Exhibit 10.2
AMENDED AND
RESTATED
SEAGATE TECHNOLOGY EXECUTIVE
OFFICER SEVERANCE AND CHANGE IN
CONTROL (CIC) PLAN
SECTION 1.
INTRODUCTION.
THE AMENDED AND RESTATED SEAGATE
TECHNOLOGY EXECUTIVE OFFICER SEVERANCE AND CHANGE IN CONTROL (CIC)
PLAN (the “
Plan ” or “ Severance and CIC Plan
”) was originally approved by the Board of Directors of
SEAGATE TECHNOLOGY (the “ Company ”) on
August 21, 2008 and became effective on September 1,
2008. The Plan was amended and restated in the form set forth
herein by the Plan Administrator on April 29, 2009. The
purpose of the Plan is to provide for the payment of severance
benefits to certain eligible executive officers of the Company in
the event their employment with the Company and any Applicable
Subsidiary (as defined herein), as applicable, is terminated
involuntarily, as provided herein, and to encourage such officers
to continue as employees of the Company or an Applicable
Subsidiary, as the case may be, in the event of a Change in Control
(as defined herein). Except as otherwise stated herein, this Plan
shall supersede any severance benefit plan, policy or practice
previously maintained by the Company (including, without
limitation, the provisions of any employment agreement between any
Eligible Officer and the Company or any Applicable Subsidiary).
This Plan document also is the Summary Plan Description for the
Plan.
SECTION 2. ELIGIBILITY FOR
BENEFITS.
(a) General Rules.
Subject to the requirements set
forth in this Section, the Company will grant severance benefits
under the Plan to each Eligible Officer.
(i) “Potential Eligible
Officers” are all
officers employed by the Company or any Applicable Subsidiary with
the title of vice president or more senior selected to participate
in this Plan as indicated in the Benefits Schedules attached
hereto. An “ Eligible Officer ” is any Potential
Eligible Officer, other than those excluded under this
Section 2, whose employment with the Company is either
(A) voluntarily terminated for Good Reason or
(B) involuntarily terminated for a reason other than Cause
(collectively, a “ Termination Event ”) and in
connection with such Termination Event is designated by the Company
as an Eligible Officer. Additionally, an Eligible Officer shall be
eligible for additional benefits under this Plan if the Termination
Event occurs during the Change in Control Period. An Eligible
Officer who is involuntarily terminated for Cause shall not be
eligible for benefits under this Plan.
(ii) In order to be eligible to receive benefits
under the Plan, in addition to meeting the requirements of an
“Eligible Officer” set forth in Section 2(a)(i)
above, an Eligible Officer must execute (A) a general waiver
and release on the form provided by the Company within 60 days of
the Eligible Officer’s receipt thereof and (B) an
agreement containing certain covenants on the form provided by the
Company and covering the matters set forth in Section 6 of
this Plan, the scope and applicability of which covenants shall be
determined by the Plan Administrator in its sole discretion
(collectively, the “ Release and Covenant Documents
”).
(iii) Any Termination Event that triggers the payment
of benefits under this Plan must occur during the term of this Plan
as specified in Section 9(b); provided that in any
event eligibility for benefits shall continue for 24 months
following the effective date of a Change in Control which occurs
during such period.
(b) Exceptions
. A Potential Eligible Officer who
otherwise is an Eligible Officer will not receive benefits under
the Plan in any of the following circumstances:
(i) The Eligible Officer is involuntarily terminated
for any reason other than a reason specified in
Section 2(a)(i).
(ii) The Eligible Officer voluntarily terminates
employment with the Company either (A) for a reason other than
Good Reason or (B) for no reason. Voluntary terminations
include, but are not limited to, death, Disability, resignation,
retirement, or failure to return from a leave of absence on the
scheduled date.
SECTION 3.
DEFINITIONS.
Capitalized terms used in this Plan,
unless defined elsewhere in this Plan, shall have the following
meanings:
(a) Applicable
Subsidiary means a
subsidiary of the Company included on Schedule A attached
hereto.
