EXHIBIT 10.3
EXECUTIVE SEVERANCE
AND
BONUS RESTRICTION AGREEMENT
August 2, 2002
Xxxx Xxxxx
0000 XX 00xx Xxxxxx XXXXXXXXX
Xxxx Xxxxx, Xxxxxxx
00000
RadiSys Corporation
an Oregon corporation
0000 XX Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxx 00000 RADISYS
RadiSys considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best interests of
RadiSys and its shareholders. In order to induce Executive to remain employed by
RadiSys in the face of uncertainties about the long-term strategies of RadiSys
and their potential impact on the scope and nature of Executive's position with
RadiSys, this Agreement, which has been approved by the Board of Directors of
RadiSys, sets forth the bonus and severance benefits that RadiSys will provide
to Executive in the event of Termination of Executive's Employment by RadiSys
without Cause during the period beginning the date of this Agreement and ending
eighteen (18) months following the first day of employment of the RadiSys Chief
Executive Officer hired to succeed Xxxxxx X. Xxxxxxx (such period is referred to
as the "Term"), under the circumstances described in this Agreement.
1. EMPLOYMENT RELATIONSHIP. Executive is currently employed by RadiSys
as Vice President General Manager. Executive and RadiSys acknowledge that either
party may terminate this employment relationship at any time and for any or no
reason, subject to the obligation of RadiSys to provide the benefits specified
in this Agreement in accordance with the terms hereof.
2. RELEASE OF CLAIMS; RESIGNATION. In consideration for and as a
condition precedent to receiving the severance benefits outlined in this
Agreement, Executive agrees to execute a Release of Claims in the form attached
as EXHIBIT A ("Release of Claims") and to provide a written resignation of
employment and all corporate offices in the form attached as EXHIBIT B
("Resignation"). Executive promises to execute and deliver the Release of Claims
and the Resignation to RadiSys within the later of (a) forty-five (45) days from
the date
Executive receives the Release of Claims or (b) the last day of Executive's
active employment.
3. COMPENSATION UPON TERMINATION; NONCOMPETITION. In the event of a
Termination of Executive's Employment (as defined in Section 6.1) at any time
during the Term other than for Cause (as defined in Section 6.2 of this
Agreement), Death or Disability (as defined in Sections 6.4 and 6.3 of this
Agreement), and contingent upon Executive's execution, delivery and
nonrevocation of the Release of Claims, execution and delivery of the
Resignation, and continued noncompetition with RadiSys, Executive shall be
entitled to the following benefits in lieu of any other compensation for periods
subsequent to the date of termination:
3.1 As bonus pay, RadiSys shall pay Executive, in periodic payments
on regular paydays over twelve (12) months beginning on the later of (a) the
termination of employment or (b) eight (8) days after execution and
nonrevocation of the Release of Claims, the total amount equal to twelve (12)
months of the Executive's then current base salary subject to the following
restrictions:
3.1.1 During the period of such periodic payments, Executive
agrees that Executive will not individually, and will not serve as or become a
director, officer, partner, limited partner, employee, agent, representative,
material stockholder (greater than ten percent (10%) of a company's outstanding
shares), creditor, or consultant of or to, or serve in any other capacity with
any business worldwide which shall in any manner, directly or indirectly:
(a) Engage or prepare to engage in any business which
competes with RadiSys;
(b) Solicit, hire or otherwise assist in any effort that
attempts to employ or otherwise utilize the services of any RadiSys employee;
(b) Solicit, divert, or accept orders for goods or services
that are substantially competitive with the goods or services sold by RadiSys
from any customer of RadiSys.
3.1.2 Executive acknowledges and agrees that the time, scope,
worldwide geographic area, and other provisions of this Section 3.1 and its
subparts are reasonable under the circumstances. Executive further agrees that
if, at any time, despite the express agreement of the parties hereto, a court of
competent jurisdiction holds that any portion of this Section 3.1 and its
subparts are unenforceable for any reason, the maximum restrictions of time,
scope, or geographic area reasonable under the circumstances, as determined by
such court, will be substituted for any such restrictions held unenforceable.
