneficial owner of 25% or more of the combined voting power of the Voting Stock of | |
15. | the Company solely as a result of an issuance of Voting Stock described in clause (A) of | |
16. | this Section l(d)(i) or an acquisition of Voting Stock described in clause (B) of this | |
17. | Section l(d)(i) unless and until such Person thereafter acquires beneficial ownership of | |
18. | Voting Stock of the Company that causes the aggregate percent of the combined voting | |
19. | power of the Voting Stock of the Company then owned beneficially by such Person to | |
20. | exceed the percent of the combined voting power of Voting Stock of the Company owned | |
21. | beneficially by such Person immediately after such issuance or acquisition described in | |
22. | clause (A) or (B) of this Section l(d)(i); | |
23. | individuals who, as of the date hereof, constitute the Board (the “Incumbent Board,” as | |
24. | modified by this Section l(d)(ii)), cease for any reason to constitute at least a majority of | |
25. | the Board; provided, however, that any individual becoming a Director subsequent to the | |
26. | date hereof whose election, or nomination for election by the Company’s stockholders, | |
27. | was approved by a vote of at least two-thirds of the Directors then comprising the | |
28. | Incumbent Board (either by a specific vote or by approval of the proxy statement of the | |
29. | Company in which such person is named as a nominee for director, without objection to | |
30. | such nomination) will be deemed to have then been a member of the Incumbent Board, | |
31. | but excluding, for this purpose, any such individual whose initial assumption of office | |
32. | occurs as a result of an actual or threatened election contest (within the meaning of Rule | |
33. | 14a-l1 of the Exchange Act) with respect to the election or removal of Directors or other | |
34. | actual or threatened solicitation of proxies or consents by or on behalf of a Person other | |
35. | than the Board; | |
36. | consummation of a reorganization, merger or consolidation, a sale or other disposition of | |
37. | all or substantially all of the assets of the Company, or other transaction (each, a | |
38. | “Business Combination”), unless, in each case, immediately following such Business | |
39. | Combination, (A) all or substantially all of the individuals and entities who were the | |
40. | beneficial owners of Voting Stock of the Company immediately prior to such Business | |
41. | Combination beneficially own, directly or indirectly, more than 50% of the combined | |
42. | voting power of the then outstanding shares of Voting Stock of the entity resulting from | |
43. | such Business Combination (including, without limitation, an entity which as a result of | |
44. | such transaction owns the Company or all or substantially all of the Company’s assets | |
45. | either directly or through one or more subsidiaries), (B) no Person (other than the | |
46. | Company; such entity resulting from such Business Combination; any employee benefit |
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1. | plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such | |
2. | entity resulting from such Business Combination; or any Person who immediately prior | |
3. | to such Business Combination beneficially owned directly or indirectly 25% or more of | |
4. | the combined voting power of the voting stock of the Company and whose ownership of | |
5. | such Voting Stock did not result in a Change in Control under Section 1(d)(i)) | |
6. | beneficially owns, directly or indirectly, 25% or more of the combined voting power of | |
7. | the then outstanding shares of Voting Stock of the entity resulting from such Business | |
8. | Combination, and (C) at least a majority of the members of the Board of Directors of the | |
9. | entity resulting from such Business Combination were members of the Incumbent Board | |
10. | at the time of the execution of the initial agreement or of the action of the Board | |
11. | providing for such Business Combination; or | |
12. | approval by the stockholders of the Company of a complete liquidation or dissolution of | |
13. | the Company, except pursuant to a Business Combination that complies with clauses (A), | |
14. | (B) and (C) of Section 1(d)(iii). | |
15. | “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1986, as | |
16. | amended. | |
17. | “Code” means the Internal Revenue Code of 1986, as amended. | |
18. | “Constructive Termination Associated With a Change in Control” means the termination | |
19. | of the Executive’s employment with the Company by the Executive as a result of the | |
20. | occurrence of one of the following events, without the Executive’s express written | |
21. | consent, as a result of a Change in Control: | |
22. | the failure to elect or reelect or otherwise to maintain the Executive in the office or the | |
23. | position, or an equivalent office or position, of or with the Company and/or a Subsidiary | |
24. | (or any successor thereto by operation of law or otherwise), as the case may be, which the | |
25. | Executive held immediately prior to a Change in Control, or the removal of the Executive | |
26. | as a Director of the Company and/or a Subsidiary (or any successor thereto) if the | |
27. | Executive has been a Director of the Company and/or a Subsidiary immediately prior to | |
28. | the Change in Control; | |
29. | the failure of the Company to remedy any of the following within ten (10) business days | |
30. | after receipt by the Company of written notice thereof from the Executive: (A) an adverse | |
31. | change in the nature or scope of the authorities, powers, functions, responsibilities or | |
32. | duties attached to the position with the Company and any Subsidiary which the Executive | |
33. | held immediately prior to the Change in Control, (B) a reduction in the aggregate of the | |
34. | Executive’s Base Pay, Incentive Pay, and Equity Compensation, or (C) the termination or | |
35. | denial of the Executive’s rights to Employee Benefits or a reduction in the scope or value | |
36. | thereof; | |
37. | a determination by the Executive (which determination will be conclusive and binding | |
38. | upon the parties hereto provided it has been made in good faith and in all events will be | |
39. | presumed to have been made in good faith unless otherwise shown by the Company by | |
40. | clear and convincing evidence) that a change in circumstances has occurred following a | |
41. | Change in Control, including, without limitation, a change in the scope of the business or | |
42. | other activities for which the Executive was responsible immediately prior to the Change |
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1. | in Control, which has rendered the Executive unable to carry out, has hindered the | |
2. | Executive’s performance of, or has caused the Executive to suffer a reduction in, any of | |
3. | the authorities, powers, functions, responsibilities or duties attached to the position held | |
4. | by the Executive immediately prior to the Change in Control, which situation is not | |
5. | remedied within ten (10) business days after written notice to the Company from the | |
6. | Executive of such determination; | |
7. | the liquidation, dissolution, merger, consolidation or reorganization of the Company or | |
8. | transfer of all or substantially all of its business and/or assets, unless the successor or | |
9. | successors (by liquidation, merger, consolidation, reorganization, transfer or otherwise) | |
10. | to which all or substantially all of its business and/or assets have been transferred (by | |
11. | operation of law or otherwise) assumes all duties and obligations of the Company under | |
12. | this Agreement pursuant to Section 15(a); | |
13. | a requirement by the Company that the Executive have his principal location of work | |
14. | changed to any location that is in excess of thirty-five (35) miles from the location | |
15. | thereof immediately prior to the Change in Control, or that the Executive travel away | |
16. | from his office in the course of discharging his responsibilities or duties hereunder at | |
17. | least 20% more (in terms of aggregate days in any calendar year or in any calendar | |
18. | quarter when annualized for purposes of comparison to any prior year) than was required | |
19. | of the Executive in any of the three (3) full years immediately prior to the Change in | |
20. | Control; or | |
21. | without limiting the generality or effect of the foregoing, any material breach of this | |
22. | Agreement by the Company or any successor thereto which is not remedied by the | |
23. | Company within ten (10) business days after receipt by the Company of written notice | |
24. | from the Executive of such breach. | |
25. | In no event shall the termination of the Executive’s employment with the Company on | |
26. | account of the Executive’s death or Disability or because the Executive engaged in | |
27. | conduct constituting Cause be deemed to be a Constructive Termination Associated With | |
28. | a Change in Control. | |
29. | “Constructive Termination Prior to a Change in Control” means the termination of the | |
30. | Executive’s employment with the Company by the Executive as a result of the | |
31. | occurrence of one of the following events, without the Executive’s express written | |
32. | consent: | |
33. | a comprehensive and substantial reduction in all or most of the Executive’s primary | |
34. | duties, authority and responsibilities compared to the Executive’s duties, authority and | |
35. | responsibilities immediately prior to such reduction; | |
36. | a significant reduction in the Executive’s Base Pay compared to the Executive’s Base | |
37. | Pay in effect immediately prior to such reduction; provided, however, that a reduction in | |
38. | the Executive’s Base Pay of less than twenty percent (20%) or a reduction in the | |
39. | Executive’s Base Pay that is part of an overall reduction in compensation also applied to | |
40. | other senior executives of the Company as a result of decreased business performance by | |
41. | the Company or one of its business units, shall not constitute a Constructive Termination | |
42. | Prior to a Change in Control; or |
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1. | the failure of the Company to obtain the assumption of this Agreement by any successors. | |
2. | In no event shall the termination of the Executive’s employment with the Company on | |
3. | account of the Executive’s death or Disability or because the Executive engaged in | |
4. | conduct constituting Cause be deemed to be a Constructive Termination Prior to a | |
5. | Change in Control. | |
6. | “Disability” means the Executive becomes permanently disabled within the meaning of, | |
7. | and begins actually to receive disability benefits pursuant to, the long-term disability plan | |
8. | in effect for, or applicable to, the Executive. | |
9. | “Employee Benefits” means the perquisites, benefits and service credit for benefits as | |
10. | provided under any and all employee retirement income and welfare benefit policies, | |
11. | plans, programs or arrangements in which the Executive is entitled to participate, | |
12. | including, without limitation, any stock option, performance share, performance unit, | |
13. | stock purchase, stock appreciation, savings, pension, supplemental executive retirement, | |
14. | or other retirement income or welfare benefit, deferred compensation, incentive | |
15. | compensation, group or other life, health, medical/hospital or other insurance (whether | |
16. | funded by actual insurance or self-insured by the Company or a Subsidiary), disability, | |
17. | salary continuation, expense reimbursement and other employee benefit policies, plans, | |
18. | programs or arrangements that may now exist or any equivalent successor policies, plans, | |
