EXHIBIT 10.1
SEAGATE TECHNOLOGY
EXECUTIVE OFFICER SEVERANCE AND
CHANGE IN CONTROL (CIC) PLAN
SECTION 1.
INTRODUCTION.
THE SEAGATE TECHNOLOGY EXECUTIVE
OFFICER SEVERANCE AND CHANGE IN CONTROL (CIC) PLAN
(the “ Plan ” or
“ Severance and CIC Plan ”) was approved by the
Board of Directors of SEAGATE TECHNOLOGY (the “
Company ”) on August 21, 2008 to be effective as
of September 1, 2008. The purpose of the Plan is to provide
for the payment of severance benefits to certain eligible executive
officers of the Company in the event their employment with the
Company is terminated involuntarily, as provided herein, and to
encourage such officers to continue as employees of the Company in
the event of a Change in Control (as defined herein). Except as
otherwise stated herein, this Plan shall supersede any severance
benefit plan, policy or practice previously maintained by the
Company (including, without limitation, the provisions of any
employment agreement between any Eligible Officer and the Company).
This Plan document also is the Summary Plan Description for the
Plan.
SECTION 2. ELIGIBILITY FOR
BENEFITS.
(a) General Rules.
Subject to the requirements set
forth in this Section, the Company will grant severance benefits
under the Plan to each Eligible Officer.
(i) “Potential Eligible
Officers” are all
officers of the Company with the title of vice president or more
senior selected to participate in this Plan as indicated in the
Benefits Schedules attached hereto. An “ Eligible
Officer ” is any Potential Eligible Officer, other than
those excluded under this Section 2, whose employment with the
Company is either (A) voluntarily terminated for Good Reason
or (B) involuntarily terminated for a reason other than Cause
(collectively, a “ Termination Event ”) and in
connection with such Termination Event is designated by the Company
as an Eligible Officer. Additionally, an Eligible Officer shall be
eligible for additional benefits under this Plan if the Termination
Event occurs during the Change in Control Period. An Eligible
Officer who is involuntarily terminated for Cause shall not be
eligible for benefits under this Plan.
(ii) In order to be eligible to receive benefits
under the Plan, in addition to meeting the requirements of an
“Eligible Officer” set forth in Section 2(a)(i)
above, an Eligible Officer must execute (A) a general waiver
and release on the form provided by the Company within 60 days of
the Eligible Officer’s receipt thereof and (B) an
agreement containing certain covenants on the form provided by the
Company and covering the matters set forth in Section 6 of
this Plan, the scope and applicability of which covenants shall be
determined by the Plan Administrator in its sole discretion
(collectively, the “ Release and Covenant Documents
”).
(iii) Any Termination Event that triggers the payment
of benefits under this Plan must occur during the term of this Plan
as specified in Section 9(b); provided that in any
event eligibility for benefits shall continue for 24 months
following the effective date of a Change in Control which occurs
during such period.
(b) Exceptions.
A Potential Eligible Officer who
otherwise is an Eligible Officer will not receive benefits under
the Plan in any of the following circumstances:
(i) The Eligible Officer is involuntarily terminated
for any reason other than a reason specified in
Section 2(a)(i).
(ii) The Eligible Officer voluntarily terminates
employment with the Company for a reason other than Good Reason or
for no reason. Voluntary terminations include, but are not limited
to, death, Disability, resignation, retirement, or failure to
return from a leave of absence on the scheduled date.
SECTION 3.
DEFINITIONS.
Capitalized terms used in this Plan,
unless defined elsewhere in this Plan, shall have the following
meanings:
(a) Beneficial Owner
means the definition given in Rule
13d-3 promulgated under the Exchange Act.
(b) Board means the Board of Directors of the
Company.
(c) Cause means (i) an Eligible Officer’s
continued failure to substantially perform the material duties of
his office (other than as a result of total or partial incapacity
due to physical or mental illness), (ii) embezzlement or theft
by an Eligible Officer of the Company’s property,
(iii) the commission of any act or acts on an Eligible
Officer’s part resulting in the conviction of such Eligible
Officer of a felony under the laws of the United States or any
state, (iv) an Eligible Officer’s willful malfeasance or
willful misconduct in connection with such Eligible Officer’s
duties to Company or any other act or omission which is materially
injurious to the financial condition or business reputation of the
Company or any of its subsidiaries or affiliates, or (v) a
material breach by an Eligible Officer of any of the material
provisions of (A) this Plan, (B) any non-compete,
non-solicitation or confidentiality provisions to which such
Eligible Officer is subject or (C) any policy of the Company
to which such Eligible Officer is subject. However, no termination
shall be deemed for Cause under clause (i), (iv) or
(v) unless the Eligible Officer is first given written notice
by the Company of the specific acts or omissions which the Company
deems constitute grounds for a termination for Cause, is provided
with at least 30 days after such notice to cure the specified
deficiency and fails to substantially cure such deficiency within
such time frame to the satisfaction of the Plan
Administrator.
