FUSION-IO, INC. INVOLUNTARY TERMINATION SEVERANCE AGREEMENT
Exhibit 10.10
THIS INVOLUNTARY TERMINATION SEVERANCE AGREEMENT (this “Agreement”) is made and entered into
by and between _________ (“Employee”) and Fusion-io, Inc. (the “Company”), effective as of
__________ (the “Effective Date”).
RECITALS
1. The Compensation Committee (the “Committee”) of the Board of Directors of the Company (the
“Board”) believes that it is in the best interests of the Company and its stockholders to assure
that the Company shall have the continued dedication and objectivity of Employee, to provide
Employee with an incentive to continue his/her employment, and to motivate Employee to maximize the
value of the Company for the benefit of its stockholders.
2. The Committee believes that it is imperative to provide Employee with certain severance
benefits upon Employee’s termination of employment under certain circumstances. These benefits
shall provide Employee with enhanced financial security and incentive and encouragement to remain
with the Company.
3. Certain capitalized terms used in this Agreement are defined in Section 6 below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, including the mutual covenants contained
herein, the Company and Employee hereby agree that the Previous Agreement is hereby amended and
restated as follows:
1. Term of Agreement. This Agreement shall terminate upon the date that all of the
obligations of the parties hereto with respect to this Agreement have been satisfied.
2. At-Will Employment. The Company and Employee acknowledge that Employee’s
employment is and shall continue to be at-will, as defined under applicable law. If Employee’s
employment terminates for any reason, including (without limitation) any termination prior to a
Change of Control, Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement or as may otherwise be available in
accordance with the Company’s established employee plans.
3. Severance Benefits.
(a) Termination without Cause Prior to a Change of Control. If the Company terminates
Employee’s employment with the Company without Cause or if Employee resigns from such employment
for Good Reason, and such termination occurs prior to three (3) months before a Change of Control,
then subject to Section 4, Employee shall receive the following:
(i) Accrued Compensation. The Company shall pay Employee all accrued but unpaid
vacation, expense reimbursements, wages, and other benefits due to Employee under any
Company-provided plans, policies, and arrangements.
(ii) Severance Payment. Employee shall be paid continuing payments of severance pay
at a rate equal to Employee’s base salary rate, as then in effect, for twelve (12) months from the
date of such termination of employment, to be paid periodically in accordance with the Company’s
normal payroll policies. If a Change of Control occurs while Employee is receiving severance
payments pursuant to this clause (ii), then Employee shall receive a lump sum payment equal to the
remaining unpaid severance pay under this clause (ii) on the date of the Change of Control in lieu
of continuing payments otherwise due following the Change of Control.
(iii) Continued Employee Benefits. If Employee elects continuation coverage pursuant
to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) within the time
period prescribed pursuant to COBRA for Employee and Employee’s eligible dependents, then the
Company shall reimburse Employee for the COBRA premiums for such coverage (at the coverage levels
in effect immediately prior to Employee’s termination) until the earlier of (A) a period of twelve
(12) months from the date of termination, or (B) the date upon which Employee and/or Employee’s
eligible dependents become covered under similar plans. The reimbursements shall be made by the
Company to Employee consistent with the Company’s normal expense reimbursement policy.
(b) Involuntary Termination other than for Cause, Voluntary Termination for Good Reason or
Death or Disability during the Change of Control Period. If within the period commencing three
(3) months prior to a Change of Control and ending twelve (12) months following a Change of Control
(the “Change of Control Period”), (i) Employee terminates his or her employment with the Company
(or any parent or subsidiary of the Company) for Good Reason or (ii) the Company (or any parent or
subsidiary of the Company) terminates Employee’s employment without Cause, or (iii) Employee dies
or terminates employment due to becoming Disabled, then, subject to Section 4 Employee shall
receive the following severance from the Company:
(i) Severance Payment. Employee shall be entitled to receive a lump-sum severance
payment equal to 100% of Employee’s annual base salary (as in effect immediately prior to (A) the
Change of Control or (B) Employee’s termination, whichever is greater) plus an amount equal to 100%
of Employee’s target annual bonus (for the year in which the termination or Change of Control
occurs, whichever is greater).
(ii) Equity Compensation Acceleration. One hundred percent (100%) of the Employee’s
then unvested outstanding stock options, stock appreciation rights, restricted stock, restricted
stock units and other Company equity compensation awards, including any equity awards previously
transferred to Employee’s estate planning vehicles (the “Equity Compensation Awards”) shall
immediately vest and become exercisable. Any Company stock options and stock appreciation rights
shall thereafter remain exercisable following Employee’s employment termination for the period
prescribed in the respective option and stock appreciation right agreements.
