Exhibit 10.2
WIND RIVER SYSTEMS,
INC.
AMENDED & RESTATED
EXECUTIVE OFFICERS’ CHANGE OF CONTROL INCENTIVE
AND
SEVERANCE BENEFIT PLAN AND
SUMMARY PLAN DESCRIPTION
Amended and Restated July 8,
2009
(Effective immediately prior to
the Acceptance Date, as defined below)
SECTION 1. INTRODUCTION.
This Wind River Systems, Inc.
Executive Officers’ Change of Control Incentive and Severance
Benefit Plan (the “Plan”) was approved by the
Compensation Committee of the Board of Directors of Wind River
Systems, Inc. (the “Company”) on November 16,
1995, was amended and restated effective October 14, 2008 to
comply with Internal Revenue Code Section 409A, and was
further amended and restated on January 30, 2009 to replace
the golden parachute excise tax gross-up provisions with
“best results” golden parachute excise provisions. In
connection with the consummation of the transactions contemplated
by the Agreement and Plan of Merger among Intel Corporation
(“Parent”), APC II Acquisition Corporation, and the
Company (the “Merger Agreement” and transactions
effected by it, the “Merger”), the Plan is hereby
further amended and restated effective immediately prior to the
Acceptance Date (as such term is defined in the Merger Agreement)
(the “Effective Date”) to: (i) remove the
“good reason” trigger under the Plan and clarify that
Eligible Employees will not be entitled to benefits under the Plan
in connection with any voluntary termination of employment;
(ii) limit the acceleration of vesting, exercisability or
settlement of any stock option, restricted stock unit or other
equity based award to awards outstanding at the Effective Time (as
such term is defined in the Merger Agreement); (iii) include
commissions and MBO payments in the definition of
“compensation” used to calculate benefits payable under
the Plan; and (iv) limit the amendment and termination
authority reserved in Section 8(b) of the Plan for twelve
(12) months following the Effective Time; provided, however,
that with respect to each Eligible Employee employed in Austria,
Canada or Japan, the amendments described in subsections
(i) and (ii) shall be subject to the Company obtaining a
consent or waiver and release from such Eligible Employee (to the
extent necessary under applicable law) and, if such consent or
waiver and release is not obtained, the amendments described in
subsections (i) and (ii) shall be disregarded to that
extent and the terms of the Plan in effect immediately prior to
such amendments shall continue to apply to such Eligible Employee
to that extent.
The purpose of the Plan is to
encourage valued senior employees to work in the Company’s
best interests during and following a Change of Control (defined
below) by providing for the payment of incentive and severance
benefits as set forth herein. As of the Effective Date, this
amended and restated Plan shall supersede any group severance
benefit plan, policy or practice previously maintained by the
Company for the employees described herein. 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 2, and subject
to further limitations set forth subsequently in this Plan, the
Company will award incentive benefits to Eligible Employees and
will grant severance benefits during the Benefit Period to Eligible
Employees. As a condition of receiving severance benefits under the
Plan, each Eligible Employee must execute a general waiver and
release, on the form provided by the Company, which releases the
Company from any and all claims the Eligible Employee may have
against the Company (the “Release”).
(i) “ Eligible
Employees ” are, for purposes of the Plan’s
incentive benefits, all employees employed at the level of Vice
President or above at the time of the occurrence of a Change of
Control. This term, for purposes of the Plan’s severance
benefits, shall mean all employees employed at the level of Vice
President or above whose employment with the Company is
involuntarily terminated other than for Cause, at any time within
twelve (12) months following a Change of Control.
(ii) “ Change of
Control ” shall mean (i) a merger or consolidation
in which the Company is not the surviving corporation; (ii) a
reverse merger in which the Company is the surviving corporation
but the shares of the Company’s common stock outstanding
immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash
or otherwise; (iii) any other capital reorganization in which
the beneficial ownership of more than fifty percent (50%) of
the shares of the Company entitled to vote changes; (iv) a
transaction or group of related transactions involving the sale of
all or substantially all of the Company’s assets; or
(v) the acquisition by any person, entity or group (excluding
any employee benefit plan, or related trust, sponsored or
maintained by the Company or any subsidiary of the Company) of the
beneficial ownership, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the
combined voting power in the election of directors.