(d) Change in Control means the occurrence of
any of the following events:
(i) The sale, exchange, lease or
other disposition of all or substantially all of the assets of the
Company to a person or group of related persons, as such terms are
defined or described in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act, that will continue the business of the Company in the
future;
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(ii) A merger, consolidation or
similar transaction involving the Company and at least one other
entity in which the voting securities of the Company owned by the
shareholders of the Company immediately prior to such merger,
consolidation or similar transaction do not represent, after
conversion if applicable, more than fifty percent (50%) of the
total voting power of the surviving controlling entity outstanding
immediately after such merger, consolidation or similar
transaction; provided that any person who (1) was a Beneficial
Owner of the voting securities of the Company immediately prior to
such merger, consolidation or similar transaction, and (2) is
a Beneficial Owner of more than 20% of the securities of the
Company immediately after such merger, consolidation or similar
transaction, shall be excluded from the list of “shareholders
of the Company immediately prior to such merger, consolidation or
similar transaction” for purposes of the preceding
calculation;
(iii) Any person or group is or
becomes the Beneficial Owner, directly or indirectly, of more than
50% of the total voting power of the voting stock of the Company
(including by way of merger, consolidation or
otherwise);
(iv) During any period of two
consecutive years, individuals who at the beginning of such period
constituted the Board (together with any new directors whose
election by such Board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of
the directors of the Company then still in office, who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board then in office;
or
(v) A dissolution or liquidation of
the Company.
(e) Change in Control
Period means the period
six months prior to and 24 months following the effective date of a
Change in Control.
(f) Code means the Internal Revenue Code of 1986, as
amended.
(g) Company
means Seagate Technology, an
exempted limited liability company incorporated under the laws of
the Cayman Islands, and any successor as provided in
Section 9(d) hereof.
(h) Disability means the physical or mental
incapacitation such that for a period of six consecutive months or
for an aggregate of nine months in any 24-month consecutive period,
an Eligible Officer is unable to substantially perform his or her
duties. Any question as to the existence of that Eligible
Officer’s physical or mental incapacitation as to which the
Eligible Officer or the Eligible Officer’s representative and
the Company cannot agree shall be determined in writing by a
qualified independent physician mutually acceptable to the Eligible
Officer and the Company. If the Eligible Officer and the Company
cannot agree as to a qualified independent physician, each shall
appoint such a physician and those two physicians shall select a
third who shall make such determination in writing. The
determination of “Disability” made in writing to the
Company and the Eligible Officer shall be final and conclusive for
all purposes of the benefits under this Plan.
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(i) Exchange Act means the Securities
Exchange Act of 1934, as amended.
(j) Good Reason means an Eligible
Officer’s resignation of his or her employment with the
Company as a result of the occurrence of one or more of the
following actions, which such action or actions remain uncured for
at least 30 days following written notice from such Eligible
Officer to the Company describing the occurrence of such action or
actions and asserting that such action or actions constitute
grounds for a Good Reason resignation which notice must be provided
by the Eligible Officer no later than 90 days after the initial
existence of such condition, provided that such resignation occurs
no later than 60 days after the expiration of the cure period:
(i) without such Eligible Officer’s express written
consent, any material diminution in the level of such Eligible
Officer’s authority or duties; (ii) without such
Eligible Officer’s express written consent, a reduction of
10% or more in the level of the base salary or employee benefits to
be provided to such Eligible Officer, other than a reduction
implemented with the consent of such Eligible Officer or a
reduction that is equivalent to reduction in base salaries and/or
employee benefits, as applicable, imposed on all other executives
of the Company at a similar level within the Company;
(iii) the relocation of such Eligible Officer to a principal
place of employment that increases such Eligible Officer’s
one-way commute by more than 40 miles from such Eligible
Officer’s current principal place of employment, without such
Eligible Officer’s express written consent; or (iv) the
failure of any successor to the business of the Company or to
substantially all of the assets and/or business of the Company to
assume the Company’s obligations under this Plan as required
by Section 9(d).