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(iii) Continued Employee Benefits. If Employee elects continuation coverage pursuant
COBRA within the time period prescribed pursuant to COBRA for Employee and Employee’s eligible
dependents, then the Company shall reimburse Employee for the COBRA premiums for such coverage (at
the coverage levels in effect immediately prior to Employee’s termination) until the earlier of (A)
a period of twelve (12) months from the date of termination, or (B) the date upon which Employee
and/or Employee’s eligible dependents become covered under similar plans. The reimbursements shall
be made by the Company to Employee consistent with the Company’s normal expense reimbursement
policy.
(c) Voluntary Resignation; Termination for Cause. If Employee’s employment with the
Company terminates (i) voluntarily by Employee other than for Good Reason, or (ii) for Cause by the
Company, then Employee shall not be entitled to receive severance or other benefits, except for
those (if any) as may then be established under the Company’s then existing severance and benefits
plans and practices or pursuant to other written agreements with the Company.
4. Conditional Nature of Severance Payments and Benefits.
(a) Release of Claims Agreement. The receipt of any severance payments or benefits
pursuant to this Agreement is subject to Employee signing and not revoking a separation agreement
and release of claims in substantially the form attached hereto as Exhibit A (the
“Release”), which must become effective and irrevocable no later than the sixtieth (60th) day
following Employee’s termination of employment (the “Release Deadline”). If the Release does not
become effective and irrevocable by the Release Deadline, Employee shall forfeit any right to
severance payments or benefits under this Agreement. In no event shall severance payments or
benefits be paid or provided until the Release actually becomes effective and irrevocable.
(b) Noncompete. During the term of Employee’s employment and for twelve (12) months
following the date of termination of such employment for any reason, Employee shall not accept or
engage, directly or indirectly, any work, consulting, or other services, for remuneration of any
kind for any other business entity engaged in the Covered Business, without prior written approval
by the Board. Nothing in this Agreement shall prevent Employee from: (i) accepting speaking or
presentation engagements in exchange for honoraria; (ii) serving on advisory boards that do not
compete with the Covered Business of the Company (or any of its subsidiaries or affiliates) or
boards of trade associations or boards of charitable organizations so long as such service does not
unduly interfere with the performance of Employee’s duties to the Company and provided that
Employee provides prior written notice to the Board; or (iii) from making or owning, directly or
indirectly, any passive investment in any other business or entity that does not compete with the
Covered Business of the Company. For purposes of this Agreement, the phrase “Covered Business”
shall mean the business conducted or demonstrably anticipated to be conducted as of the date of any
such action by the Company (and its subsidiaries and affiliates). The phrase “engage, directly or
indirectly” means engaging or having an interest in, directly or indirectly, as owner, partner,
participant of a joint venture, trustee, proprietor, shareholder, member, manager, director,
officer, employee, independent contractor, capital investor, lender, consultant, advisor or similar
capacity, or by lending or allowing his name or reputation to be used in connection with, or
otherwise participating in or allowing his skill, knowledge or experience to be used in connection
with, the operation, management or control of a business or enterprise engaged in any aspect of the
Covered
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Business, or being connected with or having any financial interest in any business or
enterprise engaged in the Covered Business, except for the purposes of performing services on
behalf of the Company or any of its subsidiaries or affiliates. This Section 4(b) shall
not apply to Employee while he or she is residing in the State of California.
(c) Nonsolicitation/Nondisparagement. In the event of the termination of Employee’s
employment for any reason, Employee shall not, for a period of twelve (12) months, directly or
indirectly:
(i) solicit, induce or encourage any employee of the Company or any of its affiliates or
subsidiaries to terminate their employment with the Company or any of its affiliates or
subsidiaries;
(ii) make any derogatory public statement concerning the financial performance, products,
services, the Board or management personnel of the Company or any of its affiliates or
subsidiaries, or Employee’s employment; or
(iii) use
or disclose the Company’s “Confidential Information” (as defined in the
Confidentiality Agreement) to induce, attempt to induce or knowingly encourage any Customer of the
Company or any of its affiliates or subsidiaries to divert any business or income from the Company
or any of its affiliates or subsidiaries, or to stop or alter the manner in which they are then
doing business with the Company or any of its affiliates or subsidiaries.
The term “Customer” shall mean any individual or business firm that is, or within the prior
twelve (12) months was, a customer or client of the Company, whether or not such business was
actively solicited by Employee on behalf of the Company or any of its affiliates or subsidiaries
during Employee’s employment. Nothing in Section 4(c) shall prohibit Employee from providing
truthful testimony in any legal, administrative or regulatory proceeding and Employee may at all
times respond truthfully to a lawfully-issued subpoena, court order or governmental inquiry or as
otherwise may be required by law, provided, however, that upon receiving such lawfully-issued
subpoena or court order, Employee shall promptly provide reasonable written notice to Company and
cooperate with the Company to the extent reasonably necessary to protect the confidentiality of any
proprietary or trade secret information of the Company or any of its affiliates or subsidiaries,
and the privacy rights of any employee or director.
