LIONBRIDGE
TECHNOLOGIES, INC.
CHANGE OF CONTROL PLAN
Amended and Restated as of October 31, 2008
The purpose of this Plan is to induce those key executives of
Lionbridge Technologies,
Inc. (the “Company”) who are chosen to participate in
the Plan (“Executives”) to continue their employment
with the Company notwithstanding any threatened or actual change of
control of the Company.
1. Term . The term during which this Plan
(the “Plan”) will be in effect (the “Term of the
Plan”) originally began on November 2, 2006 (the
“Effective Date”) and will remain in effect until
terminated by a vote of the majority of the Board of Directors or
its Nominating or Compensation Committee. If a Change of Control
(as defined in Exhibit A) occurs during the Term of the Plan,
the Plan will remain in effect until all obligations hereunder have
been discharged.
2. Participation . The Nominating and
Compensation Committee of the Board of Directors of the Company
(the “Committee”) will select Executives to participate
in the Plan upon recommendation of the Chief Executive Officer of
the Company. The Executives whose names or positions are set forth
in attached Schedules I and II will become participants on the
Effective Date. If and when participants are added or deleted, the
Schedules will be appropriately amended. Each participant in the
Plan will enter into an agreement with the Company containing a
description of such individual’s rights under this Plan.
3. Termination of Employment; Severance
Benefits .
3.1 Employment Protection Period . If an
Executive’s employment terminates during that
Executive’s “Employment Protection Period,” the
Company and such Executive will be required to discharge the
applicable obligations described in this Section 3 and
elsewhere in the Plan. The Employment Protection Period of an
Executive will begin on the date of any Change of Control that
occurs during the Term of the Plan and will end, in the case of an
Executive whose name or position is listed on Schedule I (a
“Tier I Executive”), on the 18-month anniversary of the
Change of Control; and in the case of an Executive whose name or
position is listed on Schedule II (a “Tier II Executive
), on the first anniversary of the Change of Control. If an
Executive’s employment terminates at any time other than
during his or her Employment Protection Period, the Executive will
have no rights under this Plan, and the Plan will cease to be
effective as to that person.
3.2 Termination upon Death or Disability . If an
Executive ceases to be an employee of the Company as a result of
death or disability, the Company will have no further obligation or
liability to the Executive under this Plan, but nothing in the Plan
is intended to interfere with the rights of the Executive and his
or her family or beneficiaries under other applicable plans,
policies or arrangements of the Company. For purposes of this
Section 3.2, the Company may terminate an Executive’s
employment for “disability” if, because of physical or
mental incapacity, the Executive is unable for a period of 90
consecutive days to perform each of the material duties of his or
her position, and it is determined by a qualified physician chosen
by the Company and approved by the Executive or his or her
conservator to be probable that such incapacity will continue for
an additional 60 consecutive days.
3.3 Termination by the Company for Cause or by an
Executive Without Good
Reason . If the Company terminates an
Executive’s employment for Cause (as
defined in this Section 3.3) or if an Executive terminates his
or her
employment other than for Good Reason (as defined in this
Section 3.3), the Company
will have no further obligation or liability to the Executive under
this Plan.
“Cause” means (a) willful malfeasance or gross
negligence in the performance
by the Executive of his or her duties, resulting in harm to the
Company, (b)
fraud or dishonesty by the Executive with respect to the Company,
or (c) the
Executive’s conviction of a felony.
“Good Reason” means (i) a material reduction in
the Executive’s total compensation, including but not limited
to (a) a reduction of the Executive’s base salary below
the
level in effect immediately prior to the Change of Control without
the
Executive’s prior written consent, (b) a reduction in
the Executive’s target annual bonus opportunity below the
level in effect immediately prior to the Change of Control without
the Executive’s prior written consent,
(c) discontinuation of participation in any compensation plan
that is maintained following the Change in Control in which the
Executive participated immediately prior to the Change of Control
without the Executive’s prior written consent, or
(d) exclusion from participating in compensation programs that
are customarily offered to senior executives, (ii) relocation of
the Executive’s principal place of work to a location more
than 50 miles from its location
immediately prior to the Change of Control or (iii) change in
title or responsibilities below the level in effect immediately
prior to the Change of Control without the Executive’s prior
written consent.
3.4 By the Company Without Cause or By the Executive for
Good Reason .
(a) Entitlement to Severance Benefits . If,
during an Executive’s Employment Protection Period, the
Company terminates the Executive’s employment without Cause,
or if the Executive terminates his or her employment for Good
Reason, the Company
will, subject to Section 4, provide severance benefits to the
Executive as set
forth below in paragraph (b).
(b) Severance Benefits . The benefits to be
provided to the Executive under
this Section 3.4 are as follows:
(i) The Company will pay to the
Executive within 30 days of the termination of employment a
lump-sum cash amount equal to the “applicable
percentage” multiplied by the sum of (a) the
Executive’s annual base salary in effect immediately prior to
the termination (or, if his or her base salary has been reduced
after the Change of Control, the base salary in effect prior to the
reduction) plus (b) the then current target bonus. An
Executive’s “applicable percentage” will be 150%
in the case of Tier I Executives and 100% in the case of Tier II
Executives.
(ii) The Company will also pay to
the each Executive within 30 days of the termination of
employment a pro-rata portion of his or her target bonus for the
year of termination.
(iii) The Company will continue
for the applicable period to provide the Executive with family
medical, disability and life insurance coverage at the level in
effect immediately prior to the Change of Control. To the extent
the Company is unable to provide such benefits to an Executive
under its existing plans and arrangements, it will at the
discretion of the Company either arrange to provide the Executive
with substantially similar benefits upon comparable terms or pay
the Executive cash amounts on a monthly basis equal to the
Executive’s monthly cost of obtaining such benefits. An
Executive’s “applicable period” will be eighteen
months in the case of a Tier I Executive and one year in the case
of a Tier II Executive.
(c) Option Acceleration . Notwithstanding
any contrary provision of plans or arrangements under which they
are granted, upon a Change of Control and irrespective of whether
employment has been terminated (A) 50% of the options to
purchase Company stock held by any Executive will immediately
become exercisable and the remaining 50% of such options will
become exercisable on the earlier of the six month anniversary of
the Change of Control or the date such Executive’s employment
is terminated without Cause or for Good Reason, and (B) all
restricted stock or restricted stock units held by any Executive
under restricted stock plans and arrangements of the Company will
immediately become fully vested.
4. Taxes
4.1 Section 280G. The payments to each
Executive under this Plan shall be made without regard to whether
the deductibility of such payments (or any other “parachute
payments,” as that term is defined in Section 280G of
the Internal Revenue Code of 1986, as amended (the
“Code”), to or for the benefit of such Executive) would
be limited or prec
