Contract
Exhibit 10.2 Personal and Confidential May 13, 2016 Xxxxx X. Xxxxxxx Re: Executive Change in Control Agreement Dear Xxxxx: On behalf of Avaya Inc. (the “Company”), I am pleased to offer you the opportunity to receive an Executive Change in Control Agreement (this “Agreement”). AVAYA INC. EXECUTIVE CHANGE IN CONTROL AGREEMENT This Agreement is entered into by and between Avaya Inc., a Delaware corporation (the “Company,” which term will include any successor to the Company as the context requires), and Xxxxx X. Xxxxxxx (the “Executive”), effective as of May 13, 2016 (the “Effective Date”). WITNESSETH: WHEREAS, the Company has determined that it is in the best interests of the Company and its shareholders and affiliated companies to facilitate the Executive’s continued dedication, notwithstanding the occurrence of a Change in Control of the Company; WHEREAS, the Company believes it is imperative to diminish the Executive’s inevitable distraction by virtue of the personal uncertainties and risks created by the circumstances surrounding a Change in Control and to encourage the Executive’s full attention and dedication to the Company and its affiliated companies currently and in the event of a Change in Control; and WHEREAS, in order to accomplish the aforementioned objectives, the Company is entering into this Agreement. NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, the parties hereby agree as follows (with capitalized terms not otherwise defined in this Agreement having the meaning set forth in Appendix A): 1. Term. The “Term” of this Agreement is the period commencing on the Effective Date and ending on the third anniversary thereof; provided, however, that commencing on the first anniversary of the Effective Date, and on each annual anniversary thereof (such date and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless
7 and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 12. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: To the Executive’s address on file with the Company If to the Company: Avaya Inc. 0000 Xxxxx Xxxxxxx Xxxxxxx Xxxxx Xxxxx, XX 00000 Attention: Human Resources - Executive Compensation or such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (d) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. (e) The Executive’s or the Company’s failure to insist upon strict compliance with any provision hereof or any other provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. (f) The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the
8 Company, the employment of the Executive by the Company is “at will” and, prior to the Effective Date, may be terminated by either the Executive or the Company at any time. IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from the Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written. AVAYA INC. Xxxx Xxxxxx Chairman of the Board of Directors EXECUTIVE _______/s/ Xxxxx X. Kennedy_______ Xxxxx X. Xxxxxxx
9 KE 39910590.2 APPENDIX A DEFINITIONS 1. “Accrued Obligations” means the sum of (a) the Executive’s annual base salary through the Date of Termination to the extent not theretofore paid, (b) the product of (i) the Executive’s Annual Bonus and (ii) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365, and (c) any accrued vacation pay, to the extent not theretofore paid. 2. “Annual Bonus” means the Executive’s Target Bonus in effect immediately prior to (x) the Change in Control or (y) the Executive’s Date of Termination, whichever is greater. 3. “Base Salary” means the greater of the Executive’s annual base salary in effect immediately prior to (a) the Change in Control and (b) the Executive’s Date of Termination. 4. “Cause” means: (a) the willful and continued failure by the Executive to perform substantially all of his duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness), after a demand for substantial performance is delivered to the Executive by the Board which specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties, or (b) the willful engaging by the Executive in criminal conduct that is materially and demonstrably injurious to the Company. No act or failure to act, on the Executive’s part shall be considered “willful” unless done, or omitted to be done, by the Executive in bad faith and without reasonable belief that the 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 or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Notwithstanding the foregoing, “Cause” for termination the Executive shall not exist unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Executive was guilty of the conduct set forth above in (a) or (b) of this paragraph and specifying the particulars thereof in detail. 5. “Change in Control” means the first (and only the first) to occur of the following: a. the consummation of a merger, sale, transfer, conveyance or transaction involving the Company or its affiliates, such that, immediately following such transaction or disposition (or series of related transactions or dispositions), the Sponsors and their affiliates beneficially own securities representing less than 50% of the voting power of all outstanding voting securities of the Company; b. the disposition, by the Sponsors and their affiliates, in one or a series of transactions, of the equity securities of the Company, such that the Sponsors and