(d) Confidential Information and Invention Assignment Agreements. Employee’s receipt
of any payments or benefits under Section 3 shall be subject to Employee continuing to comply with
the terms of the Employee Proprietary Information and Invention Assignment Agreement dated
, between the Company and Employee, as such agreement may be amended from
time to time (the “Confidentiality Agreement”).
(e) Section 409A.
(i) Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits
to be paid or provided to Employee, if any, pursuant to this Agreement that, when considered
together with any other severance payments or separation benefits, are
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considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the final regulations and any guidance promulgated thereunder (“Section
409A”) (together, the “Deferred Payments”) shall be paid or otherwise provided until Employee has a
“separation from service” within the meaning of Section 409A. Similarly, no severance payable to
Employee, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A
pursuant to Treasury Regulation Section 1.409A-1(b)(9) shall be payable until Employee has a
“separation from service” within the meaning of Section 409A.
(ii) It is intended that none of the severance payments under this Agreement shall constitute
“Deferred Payments” but rather shall be exempt from Section 409A as a payment that would fall
within the “short-term deferral period” as described in Section 4(e)(iv) below or resulting
from an involuntary separation from service as described in Section 4(e)(v) below.
However, any severance payments or benefits under this Agreement that would be considered Deferred
Payments shall be paid on, or, in the case of installments, shall not commence until, the sixtieth
(60th) day following Employee’s separation from service, or, if later, such time as required by
Section 4(e)(iii). Except as required by Section 4(e)(iii), any installment
payments that would have been made to Employee during the sixty (60) day period immediately
following Employee’s separation from service but for the preceding sentence shall be paid to
Employee on the sixtieth (60th) day following Employee’s separation from service and the
remaining payments shall be made as provided in this Agreement.
(iii) Notwithstanding anything to the contrary in this Agreement, if Employee is a “specified
employee” within the meaning of Section 409A at the time of Employee’s termination (other than due
to death), then the Deferred Payments, if any, that are payable within the first six (6) months
following Employee’s separation from service, shall become payable on the first payroll date that
occurs on or after the date six (6) months and one (1) day following the date of Employee’s
separation from service. All subsequent Deferred Payments, if any, shall be payable in accordance
with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein
to the contrary, if Employee dies following Employee’s separation from service, but before the six
(6) month anniversary of the separation from service, then any payments delayed in accordance with
this paragraph shall be payable in a lump sum as soon as administratively practicable after the
date of Employee’s death and all other Deferred Payments shall be payable in accordance with the
payment schedule applicable to each payment or benefit. Each payment and benefit payable under
this Agreement is intended to constitute a separate payment under Section 1.409A-2(b)(2) of the
Treasury Regulations.
(iv) Any amount paid under this Agreement that satisfies the requirements of the “short-term
deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations shall not constitute
Deferred Payments for purposes of clause (i) above.
(v) Any amount paid under this Agreement that qualifies as a payment made as a result of an
involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury
Regulations that does not exceed the Section 409A Limit (as defined below) shall not constitute
Deferred Payments for purposes of clause (i) above.
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(vi) The foregoing provisions are intended to comply with the requirements of Section 409A so
that none of the severance payments and benefits to be provided hereunder shall be subject to the
additional tax imposed under Section 409A, and any ambiguities herein shall be interpreted to so
comply. The Company and Employee agree to work together in good faith to consider amendments to
this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to
avoid imposition of any additional tax or income recognition before actual payment to Employee
under Section 409A.