3.2 Executive may be entitled to extend coverage under any group
health plan in which Executive and Executive's dependents are enrolled at the
time of termination of employment under the COBRA continuation laws for the
eighteen- (18-) month statutory period, or so long as Executive remains eligible
under COBRA.
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RadiSys will pay Executive a lump sum payment in an amount equivalent
to the reasonably estimated cost Executive may incur to extend such coverage for
a period of twelve (12) months under the COBRA continuation laws Executive and
Executive's dependents group health and dental plan coverage in effect at the
time of termination. Subject to Section 4, Executive may use the net payment, as
well as any payment made under Section 3.1, for such COBRA continuation coverage
or for any other purpose.
3.3 Executive shall be entitled to a portion of the benefits under
the Executive MBO Plan or the incentive plan in effect at the time of
termination, if any payment is earned under such plan, prorated for the portion
of the incentive plan year during which Executive was a participant. For
purposes of this Agreement, Executive's participation in any annual targeted
incentive plan will be considered to have ended on Executive's last day of
active employment. Prorated awards, if any, shall not be due and payable by
RadiSys to Executive until the date that all awards are paid to other eligible
employees after the incentive plan year has ended. Unless the applicable
incentive plan provides for a greater payment for a participant whose employment
terminates prior to the end of an incentive plan year (in which case the
applicable plan payment shall be made), the proration shall be calculated
pursuant to this Section 3.3. The payment, if any, that would have been made
under Executive's award had Executive been made a participant for the full
incentive plan year shall be calculated after the end of the incentive plan
year. Such amount shall be divided by the total number of days in the incentive
plan year and the result multiplied by the actual number of days during the
incentive plan year of Executive's participation in the plan.
3.4 RadiSys will pay up to Fifteen Thousand and No/100 Dollars
($15,000.00) to Executive or to a third party outplacement firm selected by
Executive so that Executive may obtain career counseling assistance to Executive
for a period of one (1) year following Executive's termination date if Executive
so chooses.
4. WITHHOLDING; SUBSEQUENT EMPLOYMENT. All payments provided for in
Sections 3.1, 3.2, 3.3 and 3.4 of this Agreement are subject to and will be
reduced by applicable withholding obligations imposed by federal, state or local
laws and regulations. Except as provided in Section 3.1 and its subparts, the
amount of any payment provided for in this Agreement shall not be reduced,
offset or subject to recovery by RadiSys because of any compensation earned by
Executive as the result of employment by another employer after termination.
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5. OTHER AGREEMENTS. In the event that severance benefits are payable to
Executive under any other agreement with RadiSys in effect at the time of
termination (including but not limited to any change of control, "golden
parachute" or employment agreement, but excluding for this purpose any stock
option agreement or stock bonus agreement or stock appreciation right agreement
that may provide for accelerated vesting or related benefits upon the occurrence
of a change in control), the benefits provided in this Agreement shall not be
payable to Executive. Executive may, however, elect to receive all of the
benefits provided for in this Agreement in lieu of all of the benefits provided
in all such other agreements. Any such election shall be made with respect to
the agreements as a whole, and Executive cannot select some benefits from one
agreement and other benefits from this Agreement.
6. DEFINITIONS.
6.1 Termination of Executive's Employment. Termination of Executive's
Employment means that RadiSys has terminated Executive's employment with RadiSys
(including any subsidiary of RadiSys). If Executive is assigned additional or
different titles, tasks or responsibilities from those currently held or
assigned, consistent with Executive's areas of professional expertise, whether
at RadiSys or any subsidiary of RadiSys, such circumstances shall not constitute
a Termination of Executive's Employment.
