EXHIBIT 10.21
NETSUITE INC.
AMENDED AND
RESTATED
SEVERANCE AND CHANGE OF CONTROL
AGREEMENT
This Amended and Restated Severance
and Change of Control Agreement (the “Agreement”) is
made and entered into by and between Timothy Dilley
(“Executive”) and NetSuite Inc. (the
“Company”), effective as of December 24, 2008 (the
“Effective Date”).
RECITALS
1. It is possible that the Company
could terminate Executive’s employment with the Company and
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 considerations 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 such a termination of employment or the 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 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 and with certain
additional benefits upon a Change of Control. These benefits will
provide Executive with enhanced financial security and incentive
and encouragement to remain with the Company.
4. This Agreement is intended to
replace in its entirety the previous Severance and Change of
Control Agreement entered into between the Company and Executive
effective July 1, 2007 (the “Original
Agreement”).
5. Certain capitalized terms used in
the Agreement are defined in Section 6 below.
AGREEMENT
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, the parties hereto agree as
follows:
1. Term of Agreement . This
Agreement will terminate upon the date that all of the obligations
of the parties hereto with respect to this Agreement have been
satisfied.
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 forth in
Section 3, Executive will not be entitled to any payments,
benefits, damages, awards or compensation other than as provided by
this Agreement.
3. Severance Benefits
.
(a) Termination without Cause and
not in Connection with a Change of Control . If the Company (or
any Affiliate) terminates Executive’s employment with the
Company (or any Affiliate), for a reason other than Cause,
Executive becoming Disabled or Executive’s death at any time
other than during the period
commencing three (3) months
before and ending twelve (12) months after a Change of
Control, then, subject to Section 4, Executive will receive
the following severance benefits 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 be paid continuing payments of severance pay at a
rate equal to Executive’s base salary rate, as then in
effect, for twelve (12) months from the date of such
termination of employment, to be paid periodically in accordance
with the Company’s normal payroll policies.
(iii) Pro-Rated Bonus Payment
. Executive will receive a lump-sum severance payment equal to one
hundred percent (100%) of Executive’s target bonus as in
effect for the fiscal year in which Executive’s termination
occurs, pro-rated by multiplying such bonus amount by a fraction,
the numerator of which shall be the number of days from and
including the first day of such fiscal year through and including
the date of Executive’s termination, and the denominator of
which shall be three-hundred and sixty-five (365).
(iv) Equity . All of
Executive’s unvested and outstanding equity awards that would
have become vested had Executive remained in the employ of the
Company for the twelve (12) month period following
Executive’s termination of employment shall immediately vest
and become exercisable as of the date of Executive’s
termination. In addition, with respect to equity awards granted
after July 1, 2007, Executive will have twelve
(12) months following any such termination of employment in
which to exercise any stock options, stock appreciation rights, or
similar rights to acquire Company common stock, but in no event
will such equity award be permitted to be exercised beyond the
earlier of the original maximum term of such equity award or ten
(10) years from the original grant date of such equity
award.
(v) Outplacement Benefits .
If requested by Executive, the Company will pay the expense for
outplacement benefits provided by a service to be determined by the
Company in its discretion for a period of up to twelve
(12) months following Executive’s
termination.
(vi) 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.
(vii) Payments or Benefits
Required by Law . Executive will receive such other
compensation or benefits from the Company as may be required by law
(for example, Title X of the Consolidated Budget
Reconciliation Act of 1985, as amended
(“COBRA”)).
(b) Termination without Cause or
Resignation for Good Reason in Connection with a Change of
Control . If during the period commencing three (3) months
before and ending twelve (12) months after a Change of
Control, (1) Executive terminates his employment with the
Company (or any Affiliate) for Good Reason or (2) the Company
(or any Affiliate) terminates Executive’s employment for
other than Cause, Executive becoming Disabled or Executive’s
death, then, subject to Section 4, 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 a lump-sum severance payment equal to twelve
(12) months 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.
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(iii) Bonus Payment .
Executive will receive a lump-sum severance payment equal to one
hundred percent (100%) of the higher of
(i) Executive’s target bonus as in effect for the fiscal
year in which the Change of Control occurs or
(ii) Executive’s target bonus as in effect for the
fiscal year in which Executive’s termination
occurs.
(iv) Equity . Executive will
be entitled to accelerated vesting as to one hundred percent
(100%) of the then unvested portion of all of
Executive’s outstanding equity awards. In addition, with
respect to equity awards granted after July 1, 2007, Executive
will have twelve (12) months following any such termination of
employment in which to exercise any stock options, stock
appreciation rights, or similar rights to acquire Company common
stock, but in no event will such equity award be permitted to be
exercised beyond the earlier of the original maximum term of such
equity award or ten (10) years from the original grant date of
such equity award.
(v) 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.
(vi) Outplacement Benefits .
If requested by the Executive, the Company will pay the expense for
outplacement benefits provided by a service to be determined by the
Company in its discretion for a period of twelve (12) months
following Executive’s termination.