(k) IRS means the Internal Revenue
Service.
(l) Pay means the Eligible Officer’s
monthly base pay at the rate in effect on the Termination Date (or
if greater, the last regularly scheduled payroll period immediately
preceding either a Change in Control or termination for Good
Reason, as applicable) and inclusive of the Eligible
Officer’s target bonus level (expressed as a percentage of
base pay) with respect to the fiscal year prior to the Termination
Date. In order to be included as Pay, the target bonus level must
be approved by the Plan Administrator under a bonus plan adopted by
the Company. One-time bonuses paid by the Company that are not paid
under a bonus plan adopted by the Company shall be excluded from
Pay for purposes of this Plan. Examples of such one-time bonuses
are sign-on bonuses or special recognition bonuses.
(m) Plan means this Seagate Technology
Executive Officer Severance and CIC Plan.
(n) Severance Period
means the number of months of Pay,
rounded to the nearest whole month, used for calculating the
Eligible Officer’s cash severance benefits, as specified in
the Benefits Schedules attached hereto. Notwithstanding the
foregoing, in the event that the Eligible Officer becomes eligible
to receive additional benefits in connection with the occurrence of
a Change in Control, the Severance Period shall be twelve
months.
(o) Termination Date
means the last date on which the
Eligible Officer is in active employment status with the
Company.
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SECTION 4. AMOUNT OF BENEFIT.
Severance benefits payable under the
Plan are as follows:
(a) Eligible Officers will receive the benefits
described in Sections 7 and 8 of the Plan and in the Benefit
Schedules attached hereto.
(b) Notwithstanding any other provision of the Plan
to the contrary, any benefits payable to an Eligible Officer under
this Plan shall be in lieu of any severance benefits payable by the
Company to such individual under any other arrangement covering the
individual, unless expressly otherwise agreed to by the Company in
writing. In the event that the Eligible Officer is entitled to
receive severance benefits under any agreement or contract with the
Company or any plan, policy, program or other arrangement adopted
or established by the Company (“ Other Benefits
”), any severance benefits payable hereunder shall be reduced
by the Other Benefits.
SECTION 5. TIME OF PAYMENT AND
FORM OF BENEFIT; INDEBTEDNESS.
(a) Benefits under this Plan shall be paid in a lump
sum unless otherwise determined by the Plan Administrator in its
sole discretion. The Company reserves the right to determine the
timing of such payments, provided , however , that no
payment shall be made under this Plan prior to 10 days following
the last day of any waiting period or revocation period as required
by applicable law in order for the general waiver and release
required by Section 2(a)(ii) of this Plan to be effective,
and provided further that, unless otherwise determined by
the Plan Administrator in its sole discretion and subject to
Section 16 of this Plan, all payments under this Plan will be
completed within 30 days of the later of (i) an Eligible
Officer’s Termination Date and (ii) the date on which
the Company receives the executed Release and Covenant
Documents.
(b) If an Eligible Officer is indebted to the
Company at his or her Termination Date, the Company reserves the
right to offset any severance payments under the Plan by the amount
of such indebtedness. In no event shall payment of any Plan benefit
be made prior to the Eligible Officer’s Termination
Date.
SECTION 6. ELIGIBLE OFFICER
COVENANTS.
Severance benefits payable under the
Plan may be subject to the following covenants made by each
Eligible Officer (the “ Covenants ”), the scope
and applicability of which covenants shall be determined by the
Plan Administrator in its sole discretion:
(a) Non-Competition. During the Severance
Period, an Eligible Officer will not directly or
indirectly:
(i) engage in any business that competes with the
business of the Company, or its subsidiaries (including, without
limitation, any businesses which the Company or its subsidiaries
have specific plans to conduct in the future and as to which such
Eligible Officer is aware of such planning) in any geographical
area which is within 100 miles of any geographical area in which
the Company or its subsidiaries conduct such business (a “
Competitive Business ”);
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(ii) enter the employ of, or render any services to,
any person or entity (or any division of any person or entity) who
or which engages in a Competitive Business;
(iii) acquire a financial interest in, or otherwise
become actively involved with, any Competitive Business, directly
or indirectly, as an individual, partner, shareholder, officer,
director, principal, agent, trustee or consultant; or
(iv) interfere with, or attempt to interfere with,
business relationships (whether formed before, on or after the date
of this Agreement) between the Company or any of its subsidiaries
and customers, clients, suppliers, partners, members or investors
of the Company or its subsidiaries.
