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INTRAWARE, INC.
AMENDED AND RESTATED CHANGE OF CONTROL
SEVERANCE AGREEMENT
This Amended and Restated Change of Control Severance Agreement
(the "Agreement") is made and entered into by and between Wendy
Nieto (the "Officer") and Intraware, Inc. (the "Company"),
effective as of the latest date set forth by the signatures of the
parties hereto below. This Agreement amends and supersedes the
prior version of this agreement executed on or about June 19, 2007
in its entirety.
R E C I T A L S
A. 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 as a means of enhancing stockholder value.
The Board of Directors of the Company (the "Board") recognizes that
such consideration can be a distraction to the Officer and can
cause the Officer 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 the Officer,
notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined below) of the Company.
B. The Board believes that it is in the best interests of the
Company and its stockholders to provide the Officer with an
incentive to continue her employment and to motivate the Officer to
maximize the value of the Company upon a Change of Control for the
benefit of its stockholders.
C. The Board believes that it is imperative to provide the
Officer with certain severance benefits upon Officer's termination
of employment following a Change of Control which provides the
Officer with enhanced financial security and provides incentive and
encouragement to the Officer to remain with the Company
notwithstanding the possibility of a Change of Control.
D. Certain capitalized terms used in the Agreement are defined
in Section 6 below.
The parties hereto agree as follows:
1. Term of Agreement . This Agreement shall terminate
upon the date that all obligations of the parties hereto with
respect to this Agreement have been satisfied.
2. At-Will Employment . The Company and the Officer
acknowledge that the Officer's employment is and shall continue to
be at-will, as defined under applicable law. If the Officer's
employment terminates for any reason, including (without
limitation) any termination prior to the announcement of a Change
of Control, the Officer shall not be entitled to any payments,
benefits,
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damages, awards or compensation except for those payments that
may be available in accordance with the Company's established
employee plans and practices or pursuant to other agreements with
the Company.
3. Severance Benefits .
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(a) Termination In Connection With a Change of Control .
If the Officer's employment terminates as a result of Involuntary
Termination (as defined below), and such termination is within the
period commencing on the Company's public announcement of a
proposed Change of Control (as defined below) and ending on the
earlier of (A) the twelve (12) month period following the
consummation of the proposed Change of Control, or (B) the
Company's public announcement that the proposed Change of Control
will not occur (a "Severance Termination"), then, subject to
Section 5, the Officer shall be entitled to receive the following
severance benefits:
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(1) Severance Payment . A cash payment in an amount equal
to fifty percent (50%) of the Officer's Annual Compensation plus
fifty percent (50%) of the Officer's current year target bonus
award;
(2) Continued Employee Benefits . Reimbursement for one
hundred percent (100%) of premiums paid for Company group health,
dental and vision insurance coverage at the same level of coverage
as was provided to such Officer (and any eligible dependents if the
eligible dependents were covered immediately prior to the Severance
Termination) immediately prior to the Severance Termination,
payable when such premiums are due (provided Officer validly elects
to continue coverage under COBRA) (the "Company-Paid Coverage").
Company-Paid Coverage shall continue until the earlier of (i) six
(6) months from the date of the Involuntary Termination or (ii) the
date that the Officer and her dependents become covered under
another employer's group health, dental and vision insurance plans
that provide Officer and her dependents with comparable benefits
and levels of coverage.
(3) Equity Compensation Accelerated Vesting . All
outstanding stock awards held by Officer which are unvested as of
the Termination Date of Officer's Severance Termination shall
immediately become fully vested and exercisable as of such
Termination Date (but, in no event, shall any stock award become
vested and exercisable as to more than one hundred percent (100%)
of the shares subject to such award). All of Officer's stock
options and stock appreciation rights (including the portion of
such awards which becomes vested pursuant to this Section) shall
remain exercisable for such period of time as is prescribed in the
respective stock option or stock appreciation right agreements.
(4) Timing of Severance Payments . Any severance payment
to which Officer is entitled under Section 3(a)(1) shall be paid by
the Company to the Officer (or to the Officer's successor in
interest, pursuant to Section 7(b)) in cash and in full, not later
than thirty (30) calendar days following the Termination Date,
subject to Sections 9(f) and 9(h) below.
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(b) Voluntary Resignation; Termination For Cause . If the
Officer's employment terminates by reason of the Officer's
voluntary resignation (and is not an Involuntary Termination), or
if the Officer is terminated for Cause, then the Officer shall 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 equity, severance and benefits plans and practices or
pursuant to other agreements with the Company.
(c) Disability; Death . If the Company terminates the
Officer's employment as a result of the Officer's Disability, or
such Officer's employment is terminated due to the death of the
Officer, then the Officer shall 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 agreements with
the Company.
(d) Termination Apart from Change of Control . In the
event the Officer's employment is terminated for any reason, either
prior to the announcement of a Change of Control or after the
twelve (12)-month period following a Change of Control, then the
Officer shall be entitled to receive severance and any other
benefits only as may then be established under the Company's
existing severance and benefits plans and practices or pursuant to
other agreements with the Company.
(e) Change in Officer Status . In the event the Officer
ceases to be an "executive officer" of the Company, for purposes of
Section 401(b) of Regulation S-K under the Securities Exchange Act
of 1934, one hundred eighty (180) or more days prior to any Change
of Control or the Company's public announcement of a proposed
Change of Control, then the Officer shall be entitled to receive
severance and any other benefits only as may then be established
under the Company's existing severance and benefits plans and
practices or pursuant to other agreements with the Company,
provided such change in the Officer's status was at the Officer's
written request or pursuant to a substantial and bona fide change
in the Officer's responsibilities and was not initiated by the
Company for the purpose of avoiding the Company's obligations
hereunder.
3. Attorney Fees, Costs and Expenses . The Company shall
reimburse Officer for the reasonable attorney fees, costs and
expenses incurred by the Officer in connection with any action
brought by Officer to enforce her rights hereunder, provided the
Officer prevails on at least one material issue in such
dispute.
4. Limitation on Payments .
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(a) In the event that the severance and other benefits provided
for in this Agreement or otherwise payable to the Officer
(i) constitute "parachute payments" within the meaning of
Section 280G of the Code and (ii) but for this Section 5,
would be subject to the excise tax imposed by Section 4999 of the
Code, then the Officer's severance benefits under
Section 3(a)(1) shall be either
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whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the excise tax
imposed by Section 4999, results in the receipt by the Officer on
an after-tax basis, of the greatest amount of severance benefits,
notwithstanding that all or some portion of such severance benefits
may be taxable under Section 4999 of the Code. Any taxes due under
Section 4999 shall be the responsibility of the Officer.
(b) If a reduction in the payments and benefits that would
otherwise be paid or provided to the Officer under the terms of
this Agreement is necessary to comply with the provisions of
Section 5(a), the Officer shall be entitled to select which
payments or benefits will be reduced and the m
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