Exhibit 10.74
CHANGE OF CONTROL
AGREEMENT
This
Change Of Control
Agreement (the “Agreement”) is entered into
this 24 th day of November, 2008
(the “Effective Date”), between Chordiant Software, Inc. (the
“Company”) and Charles A. Altomare
(“Executive”). This Agreement is intended to
provide Executive with the compensation and benefits described
herein upon the occurrence of specific events.
Whereas ,
Executive is employed by the Company pursuant to the terms of
Executive’s offer letter with the Company; and
Whereas , the
Company believes it is imperative to provide Executive with certain
severance benefits, including certain equity acceleration, in the
event that Executive is terminated without Cause (as defined
herein) or resigns for Good Reason (as defined herein) in
connection with a Change of Control (as defined herein);
Now, Therefore
, in consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the parties
hereto hereby agree as follows:
1. Termination
of Employment.
(a)
At-Will Employment. Executive’s employment
is at-will, which means that the Company may terminate
Executive’s employment at any time, with or without advance
notice, and with or without Cause (as defined
herein). Similarly, Executive may resign his/her
employment at any time, with or without advance notice or Good
Reason (as defined herein). Executive shall not receive
any compensation of any kind, including, without limitation,
severance benefits, following Executive’s last day of
employment with the Company (the “Termination Date”),
except as expressly provided herein, or as provided in any plan
documents governing the compensatory equity awards that have been
or may be granted to Executive from time to time in the sole
discretion of the Company (the “Stock
Awards”). Executive shall devote all reasonable
efforts to the performance of Executive’s duties, and shall
perform such duties in good faith.
(b)
Termination Related to a Change of Control. If
Executive’s employment is terminated without Cause (and other
than as a result of Executive’s death or disability) or
Executive resigns for Good Reason, in either case on or within
twelve (12) months after a Change of Control (a “Covered
Termination”), and provided such termination constitutes a
“separation from service” (within the meaning of
Treasury Regulation Section 1.409A-1(h)), and provided Executive
signs and allows to become effective a release substantially in the
form attached hereto as Exhibit A (the
“Release”) within the time period provided therein,
then the Company shall provide Executive with the following
severance benefits (the “Benefits”):
(i)
The
Company shall make severance payments to Executive in the form of
continuation of Executive’s base salary (at the rate in
effect on the Termination Date) for the first twelve (12) months
following the Termination Date (the “Severance
Period”). These payments will be made on the
Company’s ordinary payroll dates and will be subject to
standard payroll deductions and withholdings.
(ii)
The
Company will pay Executive an amount equal to Executive’s
annual bonus. The annual bonus will be calculated at one
of the following rates, whichever is higher: (1) as if both
Executive and the Company achieved one hundred (100) percent of
their specified performance objectives for the year in which the
Termination Date occurs; or (2) the actual performance of the
Company and Executive, determined as of the Termination Date, as
measured against the specified performance objectives for the year
in which the Termination Date occurs. This amount will
be paid over the Severance Period on the Company’s ordinary
payroll dates, in equal installments, and will be subject to
standard payroll deductions and withholdings.
(iii)
The
Company will pay Executive an additional amount of $3,000, which
Executive may, but is not obligated to, use to pay for life
insurance benefits during the Severance Period. This
amount will be paid over the Severance Period on the
Company’s ordinary payroll dates, in equal installments, and
will be subject to standard payroll deductions and
withholdings.
(iv)
Provided
that Executive elects continued coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (together
with any state or local laws of similar effect,
“COBRA”), the Company will pay the premiums for
Executive’s group health (including dental and vision)
insurance coverage, including coverage for Executive’s
eligible dependents, for a maximum period of twelve (12) months
following the Covered Termination or such lesser number of months
as Executive and Executive’s eligible dependents are eligible
for such coverage; provided, however, that the Company will
pay premiums for Executive and Executive’s eligible
dependents only for coverage for which they were enrolled
immediately prior to the Termination Date. Executive
(and Executive’s dependents, as applicable) will be solely
responsible for making a timely and accurate election for
continuation of coverage pursuant to COBRA. No premium
payments will be made by the Company pursuant to this paragraph
following the effective date of Executive’s coverage by a
health (including dental and vision) insurance plan of a subsequent
employer or such other date on which Executive (and
Executive’s dependents, as applicable) cease to be eligible
for COBRA coverage. After the Severance Period, for the
balance of the COBRA period, if any, Executive shall maintain any
such coverage at Executive’s own expense.
