MATTHEW MEDEIROS EMPLOYMENT AGREEMENT
Exhibit
10.44
SONICWALL,
INC.
XXXXXXX
XXXXXXXX EMPLOYMENT AGREEMENT
As
Amended and Restated on the Effective Date
This
Agreement is entered into as of the last date signed below (the “Effective
Date”) by and between SonicWALL, Inc. (the “Company”) and Xxxxxxx Xxxxxxxx
(“Executive”) and amends and restates in its entirety that certain Employment
Agreement dated as of March 14, 2003 by and between the Company and Executive,
as amended July 29, 2004 (the “Prior Employment Agreement”).
RECITALS
A. This
Agreement is intended to strongly encourage Executive to remain with the
Company.
B. The
Company’s Board of Directors (the “Board”) believes that it is in the best
interests of the Company and its stockholders to continue to provide Executive
with an incentive to continue his employment and to motivate Executive to
maximize the value of the Company for the benefit of its
stockholders.
C. The
Company and Executive wish to restate the terms of Executive’s employment and
replace in its entirety the Prior Employment Agreement, in order to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and
any final regulations and official guidance promulgated thereunder (“Section
409A”), as set forth below.
AGREEMENT
1. Duties
and Scope of Employment.
(a) Positions;
Employment Commencement Date. Executive commenced employment
under this Agreement upon March 14, 2003 (the “Employment Commencement
Date”). Executive shall continue to serve hereunder as President and
Chief Executive Officer, reporting to the Board. On the Employment
Commencement Date, Executive was appointed as a member of the
Board. The period of Executive’s employment hereunder is referred to
herein as the “Employment Term.”
(b) Obligations. During
the Employment Term, Executive shall continue to devote his full business
efforts and time to the Company. Subject to the prior formal approval
of the Board or its Compensation Committee, which shall not unreasonably be
withheld, Executive may join the Boards of Directors of two (2) non-competitive
companies. Upon joining such non-competitive boards, Executive shall
continue to devote the time and energy necessary to carry out his duties as
described herein.
(c) Duties. Executive
shall have the customary duties of a President and Chief Executive Officer and
such duties as are specified in the By-Laws of the Company.
2. At-Will
Employment. Executive and the Company understand and
acknowledge that Executive’s employment with the Company constitutes “at-will”
employment. Subject to the Company’s obligation to provide severance
benefits as specified herein, Executive and the Company acknowledge that this
employment relationship may be terminated at any time, with or without good
cause or notice or for any or no cause, at the option of either the Company or
Executive.
3. Compensation.
(a) Base
Salary. While employed by the Company, the Company shall pay
Executive as compensation for his services a base salary at the annualized rate
of Four Hundred and Fifty Thousand Dollars ($450,000) (the “Base
Salary”). Such salary shall be paid periodically in accordance with
normal Company payroll practices and subject to the usual, required
withholding. Executive’s Base Salary shall be reviewed at least
annually by the Compensation Committee of the Board for possible adjustments in
light of Executive’s performance and competitive data. Such
adjustment shall not reduce Executive’s then-current Base Salary unless part of
a Company-wide pro rata reduction and in which the Base Salary of all other
executive officers of the Company are reduced pro rata unless the Executive
provides his prior consent.
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(b) Bonuses. During
the Employment Term, the Company’s annual incentive bonus plan shall provide
Executive with an on-target bonus opportunity equal to 100% of his Base Salary,
with a maximum payout of 200% of Base Salary. During the Employment
Term, Executive and the other officers, senior management and key employees,
shall be eligible to participate in bonus plans based on milestones to be
established by the Board or its Compensation Committee in consultation with
Executive on or before the end of the first quarter of each year. The
bonus plans specified in this paragraph shall be referred to herein as the
“Annual Bonus Plan.”
(c) Stock
Option. Executive has received a Stock Option grant of Two
Million Four Hundred Thousand (2,400,000) shares of Company shares (the “Stock
Option”), pursuant to the Company’s 1998 Stock Option Plan (the “1998 Option
Plan”) and form of Agreement thereunder, modified as specified herein (the
“Option Agreement”), with a strike price equal to 100% of the Fair Market Value
(as such term is defined in the 1998 Option Plan) on the grant
date. The Stock Option is now fully vested. To the extent
permitted by law, the Stock Option shall qualify as an Incentive Stock Option
under Section 422 of the Code. The Stock Option has a term of ten
(10) years (or shorter upon termination of continuous service to the Company
whether as an employee, director or consultant, subject to the terms in this
Agreement). Except as specified otherwise herein, the Stock Option is
in all respects subject to the terms, definitions and provisions of the
Company’s 1998 Stock Option Plan and the standard form of stock option agreement
thereunder, which documents are incorporated by reference. If there
is any conflict between this Agreement and the 1998 Stock Option Plan or Stock
Option, the terms of this Agreement shall govern. Commencing in
January of 2005 (or earlier at the sole discretion of the Compensation Committee
of the Board), Executive has been eligible to be considered for future stock
option and other equity compensation grants.
