Exhibit 10.1
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 James Ramsey
(“Executive”) and NetSuite Inc., a Delaware corporation
(the “Company”), effective as August 4, 2009 (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 October 1, 2008 (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, commissions/bonuses under the
Company’s Sales Incentive Plan (“Commissions”),
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 . Subject to the
remaining provisions of this paragraph, 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. If,
however, an outstanding equity award is to vest, and/or the amount
of the award to vest, is to be determined, in part or in whole,
based on the achievement of performance criteria, and the
performance period for achievement of such performance will expire
within the twelve (12) month period following
Executive’s termination of employment, then the equity award
will vest as to the amount of the equity award that would have
vested had Executive remained employed through such twelve
(12) month period and the determination of the achievement of
the performance criteria by the Administrator (with the amount of
the award vesting based upon the extent to which the performance
criteria was so determined to have been achieved). The
settlement
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of any awards that vest pursuant to the
preceding sentence shall take place at the time the Administrator
determines to what extent the performance criteria for the
performance period have been achieved. If the performance period
for achievement of such performance will not expire within the
twelve (12) month period following Executive’s
termination of employment, the award will terminate unvested upon
Executive’s termination and Executive will not be entitled to
any shares or other payment of consideration with respect to the
award.
In addition, with respect to equity
awards granted after the effective date of the Original Agreement,
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, Commissions, 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.
(iii) Bonus Payment .
Executive will receive a lump-sum severance payment equal to one
hundred percent (100%) of the higher of
(x) Executive’s target bonus as in effect for the fiscal
year in which the Change of Control occurs or
(y) Executive’s target bonus as in effect for the fiscal
year in which Executive’s termination occurs.
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(iv) Equity . Subject to the
remaining provisions of this paragraph, 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. If, however, an outstanding equity award is to vest
and/or the amount of the award to vest is to be determined based on
the achievement of performance criteria, then the equity award will
vest as to one hundred percent (100%) of the amount of the
equity award assuming the performance criteria had been achieved at
target levels for the relevant performance period(s).
In addition, with respect to equity
awards granted after the effective date of the Original Agreement,
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)
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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 the 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.
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 (60
th ) 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 twelve
(12) 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.
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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
