CHANGE OF CONTROL SEVERANCE
AGREEMENT
This Change of
Control Severance Agreement (the “Agreement”) is made
and entered into by and between Rodolfo Archbold
(“Executive”) and Evergreen Solar, Inc. (the
“Company”), effective as of July 30, 2007 (the
“Effective Date”).
1. It is
expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of
control. The Board of Directors of the Company (the
“Board”) recognizes that such consideration can be a
distraction to Executive and can cause Executive to consider
alternative employment opportunities. The Board has determined that
it is in the best interests of the Company and its stockholders to
assure that the Company will have the continued dedication and
objectivity of Executive, notwithstanding the possibility, threat
or occurrence of a Change of Control (as defined herein) of the
Company.
2. The Board
believes that it is in the best interests of the Company and its
stockholders to provide Executive with an incentive to continue his
employment and to motivate Executive to maximize the value of the
Company upon a Change of Control for the benefit of its
stockholders.
3. The Board
believes that it is imperative to provide Executive with certain
benefits upon a Change of Control and with certain severance
benefits upon Executive’s termination of employment following
a Change of Control. These benefits will provide Executive with
enhanced financial security and incentive and encouragement to
remain with the Company notwithstanding the possibility of a Change
of Control.
4. Certain
capitalized terms used in the Agreement are defined in
Section 7 below.
NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the parties
hereto agree as follows:
1. Term
of Agreement . This Agreement will have a term of three
(3) years commencing on the Effective Date. On the third
anniversary of the Effective Date, and on each annual anniversary
of the Effective Date thereafter, this Agreement automatically will
renew for an additional one (1)-year term unless either party
provides the other party with written notice of non-renewal at
least thirty (30) days prior to the date of automatic
renewal.
2.
At-Will Employment . The Company and Executive acknowledge
that Executive’s employment is and will continue to be
at-will, as defined under applicable law, except as may otherwise
be specifically provided under the terms of any written formal
employment agreement between the Company and Executive (an
“Employment Agreement”). If Executive’s
employment terminates for any reason, including (without
limitation) any termination not set for in
Section 4
hereof,
Executive will not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this Agreement or
under Executive’s Employment Agreement.
3.
Acceleration of Vesting on Change of Control . Upon the
consummation of a Change of Control (i) Executive’s
outstanding equity awards, including without limitation stock
options and restricted stock, will immediately vest and become
exercisable or become released from the Company’s repurchase
or reacquisition right as to (A) that number of unvested
shares that would have vested during the period between the equity
awards’ most recent vesting date (or grant date if no vesting
date has been reached) and the Change of Control if the equity
awards had been granted with a monthly vesting schedule and
(B) that number of unvested shares that would have otherwise
vested during the last twelve (12) months of each equity
awards’ vesting schedule, and (ii) all performance
targets for all of Executive’s performance-based equity
awards will be deemed fully achieved on the first anniversary of
the Change of Control if Executive is employed on such
date.
(a)
Termination without Cause or Resignation for Good Reason in
Connection with a Change of Control . If the Company or its
Affiliates terminate Executive’s employment with the Company
or its Affiliates, respectively, without Cause or Executive resigns
from such employment for Good Reason within twelve (12) months
following a Change of Control, and Executive signs and does not
revoke a separation agreement and release of claims with the
Company (in a form acceptable to the Company), then Executive will
receive the following severance from the Company:
(i)
Accrued Compensation . The Company will pay Executive all
accrued but unpaid vacation, expense reimbursements, wages, and
other benefits due to Executive under any Company-provided plans,
policies, and arrangements.
(ii)
Severance Payment . Executive will receive monthly severance
payments (less applicable withholding taxes) for twelve
(12) months following Executive’s termination equal to
(A) one-twelfth of Executive’s annual base salary as in
effect immediately prior to Executive’s termination date or
(if greater) at the level in effect immediately prior to the Change
of Control, and (B) one-twelfth of Executive’s target
bonus for the year of Executive’s termination. Subject to
Section 5, the Company will pay the severance payments to
which Executive is entitled as salary continuation on the same
basis and timing as in effect immediately prior to the Change of
Control.