6.2 Cause. Termination of Executive's Employment for "Cause" shall
mean Termination upon (a) the willful failure by Executive to perform
substantially Executive's reasonably assigned duties with RadiSys after written
notice outlining the deficiencies and after a demand for substantial performance
is delivered to Executive by the Board, Chief Executive Officer or President of
RadiSys or (b) the willful engaging by Executive in illegal conduct which is
materially and demonstrably injurious to RadiSys. No act, or failure to act, on
Executive's part shall be considered willful unless done or omitted to be done,
by Executive without reasonable belief that Executive's action or omission was
in, or not opposed to, the best interests of the Company. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board of Directors shall be conclusively presumed to be done, or omitted to be
done, by Executive in the best interests of the Company.
6.3 Disability. Termination of Executive's Employment based on
"Disability" shall mean termination without further compensation under this
Agreement, due to Executive's absence from Executive's full-time duties with
RadiSys for one hundred eighty (180) consecutive days as a result of Executive's
incapacity due to physical or mental illness, unless within thirty (30) days
after notice of termination by RadiSys following such absence Executive shall
have returned to the full-time performance of Executive's duties.
6.4 Death. Executive's employment terminates upon Executive's death
without further compensation under this Agreement.
7. SUCCESSORS; BINDING AGREEMENT.
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7.1 This Agreement shall be binding on and inure to the benefit of
RadiSys and its successors and assigns.
7.2 This Agreement shall inure to the benefit of and be enforceable
by Executive and Executive's legal representatives, executors, administrators
and heirs.
8. RESIGNATION OF CORPORATE OFFICES. Executive will resign employment
and Executive's office, if any, as a director, officer or trustee of RadiSys,
its subsidiaries or affiliates, effective as of the date of termination of
employment. Executive agrees to provide RadiSys the Resignation that conforms
with Exhibit B and that no severance will be paid until after the Resignation is
provided.
9. GOVERNING LAW, ARBITRATION. This Agreement shall be construed in
accordance with and governed by the laws of the State of Oregon. Executive and
RadiSys agree that any dispute or controversy arising under or in connection
with this Agreement or the breach thereof, shall be settled exclusively by
arbitration under the commercial rules of the American Arbitration Association,
and judgment upon the award rendered by the Arbitrator may be entered in any
Court having jurisdiction thereof. In the event of any arbitration or
administrative or civil action to enforce the provisions of this Agreement, each
party agrees to bear its own attorney fees and costs at any proceeding, trial
and/or on appeal.
10. AMENDMENT. No provision of this Agreement may be modified unless
such modification is agreed to in a writing signed by Executive and RadiSys.
RADISYS CORPORATION
By: /s/ Xxx Xxxxxxx /s/ Xxxx X. Xxxxx
-------------------------------- --------------------------------
Title: Executive
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EXHIBIT A
RELEASE OF CLAIMS
1. PARTIES.
The parties to Release of Claims (hereinafter "Release") are [NAME] and
RADISYS CORPORATION ("RadiSys"), an Oregon corporation, as hereinafter defined.
1.1 [NAME].
For the purposes of this Release, "[NAME]" means [NAME'S] attorneys,
heirs, executors, administrators, assigns, and spouse.
1.2 THE COMPANY.
For purposes of this Release the "Company" means RADISYS
CORPORATION, an Oregon corporation, its predecessors and successors, corporate
affiliates, and all of each corporation's officers, directors, employees,
insurers, agents, or assigns, in their individual and representative capacities.
2. BACKGROUND AND PURPOSE.
[NAME] was employed by RadiSys. [NAME'S] employment is ending effective
__________. The purpose of this Release is to settle, and the parties hereby
settle, fully and finally, any and all claims [NAME] may have against Company,
whether asserted or not, known or unknown, including, but not limited to, claims
arising out of or related to [NAME'S] employment, any claim for reemployment, or
any other claims whether asserted or not, known or unknown, past or future, that
relate to [NAME'S] employment, reemployment, or application for reemployment.
