Exhibit 10.3
POLYCOM, INC.
AMENDED CHANGE OF CONTROL
SEVERANCE AGREEMENT
This Amended Change of Control
Severance Agreement (the “Agreement”) is made and
entered into by and between Michael R. Kourey (the
“Employee”) and Polycom, Inc., a Delaware Corporation
(the “Company”), effective as of May 13, 2008 (the
“Effective Date”) and amends and restates the Amended
Change of Control Severance Agreement entered into as of
May 10, 2006 by the Employee and the Company.
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 the
Employee and can cause the Employee 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 Employee, 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 the Employee with an incentive to continue his or her
employment and to motivate the Employee 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 the Employee with certain severance
benefits upon the Employee’s termination of employment
following a Change of Control. These benefits will provide the
Employee 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 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 shall 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 the Employee acknowledge that the
Employee’s employment is and shall 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 the Employee (an
“Employment Agreement”). If the Employee’s
employment terminates for any reason, including (without
limitation) any termination prior to a Change of Control, the
Employee shall not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this Agreement or
under his or her Employment Agreement.
3. Agreement to Remain with
the Company for 6 Months Following a Change of Control
. Employee agrees to remain employed with the Company (or its
successor corporation) for a period of six (6) months
following a “Change of Control” (as defined herein)
unless his or her employment terminates due to Employee’s
death, “Disability” (as defined herein), for
“Good Reason” (as defined herein), or is terminated
involuntarily by the Company during such six (6) month
period.
4. Severance Benefits
.
(a) Involuntary Termination
Other than for Cause or Voluntary Termination for Good Reason
Following a Change of Control . If within twenty-four
(24) months following a Change of Control (i) the
Employee terminates his or her employment with the Company (or any
parent or subsidiary of the Company) for Good Reason or
(ii) the Company (or any parent or subsidiary of the Company)
terminates the Employee’s employment for other than Cause, or
(iii) the Employee dies or terminates employment due to
Disability and the Employee, except in the case of death, signs and
does not revoke a standard release of claims with the Company in a
form acceptable to the
Company within the
period required by the release and in no event later than two and
one-half (2 1 / 2 ) months following the end
of the calendar year in which the Employee’s termination of
employment occurs, then the Employee shall receive the following
severance from the Company:
(i) Severance Payment
. The Employee shall be entitled to receive a lump-sum
severance payment (less applicable withholding taxes) equal to 200%
of the Employee’s annual base salary (as in effect
immediately prior to (A) the Change of Control, or
(B) the Employee’s termination, whichever is greater)
plus 200% of the Employee’s target bonus for the fiscal year
in which the Change of Control or the Employee’s termination
occurs, whichever is greater.
(ii) Options; Restricted
Stock . All of the Employee’s then outstanding
options to purchase shares of the Company’s Common Stock (the
“Options”) shall immediately vest and became
exercisable. Additionally, all of the shares of the
Company’s Common Stock then held by the Employee subject to a
Company repurchase right (the “Restricted Stock”) shall
immediately vest and the Company’s right of repurchase with
respect to such shares of Restricted Stock shall lapse. The
Options shall remain exercisable following the termination for the
period prescribed in the respective option agreements.
(iii) Performance Shares .
The Employee will vest in one hundred percent (100%) of the
performance shares subject to his or her performance share awards,
if any, and the payment of such vested performance shares shall be
made as soon as practicable following the date of termination in
accordance with the provisions of the applicable performance share
award, except as otherwise provided herein. For this purpose, if
the Change of Control occurs during the performance period
applicable to a performance share award, the “performance
shares subject to his or her performance share awards” shall
be deemed to be one hundred percent (100%) of the Target
Number of Performance Shares (as set forth in the applicable
performance share award). With respect to performance share awards
granted prior to May 10, 2006, notwithstanding any provision
in this Agreement or the applicable performance share award to the
contrary and to the extent required to avoid imposition of any
additional tax or income recognition under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”),
prior to actual payment to the Employee, the performance shares for
which the vesting would not have otherwise been accelerated under
the terms of the applicable performance share award shall be paid
at the same time or times as if such performance shares had vested
in accordance with the vesting schedule and provisions set forth in
the applicable performance share award.
(iv) Other Awards . With
respect to outstanding awards issued under the Company’s
stock plans other than award types addressed in Sections 4(a)(ii)
and (iii) above, the Employee will immediately vest in and
have the right to exercise such awards, all restrictions will
lapse, and all performance goals or other vesting criteria will be
deemed achieved at target levels and all other terms and conditions
met. Such awards will be paid or otherwise settled as soon as
administratively practicable following the date of termination or,
if later, the date of exercise. Notwithstanding the foregoing, to
the extent required to avoid imposition of any additional tax or
income recognition under Section 409A of the Code, such awards
shall be paid or settled at the same time or times that the awards
otherwise would have been paid or settled in the absence of this
Section 4(a)(iv).
(v) Continued Employee
Benefits . Company-paid health, dental, vision, long-term
disability and life insurance coverage at the same level of
coverage as was provided to such Employee immediately prior to the
Change of Control and at the same ratio of Company premium payment
to Employee premium payment as was in effect immediately prior to
the Change of Control (the “Company-Paid
Coverage”). If such coverage included the
Employee’s dependents immediately prior to the Change of
Control, such dependents shall also be covered at Company
expense. Company-Paid Coverage shall continue until the
earlier of (i) twenty-four (24) months from the date of
termination, or (ii) the date upon which the Employee and his
or her dependents become covered under another employer’s
group health, dental, vision, long-term disability or life
insurance plans that provide Employee and his or her dependents
with comparable benefits and levels of
coverage. Notwithstanding the foregoing, if the Employee is a
“specified employee” (as described in Section 5(f)
below) on the date of the Employee’s termination, continued
coverage under the health, dental, vision, long-term disability and
life insurance plans shall be solely at the expense of the Employee
for the period beginning on the date of the Employee’s
termination and ending six (6) months thereafter. On the date
six (6) months and one (1) day following his or her
termination (or, in the event of his or her death, at such earlier
time as provided in Section 5(f) below), the Company shall
reimburse the Employee for the Company-Paid Coverage portion of
such expense in a lump sum cash payment. Thereafter, Company-Paid
Coverage shall be paid directly by the Company to the applicable
insurer and/or administrator. For purposes of Title
X of the Consolidated Budget
Reconciliation Act of 1985 (“COBRA”), the date of the
“qualifying event” for Employee and his or her
dependents shall be the date upon which the Company-Paid Coverage
terminates.
(b) Timing of Severance
Payments . Subject to Section 4(f) below, the
severance payment to which Employee is entitled pursuant to
Section 4(a)(i) shall be paid by the Company to Employee 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 4(a) of this Agreement becomes
effective. If the Employee should die before all amounts have
been paid, such unpaid amounts shall be paid in a lump-sum payment
(less any withholding taxes) to the Employee’s designated
beneficiary, if living, or otherwise to the personal representative
of the Employee’s estate.
(c) Voluntary Resignation;
Termination for Cause . If the Employee’s employment
with the Company terminates (i) voluntarily by the Employee
other than for Good Reason or Disability or (ii) for Cause by
the Company, then the Employee 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 benefi