(d) Employee
Benefits. During the Employment Term, Executive shall be
eligible to participate in the employee benefit plans maintained by the Company
that are applicable to other senior management to the full extent provided for
under those plans. Subject to Executive’s insurability at standard
rates, while he is employed hereunder the Company shall reimburse Executive
within thirty (30) days following the premium due date on the premiums for a
$1,000,000 face value policy of term life insurance (the “Term Life Insurance”)
in addition to any group coverage otherwise provided by the
Company.
(e) Vacation. Executive
shall receive up to three weeks’ paid-time off (“PTO”) per
full year of employment, subject to the Company’s PTO accrual
policy.
(f) Golden
Parachute Excise Tax – Best Results. Payments and benefits
under this Agreement shall be made without regard to whether the deductibility
of such payments or benefits (or any other payments or benefits to or for the
Executive’s benefit) would be limited or precluded by Section 280G of the
Code and without regard to whether such payments or benefits (or any other
payments or benefits) would subject the Executive to the federal excise tax
levied on certain “excess parachute payments” under Section 4999 of the
Code; provided, that if the total of all payments and benefits to or for the
Executive’s benefit, after deduction of all state and federal taxes (including
the tax set forth in Section 4999 of the Code, if applicable) with respect
to such payments and benefits (the “total after-tax payments”), would be
increased by the limitation or elimination of any payment or benefit under this
Agreement, amounts payable and benefits receivable under this Agreement shall be
reduced to the extent, and only to the extent, necessary to maximize the total
after-tax payments. Unless the Company and Executive otherwise agree
in writing, any determination required under this Section 3(f) will be made in
writing by a national “Big Four” accounting firm selected by the Company or such
other person or entity to which the parties mutually agree (the “Accountants”),
whose determination will be conclusive and binding upon Employee and the Company
for all purposes. Any reduction in payments and/or benefits required
by this Section 3(f) shall occur in the following order: (1) reduction of cash
payments; and (2) reduction of other benefits paid to Employee. In
the event that acceleration of vesting of equity awards is to be reduced, such
acceleration of vesting shall be cancelled in the reverse order of the date of
grant for Employee’s equity awards.
4. Eligibility
for Severance Benefits. Executive will be entitled to the
payments and benefits described in Section 5 only if: (a) either (i) the Company
or any successor terminates Executive’s employment for a reason other than
Cause, death or Disability, or (ii) Executive voluntarily terminates employment
with the Company or any successor for Good Reason; and (b) Executive complies
with all of the terms of this Agreement.
5. Severance
Benefits.
(a) Prior
to Ninety Days Before a Change of Control or More Than One (1) Year After a
Change of Control. If, prior to ninety days before a Change of
Control or more than one (1) year after a Change of Control, Executive’s
employment with the Company terminates in accordance with Section 4 above, then
subject to Executive executing and not revoking the form of release of claims in
favor of the Company substantially in the form attached hereto (the “Release”)
and not breaching the
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terms of
Section 12 hereof, Executive shall receive (subject to Section 7 of this
Agreement with regard to the timing of payment, as applicable) (i) a lump-sum
payment equal to twelve (12) months salary, and (ii) an additional lump-sum
payment determined by averaging the target percentages achieved under the Annual
Bonus Plan with respect to any Company fiscal year quarters already concluded in
the year of termination (the “Severance Target Bonus Percentage”) and
multiplying the Severance Target Bonus Percentage by 150% of Base Salary;
provided, however, that if Executive’s termination occurs in the first quarter
of a Company fiscal year, then the Severance Target Bonus Percentage shall be
equal to the target percentage achieved in the most recently concluded fiscal
year.
EXAMPLE
1: Executive’s
Base Salary is $500,000. Executive is terminated without Cause prior
to 90 days before a Change of Control in the third quarter of the Company’s
fiscal year. In the first quarter of that year, Executive achieved a
target percentage under the Annual Bonus Plan equal to 150% of
target. In the second quarter, Executive achieved a target percentage
under the Annual Bonus Plan equal to 0% of target. Subject to
Executive satisfying the conditions for receiving a severance payment, Executive
will receive a lump-sum payment equal to $500,000 + (.75)($750,000) =
$1,062,500, less applicable withholding.
