Exhibit 10.17
RIVERBED TECHNOLOGY,
INC.
AMENDED AND RESTATED CHANGE IN
CONTROL SEVERANCE AGREEMENT
This Amended and Restated Change in
Control Severance Agreement (the “Agreement”) is made
and entered into by and between Randy S. Gottfried
(“Executive”) and Riverbed Technology, Inc. (the
“Company”), effective as of the latest date set forth
by the signatures of the parties hereto below (the “Effective
Date”). This Agreement amends and supersedes the prior
version of this agreement executed on or about May 1, 2008 in its
entirety.
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 in control. The Compensation
Committee of the Board of Directors of the Company (the
“Committee”) recognizes that such consideration can be
a distraction to Executive and can cause Executive to consider
alternative employment opportunities. The Committee 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 a Change in Control of the
Company.
2. The Committee 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 upon a
Change in Control for the benefit of its stockholders.
3. The Committee believes that it is
imperative to provide Executive with certain severance benefits
upon Executive’s termination of employment following a Change
in Control. These benefits will provide Executive with enhanced
financial security and incentive and encouragement to remain with
the Company notwithstanding the possibility of a Change in
Control.
4. Certain capitalized terms used in
the Agreement are defined in Section 5
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 not terminate until 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. If Executive’s employment terminates for any reason
other than for the reasons specified herein during the period that
is on or within twelve (12) months after a Change in Control
as provided herein, Executive will not be entitled to any payments,
benefits, damages, awards or compensation other than the payment of
accrued but unpaid wages, as required by law, and any unreimbursed
reimbursable expenses or pursuant to written agreements with the
Company, including equity award agreements.
3. Severance Benefits
.
(a) Termination without Cause or
Resignation for Good Reason in Connection with a Change in
Control . If the Company terminates Executive’s
employment with the Company without Cause or if Executive resigns
from such employment for Good Reason, and such termination or
resignation occurs on or within twelve (12) months after a
Change in Control, and Executive signs and does not revoke a
release of claims with the Company in a form reasonably acceptable
to the Company (the “Release”) subject to the
conditions of Section 3(c), then Executive will receive the
following 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 payment of severance equal to one
hundred percent (100%) of Executive’s annual base salary
as in effect immediately prior to Executive’s termination or
resignation date or (if greater) at the level in effect immediately
prior to the Change in Control.
(iii) Bonus Payment .
Executive will receive a lump-sum cash payment in an amount equal
to one hundred percent (100%) of Executive’s full target
bonus for the fiscal year in effect at the date of such termination
or resignation.
(iv) Continued Employee
Benefits . If Executive elects continuation coverage pursuant
to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) for Executive and Executive’s
eligible dependents, within the time period prescribed pursuant to
COBRA, the Company will reimburse Executive for the COBRA premiums
for such coverage (at the coverage levels in effect immediately
prior to Executive’s termination or resignation) until the
earlier of (A) a period of twelve (12) months from the
last date of employment of Executive with the Company. or
(B) the date upon which Executive and/or Executive’s
eligible dependents becomes covered under similar plans. COBRA
reimbursements will be made by the Company to Executive consistent
with the Company’s normal expense reimbursement
policy.
(b) Timing of
Severance Payments . Subject to Section 3(h) below, the
severance payment to which Executive is entitled shall be paid by
the Company to Executive in cash and in full on the sixty-first
(61 st ) day following the employment
termination date or such later date as is required under
Section 3(h). If Executive should die before all amounts have
been paid, such unpaid amounts will be paid in a lump-sum payment
(less any withholding taxes) promptly following such event to
Executive’s designated beneficiary, if living, or otherwise
to the personal representative of Executive’s
estate.
(c) Release Effectiveness .
The receipt of any severance payment or benefits pursuant to
section 3(a) will be subject to Executive signing and not revoking
the Release and
-2-
provided that such Release is effective within
sixty (60) days following the termination of Executive’s
employment. No severance pursuant to such section shall be paid or
provided until the Release becomes effective.
(d) Voluntary Resignation;
Termination for Cause . If Executive’s employment with
the Company terminates (i) voluntarily by Executive (other
than for Good Reason during the period that is on or within twelve
(12) months after a Change in Control) or (ii) for Cause
by the Company, then Executive will 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 written
severance and benefits plans and practices or pursuant to other
written agreements with the Company.
(e) Disability; Death . If
the Company terminates Executive’s employment as a result of
Executive’s Disability, or Executive’s employment
terminates due to his death, then Executive will 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
written severance and benefits plans and practices or pursuant to
other written agreements with the Company.