(b) Beneficial Owner
means the definition given in Rule
13d-3 promulgated under the Exchange Act.
(c) Board means the Board of Directors of the
Company.
(d) Cause means (i) an Eligible Officer’s
continued failure to substantially perform the material duties of
his or her office (other than as a result of total or partial
incapacity due to physical or mental illness),
(ii) embezzlement or theft by an Eligible Officer of the
Company’s property, (iii) the commission of any act or
acts on an Eligible Officer’s part resulting in the
conviction of such Eligible Officer of a felony under the laws of
the United States or any state or foreign jurisdiction,
(iv) an Eligible Officer’s willful malfeasance or
willful misconduct in connection with such Eligible Officer’s
duties to Company or any of its subsidiaries or affiliates or any
other act or omission which is materially injurious to the
financial condition or business reputation of the Company or any of
its subsidiaries or affiliates, or (v) a material breach by an
Eligible Officer of any of the material provisions of (A) this
Plan, (B) any non-compete, non-solicitation or confidentiality
provisions to which such Eligible Officer is subject or
(C) any policy of the Company or any of its subsidiaries or
affiliates to which such Eligible Officer is subject. However, no
termination shall be deemed for Cause under clause (i),
(iv) or (v) unless the Eligible Officer is first given
written notice by the Company of the specific acts or omissions
which the Company deems constitute grounds for a termination for
Cause, is provided with at least 30 days after such notice to cure
the specified deficiency and fails to substantially cure such
deficiency within such time frame to the satisfaction of the Plan
Administrator.
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(e) Change in Control
means the occurrence of any of the
following events:
(i) The sale, exchange, lease or
other disposition of all or substantially all of the assets of the
Company to a person or group of related persons, as such terms are
defined or described in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act, that will continue the business of the Company in the
future;
(ii) A merger, consolidation or
similar transaction involving the Company and at least one other
entity in which the voting securities of the Company owned by the
shareholders of the Company immediately prior to such merger,
consolidation or similar transaction do not represent, after
conversion if applicable, more than fifty percent (50%) of the
total voting power of the surviving controlling entity outstanding
immediately after such merger, consolidation or similar
transaction; provided that any person who (1) was a Beneficial
Owner of the voting securities of the Company immediately prior to
such merger, consolidation or similar transaction, and (2) is
a Beneficial Owner of more than 20% of the securities of the
Company immediately after such merger, consolidation or similar
transaction, shall be excluded from the list of “shareholders
of the Company immediately prior to such merger, consolidation or
similar transaction” for purposes of the preceding
calculation;
(iii) Any person or group is or
becomes the Beneficial Owner, directly or indirectly, of more than
50% of the total voting power of the voting stock of the Company
(including by way of merger, consolidation or
otherwise);
(iv) During any period of two
consecutive years, individuals who at the beginning of such period
constituted the Board (together with any new directors whose
election by such Board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of
the directors of the Company then still in office, who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board then in office;
or
(v) A dissolution or liquidation of
the Company.
(f) Change in Control
Period means the period
six months prior to and 24 months following the effective date of a
Change in Control.
(g) Code means the Internal Revenue Code of 1986, as
amended. Any specific reference to a section of the Code shall be
deemed to include any regulations and other Treasury Department
guidance promulgated thereunder.
(h) Company
means Seagate Technology, an
exempted limited liability company incorporated under the laws of
the Cayman Islands, and any successor as provided in
Section 9(d) hereof.
(i) Disability
means the physical or mental
incapacitation such that for a period of six consecutive months or
for an aggregate of nine months in any 24-month consecutive period,
an Eligible Officer is unable to substantially perform his or her
duties. Any question as to the existence of that Eligible
Officer’s physical or mental incapacitation as to which the
Eligible Officer or the Eligible Officer’s representative and
the Company cannot agree shall be determined in writing by a
qualified independent physician mutually acceptable to the
Eligible
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Officer and the Company. If the Eligible Officer
and the Company cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two
physicians shall select a third who shall make such determination
in writing. The determination of “Disability” made in
writing to the Company and the Eligible Officer shall be final and
conclusive for all purposes of the benefits under this
Plan.