EXAMPLE
2: Executive’s
Base Salary is $500,000. Executive is terminated without Cause prior
to 90 days before a Change of Control in the first quarter of the Company’s
fiscal year. In the most recently concluded Company fiscal year,
Executive achieved a target percentage equal to 100% of
target. Subject to Executive satisfying the conditions for receiving
a severance payment, Executive will receive a lump-sum payment equal to $500,000
+ (1.0)($750,000) = $1,250,000, less applicable
withholding.
(b) Ninety
Days Before a Change of Control Through One (1) Year After Change Of
Control. If within the period commencing ninety days prior to
a Change of Control through one (1) year following a Change of Control (the
“Change of Control Period”), Executive’s employment with the Company terminates
in accordance with Section 4 above, then subject to the Executive’s executing
and not revoking the Release and not breaching the terms of Section 12 hereof,
Executive shall immediately receive (subject to Section 7 of this Agreement, as
applicable) (i) a lump sum payment equal to two (2) years’ Base Salary, (ii)
accelerated vesting as to all Company stock options and other Company equity
compensation then held by Executive, and (iii) a pro-rated bonus under the
Annual Bonus Plan, payable at the same time and to the same extent as other
senior Executives’ of the Company payments pursuant to the Annual Bonus Plan,
pro-rated according to the percentage of the applicable fiscal
year Executive is with the Company, calculated as the number of days
from the commencement of the fiscal year to the termination date over
365.
(c) Accrued
Wages, Paid Time Off, Expenses, Option Vesting and Exercise and
Benefits. If Executive is entitled to severance benefits under
Section 5(a) or 5(b):
(i) The
Company shall pay Executive (A) any unpaid base salary due for the periods prior
to the Termination Date, (B) all accrued and unused paid time off (PTO) through
the Termination Date, and (C) following Executive’s submission of profit and
expense reports, the total unreimbursed amount of expenses incurred by Executive
in Executive’s duties of employment with the Company that are reimbursable in
accordance with the Company’s then-existing policies. These payments
shall be made promptly upon Executive’s employment termination with the period
of time mandated by law;
(ii) Executive
shall have one year from the date of termination to exercise all vested and
unexercised stock options, including the vesting which has occurred as a result
of any acceleration provided by this Agreement (but in no event later than the
original term of the award);
(iii) The
Company shall make a lump sum payment to Executive equal to the life insurance
premium payments had Executive continued coverage under such life insurance plan
of the Company for the period of time equal to the number of months of salary
paid under Sections 5(a)(i) or 5(b)(i). Such payment shall be made
within thirty (30) days of the Termination Date, subject to Section 7 of this
Agreement; and
(iv) The
Company shall reimburse Executive (and Executive’s eligible dependents) for
health, dental and vision insurance premium payments so that Executive only pays
the same amount as an employed senior Company executive with comparable coverage
for the period of time equal to the number of months of salary paid under
Sections 5(a)(i) or 5(b)(i), but only if Executive initially elects continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”), within the time period prescribed pursuant to COBRA, and
subject to the maximum time period required to be made available to Executive
and his covered dependents under COBRA.
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(d) Voluntary
Termination; Involuntary Termination For Cause. If Executive
terminates his employment voluntarily without Good Reason or is involuntarily
terminated by the Company for Cause, then all the vesting of Executive’s stock
options shall terminate immediately and all payments of compensation by the
Company to Executive hereunder shall immediately terminate, except Executive
shall be paid all accrued and unpaid wages, including any bonus, PTO, and
expenses incurred by Executive in Executive’s duties of employment with the
Company that are reimbursable in accordance with the Company’s then-existing
policies upon Executive’s submission of proper expense reports. Such
payments will be paid promptly upon Executive’s employment termination and
within the time period mandated by law.
(e) Executive
Ineligible For Other Severance, No Duty to Mitigate. If
Executive receives severance benefits under Sections 5(a) or (b) and (c), he
expressly waives the right to receive severance benefits under any other
severance plan or policy of the Company. Executive is under no
contractual or legal obligation to mitigate his damages in order to receive the
severance benefits provided hereunder.
(f)
Definitions.
