|
Exhibit 10.1
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 Robert C.
Hagerty (the "Employee") and Polycom, Inc., a Delaware corporation
(the "Company"), effective as of December 19, 2008 (the
"Effective Date") and amends and restates the Amended Change of
Control Severance Agreement entered into as of May 20, 2008,
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 transaction. 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 7 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 or severance 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 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. Termination of Employment . In the event
Employee’s employment with the Company terminates for any
reason governed by this Agreement, Employee will be entitled to
any: (a) unpaid base salary accrued up to the effective date
of termination, (b) unpaid, but earned and accrued annual
incentive for any completed fiscal year as of his or her
termination of employment, (c) pay for accrued but unused
vacation, (d) benefits or compensation as provided under the
terms of any employee benefit and compensation agreements or plans
applicable to Employee, (e) unreimbursed business expenses
required to be reimbursed to Employee, and (f) rights to
indemnification Employee may have under the Company’s
Articles of Incorporation, Bylaws, or separate indemnification
agreement, as applicable. In addition, if the termination is by the
Company other than for "Cause" (as defined
herein), Employee terminates his or her
employment with the Company (or any parent or subsidiary of the
Company) for Good Reason or Employee dies or terminates employment
due to Disability, Employee may be entitled to the amounts and
benefits specified in Section 5.
5. 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 reasonably acceptable to the
Company within the period required by the release and in no event
later than sixty (60) days following the Employee’s
termination of employment, inclusive of any revocation period set
forth in the release of claims, 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 5(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 5(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 (A) twenty-four
(24) months from the date of termination, or (B) 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. Company-Paid Coverage shall be paid directly by the
Company to the applicable insurer and/or administrator when
premiums for such coverage are due in accordance with the terms and
conditions of the applicable insurance policy or administrative
services agreement. Notwithstanding the foregoing, if the Employee
is a "specified employee" (as described in Section 5(f) below)
on the date of the Employee’s "separation from service" (as
described in Section 5(f) below), continued coverage under the
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 separation and ending six (6) months
thereafter. On the date six (6) months and one (1) day
following his or her separation (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 under the long-term
disability and life insurance plans shall be paid directly by the
Company to the applicable insurer and/or administrator when
premiums for such coverage are due in accordance with the terms and
conditions of the applicable insurance policy or administrative
services agreement. 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 5(f) below, if Employee’s employment ends on or
before October 15 of a calendar year, the severance payment to
which Employee is entitled pursuant to Section 5(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 5(a) or, if
later, on the date the release of claims required pursuant to
Section 5(a) of this Agreement becomes effective, but in no
event shall payment be made later than December 31 of that
calendar year. If the Employee’s employment ends after
October 15 of a calendar year, the severance payment to which
Employee is entitled pursuant to Section 5(a)(i) shall be paid
by the Company to Employee in cash and in full, on the later of
(i) the first payroll date in the calendar year next following
the calendar year in which the Employee’s employment has
ended or (ii) the first payroll date following the date the
Employee’s release of claims becomes effective, subject to
Section 5(f) below. If the Employee should die before all
amounts have been paid, such unpaid amounts shall be paid in a
lump-sum payment (less any applicable withholding taxes) to the
Employee’s designated beneficiary, if living, or otherwise to
the personal representative of the Employee’s estate, as
described in Section 5(f) below.
(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 due to 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 benefits
plans and practices or pursuant to other written agreements with
the Company, including, without limitation, any Employment
Agreement.
(d) Termination Apart from Change of Control
. In the event the Employee’s employment is terminated
for any reason, either prior to the occurrence of a Change of
Control or after the twenty-four (24)–month period following
a Change of Control, then the Employee shall be entitled to receive
severance and any other benefits only as may then be established
under the Company’s existing written severance and benefits
plans and practices or pursuant to other written agreements with
the Company, including, without limitation, any Employment
Agreement.
(e) Exclusive Remedy . In the event of a
termination of Employee’s employment within twenty-four
(24) months following a Change of Control, the provisions of
this Section 5 are intended to be and are exclusive and in
lieu of any other rights or remedies to which the Employee or the
Company may otherwise be entitled, whether at law, tort or
contract, in equity, or under this Agreement. The Employee
shall be entitled to no benefits, compensation or other payments or
rights upon termination of employment following a Change in Control
other than those benefits expressly set forth in this
Section 5.
(f) Section 409A .
(i) Six-Month Delay . Notwithstanding anything to the
contrary in this Agreement, no Deferred Compensation Separation
Benefits (as defined below) payable under this Agreement will be
considered due or payable until the Employee has incurred a
"separation from service" within the meaning of Section 409A
of
the Internal Revenue Code of 1986, as amended and
the final regulations and any guidance promulgated thereunder
(together, "Section 409A"). In addition, if the Employee is a
"specified employee" within the meaning of Section 409A at the
time of the Employee’s separation from service (other than
due to death), then the severance benefits payable to the Employee
under this Agreement, if any, and any other seve
| 