(f) Termination not in Connection
with a Change in Control . In the event Executive’s
employment is terminated for any reason other than as provided in
Section 3(a), then Executive will be entitled to receive
severance and any other benefits only as may then be established
under the Company’s then existing written severance and
benefits plans and practices or pursuant to other written
agreements with the Company.
(g) Exclusive Remedy . In the
event of a termination of Executive’s employment as set forth
in Section 3(a) of this Agreement, the provisions of
Section 3, as applicable, are intended to be and are exclusive
and in lieu of any other rights or remedies to which Executive or
the Company may otherwise be entitled, whether at law, tort or
contract, in equity, or under this Agreement (other than the
payment of accrued but unpaid wages, as required by law, and any
unreimbursed reimbursable expenses). Executive will be entitled to
no benefits, compensation or other payments or rights upon a Change
in Control or a termination of employment following a Change in
Control other than those benefits expressly set forth in
Section 3 of this Agreement or pursuant to written agreements
with the Company, including equity award agreements.
(h) Section 409A
.
(i) Notwithstanding any provision to
the contrary herein, no Deferred Compensation Separation Payments
(as defined below) that becomes payable under this Agreement by
reason of Executive’s termination of employment with the
Company (or any successor entity thereto) will be made unless such
termination of employment constitutes a “separation from
service” within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”),
and any final regulations and Internal Revenue Service guidance
promulgated thereunder (“Section 409A”). Further, if
Executive is a “specified employee” of the Company (or
any successor entity thereto) within the meaning of
Section 409A on the date of Executive’s termination of
employment (other than a termination of employment due to death),
then the severance payable to Executive, if any, under this
Agreement, when considered together with any other severance
payments or separation benefits that are considered deferred
compensation under Section 409A
-3-
(together the “Deferred Compensation
Separation Payments”) that are payable within the first six
(6) months following Executive’s termination of
employment, shall be delayed until the first payroll date that
occurs on or after the date that is six (6) months and one
(1) day after the date of Executive’s termination of
employment, when they shall be paid in full arrears. All subsequent
Deferred Compensation Separation Payments, if any, will be paid in
accordance with the payment schedule applicable to each payment or
benefit. Notwithstanding anything herein to the contrary, if
Executive dies following his termination but prior to the six
(6) month anniversary of his termination, then any payments
delayed in accordance with this paragraph will be payable in a lump
sum as soon as administratively practicable after the date of
Executive’s death and all other Deferred Compensation
Separation Payments will be payable in accordance with the payment
schedule applicable to each payment or benefit. Each payment and
benefit payable under this Agreement is intended to constitute a
separate payment far purposes of Section 1.409A-2(b)(2) of the
Treasury Regulations.
(ii) Any amounts paid under this
Agreement that satisfy the requirements of the “short-term
deferral” rule set forth in Section 1.409A-1(b)(4) of the
Treasury Regulations shall not constitute Deferred Compensation
Separation Payments for purposes of clause
(i) above.
(iii) Any amount paid under this
Agreement that qualifies as a payment made as a result of an
involuntary separation from service pursuant to
Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that
do not exceed the Section 409A Limit shall not constitute
Deferred Compensation Separation Payments for purposes of clause
(i) above.
(iv) Any taxable reimbursements
and/or taxable in-kind benefits provided in this Agreement shall be
made or provided in accordance with the requirements of
Section 409A, including: (i) the amount of any such
expense reimbursement or in-kind benefit provided during a taxable
year of Executive shall not affect any expenses eligible for
reimbursement in any other taxable year; (ii) the
reimbursement of an eligible expense shall be made no later than
the last day of Executive’s taxable year that immediately
follows the taxable year in which the expense was incurred; and
(iii) the right to any such reimbursement shall not be subject
to liquidation or exchange for another benefit or
payment.
(v) The foregoing provisions are
intended to comply with the requirements of Section 409A so
that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted
to so comply. The Company and Executive agree to work together in
good faith to consider amendments to this Agreement and to take
such reasonable actions which are necessary, appropriate or
desirable to avoid imposition of any additional tax or income
recognition prior to actual payment to Executive under
Section 409A.
4. Limitation on Payments
.
(a) In the event that the severance
and other benefits provided for in this Agreement or otherwise
payable to Executive (i) constitute “parachute
payments” within the meaning of Section 280G of the Code
and (ii) but for this Section 4, would be subject to the
excise tax imposed by Section 4999 of the Code, then
Executive’s severance benefits under Section 3 will be
either:
(A) delivered in full, or
-4-
(B) delivered as to such lesser
extent which would result in no portion of such benefits being
subject to excise