(j) Exchange Act
means the Securities Exchange Act of
1934, as amended.
(k) Good Reason
means an Eligible Officer’s
resignation of his or her employment with the Company or an
Applicable Subsidiary as a result of the occurrence of one or more
of the following actions, which such action or actions remain
uncured for at least 30 days following written notice from such
Eligible Officer to the Company describing the occurrence of such
action or actions and asserting that such action or actions
constitute grounds for a Good Reason resignation which notice must
be provided by the Eligible Officer no later than 90 days after the
initial existence of such condition, provided that such resignation
occurs no later than 60 days after the expiration of the cure
period: (i) without such Eligible Officer’s express
written consent, any material diminution in the level of such
Eligible Officer’s authority or duties; (ii) without
such Eligible Officer’s express written consent, a reduction
of 10% or more in the level of the base salary or employee benefits
to be provided to such Eligible Officer, other than a reduction
implemented with the consent of such Eligible Officer or a
reduction that is equivalent to reduction in base salaries and/or
employee benefits, as applicable, imposed on all other executives
of the Company at a similar level within the Company;
(iii) the relocation of such Eligible Officer to a principal
place of employment that increases such Eligible Officer’s
one-way commute by more than 40 miles from such Eligible
Officer’s current principal place of employment, without such
Eligible Officer’s express written consent; or (iv) the
failure of any successor to the business of the Company or to
substantially all of the assets and/or business of the Company to
assume the Company’s obligations under this Plan as required
by Section 9(d).
(l) IRS means the Internal Revenue Service.
(m) Pay means the Eligible Officer’s monthly base
pay at the rate in effect on the Termination Date (or if greater,
the last regularly scheduled payroll period immediately preceding
either a Change in Control or termination for Good Reason, as
applicable) and inclusive of the Eligible Officer’s target
bonus level (expressed as a percentage of base pay) with respect to
the fiscal year prior to the Termination Date. In order to be
included as Pay, the target bonus level must be approved by the
Plan Administrator under a bonus plan adopted by the Company.
One-time bonuses paid by the Company that are not paid under a
bonus plan adopted by the Company shall be excluded from Pay for
purposes of this Plan. Examples of such one-time bonuses are
sign-on bonuses or special recognition bonuses.
(n) Plan means this Amended and Restated Seagate
Technology Executive Officer Severance and CIC Plan.
(o) Severance Period
means the number of months of Pay,
rounded to the nearest whole month, used for calculating the
Eligible Officer’s cash severance benefits, as specified in
the Benefits Schedules attached hereto. Notwithstanding the
foregoing, in the event that the Eligible Officer becomes eligible
to receive additional benefits in connection with the occurrence of
a Change in Control, the Severance Period shall be twelve
months.
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(p) Termination Date
means the last date on which the
Eligible Officer is in active employment status with the Company or
any of its affiliates or subsidiaries.
(q) WARN Act
means the federal Worker Adjustment
and Retraining Notification Act and any other comparable law
applicable under the laws of any state or foreign
jurisdiction.
SECTION 4. AMOUNT OF
BENEFIT.
Severance benefits payable under the
Plan are as follows:
(a) Subject to Section 6(f), Eligible Officers
will receive the benefits described in Sections 7 and 8 of the Plan
and in the Benefit Schedules attached hereto. The level of benefits
applicable to an Eligible Officer shall be based upon his or her
title (and corresponding salary grade) as designated by the Plan
Administrator in its sole discretion. In the event of any
circumstances relating to the Eligible Officer’s title and
assigned salary grade that may result in a difference in the level
of benefits applicable to an Eligible Officer under the Plan, the
Eligible Officer’s salary grade shall control for purposes of
placing the Eligible Officer in a specific “Tier” of
benefits set forth in the Benefits Schedules.