(i) “Cause”
shall mean (i) Executive is convicted of or pleas nolo
contendere
or guilty to a felony involving moral turpitude; provided that Executive may be
suspended without compensation or continued option vesting if charged with a
felony involving moral turpitude, with full reinstatement and back-pay if
Executive is subsequently exonerated or the charges are dismissed; (ii)
Executive engages in conduct that constitutes willful gross
neglect or willful gross misconduct resulting in either case in significant and
demonstrable economic harm to the Company, provided that no act or failure to
act shall be considered “willful” under this definition unless Executive acted,
or failed to act, with an absence of good faith and without a reasonable belief
that Executive’s action, or failure to act, was in the best interest of the
Company; (iii) an act of personal dishonesty taken by Executive in connection
with his responsibilities as an employee and intended to result in substantial
personal enrichment of Executive; (iv) following delivery to Executive of a
written demand for performance from the Company which describes the basis for
the Company’s reasonable belief that Executive has not substantially performed
his duties, continued violations by Executive of Executive’s obligations to the
Company which are demonstrably willful and deliberate on Executive’s part;
provided, however, that failure of Executive to achieve certain results, such as
the Company’s business plan, that is not the result of Executive’s demonstrably
willful and deliberate dereliction of duty shall not constitute
“Cause.” Anything herein to the contrary notwithstanding,
Executive’s employment shall not be terminated for “Cause” above unless written
notice stating the basis for the termination is provided to Executive, Executive
is given fifteen (15) days after receipt of such notice to cure the neglect or
conduct that is the basis of such claim (but only with respect to curable
actions or failures to act), and Executive has an opportunity to be heard before
the full Board of Directors, and, after such hearing, there is a majority vote
of the non-employee directors of the Company to terminate Executive for
Cause.
(ii) “Change
of Control” shall mean the occurrence of any of the following
events:
(A) Any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the
total voting power represented by the Company’s then outstanding voting
securities; or
(B) The
consummation of the sale or disposition by the Company of all or substantially
all the Company’s assets or its business; or
(C) The
consummation of a merger, reverse merger or consolidation of the Company with
any other corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; or
(D) A change
in the composition of the Board occurring within a two-year period, as a result
of which fewer than a majority of the directors are Incumbent
Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the date upon which this Agreement was
entered into, or (B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of those directors whose
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election
or nomination was not in connection with any transaction described in
subsections (i), (ii), or (iii) above, or in connection with an actual or
threatened proxy contest relating to the election of directors to the
Company.
(iii) “Disability”
shall mean that the Executive has been unable to perform with
reasonable accommodation his duties as an employee of the Company (or any
subsidiary thereof that employs the Executive at such time) as the result of his
incapacity due to physical or mental illness, and such inability, at least 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive’s legal representative (such agreement as to
acceptability not to be unreasonably withheld). Termination resulting
from Disability may only be effected after at least 30 days’ written notice by
the Company (or any subsidiary thereof that employs the Executive at such time)
of its intention to terminate the Executive’s employment.
(iv) “Good
Reason” shall mean, without Executive’s written consent: (i) any material
diminution in Executive’s authority, duties or responsibilities as described in
Section 1(c) herein; provided, however, that a material reduction in authority,
duties, or responsibilities solely by virtue of the Company being acquired and
made part of a larger entity (as, for example, when the Chief Executive Officer
and President of the Company remains Chief Executive Officer and President of
the Company’s business operations that are a subsidiary or division of the
acquirer following a Change of Control) shall not by itself constitute grounds
for a Good Reason; (ii) the failure of Executive to be appointed to the Board of
Directors (but not following his failure to be re-elected to the Board); (iii)
any reduction in Executive’s Base Salary or target bonus opportunity other than
a reduction effected by the Company or its successor with respect to all
executive officers as part of a general readjustment of their compensation
levels; (iv) a material reduction in the kind or level of Executive’s benefits
(other than equity compensation) to which he was entitled immediately prior to
such reduction, other than a reduction effected by the Company or its successor
with respect to all executive officers as a part of a general readjustment of
the benefits provided by the Company or its successor; (v) a material reduction
of the facilities and perquisites (including office space and location) or
secretarial and administrative support available to Executive immediately prior
to such reduction, other than a reduction generally applicable to all senior
management of the Company; (vi) a relocation of Executive’s principal place of
employment more than thirty-five (35) miles from its current location; (vii) the
failure of any successor-in-interest to assume all of the obligations of the
Company under this Agreement; (viii) within one year following a Change of
Control only, any act which constitutes a constructive termination under the
laws of California, or (ix) the assignment of duties that are substantially
inconsistent with Executive’s training, education, professional experience and
the job for which he was initially hired hereunder.