their affiliates beneficially own securities representing less than 50% of the voting power of all outstanding voting securities of the Company; or c. the consummation of the sale, lease, transfer, conveyance or other disposition, in one or a series of transactions, of all or substantially all of the assets of the Company and its subsidiaries taken as a whole, to any “person” (as such term is defined in Section 13(d)(3) of the Exchange Act) other than to the Sponsor or any affiliate. 6. “Continuation Period” means the eighteen (18)-month period commencing on the Date of Termination. 7. “Date of Termination” shall mean (a) if the Executive’s employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (b) if the Executive’s employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination, and (c) if the Executive’s employment is terminated by reason of Disability, the Date of Termination shall be the Disability Effective Date. 8. “Disability” shall mean the absence of the Executive from the Executive’s duties with the Company for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative (such agreement as to acceptability not to be withheld unreasonably). 9. “Good Reason” means the occurrence, without the Executive’s express written consent (which may be withheld for any reason or no reason), of any of the events or conditions described in the following subsections (a) through (g), provided that the Executive provides notice to the Company within sixty (60) days following the first occurrence of any such event or condition and the Company does not fully correct the situation within thirty (30) days after such notice of Good Reason: a. a material reduction by the Company in the Executive’s Base Salary; or b. a material breach of the Executive Employment Agreement, by and between the Executive, the Company and Sierra Holdings Corp., a Delaware Corporation (the “Parent”), dated as of November 26, 2008 (the “Employment Agreement”), by the Company, which shall include a material reduction or material negative change by the Company in the type or level of compensation and benefits (other than Base Salary) to which the Executive is entitled under the Employment Agreement, other than any such reduction or change that is part of and consistent with a general reduction or change applicable to all senior officers of the Company; or c. a material failure by the Company to pay or provide to the Executive any compensation or benefits to which the Executive is entitled; or
d. a change in the Executive’s status, positions, titles, offices or responsibilities that constitutes a material and adverse change from the Executive’s status, positions, titles, offices or responsibilities as in effect immediately before such change; or the assignment to the Executive of any duties or responsibilities that are materially and adversely inconsistent with the Executive’s status, positions, titles, offices or responsibilities as in effect immediately before such assignment; or any removal of the Executive from or failure to reappoint or reelect the Executive to any of such positions, titles or offices; provided that termination of the Executive’s employment by the Company for Cause (as defined in the Employment Agreement), by the Executive other than for Good Reason (as defined in any of the other subsections of this paragraph 9) or as a result of the Executive’s death or Disability shall not be-deemed to constitute or result in Good Reason under this subsection (d); or e. the Company changing the location of its principal executive offices to a location more than fifty (50) miles from the location of such offices immediately prior to the effective date of the Employment Agreement; or f. any material breach by the Parent or the Company of the Employment Agreement or any other agreement between the Parent or the Company and the Executive incorporated by reference in the Employment Agreement; or g. the provision of notice by the Company pursuant to Section 1.1 of nonrenewal of the Employment Agreement. Any resignation for Good Reason following the thirty (30) day correction period set forth above must occur no later than the date that is six (6) months following the initial occurrence of one of the foregoing events or conditions without the Executive’s express written consent. For purposes of this Paragraph 8, the Executive’s good faith determination of “Good Reason” shall be conclusive. 10. “Notice of Termination” shall mean a written notice which (a) indicates the specific termination provision in this Agreement relied upon, (b) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (c) if the Date of Termination is other than the date of receipt of such notice, specifies the Date of Termination (which, except in the case of a termination due to a Disability, date shall be not more than fifteen (15) days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstances which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder. 11. “Sponsors” means each of (a)(1) Silver Lake Partners II, L.P., (2) Silver Lake Technology Investors II, L.P., (3) Silver Lake Partners III, L.P., and Silver Lake Technology Investors III, L.P. and their respective affiliates who become stockholders of Avaya Holdings
Corp., and (b)(1) TPG Partners V, L.P., (2) TPG FOF V-A, L.P., (3) TPG VOV F-B, L.P. and their respective affiliates who become stockholders of Avaya Holdings Corp. 12. “Target Bonus” means the greater of (a) 150% of Base Salary or (b) the percentage of Base Salary specifically identified by the Company’s compensation committee as the Executive’s target annual bonus. For the avoidance of doubt, the Executive’s target bonus under the Avaya Inc. 2016 Key Employee Incentive Plan (or its successor) shall not be the Target Bonus for purposes of this Agreement.