19. | programs or arrangements that may be adopted hereafter by the Company or a | |
20. | Subsidiary, providing perquisites, benefits and service credit for benefits at least as great | |
21. | in the aggregate as are payable thereunder. | |
22. | “Equity Compensation” means any stock option, stock appreciation, stock purchase, | |
23. | restricted stock, restricted stock unit, long term incentive cash bonus award or any other | |
24. | kind of equity-based plan, program, arrangement or grant regardless of whether the form | |
25. | of distribution is in stock or cash. | |
26. | “Exchange Act” means the Securities Exchange Act of 1934, as amended. | |
27. | “Incentive Pay” means the greater of: (i) the Executive’s maximum Target Bonus for | |
28. | which the Executive was eligible during the period that includes the Termination Date, or | |
29. | (ii) the highest aggregate bonus or incentive payment paid to the Executive during any of | |
30. | the three (3) full calendar years prior to his Termination Date. For purposes of this | |
31. | definition, “Target Bonus” means the annual bonus, incentive, commission or other sales | |
32. | incentive compensation, or comparable incentive payment opportunity which, in the sole | |
33. | discretion of the Company, is deemed to constitute a Target Bonus, in addition to Base | |
34. | Pay, for which the Executive was eligible to receive, but did not receive prior to his | |
35. | Termination Date, in regard to services rendered in the year covered by the Executive’s | |
36. | Termination Date and is to be made pursuant to any bonus, incentive, profit-sharing, | |
37. | performance, discretionary pay or similar agreement, policy, plan, program or | |
38. | arrangement (whether or not funded) of the Company or a Subsidiary, or any successor | |
39. | thereto. For purposes of this definition, “Incentive Pay” does not include any Equity | |
40. | Compensation, one time bonus or payment (including, but not limited to, any sign-on | |
41. | bonus), any amounts contributed by the Company for the benefit of the Executive to any | |
42. | qualified or nonqualified deferred compensation plan, whether or not provided under an |
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1. | arrangement described in the prior sentence, or any amounts designated by the parties as | |
2. | amounts other than Incentive Pay. | |
3. | “Involuntary Termination Associated With a Change in Control” means the termination | |
4. | of the Executive’s employment related to a Change in Control: (i) by the Company for | |
5. | any reason other than Cause, the Executive’s death or the Executive’s Disability, or (ii) | |
6. | on account of a Constructive Termination Associated with a Change in Control. | |
7. | “Involuntary Termination Prior to a Change in Control” means the termination of the | |
8. | Executive’s employment unrelated to a Change in Control: (i) by the Company for any | |
9. | reason other than Cause, the Executive’s death or the Executive’s Disability, or (ii) on | |
10. | account of a Constructive Termination Prior to a Change in Control. | |
11. | “Restricted Business” means, | |
12. | if the Executive is entitled to severance benefits under this Agreement on account of an | |
13. | Involuntary Termination Prior to a Change in Control, (A) the design, development, | |
14. | manufacture, marketing or support of local or wide area network products, computer | |
15. | operating systems, applications products, software products or services that enable | |
16. | organizations to more effectively conduct business using the Web, or any other software | |
17. | products of the type designed, developed, manufactured, sold or supported by the | |
18. | Company or as proposed to be designed, developed, manufactured, sold or supported by | |
19. | the Company pursuant to a development project that is actually being pursued during the | |
20. | term of this Agreement; (B) any business that performs technology and consulting | |
21. | services that help businesses develop and accelerate their transition to Internet-based x- | |
00. | business solutions and processes, or management services that assist businesses in | |
23. | improving their operating processes; or (C) any business that competes directly or | |
24. | indirectly with the hardware, software or consulting businesses of the Company. | |
25. | if the Executive is entitled to severance benefits under this Agreement on account of an | |
26. | Involuntary Termination Associated With a Change in Control, any business function | |
27. | with a direct competitor of the Company that is substantially similar to the business | |
28. | function performed by the Executive with the Company immediately prior to his | |
29. | Termination Date. | |
30. | “Restricted Territory” means the counties, towns, cities or states of any country in which | |
31. | the Company operates or does business. | |
32. | “Severance Period” means the twelve (12) month period after the Executive’s | |
33. | Termination Date. | |
34. | “Subsidiary” means any Company controlled affiliate. | |
35. | “Termination Date” means the last day of the Executive’s employment with the | |
36. | Company. | |
37. | “Termination of Employment” means, except as provided in the following sentence, the | |
38. | termination of the Executive’s active employment relationship with the Company on | |
39. | account of an Involuntary Termination Prior to a Change in Control or an Involuntary |
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1. | Termination Associated With a Change in Control. For purposes of the non-solicitation | |
2. | provision of Section 11 of the Agreement, the term “Termination of Employment” shall | |
3. | mean the termination of the Executive’s employment relationship with the Company for | |
4. | any reason, including, but not limited to, the Executive’s Involuntary Termination Prior | |
5. | to a Change in Control, Involuntary Termination Associated With a Change in Control, | |
6. | voluntary termination, termination on account of Disability, or termination by the | |
7. | Company for Cause. | |
8. | “Voting Stock” means securities entitled to vote generally in the election of directors. | |
9. | 2.Termination Prior to a Change in Control. | |
10. | Involuntary Termination Prior to a Change in Control. In the event the Executive’s | |
11. | employment is terminated on account of an Involuntary Termination Prior to a Change in | |
12. | Control, the Executive shall be entitled to the benefits provided in subsection (b) of this | |
13. | Section 2. | |
14. | Compensation and Benefits Upon Involuntary Termination Prior to a Change in Control. | |
15. | Subject to the provisions of Section 5 hereof, in the event a termination described in | |
16. | subsection (a) of this Section 2 occurs, the Company shall pay and provide to the | |
17. | Executive after his Termination Date: | |
18. | 100% of his Base Pay. Unless a different payment stream is made pursuant to Section | |
19. | 13(b) of this Agreement, such Base Pay shall be paid to the Executive in equal | |
20. | installments over the Severance Period, consistent with the Company’s normal payroll | |
21. | practices, commencing with the first administratively practicable payroll period that | |
22. | occurs after the period during which the Executive’s right to revoke his acceptance to the | |
23. | terms of the Release has expired. | |
24. | The Executive shall receive his pro rated Incentive Pay for the year in which his | |
25. | Termination of Employment occurs. The pro rated Incentive Pay shall be based on the | |
26. | Executive’s Incentive Pay for the year in which the Executive’s Termination Date occurs, | |
27. | multiplied by a fraction, the numerator of which is the number of days during which the | |
28. | Executive was employed by the Company in the year of his termination and the | |
29. | denominator of which is 365. Unless a different payment stream is made pursuant to | |
30. | Section 13(b) of this Agreement, such pro rated Incentive Pay shall be paid to the | |
31. | Executive in equal installments over the Severance Period, consistent with the | |
32. | Company’s normal payroll practices, commencing with the first administratively | |
33. | practicable payroll period that occurs after the period during which the Executive’s right | |
34. | to revoke his acceptance to the terms of the Release has expired. | |
35. | Commencing on the month immediately following the month in which his Termination | |
36. | Date occurs, the Executive shall continue to receive for a twelve (12) month period the | |
37. | medical and dental coverage in effect on his Termination Date (or generally comparable | |
38. | coverage) for himself and, where applicable, his spouse and dependents, at the same | |
39. | premium rates as may be charged from time to time for employees of the Company | |
40. | generally, as if the Executive had continued in employment with the Company during | |
41. | such period; provided, however, that in the event that such continuation coverage violates | |
42. | applicable law or results in a material adverse tax effect to the Company or the Executive, |
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1. | the Company shall pay the Executive cash in lieu of such coverage in an amount equal to | |
2. | the Executive’s after-tax cost of continuing comparable coverage, where such coverage | |
3. | may not be continued by the Company (or where such continuation would adversely | |
4. | affect the tax status of the plan pursuant to which the coverage is provided). If the | |
5. | Executive does not receive the cash payment described in the preceding sentence, the | |
6. | Company shall take all commercially reasonable efforts to provide that the COBRA | |
7. | health care continuation coverage period under section 4980B of the Code, shall | |
8. | commence immediately after the foregoing twelve (12) month period, with such | |
9. | continuation coverage continuing until the earlier of (A) the end of the applicable | |
10. | COBRA health care continuation coverage period or (B) the date on which the Executive | |
11. | is covered by the medical and dental coverage of his successor employer, if any. | |
12. | With respect to any Company stock options held by the Executive as of his Termination | |
13. | Date, the Company shall accelerate the vesting of that portion of the Executive’s stock | |
14. | options, if any, which would have vested and become exercisable within the one (I) year | |
15. | period after the Executive’s Termination Date, such options, plus any other options that | |
16. | previously became exercisable and have not expired or been exercised, shall remain | |
17. | exercisable, notwithstanding anything in any other agreement governing such options, for | |
18. | the longer of(A) a period of six (6) months after the Executive’s Termination Date, or | |
19. | (B) the period set forth in the award agreement covering the option (collectively, the | |
20. | “Pre-Change in Control Option Expiration Date”); provided, however, that in no event | |
21. | will the option be exercisable beyond its original term or, if not addressed in the grant | |
22. | agreement, then not later than the latest date that will avoid adverse tax consequences to | |
23. | the Executive (if such date is earlier than the Pre-Change in Control Option Expiration | |
24. | Date). | |
25. | With respect to any shares of Company common stock held by the Executive as of his | |
26. | Termination Date that are subject to the Company’s repurchase right upon termination of | |
27. | the Executive’s employment (“Restricted Stock”), the Company shall waive such | |
28. | repurchase rights as to the number of shares of Restricted Stock that would have vested | |
29. | within the one (1) year period after the Executive’s Termination Date. | |
30. | To cover the cost of outplacement assistance services for the Executive that are actually | |