Anything
herein to the contrary notwithstanding, Executive’s employment shall not be
terminated for “Good Reason” above unless written notice stating the basis for
the termination is provided to the Company and the Company is given fifteen (15)
days after receipt of such notice to cure the neglect or conduct that is the
basis of such claim (but only with respect to curable actions or failures to
act). With respect to purported Good Reason terminations within one
year following a Change of Control only, for the purposes of any determination
regarding the applicability of Good Reason, the position taken by Executive
shall be presumed to be correct unless the Company, or its successor,
establishes, by clear and convincing evidence that such position is not
correct. Executive’s continued employment shall not constitute
consent or a waiver of Executive’s rights to assert Good Reason hereunder;
provided that Executive may only effect a termination for Good Reason with three
months following the last occur of actions or failures to act or Executive’s
knowledge of the same giving rise to the Good Reason. Executive’s
death or Disability shall not terminate the right of Executive’s estate or heirs
to assert Good Reason if such right existed at the time of Executive’s death or
Disability. Following a Change of Control only, if Executive is
assigned new authorities, duties or responsibilities by the Company or
successor, Executive shall also be provided a written statement which explains
in detail the authorities, duties or responsibilities Executive has been
assigned and an explanation why such authorities, duties or responsibilities do
not constitute grounds for a Good Reason termination. Following a
Change of Control only, the failure to provide such written explanation shall be
an admission by the Company that Executive has Good Reason to voluntarily
terminate his employment.
6. Death
or Total Disability of Executive. Upon Executive’s death or
Disability while Executive is an employee of the Company, then employment
hereunder shall automatically terminate and all payments of compensation by the
Company to Executive hereunder shall immediately terminate (except as to amounts
already earned), and all vesting of Executive’s stock options shall terminate
immediately.
7. Section
409A.
(a) Notwithstanding
anything to the contrary in this Agreement, if Executive is a “specified
employee” within the meaning of Section 409A at the time of Executive’s
termination, then, if required, the severance and benefits payable to Executive
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pursuant
to this Agreement (other than due to death), if any, and any other severance
payments
or separation benefits which may be considered deferred compensation under
Section 409A (together, the “Deferred Compensation Separation Benefits”), which
otherwise are due to Executive on or within the six (6) month
period following Executive’s termination shall accrue during such
six (6) month period and shall become payable in a lump sum payment on the date
six (6) months and one (1) day following the date of Executive’s termination of
employment or the date of Executive’s death, if earlier. All
subsequent Deferred Compensation Separation Benefits, if any, shall be payable
in accordance with the payment schedule applicable to each payment or
benefit.
(b) 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 Compensation Separation Benefits
for purposes of subsection 7(a) above.
(c) 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. Executive
and the Company 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 prior to actual payment to Executive under Section
409A.
(d) The
receipt of any severance pursuant to Section 5 will be subject to Employee
signing and not revoking the Release and subject to the Release becoming
effective within sixty (60) days following the termination of employment (the
“Release Period”). No severance pursuant to such Section will be paid
or provided until the Release becomes effective. No severance will be
paid or provided pursuant to such Section unless the Release becomes effective
during the Release Period. In the event the termination occurs on or
after November 1 of any year, any severance that would be considered Deferred
Compensation Separation Benefits (as defined in Section 5.1) will be paid on the
first payroll date to occur during the following calendar year, or such later
time as required by the payment schedule applicable to each payment or benefit)
or Section 5.1. In the event the termination occurs on or after
November 1 of any year, any severance that would be considered Deferred
Compensation Separation Benefits will be paid on the first payroll date to occur
during the following calendar year, or such later time as required by the
payment schedule applicable to each payment or benefit) or Section
7(a).
8. Assignment. This
Agreement shall be binding upon and inure to the benefit of (a) the heirs,
beneficiaries, executors and legal representatives of Executive upon Executive’s
death and (b) any successor of the Company. Any such successor
of the Company shall be deemed substituted for the Company under the terms of
this Agreement for all purposes. As used herein, “successor” shall
include any person, firm, corporation or other business entity which at any
time, whether by purchase, merger or otherwise, directly or indirectly acquires
all or substantially all of the assets or business of the
Company. None of the rights of Executive to receive any form of
compensation payable pursuant to this Agreement shall be assignable or
transferable except through a testamentary disposition or by the laws of descent
and distribution upon the death of Executive. Any attempted
assignment, transfer, conveyance or other disposition (other than as aforesaid)
of any interest in the rights of Executive to receive any form of compensation
hereunder shall be null and void.