Exhibit A-1 KE 39910590.2 EXHIBIT A GENERAL RELEASE I, Xxxxx X. Xxxxxxx, in consideration of and subject to the performance by Avaya Inc. (together with its subsidiaries, the “Company”), of its obligations under the Company Executive Change in Control Agreement, dated as of May 13, 2016 (the “Agreement”), do hereby release and forever discharge as of the date hereof the Company and its respective affiliates and all present, former and future managers, directors, officers, employees, successors and assigns of the Company and its affiliates and direct or indirect owners (collectively, the “Released Parties”) to the extent provided below (this “General Release”). The Released Parties are intended to be third-party beneficiaries of this General Release, and this General Release may be enforced by each of them in accordance with the terms hereof in respect of the rights granted to such Released Parties hereunder. Terms used herein but not otherwise defined shall have the meanings given to them in the Agreement. 1. I understand that any payments or benefits paid or granted to me under Section 4 of the Agreement represent, in part, consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled. I understand and agree that I will not receive certain of the payments and benefits specified in Section 4 of the Agreement, unless I execute this General Release and do not revoke this General Release within the time period permitted hereafter. Such payments and benefits will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter established by the Company or its affiliates. 2. Except as provided in paragraphs 5 and 6 below and except for the provisions of the Agreement which expressly survive the termination of my employment with the Company, I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date that this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or under any other local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional
Exhibit A-2 KE 39910590.2 distress, defamation; or any claim for costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “Claims”). 3. The released claims described in paragraph 2 hereof include all such claims, whether known or unknown by me. Therefore, I waive the effect of California Civil Code Section 1542 and any other analogous provision of applicable law of any jurisdiction. Section 1542 states: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.” 4. I represent that I have made no assignment or transfer of any right, claim, demand, cause of action, or other matter covered by paragraph 2 above. 5. I agree that this General Release does not waive or release any rights or claims that I may have under the Age Discrimination in Employment Act of 1967 which arise after the date I execute this General Release. I acknowledge and agree that my separation from employment with the Company in compliance with the terms of the Agreement shall not serve as the basis for any claim or action (including, without limitation, any claim under the Age Discrimination in Employment Act of 1967). 6. I agree that I hereby waive all rights to xxx or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever in respect of any Claim, including, without limitation, reinstatement, back pay, front pay, and any form of injunctive relief. Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding. Additionally, I am not waiving (i) any right to the Accrued Obligations or any other benefits to which I am entitled under the Agreement, (ii) any claim relating to directors’ and officers’ liability insurance coverage or any right of indemnification under the Company’s organizational documents or otherwise, or (iii) my rights as an equity or security holder in the Company or its affiliates. 7. In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state or local statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, or in the event I should seek to recover
Exhibit A-3 KE 39910590.2 against the Company in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a complete defense to such Claims to the maximum extent permitted by law. I further agree that I am not aware of any pending claim of the type described in paragraph 2 above as of the execution of this General Release. 8. I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct. 9. I agree that if I violate this General Release by suing the Company or the other Released Parties, I will pay all costs and expenses of defending against the suit incurred by the Released Parties, including reasonable attorneys’ fees. 10. I agree that this General Release and the Agreement are confidential and agree not to disclose any information regarding the terms of this General Release or the Agreement, except to my immediate family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone. 11. Any non-disclosure provision in this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry about this General Release or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other self-regulatory organization or any governmental entity. 12. I hereby acknowledge that Sections 7 through 12 of the Agreement shall survive my execution of this General Release. 13. I represent that I am not aware of any claim by me other than the claims that are released by this General Release. I acknowledge that I may hereafter discover claims or facts in addition to or different than those which I now know or believe to exist with respect to the subject matter of the release set forth in paragraph 2 above and which, if known or suspected at the time of entering into this General Release, may have materially affected this General Release and my decision to enter into it. 14. Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date hereof. 15. Whenever possible, each provision of this General Release shall be interpreted in, such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
Exhibit A-4 KE 39910590.2 16. I agree that, as reasonably requested by the Company with notice, I shall cooperate fully with any pending or future litigation, arbitration, business or investigatory matter. The Company agrees to pay the reasonable expenses associated with such cooperation. BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT: (i) I HAVE READ IT CAREFULLY; (ii) I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING, BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED; TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; (iii) I VOLUNTARILY CONSENT TO EVERYTHING IN IT; (iv) I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION; (v) I HAVE HAD AT LEAST [21][45] DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE TO CONSIDER IT, AND THE CHANGES MADE SINCE MY RECEIPT OF THIS RELEASE ARE NOT MATERIAL OR WERE MADE AT MY REQUEST AND WILL NOT RESTART THE REQUIRED [21][45]-DAY PERIOD; (vi) I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT, AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED; (vii) I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND (viii) I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME. SIGNED: DATED: