Exhibit 10.8
S ECURE C OMPUTING C ORPORATION
C HANGE I N C ONTROL S EVERANCE P LAN
AND
S UMMARY P LAN D ESCRIPTION
As Adopted in January 2008
and
Updated in July 2008
INTRODUCTION.
Secure Computing Corporation (the
“Company”) has established the Secure Computing
Corporation Change in Control Severance Plan (the
“Plan”), effective January 1, 2008, for the
benefit of Eligible Employees of the Company. The Plan is designed
to make certain benefits available to Eligible Employees in the
event of a Change in Control of the Company and to provide certain
severance benefits to Eligible Employees of the Company who are
terminated from employment with the Company (or its successor)
within twelve months following a Change in Control. Please refer to
Schedule 1, Benefits at a Glance, for a description of the benefits
made available under the Plan. Note: Certain benefits
described in this Plan are actually provided through other programs
sponsored by the Company.
The Plan is unfunded, has no trustee
and is administered by the Plan administrator. The Plan is intended
to be an “employee welfare benefit plan” within the
meaning of Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), 29 U.S.C.
¤1002(1), and 29 C.F.R. ¤2510.3-2(b). Please review the
section entitled “Amendment and Termination of the
Plan” regarding the Company’s reservation of future
rights.
This document serves as
both the Plan document and the summary plan
description for the Plan. The legal rights and obligations of any
person having an interest in the Plan are determined solely by the
provisions of this document. Nothing in the Plan will be construed
to give any employee the right to continue in the employment of the
Company.
This Plan supersedes all prior
agreements, arrangements or related communications of the Company
relating to accelerated vesting and severance benefits on a Change
in Control for employees eligible for such coverage, whether formal
or informal, or written or unwritten. Any benefits under the Plan
will be provided to Eligible Employees in lieu of benefits under
any other severance plan or employment agreement. The Plan does not
supersede any prior agreements relating to confidentiality,
assignment of inventions, noncompetition or nonsolicitation, or the
Company’s Code of Business Conduct and Ethics or any
replacement code or policy.
GENERAL
INFORMATION
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1. Plan Name
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Secure
Computing Corporation Change In Control Severance Plan
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2. Plan Number
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503
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3. Employer / Plan
Sponsor
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Secure Computing Corporation, a Delaware
Corporation and following a Change In Control, its
successor.
Secure Computing
Corporation
55 Almaden Boulevard, Suite
500
San Jose, CA 95113
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4. Employer Identification
No.
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52-1637226
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5. Type of Plan
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Welfare Benefit
– Severance Plan
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6. Plan Administrator
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Secure
Computing Corporation, a Delaware Corporation and following a
Change In Control, its successor. The Company may designate Plan
administrator responsibilities to the Board of Directors
Compensation Committee and following a Change in Control, any
successor committee appointed by the successor of the Company to
administer the Plan.
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7. Agent for Service of Legal
Process
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Secure Computing Corporation, a Delaware
Corporation and following a Change In Control, its
successor.
Secure Computing
Corporation
55 Almaden Boulevard, Suite
500
San Jose, CA 95113
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8. Sources of
Contributions
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The Plan is
unfunded and all benefits are paid from the general assets of the
Company.
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9. Type of
Administration
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The Plan is
administered by the Plan administrator with benefits provided in
accordance with the provisions of the Plan document.
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10. Plan Year
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January 1
through December 31
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DEFINITIONS.
“ Base Amount
” means an amount calculated by averaging an Eligible
Employee’s gross income (Box 1 on the Eligible
Employee’s Form W-2) from the Company or its predecessor, or
a related entity, for the five calendar years ending before the
year of the Change in Control. If the Eligible Employee does not
have five years of such employment, then Base Amount means an
amount calculated by averaging an Eligible Employee’s gross
income from the Company or its predecessor, or a related entity,
during the portion of the five year period during which the
Eligible Employee was an employee of the Company or its
predecessor, or a related entity.
“ Base Pay
” means the base salary paid by the Company to an Eligible
Employee without regard to bonuses and other incentive
compensation.