Notwithstanding anything to the
contrary in this Plan, an Eligible Officer may, directly or
indirectly own, solely as a passive investment, securities of any
person engaged in the business of the Company or its subsidiaries
which are actively traded on a public securities market (including
the OTCBB and similar over-the-counter market) if such Eligible
Officer (i) is not a controlling person of, or a member of a
group which controls, such person and (ii) does not, directly
or indirectly, own 5% or more of any class of such actively traded
securities of such person.
(b) Non-Solicitation of Clients. During the
Severance Period, an Eligible Officer will not, whether on such
Eligible Officer’s own behalf or on behalf of or in
conjunction with any person, company, business entity or other
organization whatsoever, directly or indirectly solicit or assist
in soliciting in competition with the Company, the business of any
client or prospective client:
(i) with whom such Eligible Officer had personal
contact or dealings on behalf of the Company during the one year
period preceding such Eligible Officer’s Termination
Date;
(ii) with whom employees reporting to such Eligible
Officer have had personal contact or dealings on behalf of the
Company during the one year immediately preceding such Eligible
Officer’s Termination Date; or
(iii) for whom such Eligible Officer had direct or
indirect responsibility during the one year immediately preceding
such Eligible Officer’s Termination Date.
(c) Non-Solicitation of Employees. During the
Severance Period, an Eligible Officer will not, whether on such
Eligible Officer’s own behalf or on behalf of or in
conjunction with any person, company, business entity or other
organization whatsoever, directly or indirectly:
(i) solicit or encourage any employee of the Company
or its subsidiaries to leave the employment of the Company or its
subsidiaries; or
(ii) encourage to cease to work with the Company or
its subsidiaries any consultant then under contract with the
Company or its subsidiaries.
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(d) During the term of an Eligible Officer’s
employment with the Company, such Eligible Officer will have access
to and become acquainted with the Company’s and its
affiliates’ confidential and proprietary information,
including but not limited to, information or plans regarding the
Company’s and its affiliates’ customer relationships,
personnel or sales, marketing and financial operations and methods,
trade secrets, formulas, devices, secret inventions, processes and
other compilations of information, records and specifications
(collectively, “ Proprietary Information ”).
During the Severance Period, an Eligible Officer shall not disclose
any of the Company’s or its affiliates’ Proprietary
Information, directly or indirectly, or use it in any way except in
the course of performing services for the Company and its
affiliates, as authorized in writing by the Company or as required
to be disclosed by applicable law. All files, records, documents,
computer-recorded information, drawings, specifications, equipment
and similar items relating to the business of the Company or its
affiliates, whether prepared by an Eligible Officer or otherwise
coming into such Eligible Officer’s possession, shall remain
the exclusive property of the Company or its affiliates, as the
case may be. Notwithstanding the foregoing, Proprietary Information
shall not include information that is or becomes generally public
knowledge other than as a result of a breach of this
Section 6(d) or any obligation that the Eligible Officer has
to protect the confidentiality of the Proprietary Information of
the Company and its affiliates.
(e) It is expressly understood and agreed that
although each Eligible Officer and the Company consider the
restrictions contained in the Covenants to be reasonable, if a
final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction
contained in the Covenants is an unenforceable restriction against
an Eligible Officer, for which injunctive relief is unavailable,
the provisions of the Covenants shall not be rendered void but
shall be deemed amended to apply as to such maximum time and
territory and to such maximum extent as such court may judicially
determine or indicate to be enforceable. Furthermore, such a
determination shall not limit the Company’s ability to cease
providing payments or benefits during the remainder of any
Severance Period, if applicable, unless a court of competent
jurisdiction has expressly declared that action to be unlawful.
Alternatively, if any court of competent jurisdiction finds that
any restriction contained in the Covenants is unenforceable, and
such restriction cannot be amended so as to make it enforceable,
such finding shall not affect the enforceability of any of the
other restrictions contained in the Covenants or other provisions
of this Plan.
(f) Benefits under this Plan will terminate
immediately if