31. | provided by an outplacement agency selected by the Executive, for which the Company | |
32. | provides prior approval, with such approval not to be unreasonably withheld, in an | |
33. | amount not to exceed twenty percent (20%) of the Executive’s Base Pay. | |
34. | The Executive shall receive any amounts earned, accrued or owing but not yet paid to the | |
35. | Executive as of his Termination Date, payable in a lump sum, and any benefits accrued or | |
36. | earned in accordance with the terms of any applicable benefit plans and programs of the | |
37. | Company. | |
38. | 3.Termination Associated With a Change in Control. | |
39. | Involuntary Termination Associated With a Change in Control. In the event the | |
40. | Executive’s employment is terminated after, or in connection with, a Change in Control, | |
41. | on account of (i) an Involuntary Termination Associated With a Change in Control within | |
42. | the two (2) year period after the Change in Control, or(ii) an Involuntary Termination | |
43. | Associated With a Change in Control that occurs (A) not more than six (6) months prior |
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1. | to the date on which a Change in Control occurs or (B) following the commencement of | |
2. | any discussion with a third person that ultimately results in a Change in Control, the | |
3. | Executive shall be entitled to the benefits provided in subsection (b) of this Section 3. If | |
4. | the Executive is entitled to benefits described in this Section 3 by reason of clause (a)(ii) | |
5. | above, the Executive shall receive the compensation and benefits described in Section | |
6. | 2(b) above after his Termination of Employment, in accordance with the provisions of | |
7. | Section 2(b), regardless of whether the Change in Control actually occurs, and the | |
8. | Executive shall receive the additional compensation and benefits described in Section | |
9. | 3(b) below only if the Change in Control is consummated and shall receive such | |
10. | additional amounts after the consummation of the Change in Control, in accordance with | |
11. | the provisions of Section 3(b) below. For purposes of subsection 3(a)(ii)(B) above, to be | |
12. | eligible to receive amounts described in Section 3(b) below, the Change in Control must | |
13. | be consummated within the twelve (12) month period following the Executive’s | |
14. | Termination Date, except in circumstances pursuant to which the consummation of the | |
15. | Change in Control is delayed, through no failure of the Company or the third person, by a | |
16. | governmental or regulatory authority or agency with jurisdiction over the matter, or as a | |
17. | result of other similar circumstances. In such a circumstance, the remaining of the twelve | |
18. | (12) month period shall be tolled and shall recommence upon termination of the delaying | |
19. | event. | |
20. | Compensation and Benefits Upon Involuntary Termination Associated With a Change in | |
21. | Control. Subject to the provisions of Section 5 hereof, in the event a termination | |
22. | described in subsection (a) of this Section 3 occurs, the Company shall pay and provide | |
23. | to the Executive after his Termination Date: | |
24. | Lump sum cash payment equal to (A) one times Base Pay, plus (B) one times Incentive | |
25. | Pay. Unless the payment is delayed pursuant to Section 13(b) of this Agreement, this | |
26. | lump sum cash payment shall be paid to the Executive within thirty (30) days after the | |
27. | Executive’s Termination Date (or the end of the revocation period for the Release, if | |
28. | later). | |
29. | Lump sum cash payment equal to Executive’s pro rated Incentive Pay for the year in | |
30. | which his Termination of Employment occurs. The pro rated Incentive Pay shall be | |
31. | based on the Executive’s Incentive Pay for the year in which the Executive’s Termination | |
32. | Date occurs, multiplied by a fraction, the numerator of which is the number of days | |
33. | during which the Executive was employed by the Company in the year of his termination | |
34. | and the denominator of which is 365. Unless the payment is delayed pursuant to Section | |
35. | 13(b) of this Agreement, this lump sum payment shall be paid to the Executive within | |
36. | thirty (30) days after the Executive’s Termination Date (or the end of the revocation | |
37. | period for the Release, if later). | |
38. | Commencing with the month immediately following the month in which his Termination | |
39. | Date occurs, the Executive shall continue to receive for a twelve (12) month period the | |
40. | medical and dental coverage in effect on his Termination Date (or generally comparable | |
41. | coverage) for himself and, where applicable, his spouse and dependents, at the same | |
42. | premium rates as may be charged from time to time for employees generally, as if the | |
43. | Executive had continued in employment during such period; provided, however, that in | |
44. | the event that such continuation coverage violates applicable law or results in a material | |
45. | adverse tax effect to the Company or the Executive, the Company shall pay the Executive |
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1. | cash in lieu of such coverage in an amount equal to the Executive’s after-tax cost of | |
2. | continuing comparable coverage, where such coverage may not be continued by the | |
3. | Company (or where such continuation would adversely affect the tax status of the plan | |
4. | pursuant to which the coverage is provided). If the Executive does not receive the cash | |
5. | payment described in the preceding sentence, the Company shall take all commercially | |
6. | reasonable efforts to provide that the COBRA health care continuation coverage period | |
7. | under section 4980B of the Code, shall commence immediately after the foregoing | |
8. | twelve (12) month period, with such continuation coverage continuing until the earlier of | |
9. | (A) the end of the applicable COBRA health care continuation coverage period or (B) the | |
10. | date on which the Executive is covered by the medical and dental coverage of his | |
11. | successor employer, if any. | |
12. | Lump sum cash payment equal to the total amount that the Executive would have | |
13. | received under the Company’s 401(k) plan as a Company match if the Executive was | |
14. | eligible to participate in the Company’s 401(k) plan for the twelve (12) month period | |
15. | after his Termination Date and he contributed the maximum amount to the plan for the | |
16. | match. Unless the payment is delayed pursuant to Section 13(b) of this Agreement, this | |
17. | lump sum payment shall be paid to the Executive within thirty (30) days after the | |
18. | Executive’s Termination Date (or the end of the revocation period for the Release, if | |
19. | later). | |
20. | Lump sum cash payment equal to the total premiums that the Company would have paid | |
21. | under the Executive’s split-dollar life insurance policy, if any, that is in effect | |
22. | immediately prior to his Termination Date, if the Executive was employed by the | |
23. | Company for the twelve (12) month period following the Executive’s Termination Date; | |
24. | provided, however, that if the remaining length of the term of the split-dollar arrangement | |
25. | pursuant to which the Company must make premium payments is less than the foregoing | |
26. | twelve (12) month period, the Executive shall only receive a lump sum cash payment | |
27. | equal to the remaining Company premiums for the term of the arrangement. Unless | |
28. | payment is delayed pursuant to Section 13(b) of this Agreement, this lump sum payment | |
29. | shall be paid to the Executive within thirty (30) days after the Executive’s Termination | |
30. | Date (or the end of the revocation period for the Release, if later). Notwithstanding the | |
31. | foregoing, no payment shall be made to the Executive pursuant to this clause (v) if on the | |
32. | Executive’s Termination Date, either the Executive does not have a split-dollar life | |
33. | insurance policy with the Company or the Company has no obligations to make premium | |
34. | contributions to the Executive’s split-dollar life insurance policy. | |
35. | Lump sum cash payment equal to twenty percent (20%) of the Executive’s Base Pay in | |
36. | order to cover the cost of outplacement assistance services for the Executive. Unless | |
37. | payment is delayed pursuant to Section 13(b) of this Agreement, this lump sum payment | |
38. | shall be paid to the Executive within thirty (30) days after the Executive’s Termination | |
39. | Date (or the end of the revocation period for the Release, if later). | |
40. | The Executive shall receive any amounts earned, accrued or owing but not yet paid to the | |
41. | Executive as of his Termination Date, payable in a lump sum, and any benefits accrued or | |
42. | earned in accordance with the terms of any applicable benefit plans and programs of the | |
43. | Company. |
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1. | Equity Compensation. Notwithstanding any provision to the contrary in any applicable | |
2. | plan, program or agreement, or any contrary provision in this Agreement in the event that | |
3. | either or both of the following occur: | |
4. | a Change in Control in which the Executive’s employment is terminated on account of an | |
5. | Involuntary Termination Associated with a Change in Control; or | |
6. | a Change in Control occurs, but the acquirer or successor fails to provide the Executive | |
7. | with equity compensation rights substantially comparable in value to the Executive’s | |
8. | unvested equity compensation rights immediately prior to the Change in Control; | |
9. | then all stock options, Restricted Stock and other equity rights held by the Executive will | |
10. | become fully vested and/or exercisable, as the case may be, as of the date of the | |
11. | Executive’s Termination Date in the case of clause (i) or as of the date of the Change in | |
12. | Control in the case of clause (ii), and all stock options held by the Executive shall remain | |
13. | exercisable, notwithstanding anything in any other agreement governing such options, for | |
14. | the longer of (i) a period of twelve (12) months after the Executive’s Termination Date, | |
15. | or (ii) the period set forth in the award agreement covering the option (collectively, the | |
16. | “Change in Control Option Expiration Date”); provided, however, that in no event will | |
17. | the option be exercisable beyond its original term or, if not addressed in the grant | |
18. | agreement, then not later than the latest date that will avoid adverse tax consequences to | |
19. | the Executive (if such date is earlier than the Change in Control Option Expiration Date). | |
20. | For purposes of clause (ii) above, equity compensation provided by the acquiror or | |
21. | successor shall be deemed substantially comparable to the Executive’s unvested equity | |
22. | compensation rights immediately prior to the Change in Control only if (A) such | |
23. | unvested equity compensation rights are assumed by the acquiror or successor on the | |
24. | same basis (including the same exchange ratio) as is provided to non-employee holders of | |
25. | such equity or, if none, on a basis substantially identical to such basis; or (B) such | |
26. | unvested equity compensation rights are replaced by equity compensation rights granted | |
27. | by the acquiror or successor which rights are materially identical in value to (employing | |
28. | the same equity valuation methodology as the Company employed for financial | |
29. | accounting purposes immediately prior to the Change in Control) and are subject to the | |
30. | same vesting schedule as was applicable to the unvested equity compensation rights held | |
31. | by the Executive immediately prior to the Change in Control. | |