“ Cause ”
means, on or after a Change in Control:
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(i)
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For
Section 16 Officers and Vice Presidents, shall mean the
termination of a Section 16 Officer’s or Vice
President’s employment on account of any of the following
reasons, provided that no act or failure to act by a
Section 16 Officer or Vice President shall be deemed to
constitute “willful misconduct” or “gross
negligence” if done, or omitted to be done, at the
instruction of the Company (or any successor) or in good faith and
with the reasonable belief that the action or omission was in the
best interests of the Company (or any successor):
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(A)
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A
Section 16 Officer or Vice President shall have been convicted
of, or plead nolo contendre to, a felony or crime involving moral
turpitude, in either case causing material harm to the business and
affairs of the Company (or any successor);
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(B)
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A
Section 16 Officer or Vice President engages in gross
negligence or willful misconduct in the performance of his or her
duties to the Company (or any successor) (other than as a result of
disability) that has resulted or is likely to result in substantial
and material damage to the Company (or any successor), after a
demand for substantial performance is delivered to the
Section 16 Officer or Vice President by the Company (or any
successor), which specifically identifies the manner in which the
Section 16 Officer or Vice President has not substantially
performed his or her duties and he or she has been provided with a
reasonable opportunity to cure any alleged gross negligence or
willful misconduct; or
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(C)
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A
Section 16 Officer or Vice President commits any act of fraud
with respect to the Company (or any successor).
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“ Change in
Control ” means an event or occurrence set forth in
any one or more of the following subsections (including, without
limitation, an event or occurrence that constitutes a Change in
Control under one of such subsections but is specifically exempted
from another such subsection):
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(i)
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the acquisition
by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership of any capital stock
of the Company if, after such acquisition, such Person beneficially
owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 50% or more of either (A) the then-outstanding
shares of common stock of the Company (the “Outstanding
Company Common Stock”), or (B) the combined voting power
of the then-outstanding securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for
purposes of this subsection (i), the following acquisitions shall
not constitute a Change in Control: (x) any acquisition by the
Company, or (y) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company;
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(ii)
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the Continuing
Directors (as defined below) do not constitute a majority of the
Board of Directors of the Company (or, if applicable, the board of
directors of a successor corporation to the Company), where the
term “Continuing Director” means at any date a member
of the Board of Directors of the Company (A) who was a member
of the Board of Directors of the Company on the date of the
adoption of this Plan or (B) who was nominated or elected
subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or
election or whose election to the Board of Directors of the Company
was recommended or endorsed by at least a majority of the directors
who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this
clause any individual whose initial assumption of office occurred
as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents, by or on behalf of
a person other than the Board of Directors;
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(iii)
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the consummation of a merger,
consolidation, reorganization, recapitalization or statutory share
exchange involving the Company or a sale or other disposition of
all or substantially all of the
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assets of the Company in one or a
series of transactions (a “Business Combination”),
unless, immediately following such Business Combination the
beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of
the resulting or acquiring corporation in such Business Combination
(which shall include, without limitation, a corporation which as a
result of such transaction owns the Company or substantially all of
the Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred
to herein as the “Acquiring Corporation”);
or
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(iv)
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approval by the
stockholders of the Company of a complete liquidation or
dissolution of the Company.
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“ Code ”
means the Internal Revenue Code of 1986, as amended.
“ Company
” means Secure Computing Corporation.
“ Compensation
Committee ” means a committee of the Board of
Directors which in general, establishes and maintains a
competitive, fair and equitable compensation and benefits policy
for the Company.
“ Disqualified
Individual ” means any individual who is (1) a
Section 16 Officer or, (2) a Vice President who is a
member of the Company’s group consisting of the highest paid
1 percent of the employees of the Company.
“ Eligible
Employee ” means any employee of the Company who:
(1) is either a Section 16 Officer or a Vice President;
and (2) occupies a position identified in Schedule II of this
Plan; provided, however, an Eligible Employee shall not include any
employee of the Company who at any time prior to a Change in
Control entered into a mutual separation and release agreement with
the Company.
“ Good Reason
” means, on or after a Change in Control, a Section 16
Officer or Vice President resigns within sixty days after the
occurrence of any of the following events without the
Section 16 Officer’s or Vice President’s express
written consent:
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(i)
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a reduction in
the Section 16 Officer’s or Vice President’s
annual base salary and/or the Section 16 Officer’s or
Vice President’s target bonus opportunity;
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(ii)
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a material
reduction of the Section 16 Officer’s or Vice
President’s duties that are inconsistent with those for
his/her position immediately prior to the effective date of the
Change in Control;
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(iii)
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a requirement
by the Company (or any successor) that the Section 16 Officer
or Vice President relocates his or her principal office to a
facility more than fifty (50) miles from his or her principal
office immediately prior to the effective date of the Change in
Control;
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“ Health &
Welfare Plan(s) ” refers to plans that are eligible
for COBRA continuation excluding flexible benefit plans.
“ Highest Annual Base
Salary ” means the highest base salary set for an
Eligible Employee by the Company for any year prior to a Trigger
Event. Base salary does not include bonuses and other incentive
compensation.
“ Plan ”
means the Secure Computing Corporation Change in Control Severance
Plan.