(vii) Payments or Benefits
Required by Law . Executive will receive such other
compensation or benefits from the Company as may be required by law
(for example, COBRA).
For purposes of Section 3(a)
and (b), if Executive’s employment with the Company or one of
its Affiliates terminates, he will not be determined to have been
terminated without Cause, provided 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 under Section 3(b).
(c) Disability; Death . If
Executive’s employment with the Company (or any Affiliate) is
terminated due to Executive’s becoming Disabled or
Executive’s death, then Executive or Executive’s estate
(as the case may be) will (i) receive the earned but unpaid
base salary through the date of termination of employment,
(ii) receive all accrued vacation, expense reimbursements and
any other benefits due to Executive through the date of termination
of employment in accordance with Company-provided or paid plans,
policies and arrangements, and (iii) not be entitled to any
other compensation or benefits from the Company except to the
extent required by law (for example, COBRA).
(d) Voluntary Resignation;
Termination for Cause . If Executive voluntarily terminates
Executive’s employment with the Company or any Affiliate
(other than for Good Reason during the period that commences three
(3) months before a Change of Control and ends twelve
(12) months after a Change of Control) or if the Company (or
any Affiliate) terminates Executive’s employment with the
Company (or any Affiliate) for Cause, then Executive will
(i) receive his earned but unpaid base salary through the date
of termination of employment, (ii) receive all accrued
vacation, expense reimbursements and any other benefits due to
Executive through the date of termination of employment in
accordance with established Company-provided or paid plans,
policies and arrangements, and (iii) not be entitled to any
other compensation or benefits (including, without limitation,
accelerated vesting of any equity awards) from the Company except
to the extent provided under agreement(s) relating to any equity
awards or as may be required by law (for example,
COBRA).
(e) Exclusive Remedy . In the
event of a termination of Executive’s employment, the
provisions of this Agreement are intended to be and are exclusive
and in lieu of and supersede any other rights or remedies to which
Executive or the Company (or any Affiliate) may otherwise be
entitled, whether at law, tort or contract (including, without
limitation, Executive’s Employment Agreement and Original
Agreement) or in equity. 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
Agreement.
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4. Conditions to Receipt of
Severance
(a) Release of Claims
Agreement . The receipt of any severance payments or benefits
pursuant to this Agreement is subject to Executive signing and not
revoking a separation agreement and release of claims in a form
acceptable to the Company (the “Release”), which must
become effective no later than the sixtieth (60th) day
following Executive’s termination of employment (the
“Release Deadline”), and if not, Executive will forfeit
any right to severance payments or benefits under this Agreement.
To become effective, the Release must be executed by Executive and
any revocation periods (as required by statute, regulation, or
otherwise) must have expired without Executive having revoked the
Release. In addition, in no event will severance payments or
benefits will be paid or provided until the Release actually
becomes effective. In the event the termination occurs at a time
during the calendar year where the Release Deadline could occur in
the calendar year following the calendar year in which
Executive’s termination occurs, then any severance payments
or benefits under the this Agreement that would be considered
Deferred Compensation Separation Benefits (as defined in
Section 4(c)) will be paid on the first payroll date to occur
during the calendar year following the calendar year in which such
termination occurs, or such later time as required by (i) the
payment schedule applicable to each payment or benefit as set forth
in Section 3, (ii) the date the Release becomes
effective, or (iii) Section 4(c).
(b) Non-solicitation .
Executive agrees, to the extent permitted by applicable law, that
in the event the Executive receives severance pay or other benefits
pursuant to Sections 3(a) and (b) above, for the nine
(9) consecutive month period immediately following the date of
Executive’s termination, Executive, as a condition to receipt
of severance pay and benefits under Sections 3(a) and (b), will not
directly or indirectly, solicit, induce, recruit, any employee of
the Company to leave his employment either for Executive or for any
other entity or person. In the event Executive violates the
provisions of this Section 4(b), all severance pay and other
benefits pursuant to Section 3 shall cease
immediately.
The covenant contained in this
Section 4(b) hereof shall be construed as a series of separate
covenants, one for each country, province, state, city or other
political subdivision in which the Company currently engages in its
business or, during the term of this Agreement, becomes engaged in
its business. Except for geographic coverage, each such separate
covenant shall be deemed identical in terms to the covenant
contained in this Section 4(b). If, in any judicial
proceeding, a court refuses to enforce any of such separate
covenants (or any part thereof), then such unenforceable covenant
(or such part) shall be eliminated from this Agreement to the
extent necessary to permit the remaining separate covenants (or
portions thereof) to be enforced. In the event that the provisions
of this Section 4(b) are deemed to exceed the time, geographic
or scope limitations permitted by applicable law, then such
provisions shall be reformed to the maximum time, geographic or
scope limitations, as the case may be, permitted by applicable
law.
(c) Section 409A
.
(i) Notwithstanding anything to the
contrary in this offer, no Deferred Payments (as defined below) or
other severance benefits that otherwise are exempt from
Section 409A (as defined below) pursuant to Treasury
Regulation Section 1.409A-1(b)(9) shall become payable until
Executive has a “