9. Notices. All
notices, requests, demands and other communications called for hereunder shall
be in writing and shall be deemed given if (a) delivered personally or by
facsimile, (b) one (1) day after being sent by Federal Express or a similar
commercial overnight service, or (c) three (3) days after being mailed by
registered or certified mail, return receipt requested, prepaid and addressed to
the parties or their successors in interest at the following addresses, or at
such other addresses as the parties may designate by written notice in the
manner aforesaid:
If
to the
Company: SonicWall,
Inc.
0000
Xxxxxxxx Xxx.
Xxxxxxxxx,
XX 00000
Attn:
General Counsel
If
to
Executive: Xxxxxxx
Xxxxxxxx
at
the last residential address known by the Company.
10. Severability. In
the event that any provision hereof becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said
provision.
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11. Entire
Agreement. This Agreement and the agreements referenced herein
and the Non-Disclosure and Invention Assignment Agreement entered into by and
between the Company and Executive represent
the entire agreement and understanding between the Company and Executive
concerning Executive’s employment relationship with the Company, and supersede
and replace any and all prior agreements and understandings concerning
Executive’s employment relationship with the Company, including the Prior
Employment Agreement.
12. Dispute
Resolution. The Executive and the Company shall first meet to
settle any dispute through good faith negotiations or non-binding
mediation. If not settled by good faith negotiation or non-binding
mediation between the parties within thirty (30) days from the date one party
requests in writing to meet the other party, then to the extent permitted by
law, any dispute or controversy arising out of, relating to or in connection
with this Agreement, or the interpretation, validity, construction, performance,
breach or termination thereof, shall be finally settled by binding arbitration,
provided,
however,
that the parties retain their right to, and shall not be prohibited, limited or
in any other way restricted from, seeking or obtaining equitable relief from a
court having jurisdiction over the parties. Such arbitration shall be
conducted in accordance with the employment arbitration rules of the American
Arbitration Association in effect at that time, and the requirements of Xxxxxxxxxx
v. Foundation Health
(2000) 24 Cal.4th 83 as modified by state law from time to time. The
judgment upon the determination or award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. With respect to
terminations within one year following a Change of Control only, the Company
shall pay Executive’s legal fees and expenses incurred by Executive in disputing
in good faith any issue hereunder relating to the termination of Executive’s
employment. In all other disputes hereunder, the prevailing party
shall reimburse the other party for legal fees and expenses, to the extent
permitted by law.
Executive
understands that nothing in Section 11 modifies Executive’s at-will
status. Either the Company or Executive can terminate the employment
relationship at any time, with or without cause, subject to the terms of this
Agreement.
EXECUTIVE
HAS READ AND UNDERSTANDS SECTION 11 WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EXECUTIVE AGREES, TO THE EXTENT PERMITTED BY LAW, TO SUBMIT ANY FUTURE CLAIMS
ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO BINDING ARBITRATION AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A
WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE
RELATIONSHIP.
13. Covenant
Not to Solicit. In consideration for the benefits Executive is
to receive herein Executive agrees that he will not, at any time during the
twelve month period following his termination date, directly or indirectly
solicit any individuals to leave the Company’s employ for any reason or
interfere in any other manner with the employment relationships at the time
existing between the Company and its current or prospective
employees.
14. No
Oral Modification, Cancellation or Discharge. This Agreement
may only be amended, canceled or discharged in writing signed by Executive and
the Chairman of the Compensation Committee of the Board.
15. Withholding. The
Company shall be entitled to withhold, or cause to be withheld, from payment any
amount of withholding taxes required by law with respect to payments made to
Executive in connection with his employment hereunder.
16. Governing
Law. This Agreement shall be governed by the laws of the State
of California.
17. Effective
Date. This Agreement is effective upon the date it has been
executed by both parties.
18.
Acknowledgment. Executive
acknowledges that he has had the opportunity to discuss this matter with and
obtain advice from his private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this Agreement, and
is knowingly and voluntarily entering into this Agreement.
Page 7
of 8
IN
WITNESS WHEREOF, the undersigned have executed this Agreement:
SonicWALL,
Inc.
Xxxxx X.
Xxxxxxxx
Date: October
20, 2008
EXECUTIVE
Xxxxxxx Xxxxxxxx
Date: October
20, 2008
Page 8
of 8