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“ Safe Harbor Limit ”
means the amount of contingent payments an Eligible Employee may
receive without triggering an excess parachute payment subject to
the 20% excise tax. The safe harbor limit is the amount that is
$0.01 less than three times the Base Amount for the Eligible
Employee.
“ Section 16
Officer ” means any employee of the Company who:
(1) held the title of Chief Executive Officer,
President & Chief Operating Officer, Chief Financial
Officer or Senior Vice President; and (2) is identified in
Schedule II of this Plan.
“ Severance
Multiplier ” means the multiplier to be applied in
calculating an Eligible Employee’s severance pay as specified
on Schedule I of this Plan.
“ Services Continuation
Agreement ” – means an offer letter, employment
agreement, transitional services agreement, or other similar
agreement for services to be performed after a Change in
Control.
“ Triggering
Event ” means, upon, or within the twelve
(12) month period following a Change in Control of the
Company:
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(i)
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an Eligible
Employee’s employment is terminated involuntarily by the
Company (or its successor) without Cause; or
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(ii)
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an Eligible
Employee resigns as an employee from the Company (or its successor)
for Good Reason.
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(iii)
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an Eligible
Employee becomes entitled to terminate employment but does not
terminate employment solely because the successor enters into a
Services Continuation Agreement.
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“ Vice President
” means any employee of the Company who: (1) held the
title of Vice President; (2) was classified as a Policy Band
62 (relating to position breadth, scope, responsibility and
accountability) according to the Company’s policy banding
convention immediately prior to a Change in Control; and
(3) is identified in Schedule II of this Plan.
“ Wealth Plan
” refers to the Secure Computing Corporation Profit Sharing
and Retirement Plan.
ELIGIBILITY.
A. When You Are Eligible
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As provided in this Plan, certain
Eligible Employees may be entitled to benefits under the Plan as a
result of a Change in Control. If you are an Eligible Employee, to
receive benefits under this Plan, you must also sign and not revoke
the Company’s (or its successor’s) standard release of
all claims against the Company (or its successor) and all related
parties, including, without limitation, claims arising out of the
employment relationship and the termination of that relationship.
Among the conditions of the release is that it will contain a
reaffirmation that any prior confidentiality and non-solicitation
covenants previously agreed to by you and a reasonable
non-competition covenant to the extent such covenant has not
previously been agreed to. Notwithstanding the foregoing, if you
are a Section 16 Officer or Vice President with a severance,
change in control or other agreement with the Company that provides
for acceleration of vesting of your equity rights and/or severance
benefits on a change in control, you must have expressly waived
your entitlement to the change in control acceleration and
severance benefits under such agreement to be eligible to
participate in this Plan.
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Important: The release and waiver described above are
conditions precedent to entitlement to payment. If the requisite
release and/or waiver is not signed (or is subsequently revoked),
you are not entitled to the benefits available through this
Plan.
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B. When You Are Not
Eligible .
Notwithstanding the foregoing, you
are not eligible for accelerated vesting and severance pay in any
of the following circumstances:
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i.
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you voluntarily
resign, unless you are a Section 16 Officer or Vice President
and you resign for Good Reason;
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ii.
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you are
discharged involuntarily for Cause;
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iii.
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you terminate
your employment for any reason, or no reason, prior to a Change in
Control;
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iv.
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you are a
Section 16 Officer or Vice President and you have not waived
your entitlement to the accelerated vesting of equity rights and/or
severance benefits on a Change in Control under any severance,
Change in Control or other agreement, if any with the
Company;
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v.
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you have failed
to execute the waiver and release referenced in Part A above or you
executed such a waiver and release and subsequently revoked
it;
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vi.
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you entered
into a mutual separation and release agreement with the Company at
any time prior to a Change in Control; or
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vii.
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you actually
receive severance benefits under another plan, arrangement or
agreement.
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C. Termination of
Participation .
A participant in the Plan shall
cease to be a participant in the Plan as of the date on which the
earliest of the following events occurs:
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i.
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The individual
ceases to be an Eligible Employee;
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ii.
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The Plan is
amended to exclude the individual’s continued participation;
or
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iii.
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The Plan is
terminated.
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PLAN BENEFITS.
Benefits available under this Plan
consist of: (1) accelerated vesting rights; (2) severance
pay; and (3) continuation premiums.
A. Accelerated Vesting
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i.
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If you are a
Section 16 Officer, upon a Change in Control, all outstanding
unvested long term incentives or equity rights held by you shall be
accelerated such that these incentives or rights become 100%
vested.
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ii.
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If you are a
Vice President, upon a Triggering Event, all outstanding unvested
long term incentives or equity rights held by you as of the date of
your termination of employment or if applicable, effective date of
a Services Continuation Agree
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