(b) Notwithstanding any other provision of the Plan
to the contrary, any benefits payable to an Eligible Officer under
this Plan shall be in lieu of any severance benefits payable by the
Company to such individual under any other arrangement covering the
individual, unless expressly otherwise agreed to by the Company in
writing. In the event that the Eligible Officer is entitled to
receive severance benefits under any agreement or contract with the
Company, any plan, policy, program or other arrangement adopted or
established by the Company, or under the WARN Act or other
applicable law providing for payments from the Company or its
subsidiaries or affiliates on account of termination of employment,
including pay in lieu of advance notice of termination (“
Other Benefits ”), any severance benefits payable
hereunder shall be reduced by the Other Benefits.
SECTION 5. TIME OF PAYMENT AND
FORM OF BENEFIT; INDEBTEDNESS.
(a) Benefits under this Plan shall be paid in a lump
sum unless otherwise determined by the Plan Administrator in its
sole discretion. The Company reserves the right to determine the
timing of such payments, provided, however , that no payment
shall be made under this Plan prior to 10 days following the last
day of any waiting period or revocation period as required by
applicable law in order for the general waiver and release required
by Section 2(a)(ii) of this Plan to be effective, and
provided further that, unless otherwise determined by the Plan
Administrator in its sole discretion and subject to Section 16
of this Plan, all payments under this Plan will be completed within
30 days of the later of (i) an Eligible Officer’s
Termination Date and (ii) the date on which the Company
receives the executed Release and Covenant Documents.
(b) If an Eligible Officer is indebted to the
Company at his or her Termination Date, the Company reserves the
right to offset any severance payments under the Plan by the amount
of such indebtedness.
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(c) In no event shall payment of any Plan benefit be
made prior to the Eligible Officer’s Termination Date. In
addition, the payments and benefits hereunder shall be contingent
upon the Eligible Officer resigning from all positions the Eligible
Officer holds as an employee, officer or director of the Company or
any of its affiliates or subsidiaries as well as any other position
the Eligible Officer holds at the request or for the benefit of the
Company or any of its affiliates or subsidiaries, unless otherwise
determined by the Plan Administrator in its sole
discretion.
SECTION 6. ELIGIBLE OFFICER
COVENANTS
Severance benefits payable under the
Plan are subject to the following covenants made by each Eligible
Officer (the “ Covenants ”), the scope and
applicability of which covenants shall be determined by the Plan
Administrator in its sole discretion:
(a) Non-Competition
. During the Severance Period, an
Eligible Officer will not directly or indirectly:
(i) engage in any business that competes with the
business of the Company, or its subsidiaries (including, without
limitation, any businesses which the Company or its subsidiaries
have specific plans to conduct in the future and as to which such
Eligible Officer is aware of such planning) in any geographical
area which is within 100 miles of any geographical area in which
the Company or its subsidiaries conduct such business (a “
Competitive Business ”);
(ii) enter the employ of, or render any services to,
any person or entity (or any division of any person or entity) who
or which engages in a Competitive Business;
(iii) acquire a financial interest in, or otherwise
become actively involved with, any Competitive Business, directly
or indirectly, as an individual, partner, shareholder, officer,
director, principal, agent, trustee or consultant; or
(iv) interfere with, or attempt to interfere with,
business relationships (whether formed before, on or after the date
of this Agreement) between the Company or any of its subsidiaries
and customers, clients, suppliers, partners, members or investors
of the Company or its subsidiaries.
Notwithstanding anything to the
contrary in this Plan, an Eligible Officer may, directly or
indirectly own, solely as a passive investment, securities of any
person engaged in the business of the Company or its subsidiaries
which are actively traded on a public securities market (including
the OTCBB and similar over-the-counter market) if such Eligible
Officer (i) is not a controlling person of, or a member of a
group which controls, such person and (ii) does not, directly
or indirectly, own 5% or more of any class of such actively traded
securities of such person.