32. | 4.Termination of Employment on Account of Disability, Cause or Death. | |
33. | Notwithstanding anything in this Agreement to the contrary, if the Executive’s | |
34. | employment terminates on account of Disability, the Executive shall be entitled to | |
35. | receive disability benefits under any disability program maintained by the Company that | |
36. | covers the Executive, and the Executive shall not be considered to have terminated | |
37. | employment under this Agreement and shall not receive benefits pursuant to Sections 2 | |
38. | and 3 hereof. If the Executive’s employment terminates on account of Cause or because | |
39. | of his death, the Executive shall not be considered to have terminated employment under | |
40. | this Agreement and shall not receive benefits pursuant to Sections 2 and 3 hereof. | |
41. | 5.Release. Notwithstanding the foregoing, no such payments shall be made or benefits | |
42. | provided unless the Executive executes, and does not revoke, the Company’s standard | |
43. | written release, substantially in the form as attached hereto as Annex A, (the “Release”), |
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1. | of any and all claims against the Company and all related parties with respect to all | |
2. | matters arising out of the Executive’s employment by the Company (other than | |
3. | entitlements under the terms of this Agreement or under any other plans or programs of | |
4. | the Company in which the Executive participated and under which the Executive has | |
5. | accrued or become entitled to a benefit) or a termination thereof. | |
6. | 6.Enforcement. Without limiting the rights of the Executive at law or in equity, if the | |
7. | Company fails to make any payment or provide any benefit required to be made or | |
8. | provided hereunder on a timely basis, the Company will pay interest on the amount or | |
9. | value thereof at an annualized rate of interest equal to the so-called composite “prime | |
10. | rate” as quoted from time to time during the relevant period in the Eastern Edition of The | |
11. | Wall Street Journal. Such interest will be payable as it accrues on demand. Any change | |
12. | in such prime rate will be effective on and as of the date of such change. | |
13. | 7.Certain Additional Payments by the Company. | |
14. | The provisions of this Section 7 shall apply notwithstanding anything in this Agreement | |
15. | to the contrary. Subject to subsection (b) below, in the event that it shall be determined | |
16. | that any payment, benefit provided or distribution by the Company to or for the benefit of | |
17. | the Executive, whether paid or payable or distributed or distributable pursuant to the | |
18. | terms of this Agreement or otherwise (a “Payment”), would constitute an “excess | |
19. | parachute payment” within the meaning of section 280G of the Code, the Company shall | |
20. | pay the Executive an additional amount (the “Gross-Up Payment”) such that the net | |
21. | amount retained by the Executive after deduction of any excise tax imposed under section | |
22. | 4999 of the Code, and any federal, state and local income tax, employment tax, excise tax | |
23. | and other tax imposed upon the Gross-Up Payment, shall be equal to the Payment. The | |
24. | right to each payment of such amount shall vest as of the day on which the payment | |
25. | determination is made, and each such payment shall be made on the thirtieth (30th) day | |
26. | following the vesting date. | |
27. | Notwithstanding subsection (a), and notwithstanding any other provisions of this | |
28. | Agreement to the contrary, if the net after-tax benefit to the Executive of receiving the | |
29. | Gross-Up Payment does not exceed the Safe Harbor Amount (as defined below) by more | |
30. | than 10% (as compared to the net-after tax benefit to the Executive resulting from | |
31. | elimination of the Gross-Up Payment and reduction of the Payments to the Safe Harbor | |
32. | Amount), then (i) the Company shall not pay the Executive the Gross-Up Payment and | |
33. | (ii) the provisions of subsection (c) below shall apply. The term “Safe Harbor Amount” | |
34. | means the maximum dollar amount of parachute payments that may be paid under section | |
35. | 280G of the Code without imposition of an excise tax under section 4999 of the Code. | |
36. | The provisions of this subsection (c) shall apply only if the Company is not required to | |
37. | pay the Executive a Gross-Up Payment as a result of subsection (b) above. If the | |
38. | Company is not required to pay the Executive a Gross-Up Payment as a result of the | |
39. | provisions of subsection (b), the Company will apply a limitation on the Payment amount | |
40. | as set forth in clause (i) below (a “Parachute Cap”) if the application of the Parachute Cap | |
41. | is beneficial to the Executive, according to the following provisions: | |
42. | lf clause (ii) does not apply, the aggregate present value of the Payments under Section 3 | |
43. | of this Agreement (“Agreement Payments”) shall be reduced (but not below zero) to the |
- 13 -
1. | Reduced Amount. The “Reduced Amount” shall be an amount expressed in present | |
2. | value which maximizes the aggregate present value of Agreement Payments without | |
3. | causing any Payment to be subject to the limitation of deduction under section 280G of | |
4. | the Code. For purposes of this Section 7, “present value” shall be determined in | |
5. | accordance with section 280G(d)(4) of the Code. | |
6. | It is the intention of the parties that the Parachute Cap apply only if application of the | |
7. | Parachute Cap is beneficial to the Executive. Therefore, if the net amount that would be | |
8. | retained by the Executive under this Agreement without the Parachute Cap, after payment | |
9. | of any excise tax under section 4999 of the Code, exceeds the net amount that would be | |
10. | retained by the Executive with the Parachute Cap, then the Company shall not apply the | |
11. | Parachute Cap to the Executive’s payments. In that event, neither the Parachute Cap nor | |
12. | the Gross-Up Payment will apply to the Executive. | |
13. | All determinations to be made under this Section 7 shall be made by the nationally | |
14. | recognized independent public accounting firm used by the Company immediately prior | |
15. | to the Change in Control (“Accounting Firm”), which Accounting Firm shall provide its | |
16. | determinations and any supporting calculations to the Company and the Executive within | |
17. | ten days of the Executive’s termination date. If any Gross-Up Payment is required to be | |
18. | made, the Company shall make the Gross-Up Payment within ten days after receiving the | |
19. | Accounting Firm’s calculations. Any such determination by the Accounting Firm shall | |
20. | be binding upon the Company and the Executive. | |
21. | All of the fees and expenses of the Accounting Firm in performing the determinations | |
22. | referred to in this Section 7 shall be borne solely by the Company. | |
23. | 0.Xx Mitigation Obligation. The Company hereby acknowledges that it will be difficult | |
24. | and may be impossible for the Executive to find reasonably comparable employment | |
25. | following the Termination Date. Accordingly, the payment of the severance | |
26. | compensation by the Company to the Executive in accordance with the terms of this | |
27. | Agreement is hereby acknowledged by the Company to be reasonable, and the Executive | |
28. | will not be required to mitigate the amount of any payment provided for in this | |
29. | Agreement by seeking other employment or otherwise, nor will any profits, income, | |
30. | earnings or other benefits from any source whatsoever create any mitigation, offset, | |
31. | reduction or any other obligation on the part of the Executive hereunder or otherwise. | |
32. | 0.Xxxxx Fees and Expenses. In the event of a Change in Control, it is the intent of the | |
33. | Company that the Executive not be required to incur legal fees and the related expenses | |
34. | associated with the interpretation, enforcement or defense of the Executive’s rights under | |
35. | this Agreement by litigation or otherwise because the cost and expense thereof would | |
36. | detract from the benefits intended to be extended to the Executive hereunder. | |
37. | Accordingly, if a Change in Control occurs and it should appear to the Executive that the | |
38. | Company has failed to comply with any of its obligations under this Agreement or in the | |
39. | event that the Company or any other person takes or threatens to take any action to | |
40. | declare this Agreement void or unenforceable, or institutes any litigation or other action | |
41. | or proceeding designed to deny, or to recover from, the Executive the benefits provided | |
42. | or intended to be provided to the Executive under Section 3(b) of the Agreement, the | |
43. | Company irrevocably authorizes the Executive from time to time to retain counsel of the | |
44. | Executive’s choice, at the expense of the Company as hereafter provided, to advise and |
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1. |
represent the Executive in connection with any such interpretation, enforcement or | |
2. |
defense, including without limitation the initiation or defense of any litigation or other | |
3. |
legal action, whether by or against the Company or any Director, officer, stockholder or | |
4. |
other person affiliated with the Company, in any jurisdiction. Notwithstanding any | |
5. |
existing or prior attorney-client relationship between the Company and such counsel, the | |
6. |
Company irrevocably consents to the Executive’s entering into an attorney-client | |
7. |
relationship with such counsel, and in that connection the Company and the Executive | |
8. |
agree that a confidential relationship will exist between the Executive and such counsel. | |
9. |
Without respect to whether the Executive prevails, in whole or in part, in connection with | |
10. |
any of the foregoing, the Company will pay and be solely financially responsible for any | |
11. |
and all attorneys’ and related fees and expenses incurred by the Executive in connection | |
12. |
with any of the foregoing; provided that, in regard to such matters, the Executive has not | |
13. |
acted frivolously, in bad faith or with no colorable claim of success. Such expenses will | |
14. |
be paid by the Company on the thirtieth day following its receipt of adequate | |
15. |
substantiation to support payment of the expense amount. | |
16. |
10. Confidentiality. The Executive hereby covenants and agrees that he will not disclose | |
17. |
to any person not employed by the Company, or use in connection with engaging in | |
18. |
competition with the Company, any confidential or proprietary information (as defined | |
19. |
below) of the Company. For purposes of this Agreement, the term “confidential or | |
20. |
proprietary information” will include all information of any nature and in any form that is | |
21. |
owned by the Company and that is not publicly available (other than by the Executive’s | |
22. |
breach of this Section 10) or generally known to persons engaged in businesses similar or | |
23. |
related to those of the Company. Confidential or proprietary information will include, | |
24. |
without limitation, the Company’s financial matters, customers, employees, industry | |
25. |
contracts, strategic business plans, product development (or other proprietary product | |
26. |
data), marketing plans, consulting solutions and processes, and all other secrets and all | |
27. |
other information of a confidential or proprietary nature which is protected by the | |
28. |
Uniform Trade Secrets Act. For purposes of the preceding two sentences, the term | |
29. |
“Company” will also include any Subsidiary (collectively, the “Restricted Group”). The | |
30. |
foregoing obligations imposed by this Section 10 will not apply (i) in the course of the | |