5. Golden Parachute Excise Tax Best Results. In the event that the severance and
other benefits provided for in this agreement or otherwise payable to Employee (a) constitute
“parachute payments” within the meaning of Code Section 280G and (b) would be subject to the excise
tax imposed by Code Section 4999, then such benefits shall be either:
(i) delivered in full, or
(ii) delivered as to such lesser extent which would result in no portion of such severance
benefits being subject to excise tax under Section 4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable federal, state and local
income and employment taxes and the excise tax imposed by Code Section 4999, results in the receipt
by Employee, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or
some portion of such benefits may be taxable under Code Section 4999. Unless the Company and
Employee otherwise agree in writing, the determination of Employee’s excise tax liability and the
amount required to be paid under this Section 5 shall be made in writing by the Company’s
independent auditors who are primarily used by the Company immediately prior to the Change of
Control (the “Accountants”). For purposes of making the calculations required by this Section
5, the Accountants may make reasonable assumptions and approximations concerning applicable
taxes and may rely on reasonable, good faith interpretations concerning the application of Code
Sections 280G and 4999. The Company and Employee shall furnish to the Accountants such information
and documents as the Accountants may reasonably request in order to make a determination under this
Section 5. The Company shall bear all costs the Accountants may reasonably incur in
connection with any calculations contemplated by this Section 5. Any reduction in payments
and/or benefits required by this Section 5 shall occur in the following order: (i)
reduction of cash payments; (ii) reduction of vesting acceleration of Equity Compensation Awards;
and (iii) reduction of other benefits paid or provided to Employee. In the event that acceleration
of vesting of Equity Compensation Awards is to be reduced, such acceleration of vesting shall be
cancelled in the reverse order of the date of grant for the Equity Compensation Awards. If two or
more Equity Compensation Awards are granted on the same date, each award shall be reduced on a
pro-rata basis.
6. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:
(a) Cause. “Cause” shall mean any of the following occurring during Employee’s
employment by the Company (except with respect to clause (v) below): (i) personal dishonesty by
Employee involving Company business or participation in a fraud against the
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Company, or breach of
Employee’s fiduciary duty to Company; (ii) indictment or conviction of a
felony or other crime involving moral turpitude or dishonesty; (iii) Employee’s willful
refusal to comply with the lawful requests made of Employee by the Board reasonably related to his
employment by the Company and the performance of his duties with respect thereto (but which shall
not include a request to waive or amend any portion of this Agreement or terminate this Agreement
or to consent to an action that would result in Employee’s loss of a right under this Agreement);
(iv) material violation of the Company’s policies, after written notice to Employee and an
opportunity to be heard by the Board and his failure to fully cure such violations within a
reasonable period of time of not less than thirty (30) days after such hearing; (v) threats or acts
of violence in the workplace; (vi) unlawful harassment in the course of any business activity of
any employee or independent contractor of the Company; (vii) theft or unauthorized conversion by or
transfer of any Company asset or business opportunity to Employee or any third party; and (viii) a
material breach by Employee of any material provision of this Agreement or any other agreement with
the Company after written notice to Employee and an opportunity to be heard by the Board and his
failure to fully cure such breach within a reasonable period of time of not less than thirty (30)
days after such hearing.
(b) Change of Control. “Change of Control” shall mean the occurrence of any of the
following events:
(i) Change in Ownership of the Company. A change in the ownership of the Company
which occurs on the date that any one person, or more than one person acting as a group (“Person”),
acquires ownership of the stock of the Company that, together with the stock held by such Person,
constitutes more than 50% of the total voting power of the stock of the Company; or
(ii) Change in Effective Control of the Company. A change in the effective control of
the Company which occurs on the date that a majority of members of the Board is replaced during any
twelve (12) month period by directors whose appointment or election is not endorsed by a majority
of the members of the Board prior to the date of the appointment or election. For purposes of this
clause (ii), if any Person is considered to be in effective control of the Company, the acquisition
of additional control of the Company by the same Person shall not be considered a Change of
Control; or
(iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change
in the ownership of a substantial portion of the Company’s assets which occurs on the date that any
Person acquires (or has acquired during the twelve (12) month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that have a total gross fair
market value equal to or more than 50% of the total gross fair market value of all of the assets of
the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection
(iii), gross fair market value means the value of the assets of the Company, or the value of the
assets being disposed of, determined without regard to any liabilities associated with such assets.
For these purposes, persons shall be considered to be acting as a group if they are owners of
a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with the Company.
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Notwithstanding the foregoing provisions of this definition, a transaction shall not be deemed
a Change of Control unless the transaction qualifies as a change in control event within the
meaning of Section 409A.
(c) Disability. “Disability” shall mean that Employee has been unable to perform his
or her Company duties as the result of Employee’s incapacity due to physical or mental illness, and
such inability, at least twenty-six (26) weeks after its commencement, is determined to be total
and permanent by a physician selected by the Company or its insurers and acceptable to Employee or
Employee’s legal representative (such Agreement as to acceptability not to be unreasonably
withheld). Termination resulting from Disability may only be effected after at least thirty (30)
days’ written notice by the Company of its intention to terminate Employee’s employment. In the
event that Employee resumes the performance of substantially all of his or her duties hereunder
before the termination of his or her employment becomes effective, the notice of intent to
terminate shall automatically be deemed to have been revoked.