(iii)
Equity . All of Executive’s outstanding equity awards,
including without limitation stock options and restricted stock,
will immediately vest and become exercisable or become released
from the Company’s repurchase or reacquisition
right.
(iv)
Continued Employee Benefits . Executive will receive
Company-paid coverage for a period of twelve (12) months for
Executive and Executive’s eligible dependents under the
Company’s Benefit Plans.
For purposes of
this Section 4(a), if Executive’s employment with the
Company or one of its Affiliates terminates, he will not be
determined to have been terminated without Cause, if he
continues to
remain employed by the Company or one of its Affiliates (e.g., upon
transfer from one Affiliate to another); provided, however, that
the parties understand and acknowledge that any such termination
could potentially result in Executive’s ability to resign for
Good Reason.
(b)
Voluntary Resignation; Termination for Cause . If
Executive’s employment with the Company or its Affiliates
terminates (i) voluntarily by Executive (other than for Good
Reason within twelve (12) months following a Change of
Control) or (ii) for Cause by the Company, then Executive will
not be entitled to receive severance or other benefits except for
those (if any) as may then be established under the Company’s
then existing severance and benefits plans and practices or
pursuant to other written agreements with the Company, including,
without limitation, any Employment Agreement.
(c)
Disability; Death . If the Company terminates
Executive’s employment as a result of Executive’s
Disability, or Executive’s employment terminates due to his
death, then Executive will not be entitled to receive severance or
other benefits except for those (if any) as may then be established
under the Company’s then existing written severance and
benefits plans and practices or pursuant to other written
agreements with the Company, including, without limitation, any
Employment Agreement.
(d)
Exclusive Remedy . In the event of a termination of
Executive’s employment as set forth in Section 4(a), the
provisions of this Section 4 are intended to be and are
exclusive and in lieu of any other rights or remedies to which
Executive or the Company may otherwise be entitled, whether at law,
tort, contract, or in equity. Executive will be entitled to no
benefits, compensation or other payments or rights upon termination
of employment following a Change of Control other than those
benefits expressly set forth in this Section 4.
(a)
Distributions . Notwithstanding anything to the contrary in
this Agreement, if Executive is a “specified employee”
within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) and the final
regulations and any guidance promulgated thereunder
(“Section 409A”) at the time of Executive’s
termination, and the severance payable to Executive, if any,
pursuant to this Agreement, when considered together with any other
severance payments or separation benefits which may be considered
deferred compensation under Section 409A (together, the
“Deferred Compensation Separation Benefits”) will not
and could not under any circumstances, regardless of when such
termination occurs, be paid in full by the fifteenth day of the
third month of the Company’s fiscal year following
Executive’s termination, then only that portion of the
Deferred Compensation Separation Benefits which do not exceed the
Section 409A Limit (as defined below) may be made within the
first six (6) months following Executive’s termination
of employment in accordance with the payment schedule applicable to
each such payment or benefit. For these purposes, each severance
payment and benefit is hereby designated as a separate payment and
will not collectively be treated as a single payment. Any portion
of the Deferred Compensation Separation Benefits in excess of the
Section 409A Limit shall accrue and, to the extent such
portion of the Deferred Compensation Separation Benefits would
otherwise have been payable within the first six (6) months
following Executive’s termination of employment, will become
payable on the first payroll date that occurs on or after the date
six (6) months and one (1) day following the date
of
Executive’s termination of employment. All
subsequent Deferred Compensation Separation Benefits, if any, will
be payable in accordance with the payment schedule applicable to
each payment or benefit.
(b)
Amendment . This provision is intended to comply with the
requirements of Section 409A so that none of the severance payments
and benefits to be provided hereunder will be subject to the
additional tax imposed under Section 409A, and any ambiguities
herein will be interpreted to so comply. The Company and Executive
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.
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