31. |
business of and for the benefit of the Company, (ii) if such confidential or proprietary | |
32. |
information has become, through no fault of the Executive, generally known to the | |
33. |
public, or (iii) if the Executive is required by law to make disclosure (after giving the | |
34. |
Company notice and an opportunity to contest such requirement). | |
35. |
11. Covenants Not to Compete and Not to Solicit. In the event of the Executive’s | |
36. |
Termination of Employment, the Company’s obligations to provide severance pay as | |
37. |
provided in Sections 2 and 3 shall be expressly conditioned upon the Executive’s | |
38. |
covenants not to compete and not to solicit as provided herein. In the event the Executive | |
39. |
breaches his obligations to the Company as provided herein, the Company’s obligations | |
40. |
to make severance payments to the Executive pursuant to Sections 2 and 3 shall cease, | |
41. |
without prejudice to any other remedies that may be available to the Company. | |
42. |
Covenant Not to Compete. | |
43. |
If the Executive is receiving compensation and benefits under Section 2(b) above, then | |
44. |
for a period of six (6) months following the Executive’s Termination Date, the Executive | |
45. |
shall not directly or indirectly, engage in (whether as employee, consultant, proprietor, |
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1. |
partner, director or otherwise), or have any ownership interest in, or participate in a | |
2. |
financing, operation, management or control of, any person, firm, corporation or business | |
3. |
that is a Restricted Business in a Restricted Territory without the prior written consent of | |
4. |
the Board. For this purpose, ownership of no more than 5% of the outstanding Voting | |
5. |
Stock of a publicly traded corporation shall not constitute a violation of this provision. | |
6. |
If the Executive is receiving compensation and benefits under Section 3(b) above (or | |
7. |
subsequently becomes entitled to severance under Section 3(b) above because of a | |
8. |
termination described in Section 3(a)(ii)), then for a period of one (1) year following the | |
9. |
Executive’s Termination Date, the Executive shall not directly or indirectly, engage in | |
10. |
(whether as employee, consultant, proprietor, partner, director or otherwise), or have any | |
11. |
ownership interest in, or participate in a financing, operation, management or control of, | |
12. |
any person, firm, corporation or business that is a Restricted Business in a Restricted | |
13. |
Territory without the prior written consent of the Board. For this purpose, ownership of | |
14. |
no more than 5% of the outstanding Voting Stock of a publicly traded corporation shall | |
15. |
not constitute a violation of this provision. | |
16. |
Covenant Not to Solicit. The Executive shall not, for a period of two (2) years after the | |
17. |
Executive’s Termination Date for any reason: (i) solicit, encourage or take any other | |
18. |
action which is intended to induce any other employee of the Company to terminate his | |
19. |
employment with the Company; or (ii) interfere in any manner with the contractual or | |
20. |
employment relationship between the Company and any such employee of the Company. | |
21. |
The foregoing shall not prohibit Executive or any entity with which the Executive may be | |
22. |
affiliated from hiring a former employee of the Company, provided that such hiring | |
23. |
results exclusively from such former employee’s affirmative response to a general | |
24. |
recruitment effort. | |
25. |
Interpretation. The covenants contained herein are intended to be construed as a series of | |
26. |
separate covenants, one for each county, town, city and state or other political subdivision | |
27. |
of a Restricted Territory. Except for geographic coverage, each such separate covenant | |
28. |
shall be deemed identical in terms to the covenant contained in the preceding subsections. | |
29. |
If, in any judicial proceeding, the court shall refuse to enforce any of the separate | |
30. |
covenants (or any part thereof) deemed included in such subsections, then such | |
31. |
unenforceable covenant (or such part) shall be deemed to be eliminated from this | |
32. |
Agreement for the purpose of those proceedings to the extent necessary to permit the | |
33. |
remaining separate covenants (or portions thereof) to be enforced. | |
34. |
Reasonableness. In the event that the provisions of this Section 11 shall ever be deemed | |
35. |
to exceed the time, scope or geographic limitations permitted by applicable laws, then | |
36. |
such provisions shall be reformed to the maximum time, scope or geographic limitations, | |
37. |
as the case may be, permitted by applicable laws. | |
38. |
12. Employment Rights. Nothing expressed or implied in this Agreement will create any | |
39. |
right or duty on the part of the Company or the Executive to have the Executive remain in | |
40. |
the employment of the Company or any Subsidiary prior to or following any Change in | |
41. |
Control. | |
42. |
13. Certain Tax Matters. |
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1. | Withholding. The Company may withhold from any amounts payable under this | |
2. | Agreement all federal, state, city or other taxes as the Company is required to withhold | |
3. | pursuant to any applicable law, regulation or ruling. | |
4. | Effect of Section 409A of the Code. The parties intend that the provisions of this | |
5. | Agreement will operate in a manner that will avoid adverse federal income tax | |
6. | consequences under section 409A of the Code. If a payment under this Agreement to the | |
7. | Executive is subject to the requirements of section 409A of the Code, the Executive | |
8. | hereby acknowledges and agrees that the Company may take any actions deemed | |
9. | necessary in its sole discretion to avoid adverse federal income tax consequences under | |
10. | section 409A of the Code and that such action may be taken without the consent of the | |
11. | Executive, including, but not limited to, delaying the commencement of any payment | |
12. | under this Agreement for six (6) months from the Executive’s Termination Date if it is | |
13. | determined that as of such Termination Date, the Executive is a “specified employee” as | |
14. | defined in Section 409A(a)(2)(B)(i) of the Code and corresponding regulations, and such | |
15. | amounts are deemed as deferred compensation subject to the requirements of section | |
16. | 409A of the Code. | |
17. | Time of Payment. If a payment is not made by the designated payment date under this | |
18. | Agreement, the payment will be made in any event by the later of (i) the end of the | |
19. | calendar year in which the designated payment date occurs or (ii) the 15th day of the third | |
20. | calendar month following the designated payment date, or such other date as may be | |
21. | permitted by section 409A of the Code and the regulations thereunder. | |
22. | l4. Term of Agreement. This Agreement shall continue in full force and effect for the | |
23. | duration of the Executive’s employment with the Company; provided, however, that after | |
24. | the termination of the Executive’s employment during the term of this Agreement, this | |
25. | Agreement shall remain in effect until all of the obligations of the parties hereunder are | |
26. | satisfied or have expired. | |
27. | 15. Successors and Binding Agreement. | |
28. | The Company will require any successor (whether direct or indirect, by purchase, merger, | |
29. | consolidation, reorganization or otherwise) to all or substantially all of the business or | |
30. | assets of the Company, by agreement in form and substance reasonably satisfactory to the | |
31. | Executive, expressly to assume and agree to perform this Agreement in the same manner | |
32. | and to the same extent the Company would be required to perform if no such succession | |
33. | had taken place. This Agreement will be binding upon and inure to the benefit of the | |
34. | Company and any successor to the Company, including without limitation any persons | |
35. | acquiring directly or indirectly all or substantially all of the business or assets of the | |
36. | Company whether by purchase, merger, consolidation, reorganization or otherwise (and | |
37. | such successor will thereafter be deemed the “Company” for the purposes of this | |
38. | Agreement), but will not otherwise be assignable, transferable or delegable by the | |
39. | Company. | |
40. | This Agreement will inure to the benefit of and be enforceable by the Executive’s | |
41. | personal or legal representatives, executors, administrators, successors, heirs, distributees | |
42. | and legatees. This Agreement will supersede the provisions of any employment or other | |
43. | agreement between the Executive and the Company that relate to any matter that is also |
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1. | the subject of this Agreement, and such provisions in such other agreements will be null | |
2. | and void. | |
3. | This Agreement is personal in nature and neither of the parties hereto will, without the | |
4. | consent of the other, assign, transfer or delegate this Agreement or any rights or | |
5. | obligations hereunder except as expressly provided in Sections 15(a) and 15(b). Without | |
6. | limiting the generality or effect of the foregoing, the Executive’s right to receive | |
7. | payments hereunder will not be assignable, transferable or delegable, whether by pledge, | |
8. | creation of a security interest, or otherwise, other than by a transfer by the Executive’s | |
9. | will or by the laws of descent and distribution and, in the event of any attempted | |
10. | assignment or transfer contrary to this Section 15(c), the Company will have no liability | |
11. | to pay any amount so attempted to be assigned, transferred or delegated. | |
12. | 16. Notices. For all purposes of this Agreement, all communications, including without | |
13. | limitation notices, consents, requests or approvals, required or permitted to be given | |
14. | hereunder will be in writing and will be deemed to have been duly given when hand | |
15. | delivered or dispatched by electronic facsimile transmission (with receipt thereof orally | |
16. | confirmed by the recipient), or five (5) business days after having been mailed by United | |
17. | States registered or certified mail, return receipt requested, postage prepaid, or three (3) | |
18. | business days after having been sent by a nationally recognized courier service for | |
19. | overnight/next-day delivery, such as FedEx, UPS, or the United States Postal Service, | |
20. | addressed to the Company (to the attention of the Secretary of the Company) at its | |
21. | principal executive office and to the Executive at his principal residence, or to such other | |
22. | address as any party may have furnished to the other in writing and in accordance | |
23. | herewith, except that notices of changes of address will be effective only upon receipt. | |
24. | 17. Governing Law. The validity, interpretation, construction and performance of this | |
25. | Agreement will be governed by and construed in accordance with the substantive laws of | |
26. | the Commonwealth of Massachusetts, without giving effect to the principles of conflict | |
27. | of laws of such Commonwealth. | |
28. | l8. Validity. If any provision of this Agreement or the application of any provision hereof | |
29. | to any person or circumstances is held invalid, unenforceable or otherwise illegal, the | |
30. | remainder of this Agreement and the application of such provision to any other person or | |
31. | circumstances will not be affected, and the provision so held to be invalid, unenforceable | |
32. | or otherwise illegal will be reformed to the extent (and only to the extent) necessary to | |
33. | make it enforceable, valid or legal. | |