(d) Good Reason. “Good Reason” means Employee’s resignation within ninety (90) days
following the expiration of any Company cure period (discussed below) following the occurrence of
one or more of the following, without Employee’s express written consent:
(i) prior to a Change of Control, a material reduction of Employee’s duties, authority, or
responsibilities, relative to Employee’s title, duties, authority, or responsibilities as in effect
immediately prior to such reduction; or
(ii)
following a Change of Control, (A) the removal of Employee from the
position held by Employee immediately prior to the Change of Control,
provided that continued employment following the Change of
Control with substantially the same responsibility with respect to
the Company's business and operations shall not constitute "Good
Reason" (for example, Employee shall not have been removed
from his position if he is employed by the Company, the acquiring
company or one of its affiliates and Employee has substantially the
same responsibilities with respect to the business of the Company as
he had immediately prior to the Change in Control whether Employee's
title is revised to reflect his placement within the overall
corporate hierarchy and whether Employee provides services to a
subsidiary, affiliate, business unit or otherwise), or (B) a material
reduction in Employee's responsibilities, authority or statues as
such (which for this purpose shall include a material reduction in
the resources (financial, personnel and other) allocated to the
Company's business and under Employee's direction, including
reallocation of key personnel engaged in the Company's business to
other businesses of the acquiring company); or
(iii) a material reduction of Employee’s base compensation (in other words, a material
reduction in Employee’s base salary or bonus or benefits) as in effect immediately prior to such
reduction, other than reductions implemented as part of an overall Company-wide reduction program
that is applied similarly to all executive officers and is no more than 20%; or
(iv) a material change in the geographic location at which Employee must perform services (in
other words, Employee’s relocation to a facility or an office location more than a 50-mile radius
from Employee’s then current location); or
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(v) a material breach by the Company of a material provision of this Agreement.
Notwithstanding the foregoing, Employee agrees not to resign for Good Reason without first
providing the Company with written notice of the acts or omissions constituting the grounds for
Good Reason within ninety (90) days of the initial existence of the grounds for Good Reason and a
reasonable cure period of thirty (30) days following the date of such notice.
7. Successors.
(a) The Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in the same manner
and to the same extent as the Company would be required to perform such obligations in the absence
of a succession. For all purposes under this Agreement, the term “Company” shall include any
successor to the Company’s business and/or assets which executes and delivers the assumption
agreement described in this Section 7(a) or which becomes bound by the terms of this
Agreement by operation of law.
(b) Employee’s Successors. The terms of this Agreement and all rights of Employee
hereunder shall inure to the benefit of, and be enforceable by, Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
8. Notice.
(a) General. All notices and other communications required or permitted hereunder
shall be in writing, shall be effective when given, and shall in any event be deemed to be given
upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other
applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if
delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express
or similar overnight courier, freight prepaid or (d) one (1) business day after the business day of
facsimile transmission, if delivered by facsimile transmission with copy by first class mail,
postage prepaid, and shall be addressed (i) if to Employee, at his or her last known residential
address and (ii) if to the Company, at the address of its principal corporate offices (attention:
Secretary), or in any such case at such other address as a party may designate by ten (10) days’
advance written notice to the other party pursuant to the provisions above.
(b) Notice of Termination. Any termination by the Company for Cause or by Employee
for Good Reason or Disability or as a result of a voluntary resignation shall be communicated by a
notice of termination to the other party hereto given in accordance with Section 8(a)
above. Such notice shall indicate the specific termination provision in this Agreement relied
upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis
for termination under the provision so indicated, and shall specify the termination date (which
shall be not more than thirty (30) days after the giving of such notice). The failure by Employee
to include in the notice any fact or circumstance which contributes to a showing of Good Reason or
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Disability shall not waive any right of Employee hereunder or preclude Employee from asserting such fact
or circumstance in enforcing his or her rights hereunder.
9. Miscellaneous Provisions.
(a) No Duty to Mitigate. Employee shall not be required to mitigate the amount of any
payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that
Employee may receive from any other source,
(b) Waiver. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by Employee and by
an authorized officer of the Company (other than Employee). No waiver by either party of any
breach of, or of compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same condition or
provision at another time.
(c) Headings. All captions and section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.
(d) Entire Agreement. This Agreement constitutes the entire agreement of the parties
hereto and supersedes all prior representations, understandings, undertakings or agreements
(whether oral or written and whether expressed or implied) of the parties with respect to the
subject matter hereof, including Employee’s employment offer letter.
(e) Choice of Law. This Agreement shall be governed by the laws of the State of
California, without regard for choice-of-law provisions. The California state courts in Santa
Xxxxx County and/or the United States District Court for the Northern District of California shall
have exclusive jurisdiction and venue over all controversies in connection with this Agreement.
(f) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
(g) Withholding. All payments made pursuant to this Agreement shall be subject to
withholding of applicable income and employment taxes.