3. RELEASE.
Except as reserved in paragraph 3.1, [NAME] waives, acquits and forever
discharges Company from any and all claims [NAME] may have. Except as reserved
in Paragraph 3.1, [NAME] hereby releases Company from any and all claims,
demands, actions, or causes of action, whether known or unknown, arising from or
related in any way to any employment of or past or future failure or refusal to
employ [NAME] by Company, or any other past or future claim (except where
expressly prohibited by law) that relates in any way to [NAME'S] employment,
compensation, benefits, reemployment, or application for employment, with the
exception of any claim [NAME] may have against RadiSys for enforcement of this
Release. This release includes any and all claims, direct or indirect, which
might otherwise be made under any applicable local, state or federal authority,
including but not limited to any claim arising under the Portland or Oregon
statutes dealing with employment, discrimination in employment, wages and hours,
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
post-Civil Rights Acts (42 USC Section Section 1981-88), the Americans With
Disabilities
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Act, the Family and Medical Leave Act of 1993, the Equal Pay Act of 1963,
Executive Order 11246, the Rehabilitation Act of 1973, the Uniformed Services
Employment and Reemployment Rights Act of 1994, the Age Discrimination in
Employment Act, the Older Worker Benefit Protection Act, the Employment
Retirement Income Security Act, the Fair Labor Standards Act, all as amended,
any regulations under such authorities, and any applicable constitutional,
statutory contract, tort, or common law theories.
3.1 Reservations of Rights.
This Release shall not affect any rights, which [NAME] may have
under any medical insurance, disability plan, workers' compensation,
unemployment compensation, applicable company stock incentive plan(s),
indemnifications, or the 401(k) plan maintained by RadiSys.
3.2 No Admission of Liability.
It is understood and agreed that the acts done and evidenced hereby
and the release granted hereunder is not an admission of liability on the part
of [NAME], RadiSys or Company, by whom liability has been and is expressly
denied.
4. CONSIDERATION TO [NAME].
As provided in Section 3 (and its subparts) of the Executive Severance
and Bonus Restriction Agreement dated _________________________ ("Agreement"),
after receipt of the written resignation of employment and all corporate
offices, receipt of this Release, fully endorsed by [NAME] and the expiration of
the seven (7) day revocation period provided by the Older Workers Benefit
Protection Act without [NAME]'s revocation, and so long as [NAME] continues not
to compete against RadiSys, RadiSys shall pay the compensation when due (less
proper withholding).
5. NO DISPARAGEMENT.
[NAME] agrees that henceforth [NAME] will not disparage or make false or
adverse statements about Company. RadiSys should report to [NAME] any actions or
statements that are attributed to [NAME] that RadiSys believes are disparaging.
RadiSys may take actions consistent with breach of this Release should it
determine that [NAME] has disparaged or made false or adverse statements about
Company. RadiSys agrees to follow the applicable policy(ies) regarding release
of employment reference information.
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6. CONFIDENTIALITY, PROPRIETARY, TRADE SECRET AND RELATED INFORMATION.
[NAME] acknowledges the duty and agrees not to make unauthorized use or
disclosure of any confidential, proprietary or trade secret information learned
as an employee about Company, its products, customers and suppliers, and
covenants not to breach that duty. Moreover, [NAME] acknowledges that, subject
to the enforcement limitations of applicable law, RadiSys reserves the right to
enforce the terms of [NAME'S] Employee Agreement with RadiSys and any
paragraph(s) therein. Should [NAME], [NAME'S] attorney or agents be requested in
any judicial, administrative, or other proceeding to disclose confidential,
proprietary or trade secret information [NAME] learned as an employee of
RadiSys, [NAME] shall promptly notify RadiSys of such request by the most
expeditious means in order to enable RadiSys to take any reasonable and
appropriate action to limit such disclosure.
7. ARBITRATION OF CERTAIN DISPUTES.
[NAME] and RadiSys agree that should the issue arise of whether either
party to this Agreement has failed to satisfy or has breached the terms of this
Agreement, excepting a breach of paragraphs 5 or 6, any other dispute shall be
submitted to arbitration pursuant to the commercial rules of the American
Arbitration Association. In such event, each party shall pay its own costs and
attorneys' fees.