34. | 19. Miscellaneous. | |
35. | Except as provided in subparagraph (b) below or pursuant to Section 13(b), no provision | |
36. | of this Agreement may be modified, waived or discharged unless such waiver, | |
37. | modification or discharge is agreed to in writing signed by the Executive and the | |
38. | Company. No waiver by either party hereto at any time of any breach by the other party | |
39. | hereto or compliance with any condition or provision of this Agreement to be performed | |
40. | by such other party will be deemed a waiver of similar or dissimilar provisions or | |
41. | conditions at the same or at any prior or subsequent time. No agreements or | |
42. | representations, oral or otherwise, expressed or implied with respect to the subject matter | |
43. | hereof have been made by either party that are not set forth expressly in this Agreement. |
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1. | References to Sections are to references to Sections of this Agreement. Any reference in | |
2. | this Agreement to a provision of a statute, rule or regulation will also include any | |
3. | successor provision thereto. Whenever used herein, the masculine includes the feminine. | |
4. | Notwithstanding any contrary provision of this Agreement, the Company may modify | |
5. | benefits otherwise payable or to be provided under this Agreement without obtaining the | |
6. | Executive’s consent to such modification to the extent that the Company determines in its | |
7. | sole discretion that such modification is necessary or appropriate in order to effect | |
8. | compliance with applicable law or regulatory requirements. | |
9. | 20. Survival. Notwithstanding any provision of this Agreement to the contrary, the | |
10. | parties’ respective rights and obligations under Sections 2, 3, 7, 9, 10, and 11 will survive | |
11. | any termination or expiration of this Agreement or the termination of the Executive’s | |
12. | employment for any reason whatsoever. | |
13. | 21. Counterparts. This Agreement may be executed in one or more counterparts, each of | |
14. | which will be deemed to be an original but all of which together will constitute one and | |
15. | the same agreement. |
[SIGNATURE PAGE FOLLOWS]
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1. | IN WITNESS WHEREOF, the parties have caused this Agreement to be duly | |
2. | executed and delivered as of the date first above written. |
3. |
NOVELL, INC. | |||||
4 |
By: |
![]() |
||||
5. |
Name: | April 30, 2007 | ||||
6. |
Title: |
7. |
EXECUTIVE | |||||||
8. |
|
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Annex A
1. | SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE | |
2. | THIS SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL | |
3. | RELEASE (the “Agreement”) is made as of this day of , , by and | |
4. | between Novell, Inc. (the “Company”) and (the “Executive”). | |
5. | WHEREAS, the Executive formerly was employed by the Company as | |
6. | ; | |
7. | WHEREAS, the Executive and Company entered into the Severance Agreement, | |
8. | dated , 200 , (the “Severance Agreement”) which provides for certain benefits | |
9. | in the event that the Executive’s employment is terminated on account of a reason set | |
10. | forth in the Severance Agreement; | |
11. | WHEREAS, the Executive and the Company mutually desire to terminate | |
12. | Executive’s employment on an amicable basis, such termination to be effective | |
13. | , (“Date of Resignation”); and | |
14. | WHEREAS, in connection with the termination of the Executive’s employment, | |
15. | the parties have agreed to a separation package and the resolution of any and all disputes | |
16. | between them. | |
17. | NOW, THEREFORE, IT IS HEREBY AGREED by and between the Executive | |
18. | and the Company as follows: | |
19. | 1. (a) The Executive, for and in consideration of the commitments of the | |
20. | Company as set forth in paragraph 6 of this Agreement, and intending to be legally | |
21. | bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company, | |
22. | its affiliates, subsidiaries and parents, and its officers, directors, employees, and agents, | |
23. | and its and their respective successors and assigns, heirs, executors, and administrators | |
24. | (collectively, “Releasees”) from all causes of action, suits, debts, claims and demands | |
25. | whatsoever in law or in equity, which the Executive ever had, now has, or hereafter may | |
26. | have, whether known or unknown, or which the Executive’s heirs, executors, or | |
27. | administrators may have, by reason of any matter, cause or thing whatsoever, from the | |
28. | beginning of the Executive’s employment to the date of this Agreement, and particularly, | |
29. | but without limitation of the foregoing general terms, any claims arising from or relating | |
30. | in any way to the Executive’s employment relationship with the Company, the terms and | |
31. | conditions of that employment relationship, and the termination of that employment | |
32. | relationship, including, but not limited to, any claims arising under the Age | |
33. | Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII | |
34. | of The Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and | |
35. | Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, | |
36. | [State Fair Employment Practice Law], and any other claims under any federal, state | |
37. | or local common law, statutory, or regulatory provision, now or hereafter recognized, and | |
38. | any claims for attorneys’ fees and costs. This Agreement is effective without regard to |
A-1
1. | the legal nature of the claims raised and without regard to whether any such claims are | |
2. | based upon tort, equity, implied or express contract or discrimination of any sort. | |
3. | (b) To the fullest extent permitted by law, and subject to the provisions | |
4. | of paragraph 11 below, the Executive represents and affirms that (1) [other than | |
5. | ,] the Executive has not filed or caused to be filed on the Executive’s behalf any | |
6. | claim for relief against the Company or any Releasee and, to the best of the Executive’s | |
7. | knowledge and belief, no outstanding claims for relief have been filed or asserted against | |
8. | the Company or any Releasee on the Executive’s behalf; (ii) [other than ,] the | |
9. | Executive has not reported any improper, unethical or illegal conduct or activities to any | |
10. | supervisor, manager, department head, human resources representative, agent or other | |
11. | representative of the Company, to any member of the Company’s legal or compliance | |
12. | departments, or to the ethics hotline, and has no knowledge of any such improper, | |
13. | unethical or illegal conduct or activities; and (iii) the Executive will not file, commence, | |
14. | prosecute or participate in any judicial or arbitral action or proceeding against the | |
15. | Company or any Releasee based upon or arising out of any act, omission, transaction, | |
16. | occurrence, contract, claim or event existing or occurring on or before the date of this | |
17. | Agreement. | |
18. | 2. [The Company, for and in consideration of the commitments of the | |
19. | Executive as set forth in this Agreement, and intending to be legally bound, does | |
20. | hereby REMISE, RELEASE AND FOREVER DISCHARGE the Executive from all | |
21. | claims, demands or causes of action arising out of facts or occurrences prior to the | |
22. | date of this Agreement, but only to the extent the Company knows or reasonably | |
23. | should know of such facts or occurrence and only to the extent such claim, demand | |
24. | or cause of action relates to a violation of applicable law or the performance of the | |
25. | Executive’s duties with the Company; provided, however, that this release of claims | |
26. | shall not in any case be effective with respect to any claim by the Company alleging | |
27. | a breach of the Executive’s obligations under this Agreement.] | |
28. | [Note: Paragraph 2 only applies if the Executive is receiving severance benefits on | |
29. | account of an Involuntary Termination Associated With a Change in Control.] | |
30. | 3. In consideration of the Company’s agreements as set forth in paragraph 6 | |
31. | herein, the Executive agrees to comply with the limitations described in Sections 10 and | |
32. | 11 of the Severance Agreement. | |
33. | 4. The Executive further agrees and recognizes that the Executive has | |
34. | permanently and irrevocably severed the Executive’s employment relationship with the | |
35. | Company, that the Executive shall not seek employment with the Company or any | |
36. | affiliated entity at any time in the future, and that the Company has no obligation to | |
37. | employ him in the future. | |
38. | 5. The Executive further agrees that the Executive will not disparage or | |
39. | subvert the Company, or make any statement reflecting negatively on the Company, its | |
40. | affiliated corporations or entities, or any of their officers, directors, employees, agents or | |
41. | representatives, including, but not limited to, any matters relating to the operation or |
A-2
1. | management of the Company, the Executive’s employment and the termination of the | |
2. | Executive’s employment, irrespective of the truthfulness or falsity of such statement. | |
3. | 6. In consideration for the Executive’s agreement as set forth herein, the | |
4. | Company agrees: | |
5. | [Note: The following severance benefits would apply if the Executive has an | |
6. | involuntary Termination Prior to a Change in Control.] | |
7. | [to pay the Executive 100% of the Executive’s Base Pay (as defined in the Severance | |
8. | Agreement). Unless a different payment stream is made pursuant to Section 13(b) | |
9. | of the Severance Agreement, such Base Pay shall be paid to the Executive in equal | |
10. | installments over the Severance Period (as defined in the Severance Agreement), | |
11. | consistent with the Company’s normal payroll practices, commencing with the first | |
12. | administratively practicable payroll period that occurs after the period during | |
13. | which the Executive’s right to revoke his acceptance to the terms of this Agreement | |
14. | have expired. | |
15. | to pay the Executive the Executive’s pro rated Incentive Pay (as defined in the | |
16. | Severance Agreement) for the year in which the Executive’s Date of Resignation | |
17. | occurs. Unless a different payment stream is made pursuant to Section 13(b) of the | |
18. | Severance Agreement, such pro rated Incentive Pay shall be paid to the Executive in | |
19. | equal installments over the Severance Period, consistent with the Company’s | |
20. | normal payroll practices, commencing with the first administratively practicable | |
21. | payroll period that occurs after the period during which the Executive’s right to | |
22. | revoke his acceptance to the terms of this Agreement have expired. | |
23. | [for a period of twelve (12) months following the month of the Executive’s Date of | |
24. | Resignation, the Executive shall continue to receive the medical and dental coverage | |
25. | in effect on the Executive’s Date of Resignation (or generally comparable coverage) | |
26. | for the Executive and, where applicable, the Executive’s spouse and dependents, at the | |
27. | same premium rates as may be charged from time to time for employees generally, as if | |
28. | the Executive had continued in employment during such period.] or [pay the Executive | |
29. | cash in a lump sum payment equal to the Executive’s after-tax cost of continuing | |
30. | comparable medical and dental coverage for the twelve (12) month period following | |
31. | the month of the Executive’s Date of Resignation, unless payment is delayed pursuant | |
32. | to Section 13(b) of the Severance Agreement]. [The Company shall take all | |
33. | commercially reasonable efforts to provide that the COBRA health care continuation | |