(h) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, to be effective as of the Effective Date.
| COMPANY | FUSION-IO, INC. | ||||||
| By: | |||||||
| Name: | |||||||
| Title: | |||||||
| By: | |||||||
| Name: | |||||||
| Title: | |||||||
[Signature Page to Involuntary Termination Severance Agreement]
EXHIBIT A
FORM OF RELEASE OF CLAIMS
RELEASE OF CLAIMS
THIS RELEASE OF CLAIMS (this “Agreement”) is made by and between Fusion-io, Inc. (the
“Company”), and ________ (“Employee”). The Company and Employee are sometimes collectively
referred to herein as the “Parties” and individually referred to as a “Party”.
RECITALS
WHEREAS, Employee was employed by the Company until _________________, 20__, when Employee’s
employment was terminated (“Termination Date”);
WHEREAS, Employee signed a Employee Proprietary Information and Invention Assignment Agreement
with the Company on _________________ (the “Proprietary Rights Agreement”);
WHEREAS, in accordance with Section 3(a) of that certain Involuntary Termination Severance
Agreement between the Company and Employee, effective as of _________________ (the “Severance
Agreement”), Employee has agreed to enter into and not revoke a standard release of claims in favor
of the Company as a condition to receiving the severance benefits described in the Severance
Agreement; and
WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances,
charges, actions, petitions and demands that Employee may have against the Company and any of the
Releasees (as defined below), including, but not limited to, any and all claims arising out of or
in any way related to Employee’s employment relationship with the Company and the termination of
that relationship.
NOW THEREFORE, for good and valuable consideration, including the mutual promises and
covenants made herein, the Company and Employee hereby agree as follows:
COVENANTS
1. Termination. Employee’s employment with the Company terminated on the Termination
Date.
2. Payment of Salary and Receipt of All Benefits. Employee acknowledges and
represents that, other than the consideration to be paid in accordance with the terms and
conditions of the Severance Agreement, the Company has paid or provided all salary, wages, bonuses,
accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest,
severance, outplacement costs, fees, reimbursable expenses, commissions, draws, stock, stock
options or other equity awards (including restricted stock unit awards), vesting, and any and all
other benefits and compensation due to Employee and that no other reimbursements or compensation
are owed to Employee.
3. Release of Claims. Employee agrees that the consideration to be paid in accordance
with the terms and conditions of the Severance Agreement represents settlement in full of all
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outstanding obligations owed to Employee by the Company and its current and former officers,
directors, employees, agents, investors, attorneys, stockholders, administrators, affiliates,
benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries, and
predecessor and successor corporations and assigns (collectively, the “Releasees”). Employee, on
Employee’s own behalf and on behalf of Employee’s respective heirs, family members, executors,
agents, and assigns, hereby and forever releases the Releasees from, and agrees not to xxx
concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge,
duty, obligation, demand, or cause of action relating to any matters of any kind, whether presently
known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees
arising from any omissions, acts, facts, or damages that have occurred up until and including the
Effective Date of this Agreement, including, without limitation the following:
(a) any and all claims relating to or arising from Employee’s employment relationship with the
Company and the termination of that relationship;
(b) any and all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;
(c) any and all claims for wrongful discharge of employment; termination in violation of
public policy; discrimination; harassment; retaliation; breach of contract, both express and
implied; breach of covenant of good faith and fair dealing, both express and implied; promissory
estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or
intentional misrepresentation; negligent or intentional interference with contract or prospective
economic advantage; unfair business practices; defamation; libel; slander; negligence; personal
injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability
benefits;
(d) any and all claims for violation of any federal, state, or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the
Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the
Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act
of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of
1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the
Xxxxxxxx-Xxxxx Act of 2002; the California Family Rights Act; the California Labor Code; the
California Workers’ Compensation Act; and the California Fair Employment and Housing Act;
(e) any and all claims for violation of the federal, or any state, constitution;
(f) any and all claims arising out of any other laws and regulations relating to employment or
employment discrimination;
(g) any claim for any loss, cost, damage, or expense arising out of any dispute over the
nonwithholding or other tax treatment of any of the proceeds received by Employee as a result of
this Agreement; and
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(h) any and all claims for attorneys’ fees and costs.
Employee agrees that the release set forth in this Section 3 (the “Release”) shall be and
remain in effect in all respects as a complete general release as to the matters released. The
Release does not extend to any severance obligations due Employee under the Severance Agreement.
