Exhibit 10.20
FORM OF CHANGE OF CONTROL
AGREEMENT
OCCAM NETWORKS,
INC.
CHANGE OF CONTROL SEVERANCE
AGREEMENT
This Change of Control Severance
Agreement (the “Agreement”) is made and entered into by
and between [NAME] (“Executive”) and Occam
Networks, Inc. (the “Company”), initially
effective as of [DATE] (the “Effective Date”) and
amended and restated as of December 10, 2008.
RECITALS
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 or her 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 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 8 below.
AGREEMENT
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, the parties hereto agree as
follows:
1.
Term of Agreement
. This Agreement is effective
as of the Effective Date and will remain in effect through the
third anniversary of the Effective Date, except in the event of a
Change of Control during such term, in which case this Agreement
will remain in effect through, and automatically terminate upon,
the completion of all payments under the terms of this Agreement
(the “ Agreement Term ”), provided that
the Board of Directors of the Company or the Compensation Committee
thereof may, in its sole and absolute discretion, at any time
extend the term of this Agreement for such period of time as it may
determine appropriate. No severance benefits will be paid
under this Agreement with respect to any termination of employment
effective after the date of the Agreement’s
termination.
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
prior to a Change of Control, Executive will not be entitled to any
payments, benefits, damages, awards or compensation other than as
provided by this Agreement.
3.
Termination of
Employment . In the
event Executive’s employment with the Company terminates for
any reason, Executive will be entitled to any: (i) unpaid base
salary accrued up to the effective date of termination,
(ii) unpaid, but earned and accrued annual incentive for any
completed fiscal year as of his or her termination of employment,
(iii) pay for accrued but unused vacation, (iv) benefits
or compensation as provided under the terms of any employee benefit
and compensation agreements or plans applicable to Executive,
(v) unreimbursed business expenses required to be reimbursed
to Executive, and (vi) rights to indemnification Executive may
have under the Company’s Certificate of Incorporation,
Bylaws, or separate indemnification agreement, as applicable.
In addition, if the termination is by the Company (or any parent,
subsidiary or successor of the Company) without Cause (as defined
herein) or if Executive resigns for Good Reason (as defined
herein), Executive will be entitled to the amounts and benefits
specified in Section 4.
4.
Severance Benefits
.
(a)
Termination Without Cause or
Resignation for Good Reason in Connection with a Change of
Control . If on or
within six (6) months following a Change of Control,
(i) Executive’s employment is terminated by the Company
(or any parent, subsidiary or successor of the Company) without
Cause or (ii) Executive resigns for Good Reason, and Executive
signs and does not revoke the release of claims required by
Section 5, Executive will receive the following severance
benefits from the Company:
(i)
Severance Payment
. Executive will receive a
lump sum cash payment equal to six (6) months of the
Executive’s annual base salary (as in effect immediately
prior to (A) the Change of Control or
(B) Executive’s termination, whichever is
greater).
(ii)
Equity Awards
. Fifty percent (50%) of
Executive’s then outstanding and unvested awards relating to
the Company’s common stock (whether stock options, stock
appreciation rights, shares of restricted stock, restricted stock
units, or otherwise (collectively, the “Equity
Awards”)) as of the date of Executive’s termination of
employment will become vested and will otherwise remain subject to
the terms and conditions of the applicable Equity Award
agreement.
(iii)
Benefits . The Company agrees to reimburse
Executive for premiums paid for the same level of group health
coverage as in effect for Executive on the day immediately
preceding the date of termination; provided, however, that
(1) Executive constitutes a qualified beneficiary, as defined
in Section 4980(B)(g)(1) of the Internal Revenue Code of
1986, as amended (the “Code”); and (2) Executive
elects continuation coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended
(“COBRA”), within the time period prescribed pursuant
to COBRA. The Company will continue to reimburse Executive
for continuation coverage through the earlier of (A) the date
that is six (6) months following his or her termination, or
(B) the date upon which Executive and Executive’s
eligible dependents become covered under similar plans.