34. | coverage period under section 4980B of the Code, shall commence immediately after | |
35. | the foregoing twelve (12) month period, with such continuation coverage continuing | |
36. | until the earlier of(A) the end of the applicable COBRA health care continuation | |
37. | coverage period or (B) the date on which the Executive is covered by the medical and | |
38. | dental coverage of the Executive’s successor employer, if any.] | |
39. | with respect to any Company stock options held by the Executive as of the | |
40. | Executive’s Date of Resignation, the portion of the Executive’s stock options, if any, | |
41. | which would have vested and become exercisable within the one (1) year period | |
42. | after the Executive’s Date of Resignation shall become vested and exercisable as of | |
43. | the Executive’s Date of Resignation, such options, plus any other options that |
A-3
1. | previously became exercisable and have not expired or been exercised, to remain | |
2. | exercisable, notwithstanding anything in any other agreement governing such | |
3. | options, for the longer of (A) a period of six (6) months after the Executive’s Date of | |
4. | Resignation, or (B) the period set forth in the award agreement covering the option | |
5. | (collectively, the “Option Expiration Date”); provided, however, that in no event | |
6. | will the option be exercisable beyond its original term or, if not addressed in the | |
7. | grant agreement, then not later than the latest date that will avoid adverse tax | |
8. | consequences to the Executive (if such date is earlier than the Option Expiration | |
9. | Date). | |
10. | with respect to any shares of Company common stock that are held by the Executive | |
11. | that are, at the time of the Executive’s Date of Resignation, subject to the | |
12. | Company’s repurchase right upon termination of the Executive’s employment | |
13. | (“Restricted Stock”), to waive such repurchase right as to the number of shares of | |
14. | Restricted Stock that would have become no longer subject to the Company’s | |
15. | repurchase right within the one (1) year period after the Executive’s Date of | |
16. | Resignation. | |
17. | pay the cost of outplacement assistance services for the Executive that are actually | |
18. | provided by an outplacement agency selected by the Executive, which the Company | |
19. | provides prior approval, with such approval not to be unreasonably withheld, in an | |
20. | amount not to exceed twenty percent (20%) of the Executive’s Base Pay. | |
21. | The Executive shall receive any amounts earned, accrued or owing but not yet paid | |
22. | to the Executive as of the Executive’s Date of Resignation, payable in a lump sum, | |
23. | and any benefits accrued or earned in accordance with the terms of any applicable | |
24. | benefit plans and programs of the Company. | |
25. | Except as set forth in this Agreement, it is expressly agreed and understood that | |
26. | Releasees do not have, and will not have, any obligations to provide the Executive at | |
27. | any time in the future with any payments, benefits or considerations other than | |
28. | those recited in this paragraph, or those required by law, other than under the | |
29. | terms of any benefit plans which provide benefits or payments to former employees | |
30. | according to their terms.] | |
31. | [Note: The following severance benefits would apply if the Executive has an | |
32. | Involuntary Termination Associated With a Change in Control.] | |
33. | (i)[to pay to the Executive a lump sum cash payment equal to (A) one | |
34. | times Base Pay (as defined in the Severance Agreement), plus (B) one times | |
35. | Incentive Pay (as defined in the Severance Agreement). Unless payment is delayed | |
36. | pursuant to Section 13(b) of the Severance Agreement, payment shall be made | |
37. | within thirty (30) days after the effective date of the Executive’s Date of Resignation | |
38. | (or the end of the revocation period set forth in this Agreement, if later). | |
39. | to pay the Executive a lump sum cash payment equal to the Executive’s pro rated | |
40. | Incentive Pay (as defined in the Severance Agreement) for the year in which the | |
41. | Executive’s Date of Resignation occurs. Unless payment is delayed pursuant to | |
42. | Section 13(b) of the Severance Agreement, payment shall be made within thirty (30) |
A-4
1. | days after the effective date of the Executive’s Date of Resignation (or the end of the | |
2. | revocation period set forth in this Agreement, if later). | |
3. | [for a period of twelve (12) months following the month of the Executive’s Date of | |
4. | Resignation, the Executive shall continue to receive the medical and dental coverage | |
5. | in effect on the Executive’s Date of Resignation (or generally comparable coverage) | |
6. | for the Executive and, where applicable, the Executive’s spouse and dependents, at the | |
7. | same premium rates as may be charged from time to time for employees generally, as if | |
8. | the Executive had continued in employment during such period] or [pay the Executive | |
9. | cash in a lump sum payment equal to the Executive’s after-tax cost of continuing | |
10. | comparable medical and dental coverage for the twelve (12) month period following | |
11. | the month of the Executive’s Date of Resignation, unless payment is delayed pursuant | |
12. | to Section 13(b) of the Severance Agreement.] [The Company shall take all | |
13. | commercially reasonable efforts to provide that the COBRA health care continuation | |
14. | coverage period under section 4980B of the Code, shall commence immediately after | |
15. | the foregoing twelve (12) month period, with such continuation coverage continuing | |
16. | until the earlier of (i) the end of the applicable COBRA health care continuation | |
17. | coverage period or (ii) the date on which the Executive is covered by the medical and | |
18. | dental coverage of the Executive’s successor employer, if any.] | |
19. | to pay to the Executive a lump sum cash payment equal to the total amount that the | |
20. | Executive would have received under the Company’s 401(k) plan as a Company | |
21. | match if the Executive was eligible to participate in the Company’s 401(k) plan for | |
22. | the twelve (12) month period after the Executive’s Date of Resignation and the | |
23. | Executive contributed the maximum amount to the plan for the match. Unless | |
24. | payment is delayed pursuant to Section 13(b) of the Severance Agreement, payment | |
25. | shall be made within thirty (30) days after the Executive’s Date of Resignation (or | |
26. | the end of the revocation period set forth in this Agreement, if later). | |
27. | [to pay to the Executive a lump sum cash payment equal to the total premiums that | |
28. | the Company would have paid under the Executive’s split-dollar life insurance | |
29. | policy, if any, that is in effect immediately prior to the Executive’s Date of | |
30. | Resignation, if the Executive was employed by the Company for the twelve (12) | |
31. | month period following the Executive’s Date of Resignation. Unless payment is | |
32. | delayed pursuant to Section 13(b) of the Severance Agreement, payment shall be | |
33. | made within thirty (30) days after the effective date of the Executive’s Date of | |
34. | Resignation (or the end of the revocation period set forth in this Agreement, if | |
35. | later)]. [Note: The foregoing only applies if the Executive has a split-dollar | |
36. | arrangement with the Company and the Company is required to make premium | |
37. | contributions on the Executive’s Date of Resignation. The total months covered by the | |
38. | premiums will be reduced if the term of the policy is shorter than that provided for the | |
39. | Executive.] | |
40. | to pay to the Executive a lump sum cash payment equal to twenty percent (20%) of | |
41. | the Executive’s Base Pay in order to cover the cost of outplacement assistance | |
42. | services for the Executive. Unless payment is delayed pursuant to Section 13(b) of | |
43. | the Severance Agreement, payment shall be made within thirty (30) days after the | |
44. | effective date of the Executive’s Date of Resignation (or the end of the revocation | |
45. | period set forth in this Agreement, if later). |
A-5
1. | the Executive shall receive any amounts earned, accrued or owing but not yet paid | |
2. | to the Executive as of the Executive’s Date of Resignation, payable in a lump sum, | |
3. | and any benefits accrued or earned in accordance with the terms of any applicable | |
4. | benefit plans and programs of the Company. | |
5. | with respect to any Company stock options, Restricted Stock, and other equity | |
6. | rights held by the Executive as of the Executive’s Date of Resignation, shall become | |
7. | vested and/or exercisable, as the case may be, as of the Executive’s Date of | |
8. | Resignation, and such options, plus any other options that previously became | |
9. | exercisable and have not expired or been exercised, to remain exercisable, | |
10. | notwithstanding anything in any other agreement governing such options, for the | |
11. | longer of (A) a period of twelve (12) months after the Executive’s Date of | |
12. | Resignation, or (B) the period set forth in the award agreement covering the option | |
13. | (collectively, the “Option Expiration Date”); provided, however, that in no event | |
14. | will the option be exercisable beyond its original term or, if not addressed in the | |
15. | grant agreement, then not later than the latest date that will avoid adverse tax | |
16. | consequences to the Executive (if such date is earlier than the Option Expiration | |
17. | Date). | |
18. | Except as set forth in this Agreement, it is expressly agreed and understood that | |
19. | Releasees do not have, and will not have, any obligations to provide the Executive at | |
20. | any time in the future with any payments, benefits or considerations other than | |
21. | those recited in this paragraph, or those required by law, other than under the | |
22. | terms of any benefit plans which provide benefits or payments to former employees | |
23. | according to their terms.] | |
24. | 7. The Executive understands and agrees that the payments, benefits and | |
25. | agreements provided in this Agreement are being provided to him in consideration for the | |
26. | Executive’s acceptance and execution of, and in reliance upon the Executive’s | |
27. | representations in, this Agreement. The Executive acknowledges that if the Executive | |
28. | had not executed this Agreement containing a release of all claims against the Company, | |
29. | the Executive would only have been entitled to the payments provided in the Company’s | |
30. | standard severance pay plan for employees. | |
31. | 8. The Executive acknowledges and agrees that the Company previously has | |
32. | satisfied any and all obligations owed to him under any employment agreement or offer | |
33. | letter the Executive has with the Company and, further, that this Agreement supersedes | |
34. | any employment agreement or offer letter the Executive has with the Company, and any | |
35. | and all prior agreements or understandings, whether written or oral, between the parties | |
36. | shall remain in full force and effect to the extent not inconsistent with this Agreement, | |
37. | and further, that, except as set forth expressly herein, no promises or representations have | |
38. | been made to him in connection with the termination of the Executive’s employment | |
39. | agreement, if any, or offer letter, if any, with the Company, or the terms of this | |
40. | Agreement. | |
41. | 9. The Executive agrees not to disclose the terms of this Agreement to | |
42. | anyone, except the Executive’s spouse, attorney and, as necessary, tax/financial advisor. | |
43. | Likewise, the Company agrees that the terms of this Agreement will not be disclosed | |