The Release does not release claims that cannot be released as a matter of law, including, but not
limited to, Employee’s right to file a charge with or participate in a charge by the Equal
Employment Opportunity Commission, or any other local, state, or federal administrative body or
government agency that is authorized to enforce or administer laws related to employment, against
the Company (with the understanding that any such filing or participation does not give Employee
the right to recover any monetary damages against the Company; Employee’s release of claims herein
bars Employee from recovering such monetary relief from the Company). Employee represents that
Employee has made no assignment or transfer of any right, claim, complaint, charge, duty,
obligation, demand, cause of action, or other matter waived or released by this Section 3.
Nothing in this Agreement waives Employee’s (i) rights under that certain Indemnification Agreement
between the Company and Employee, dated as of
_______________ (the “Indemnification Agreement”), or
(ii) rights to indemnification or any payments under any fiduciary insurance policy, if any,
provided by any act or agreement of the Company, state or federal law or policy of insurance.
4. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that Employee
is waiving and releasing any rights Employee may have under the Age Discrimination in Employment
Act of 1967 (“ADEA”) and that this waiver and release is knowing and voluntary. Employee agrees
that this waiver and release does not apply to any rights or claims that may arise under the ADEA
after the Effective Date of this Agreement. Employee acknowledges that the consideration given for
this waiver and release Agreement is in addition to anything of value to which Employee was already
entitled. Employee further acknowledges that Employee has been advised by this writing that (a) he
should consult with an attorney prior to executing this Agreement; (b) Employee has at least 21
days within which to consider this Agreement; (c) Employee has 7 days following the execution of
this Agreement by the parties to revoke the Agreement; (d) this Agreement shall not be effective
until the revocation period has expired; and (e) nothing in this Agreement prevents or precludes
Employee from challenging or seeking a determination in good faith of the validity of this waiver
under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless
specifically authorized by federal law. In the event Employee signs this Agreement and delivers it
to the Company in less than the 21-day period identified above, Employee hereby acknowledges that
Employee has freely and voluntarily chosen to waive the time period allotted for considering this
Agreement. Employee acknowledges and understands that revocation must be accomplished by a written
notification to the Chief Legal Officer of the Company that is received prior to the Effective
Date.
5. California Civil Code Section 1542. Employee acknowledges that Employee has been
advised to consult with legal counsel and is familiar with the provisions of California Civil Code
Section 1542, a statute that otherwise prohibits the release of unknown claims, which provides as
follows:
A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
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OR
HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Employee, being aware of California Civil Code Section 1542, agrees to expressly waive any rights
Employee may have thereunder, as well as under any other statute or common law principles of
similar effect.
6. No Pending or Future Lawsuits. Employee represents that Employee has no lawsuits,
claims, or actions pending in Employee’s name, or on behalf of any other person or entity, against
the Company or any of the other Releasees. Employee also represents that Employee does not intend
to bring any claims on Employee’s own behalf or on behalf of any other person or entity against the
Company or any of the other Releasees. Employee confirms that Employee has no knowledge of any
wrongdoing involving improper or false claims against a federal or state governmental agency, or
any other wrongdoing that involves Employee or any other present or former Company employees,
including violations of the federal and state securities laws or the Xxxxxxxx-Xxxxx Act of 2002.
7. Confidential Information. Employee reaffirms and agrees to observe and abide by
the terms of the Proprietary Rights Agreement, specifically including the provisions therein
regarding nondisclosure of the Company’s trade secrets and confidential and proprietary
information, which agreement shall continue in force; provided, however, that: (a) as to any
provisions regarding competition contained in the Proprietary Rights Agreement that conflict with
the provisions regarding competition contained in the Severance Agreement, the provisions of the
Severance Agreement shall control; (b) as to any provisions regarding solicitation of employees
contained in the Proprietary Rights Agreement that conflict with the provisions regarding
solicitation of employees contained in this Agreement, the provisions of this Agreement shall
control.
8. Return of Company Property; Passwords and Password-protected Documents. Employee
confirms that Employee has returned to the Company in good working order all keys, files, records
(and copies thereof), equipment (including, but not limited to, computer hardware, software and
printers, wireless handheld devices, cellular phones and pagers), access or credit cards, Company
identification, and any other Company-owned property in Employee’s possession or control. Employee
further confirms that Employee has cancelled all accounts for Employee’s benefit, if any, in the
Company’s name, including, but not limited to, credit cards, telephone charge cards, cellular phone
and/or pager accounts and computer accounts. Employee also confirms that Employee has delivered
all passwords in use by Employee at the time of Employee’s termination, a list of any documents
that Employee created or of which Employee is otherwise aware that are password-protected, along
with the password(s) necessary to access such password-protected documents.