(iii) “ Cause ”
shall mean misconduct, including: (i) conviction of any felony
or any crime involving moral turpitude or dishonesty;
(ii) participation in a fraud or act of dishonesty against the
Company; (iii) conduct by Executive which based upon a good
faith and reasonable factual investigation and determination by the
Company demonstrates gross unfitness to serve; or
(iv) intentional, material violation by Executive of any
contract between Executive and the Company or any statutory duty of
Executive to the Company that is not corrected within thirty
(30) days after written notice to Executive thereof. Physical
or mental disability shall not constitute
“Cause”.
(iv) “ Benefit Period
” shall mean the period commencing on the date an employee of
the Company becomes an Eligible Employee as defined in paragraph
(i) of this Subsection (a) (the “Termination
Date”) and continuing for twelve (12) months (eighteen
(18) months if the Eligible Employee is the Company’s
Chief Executive Officer) following the Termination Date, if the
Termination Date occurs at any time within twelve (12) months
after the Change of Control.
(v) “Equity
Award” shall mean a grant of incentive or non-statutory
stock options, restricted stock, restricted stock units, stock
appreciation rights, performance shares, performance units,
deferred stock units, or other equity or equity award that is
outstanding at the Effective Time and granted to an Eligible
Employee pursuant to an equity incentive plan of the
Company.
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(b) Exceptions . An employee
who otherwise is an Eligible Employee will not receive severance
benefits under the Plan in any of the following
circumstances:
(i) The employee voluntarily
terminates employment with the Company for any reason, including
under circumstances that could constitute termination for
“good reason”, “constructive termination”
or any term of similar import (as determined under applicable law,
guidance or custom).
(ii) The employee voluntarily
terminates employment with the Company in order to accept
employment with another entity that is wholly or partly owned
(directly or indirectly) by the Company or a successor to the
Company, or is wholly or partly owned (directly or indirectly) by
the parent or other affiliate of the Company or its
successor.
SECTION 3. AMOUNT OF INCENTIVE AND
SEVERANCE BENEFITS.
(a) Incentive Benefits .
Individuals who are Eligible Employees at the time of a Change of
Control shall receive the following incentive benefits:
(i) If, on the date of the Change of
Control, the Eligible Employee has outstanding Equity Awards to
purchase or acquire shares in the stock of the Company, the vesting
schedule for such outstanding Equity Awards, to the extent not
already vested, shall be accelerated by a period of one
year.
(ii) If on the date of the Change of
Control, the Eligible Employee is the Chief Executive Officer of
the Company, and the Chief Executive Officer has outstanding Equity
Awards to purchase or acquire shares in the stock of the Company,
the vesting schedule for such outstanding Equity Awards, to the
extent not already vested, shall be accelerated by a period of two
years.
(b) Severance Benefits .
Eligible Employees whose employment is terminated as described in
Subsection 2(a) of this Plan will receive, subject to
Section 4 hereof, the following severance benefits:
(i) The Eligible Employee shall
receive Compensation during the Benefit Period.
“Compensation” shall be the Eligible Employee’s
total base pay, bonus, commissions and MBO payments (excluding
draws and other forms of additional compensation). For purposes of
this paragraph 3(b)(i), the amount of the Eligible Employee’s
base pay shall be equal to the amount of base pay actually paid to
the Eligible Employee during the twelve (12) month period
(eighteen (18) months if the Eligible Employee is the
Company’s Chief Executive Officer) immediately preceding the
Termination Date. For purposes of this paragraph 3(b)(i), the
amount of the bonus shall be determined based upon the bonus which
the Eligible Employee would have been entitled to receive under the
terms of the Company’s annual incentive bonus plan for the
Company’s fiscal year in which the Termination Date occurs,
assuming on-plan performance by the Eligible Employee and the
Company. For purposes of this paragraph 3(b)(i), the amount of
the commissions and MBO
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payments shall be determined based upon the
commissions and MBO payments which the Eligible Employee would have
been entitled to receive under the terms of the Company’s
commission and MBO plans for the Company’s fiscal year in
which the Termination Date occurs, assuming on-plan performance or,
if applicable, 100% achievement of the performance goals by the
Eligible Employee and, if applicable, the Company. If the Eligible
Employee is the Company’s Chief Executive Officer, this
bonus, commission and MBO payment amount, as applicable, shall be
multiplied by a factor of 1.5.