44. | except as may be necessary to obtain approval or authorization to fulfill its obligations |
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1. | hereunder or as required by law. It is expressly understood that any violation of the | |
2. | confidentiality obligation imposed hereunder constitutes a material breach of this | |
3. | Agreement. | |
4. | 10. The Executive represents that the Executive does not presently have in the | |
5. | Executive’s possession any records and business documents, whether on computer or | |
6. | hard copy, and other materials (including but not limited to computer disks and tapes, | |
7. | computer programs and software, office keys, correspondence, files, customer lists, | |
8. | technical information, customer information, pricing information, business strategies and | |
9. | plans, sales records and all copies thereof) (collectively, the “Corporate Records”) | |
10. | provided by the Company and/or its predecessors, subsidiaries or affiliates or obtained as | |
11. | a result of the Executive’s prior employment with the Company and/or its predecessors, | |
12. | subsidiaries or affiliates, or created by the Executive while employed by or rendering | |
13. | services to the Company and/or its predecessors, subsidiaries or affiliates. The Executive | |
14. | acknowledges that all such Corporate Records are the property of the Company. In | |
15. | addition, the Executive shall promptly return in good condition any and all Company | |
16. | owned equipment or property, including, but not limited to, automobiles, personal data | |
17. | assistants, facsimile machines, copy machines, pagers, credit cards, cellular telephone | |
18. | equipment, business cards, laptops and computers. As of the Date of Resignation, the | |
19. | Company will make arrangements to remove, terminate or transfer any and all business | |
20. | communication lines including network access, cellular phone, fax line and other | |
21. | business numbers. | |
22. | 11. Nothing in this Agreement shall prohibit or restrict the Executive from: (i) | |
23. | making any disclosure of information required by law; (ii) providing information to, or | |
24. | testifying or otherwise assisting in any investigation or proceeding brought by, any | |
25. | federal regulatory or law enforcement agency or legislative body, any self-regulatory | |
26. | organization, or the Company’s [designated legal, compliance or human resources | |
27. | officers]; or (iii) filing, testifying, participating in or otherwise assisting in a proceeding | |
28. | relating to an alleged violation of any federal, state or municipal law relating to fraud, or | |
29. | any rule or regulation of the Securities and Exchange Commission or any self-regulatory | |
30. | organization. | |
31. | 12. The parties agree and acknowledge that the agreement by the Company | |
32. | described herein, and the settlement and termination of any asserted or unasserted claims | |
33. | against the Releasees, are not and shall not be construed to be an admission of any | |
34. | violation of any federal, state or local statute or regulation, or of any duty owed by any of | |
35. | the Releasees to the Executive. | |
36. | 13. The Executive agrees and recognizes that should the Executive breach any | |
37. | of the obligations or covenants set forth in this Agreement, the Company will have no | |
38. | further obligation to provide the Executive with the consideration set forth herein, and | |
39. | will have the right to seek repayment of all consideration paid up to the time of any such | |
40. | breach. Further, the Executive acknowledges in the event of a breach of this Agreement, | |
41. | Releasees may seek any and all appropriate relief for any such breach, including | |
42. | equitable relief and/or money damages, attorney’s fees and costs. |
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1. | 14. The Executive further agrees that the Company shall be entitled to | |
2. | preliminary and permanent injunctive relief, without the necessity of proving actual | |
3. | damages, as well as to an equitable accounting of all earnings, profits and other benefits | |
4. | arising from any violations of this Agreement, which rights shall be cumulative and in | |
5. | addition to any other rights or remedies to which the Company may be entitled. | |
6. | 15. This Agreement and the obligations of the parties hereunder shall be | |
7. | construed, interpreted and enforced in accordance with the laws of the Commonwealth of | |
8. | Massachusetts. | |
9. | 16. The Executive certifies and acknowledges as follows: | |
10. | (a) That the Executive has read the terms of this Agreement, and that | |
11. | the Executive understands its terms and effects, including the fact that the Executive has | |
12. | agreed to RELEASE AND FOREVER DISCHARGE the Company and each and | |
13. | everyone of its affiliated entities from any legal action arising out of the Executive’s | |
14. | employment relationship with the Company and the termination of that employment | |
15. | relationship; | |
16. | (b) That the Executive has signed this Agreement voluntarily and | |
17. | knowingly in exchange for the consideration described herein, which the Executive | |
18. | acknowledges is adequate and satisfactory to him and which the Executive acknowlcdges | |
19. | is in addition to any other benefits to which the Executive is otherwise entitled; | |
20. | (c) That the Executive has been and is hereby advised in writing to | |
21. | consult with an attorney prior to signing this Agreement; | |
22. | (d) That the Executive does not waive rights or claims that may arise | |
23. | after the date this Agreement is executed; | |
24. | (e) That the Company has provided him with a period of [twenty-one | |
25. | (21)] or [forty-five (45)] days within which to consider this Agreement, and that the | |
26. | Executive has signed on the date indicated below after concluding that this Separation of | |
27. | Employment Agreement and General Release is satisfactory to him; and | |
28. | (f) The Executive acknowledges that this Agreement may be revoked | |
29. | by him within seven (7) days after execution, and it shall not become effective until the | |
30. | expiration of such seven (7) day revocation period. In the event of a timely revocation by | |
31. | the Executive, this Agreement will be deemed null and void and the Company will have | |
32. | no obligations hereunder. |
[SIGNATURE PAGE FOLLOWS]
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1. | Intending to be legally bound hereby, the Executive and the Company executed | |
2. | the foregoing Separation of Employment Agreement and General Release this | |
3. | day of , . |
4. |
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Witness: | ||||||
5. | [Executive] | |||||||
6. | NOVELL, INC. | |||||||
7. | By: |
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Witness: | |||||
8. | Name: | |||||||
9. | Title: |
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Page 1
To: | Xxxxx Xxxxxx | |
From: | Xxxx Xxxxxxxx | |
Date: | September 15, 2008 | |
Re: | Personal and Confidential: Effect of IRC S409A and §105(h) on Your Severance Agreement |
Background – 409A in general and potential penalties:
As you have heard, Section 409A of the Internal Revenue Code prescribes detailed rules that focus on when “deferred compensation” can be paid. “Deferred Compensation” is defined by the Tax Code to include any contractual promise made in one year to make a payment in a later year, such as any payments you are eligible to receive under your Severance Agreement. Section 409A was added to the Tax Code in 2004 but will become fully effective as of January 1, 2009, so we are taking steps to align Novell’s plans and agreements that are subject to section 409A with the Tax Code requirements.
The Tax Code imposes a 20% federal tax penalty for violations of 409A, in addition to imposing federal income tax at the regular rate (which together can lead to a combined rate as high as 55%), plus potential penalty and interest charges. Certain states also impose penalties for failing to comply with 409A (e.g., California), which are in addition to the increased taxable income subject to state and local taxation that results from noncompliance under federal law.
Effect on your Severance Agreement:
Several exceptions under 409A protect the various payments you are eligible to receive during your employment, but in order for your Severance Agreement to comply with 409A, you will need to choose Option One, which modifies its terms by imposing a six-month delay on most of the cash severance payments you are eligible to receive following termination.
If you choose not to modify your agreement by selecting Option Two, the severance payments you are eligible to receive bear a significant risk of subjecting you to the adverse tax consequences described above. While this option is present to give you the flexibility to leave your Agreement as is and take on the risk of a 20%+ tax penalty, this option is not recommended and you will be required to indemnify Novell for any consequential liability or losses to which it may be subjected.
Impact on Health Insurance Coverage:
Please also understand that Section 105(h) of the Tax Code requires that, because Novell’s plan is self-insured, continued health coverage following termination will result in significantly adverse tax consequences to highly-compensated employees, unless paid for with after-tax dollars. Therefore, to make your continued health coverage provisions compliant with both Sections 409A and 105(h), we have also specified a modified process for providing the health benefits coverage under your Severance Agreement. This change does not impact the extent or duration of your continued health benefits coverage.
As you review this, feel free to consult with your financial advisor(s) or me for more information about 409A or these changes. In order for us to meet a deadline imposed by the Tax Code, we need you to select on option on the next page, initial each page, sign this document and return it to me by no later than December 15, 2008.
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þ Option 1 < Should any event occur that triggers my right to any payment or benefit described in my Severance Agreement with Novell, Inc. dated 04/30/2007 (the “Agreement”), I elect to have all cash payments described in the Agreement deferred for 6 months following the date I am eligible to receive such payments to the extent that such delay is required under Section 409A. My right to continued health insurance following the termination of my employment, as set forth in the Agreement, will be modified so as to require that I will pay for the cost of such coverage using after-tax dollars, and will be reimbursed for such payment by Novell. I understand and acknowledge that these revisions are being included in order to bring the Agreement into compliance with Internal Revenue Code Sections 409A and 105(h).
¨ Option 2 < I do not agree to any modifications to my Severance Agreement with Novell, Inc. dated 04/30/2007 (the “Agreement”) that will bring it into compliance with Internal Revenue Code Section 409A and 105(h). I agree to accept all responsibility and consequences associated with a determination that the payments I am eligible to receive pursuant to my severance agreement are subject to the 20% tax penalty imposed by Section 409A and other applicable tax penalty. I further agree to indemnify the Company for any liability or loss associated with my selection of this option.
The option I have selected above shall be an amendment to and become part of the Agreement. Except as specified above the remaining terms, conditions and provisions of such agreement will remain unchanged.
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Signature |
Xxxxx Xxxxxx |
9/15/08 |
Date |
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Initial |