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(b) Non-Solicitation of
Clients . During the
Severance Period, an Eligible Officer will not, whether on such
Eligible Officer’s own behalf or on behalf of or in
conjunction with any person, company, business entity or other
organization whatsoever, directly or indirectly solicit or assist
in soliciting in competition with the Company, the business of any
client or prospective client:
(i) with whom such Eligible Officer had personal
contact or dealings on behalf of the Company during the one year
period preceding such Eligible Officer’s Termination
Date;
(ii) with whom employees reporting to such Eligible
Officer have had personal contact or dealings on behalf of the
Company during the one year immediately preceding such Eligible
Officer’s Termination Date; or
(iii) for whom such Eligible Officer had direct or
indirect responsibility during the one year immediately preceding
such Eligible Officer’s Termination Date.
(c) Non-Solicitation of
Employees . During the
Severance Period, an Eligible Officer will not, whether on such
Eligible Officer’s own behalf or on behalf of or in
conjunction with any person, company, business entity or other
organization whatsoever, directly or indirectly:
(i) solicit or encourage any employee of the Company
or its subsidiaries to leave the employment of the Company or its
subsidiaries; or
(ii) encourage to cease to work with the Company or
its subsidiaries any consultant then under contract with the
Company or its subsidiaries.
(d) During the term of an Eligible Officer’s
employment with the Company, such Eligible Officer will have access
to and become acquainted with the Company’s and its
affiliates’ confidential and proprietary information,
including but not limited to, information or plans regarding the
Company’s and its affiliates’ customer relationships,
personnel or sales, marketing and financial operations and methods,
trade secrets, formulas, devices, secret inventions, processes and
other compilations of information, records and specifications
(collectively, “ Proprietary Information ”).
During the Severance Period, an Eligible Officer shall not disclose
any of the Company’s or its affiliates’ Proprietary
Information, directly or indirectly, or use it in any way except in
the course of performing services for the Company and its
affiliates, as authorized in writing by the Company or as required
to be disclosed by applicable law. All files, records, documents,
computer-recorded information, drawings, specifications, equipment
and similar items relating to the business of the Company or its
affiliates, whether prepared by an Eligible Officer or otherwise
coming into such Eligible Officer’s possession, shall remain
the exclusive property of the Company or its affiliates, as the
case may be. Notwithstanding the foregoing, Proprietary Information
shall not include information that is or becomes generally public
knowledge other than as a result of a breach of this
Section 6(d) or any obligation that the Eligible Officer has
to protect the confidentiality of the Proprietary Information of
the Company and its affiliates.
(e) It is expressly understood and agreed that
although each Eligible Officer and the Company consider the
restrictions contained in the Covenants to be reasonable, if a
final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction
contained in the Covenants is an unenforceable restriction against
an Eligible Officer,
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for which injunctive relief is unavailable, the
provisions of the Covenants shall not be rendered void but shall be
deemed amended to apply as to such maximum time and territory and
to such maximum extent as such court may judicially determine or
indicate to be enforceable. Furthermore, such a determination shall
not limit the Company’s ability to cease providing payments
or benefits during the remainder of any Severance Period or to seek
recovery of any prior payments or benefits made hereunder, if
applicable, unless a court of competent jurisdiction has expressly
declared that action to be unlawful. Alternatively, if any court of
competent jurisdiction finds that any restriction contained in the
Covenants is unenforceable, and such restriction cannot be amended
so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained in the
Covenants or other provisions of this Plan.
(f) All benefits payable to an Eligible Officer are
contingent upon his or her full compliance with the foregoing
obligations during the Severance Period. Accordingly, if the
Eligible Officer, at any time, violates any Covenants, any
proprietary information or confidentiality obligation to the
Company (including Section 6(d) above), including his or her
obligations under the