(ii) The Eligible Employee shall
receive a payment attributable to the Eligible Employee’s
bonus, commissions and MBO payments, as applicable, for the year in
which the Termination Date occurs if the Eligible Employee received
a bonus, commissions and/or MBO payments, as applicable, for the
year immediately preceding the year in which the Termination Date
occurs. The amount of the payment attributable to the bonus,
commissions and MBO payments payable for the year in which the
Termination Date occurs shall be equal to the amount of the bonus,
commissions and MBO payments, if any, paid to the Eligible Employee
for the year immediately preceding the year in which the
Termination Date occurs, multiplied by a fraction, the numerator of
which shall be the number of months the Eligible Employee works for
the Company during the year in which the Termination Date occurs,
including the month in which the Termination Date occurs, and the
denominator of which shall be twelve.
(iii) If, on the Termination Date,
the Eligible Employee has outstanding Equity Awards to purchase or
acquire shares in the stock of the Company, such outstanding Equity
Awards, to the extent they would otherwise vest if the Eligible
Employee completed twelve months of employment with the Company
following the Termination Date, shall become vested and exercisable
on the Termination Date. In addition, to the extent that any
portion of the outstanding Equity Awards of the Company’s
Chief Executive Officer did not become fully vested under paragraph
3(a)(ii) of the Plan because of the limitation of paragraph
3(a)(iii) of the Plan, such options shall become vested and
exercisable on the Termination Date.
(iv) If the Eligible Employee has
medical, dental or vision coverage, under a group health plan
sponsored by the Company on the Eligible Employee’s
Termination Date, and if the Eligible Employee timely elects
continuation of such coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”), the
Company will reimburse the Eligible Employee for the total
applicable premium cost paid for medical, dental and vision
coverage under COBRA as set forth in further detail under
Subsection 9(a) below. Such reimbursement shall be made within
thirty (30) days of the premium payment.
SECTION 4. LIMITATION ON AMOUNT OF
BENEFIT; GOLDEN PARACHUTE TAXES.
(a) Notwithstanding any other
provision of the Plan to the contrary, any benefits payable to an
Eligible Employee under this Plan shall be offset, to the maximum
extent permitted by law, by any severance benefits payable by the
Company to such individual under any other arrangement covering the
individual.
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(b) Notwithstanding any other
provision of the Plan to the contrary, (i) the severance
benefits under this Plan are in lieu of any other benefit provided
under any other group severance plan of the Company and
(ii) severance benefits under this Plan shall be reduced by
the amount of any payment to which the Eligible Employee is
entitled under any individual severance agreement then in effect
between the Eligible Employee and the Company. In addition, the
Company shall withhold appropriate federal, state, local and
foreign income and employment taxes from any payments
hereunder.
(c) Notwithstanding any other
provision of the Plan to the contrary, in the event that the
severance and other benefits provided for in this Plan or otherwise
payable or provided to an Eligible Employee (i) constitute
“parachute payments” within the meaning of
Section 280G of the Internal Revenue Code (the
“Code”), and (ii) but for this Section 4(c),
would be subject to the excise tax imposed by Section 4999 of
the Code (the “Excise Tax”), then the Eligible
Employee’s Plan benefits shall be either (a) delivered
in full, or (b) delivered as to such lesser extent which would
result in no portion of such Plan benefits being subject to the
Excise Tax, whichever of the foregoing amounts, taking into account
the applicable federal, state and local income taxes and the Excise
Tax, results in the receipt by the Eligible 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 Section 4999 of the Code.
Unless the Company and the Eligible
Employee otherwise agree in writing, any determination required
under this Section 4(c) 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 the Eligible Employee and the Company
for all purposes. For purposes of making the calculations required
by this Section 4(c), the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. The Company and
the Eligible Employees shall furnish to the Accountants such
information and documents as the Accountants may reasonably request
in order to make a determination under this Section. The Company
shall bear all costs the Accountants may reasonably incur in
connection with any calculations contemplated by this
Section 4(c). Any reduction in payments and/or benefits
required by this Section 4(c) shall occur in the following
order: (1) reduction of cash payments; and (2) reduction
of equity acceleration (full-value awards first, then stock
options), and (3) other benefits paid to the E