9. No Cooperation. Employee agrees that Employee will not knowingly encourage,
counsel, or assist any attorneys or their clients in the presentation or prosecution of any
disputes, differences, grievances, claims, charges, or complaints by any third party against any of
the Releasees, unless under a subpoena or other court order to do so or as related directly to the
ADEA waiver in this Agreement. Employee agrees both to immediately notify the Company upon receipt
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of any such subpoena or court order, and to furnish, within three (3) business days of its
receipt, a copy of such subpoena or other court order. If approached by anyone for counsel or
assistance in the presentation or prosecution of any disputes, differences, grievances, claims,
charges, or complaints against any of the Releasees, Employee shall state no more than that
Employee cannot provide any such counsel or assistance.
10. No Admission of Liability. Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all actual or potential disputed
claims by Employee. No action taken by the Company hereto, either previously or in connection with
this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any
actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or
liability whatsoever to Employee or to any third party.
11. Solicitation of Employees. Employee agrees that for a period of 12 months
immediately following the Effective Date of this Agreement, Employee shall not directly or
indirectly (a) solicit, induce, recruit or encourage any of the Company’s employees to leave their
employment at the Company or (b) attempt to solicit, induce, recruit or encourage, either for
Employee or for any other person or entity, any of the Company’s employees to leave their
employment.
12. Costs. The Parties shall each bear their own costs, attorneys’ fees and other
fees incurred in connection with the preparation of this Agreement.
13. Arbitration. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS
OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT
TO ARBITRATION IN SANTA XXXXX COUNTY IN THE STATE OF CALIFORNIA, BEFORE JUDICIAL ARBITRATION &
MEDIATION SERVICES (“JAMS”), PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS
RULES”). THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE ARBITRATOR
SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE
CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL
CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY
JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL
TAKE PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE
PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL
BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION
AWARD. THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF
SUCH ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES;
PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING
PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY
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DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. NOTWITHSTANDING THE
FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER
PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF
THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN BY REFERENCE.
SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS PARAGRAPH CONFLICT WITH ANY OTHER
ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE PARTIES AGREE THAT THIS ARBITRATION AGREEMENT SHALL
GOVERN.
14. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement. Employee represents and warrants that Employee has
the capacity to act on Employee’s own behalf and on behalf of all who might claim through Employee
to bind them to the terms and conditions of this Agreement. Each Party warrants and represents
that there are no liens or claims of lien or assignments in law or equity or otherwise of or
against any of the claims or causes of action released herein.
15. No Representations. Employee represents that Employee has had the opportunity to
consult with an attorney, and has carefully read and understands the scope and effect of the
provisions of this Agreement. Employee has relied upon any representations or statements made by
the Company that are not specifically set forth in this Agreement.
16. Severability. In the event that any provision or any portion of any provision
hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent
jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in
full force and effect without said provision or portion of provision.
17. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning the subject matter of this Agreement and
Employee’s employment with and separation from the Company and the events leading thereto and
associated therewith, and supersedes and replaces any and all prior agreements and understandings
concerning the subject matter of this Agreement and Employee’s relationship with the Company, with
the exception of the Severance Agreement, the Proprietary Rights Agreement, the Indemnification
Agreement and Employee’s written equity compensation agreements with the Company.
18. No Oral Modification. This Agreement may only be amended in writing signed by
Employee and the Chief Executive Officer of the Company.
19. Governing Law. This Agreement shall be governed by the laws of the State of
California, without regard for choice-of-law provisions. The California state courts in Santa
Xxxxx County and/or the United States District Court for the Northern District of California shall
have exclusive jurisdiction and venue over all controversies in connection with this Agreement.
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20. Effective Date. Employee understands that this Agreement shall be null and void
if not executed by Employee within 21 days. Each Party has seven days after that Party signs this
Agreement to revoke it. This Agreement will become effective on the eighth (8th) day after
Employee signed this Agreement, so long as it has been signed by the Parties and has not been
revoked by either Party before that date (the “Effective Date”).
21. Counterparts. This Agreement may be executed in counterparts and by facsimile,
and each counterpart and facsimile shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the undersigned.
22. Voluntary Execution of Agreement. Employee understands and agrees that Employee
executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of
the Company or any third party, with the full intent of releasing all of Employee’s claims against
the Company and any of the other Releasees. Employee expressly acknowledges that:
(a) Employee has read this Agreement;
(b) Employee has been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of Employee’s own choice or has elected not to retain legal counsel;
(c) Employee understands the terms and consequences of this Agreement and of the releases it
contains; and
(d) Employee is fully aware of the legal and binding effect of this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth
below.
| COMPANY | FUSION-IO INC. | |||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| Dated: | ||||||
| EMPLOYEE | _____________, an individual | |||||
| (Signature) | ||||||
| Dated: | ||||||
[Signature Page to Release of Claims]