8. SCOPE OF RELEASE.
The provisions of this Release shall be deemed to obligate, extend to,
and inure to the benefit of the parties; RadiSys' parents, subsidiaries,
affiliates, successors, predecessors, assigns, directors, officers, and
employees; and each parties insurers, transferees, grantees, legatees, agents
and heirs, including those who may assume any and all of the above-described
capacities subsequent to the execution and effective date of this Release.
9. OPPORTUNITY FOR ADVICE OF COUNSEL.
[NAME] acknowledges that [NAME] has been encouraged to seek advice of
counsel with respect to this Release and has had the opportunity to do so.
10. ENTIRE RELEASE.
The Agreement, this Release and the Employee Agreement signed by [NAME]
contain the entire agreement and understanding between the parties and supersede
and replace all other prior negotiations and proposed agreements, written or
oral. [NAME] and RadiSys acknowledge that no other party, nor agent nor attorney
of any other party, has made any promise, representation, or warranty, express
or implied, not contained in this Release concerning the subject matter of this
Release to induce this Release, and [NAME] and RadiSys acknowledge that they
have not executed this Release in reliance upon any such promise,
representation, or warranty not contained in this Release.
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11. SEVERABILITY.
Every provision of this Release is intended to be severable. In the
event any term or provision of this Release is declared to be illegal or invalid
for any reason whatsoever by a court of competent jurisdiction or by final and
unappealed order of an administrative agency of competent jurisdiction, such
illegality or invalidity should not affect the balance of the terms and
provisions of this Release, which terms and provisions shall remain binding and
enforceable.
12. PARTIES MAY ENFORCE RELEASE.
Nothing in this Release shall operate to release or discharge any
parties to this Release or their successors, assigns, legatees, heirs, or
personal representatives from any rights, claims, or causes of action arising
out of, relating to, or connected with a breach of any obligation of any party
contained in this Release .
13. COSTS AND ATTORNEY'S FEES.
The parties each agree to bear their own costs and attorneys' fees which
have been or may be incurred in connection with any matters released herein or
in connection with the negotiation and consummation of this Release. In the
event of any arbitration or administrative or civil action to enforce the
provisions of this Release, each party agrees to bear its own attorney fees and
costs at any proceeding, trial and/or on appeal.
14. ACKNOWLEDGEMENTS.
[NAME] acknowledges that the Release provides severance pay and
benefits, which RadiSys would otherwise have no obligation to provide and that
[NAME] has been encouraged by RadiSys to seek advice of legal counsel.
[NAME] acknowledges that RadiSys has provided the following information:
(a) the class or group of employees offered the opportunity to obtain severance
benefits similar to those in the Release, (b) the eligibility factors required
to obtain severance benefits similar to those in the Release, (c) the time
limits required to obtain severance benefits similar to those in the Release,
(d) the job titles and ages of employees eligible or selected for severance
benefits similar to those in the Release, and (e) the ages of employees in the
same classification either not eligible or not selected.
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15. REVOCATION.
As provided by the Older Workers Benefit Protection Act, [NAME] is
entitled to have forty-five (45) days to consider this Release. For a period of
seven (7) days from execution of this Release, [NAME] may revoke this Release.
Upon receipt of [NAME'S] signed Release and the end of the revocation period,
payment by RadiSys as described in paragraph 4 above will be forwarded by mail
in a timely manner.
Dated: ___________________, 2002
[NAME]
STATE OF OREGON )
) ss.
County of ___________ )
Personally appeared the above named [NAME] and acknowledged the
foregoing instrument to be [NAME'S] voluntary act and deed.
Before me: ________________________________
Notary Public for ______________
My commission expires: _________
RADISYS CORPORATION
By:______________________________ Dated:__________________________
Its:_____________________________
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EXHIBIT B
RESIGNATION
Pursuant to the Executive Severance and Bonus Restriction Agreement,
Executive resigns as an employee and from all offices Executive holds with
RadiSys Corporation and all subsidiaries or affiliates.
_____________________________ Dated: ___________________, 2002
[NAME]
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