(v)
After
taking into account any additional acceleration of vesting
Executive may be entitled to receive under any other plan or
agreement, the Company will accelerate the vesting of the Stock
Awards such that the lesser of the following shall vest effective
as of the Termination Date: (a) 50% of the then-unvested
shares, rights, or units, as applicable subject to the Stock
Awards; and (b) that number of shares, rights or units subject to
each such Stock Award that would have vested if Executive had
worked for the Company for twelve (12) additional months beyond the
Termination Date. This acceleration of vesting will be
in addition to any acceleration of vesting of the Stock Awards that
Executive would otherwise receive under the Company’s 2000
Nonstatutory Equity Incentive Plan, 1999 Equity Incentive Plan,
2005 Equity Incentive Plan or any other documents governing the
Stock Awards. In addition, Executive shall have one (1)
year to exercise any vested Stock Awards, but in no event shall
such exercise period extend beyond the expiration of the original
term of the Stock Award. Except as expressly set forth
herein, the Stock Awards shall continue to be governed by the terms
of the applicable award agreements and equity incentive plan
documents. Notwithstanding anything to the contrary
contained herein, the maximum number of months of accelerated
vesting that may be credited to any Stock Award under this
Agreement, when added to any accelerated vesting provided for under
any award agreement or equity incentive plan documents, shall not
exceed twenty-four (24) months in the aggregate.
(c)
Termination For Cause Procedure. The Company may
not terminate Executive’s employment for Cause unless and
until Executive receives a copy of a resolution duly adopted by the
affirmative vote of at least a majority of the Board of Directors
of the Company or any successor thereto (“Board”)
finding that in the good faith opinion of the Board, Executive was
guilty of the conduct constituting “Cause” and
specifying the particulars thereof in detail. The
Company shall provide Executive with reasonable notice of the Board
vote and an opportunity for Executive, together with
Executive’s counsel, to be heard before the Board.
2. Limitations
And Conditions On Benefits
(a)
Release Prior to Payment of Benefits. Upon the
occurrence of a Covered Termination, and prior to the payment of
any of the Benefits, Executive shall execute, and allow to become
effective, the Release within the time frame set forth therein, but
not later than the 60 th day following the Termination
Date. Such Release shall specifically relate to all of
Executive’s rights and claims in existence at the time of
such execution and shall confirm Executive’s continuing
obligations to the Company (including but not limited to
obligations under any confidentiality and/or non-solicitation
agreement with the Company). Notwithstanding the payment
schedules set forth in Section 1 above, no Benefits will be paid
prior to the effective date of the Release. On the first regular
payroll pay day following the effective date of the Release, the
Company will pay Executive the Benefits Executive would otherwise
have received on or prior to such date but for the delay in payment
related to the effectiveness of the Release, with the balance of
the Benefits being paid as originally scheduled.
(b)
Compliance with Section 409A. It is intended
that each installment of the payments and benefits provided for in
this Agreement is a separate “payment” for purposes of
Treasury Regulation Section 1.409A-2(b)(2)(i). For the
avoidance of doubt, it is intended that payments of the amounts set
forth in this Agreement satisfy, to the greatest extent possible,
the exemptions from the application of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) (Section
409A of the Code, together, with any state law of similar effect,
“Section 409A”) provided under Treasury Regulations
1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the
Company (or, if applicable, the successor entity thereto)
determines that the severance payments and benefits provided under
this Agreement (the “Agreement Payments”) constitute
“deferred compensation” under Section 409A and
Executive is, on the Termination Date, a “specified
employee” of the Company or any successor entity thereto, as
such term is defined in Section 409A(a)(2)(B)(i) of the Code (a
“Specified Employee”), then, solely to the extent
necessary to avoid the incurrence of the adverse personal tax
consequences under Section 409A, the timing of the Agreement
Payments shall be delayed as follows: on the earlier to
occur of (i) the date that is six months and one day after
Executive’s “separation from service” (as defined
above) or (ii) the date of Executive’s death (such earlier
date, the “Delayed Initial Payment Date”), the Company
(or the successor entity thereto, as applicable) shall (A) pay to
Executive a lump sum amount equal to the sum of the Agreement
Payments that Executive would otherwise have received through the
Delayed Initial Payment Date if the commencement of the payment of
the Agreement Payments had not been so delayed pursuant to this
Section 2(b) and (B) commence paying the balance of the Agreement
Payments in accordance with the applicable payment schedules set
forth in this Agreement.
(a)
Definition of Cause. For purposes of this
Agreement, “Cause” shall mean that Executive has
committed, or there has occurred, one or more of the following
events: (1) conviction of any felony or misdemeanor
involving moral turpitude, fraud or act of dishonesty against the
Company; (2) a finding by the Board, after a good