Executive will thereafter be responsible for the payment of COBRA
premiums (including, without limitation, all administrative
expenses) for the remaining COBRA period. COBRA
reimbursements shall be made by the Company to Executive consistent
with the Company’s normal expense reimbursement policy,
provided that Executive submits documentation to the Company
substantiating his or her payments for COBRA coverage.
(b)
Timing of Severance
Payments . Subject
to Section 4(g) below, the Company will pay the severance
payments to which Executive is entitled pursuant to
Section 4(a)(i) above in cash and in full, within ten
(10) calendar days after the date of the termination of
Employee’s employment as provided in
Section 4(a) or, if later, on the date the release of
claims required pursuant to Section 5 of this Agreement
becomes effective. If Executive should die before all
severance amounts have been paid, such
unpaid amounts will be paid in a lump-sum
payment (less any withholding taxes) to Executive’s
designated beneficiary, if living, or otherwise to the personal
representative of Executive’s estate.
(c)
Voluntary Resignation;
Termination For Cause . If Executive’s employment with the
Company terminates (i) voluntarily by Executive (except upon a
termination for Good Reason on or within six (6) months
following a Change of Control) or (ii) for Cause by the
Company (or any parent or subsidiary of 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 or Equity
Award agreements.
(d)
Disability; Death
. If the Company terminates
Executive’s employment as a result of Executive’s
Disability (as defined herein), or Executive’s employment
terminates due to his or her 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 or Equity Award
agreements.
(e)
Termination Apart from Change of
Control . In the
event Executive’s employment is terminated for any reason,
either prior to the occurrence of a Change of Control or after the
six (6) month period following a Change of Control, then
Executive will be entitled to receive severance and any other
benefits only as may then be established under the Company’s
existing written severance and benefits plans and practices or
pursuant to other written agreements with the Company, including,
without limitation, any Employment Agreement or Equity Award
agreement.
(f)
Exclusive Remedy
. In the event of a
termination of Executive’s employment on or within six
(6) months following a Change of Control, 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 or
contract, in equity, or under this Agreement. Executive will
be entitled to no benefits, compensation or other payments or
rights upon termination of employment other than those benefits
expressly set forth in this Section 4, except as may be
provided in any Equity Award agreement.
(g)
Section 409A
.
(i)
Distributions
. Notwithstanding anything to
the contrary in this Agreement, no Deferred Compensation Separation
Benefits (as defined below) payable under this Agreement will be
considered due or payable until the Executive has incurred a
“separation from service” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended
and the final regulations and any guidance promulgated thereunder
(together, “Section 409A”). If Executive is
a “specified employee” within the meaning of
Section 409A at the time of Executive’s termination
(other than due to Executive’s death), and the payment of any
portion of the severance payments under 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 result in the imposition of
additional tax under Section 409A if paid to Executive on or
within the six (6) month period following Executive’s
termination, then the portion of the Deferred Compensation
Separation Benefits that would cause the imposition of additional
tax under Section 409A will accrue during such six
(6) month period and will 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. All
subsequent payments, if any, will be payable in accordance with the
payment schedule applicable to each payment or benefit.
Notwithstanding anything herein to the contrary, if Executive dies
following his or her termination of employment but prior to the six
(6) month anniversary of his or her date of termination, then
any payments delayed in accordance with this paragraph will be
payable in a lump sum (less applicable withholding taxes) to
Executive’s estate as soon as administratively practicable
after the
date of Executive’s death and all other
Deferred Compensation Separation Benefits will be payable in
accordance with the payment schedule applicable to each payment or
benefit.
(ii)
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.
5.
Conditions to Receipt of
Severance; No Duty to Mitigate .
(a)
Separation Agreement and Release
of Claims . The
receipt of any severance or other benefit
