Exhibit 10.6
WEB.COM GROUP,
INC.
AMENDED AND
RESTATED
EXECUTIVE SEVERANCE BENEFIT
PLAN
The Web.com Group, Inc. Executive Severance
Benefit Plan (the “ Plan ”) was
established effective April 6, 2005, and amended and restated on
October 23, 2007 and December 11, 2008. The purpose of
the Plan is to provide for the payment of severance benefits to
certain executive employees of Web.com Group, Inc. (the “
Company ”) upon the termination of their
employment under specified circumstances. This Plan
shall supersede any executive severance benefit plan, policy or
practice previously maintained by the Company for any Eligible
Employee (as defined in Section 2(a)(1) below). This
Plan document is also the Summary Plan Description for the
Plan.
Section 2.
ELIGIBILITY FOR BENEFITS.
(a) General
Rules. Subject to the requirements set
forth herein, the Company will grant severance benefits under the
Plan to Eligible Employees.
(1) Definition
of “ Eligible Employee .”
For purposes of this Plan, Eligible
Employees shall be those employees of the Company who are approved
for participation in the Plan by the Company’s Board of
Directors (the “ Board ”) as listed in
APPENDIX A hereto. The determination of whether
an employee is an Eligible Employee shall be made by the Board, in
its sole discretion, and such determination shall be binding and
conclusive on all persons. If an employee who is deemed
an Eligible Employee by the Board has an individually negotiated
employment agreement with the Company relating to severance
benefits that is in effect on his or her termination date, the
provisions of that agreement relating to severance benefits shall
be superseded by the terms of this Plan; provided, however ,
that all other remaining provisions of that agreement shall remain
in effect.
(2) Release of
Claims. To be
eligible to receive benefits under the Plan, an Eligible Employee
must execute a general waiver and release in substantially the form
attached hereto as EXHIBIT A , EXHIBIT B or
EXHIBIT C , as appropriate, within the time provided
therein, and such release must become effective in accordance with
its terms, but in all cases the release must become effective
within 60 days following the date of the Eligible Employee’s
“separation from service” (as defined under Treasury
Regulation Section 1.409A-1(h)). The Company, in its
sole discretion, may modify the form of the required release to
comply with applicable law and shall determine the form of the
required release, which may be incorporated into a termination
agreement or other agreement with the Eligible
Employee. Such release shall include non-competition and
non-solicitation provisions as deemed appropriate by the Company in
its sole discretion.
(3) Return of
Property. To
be eligible to receive benefits under the Plan, an Eligible
Employee must return all Company property which he or she has had
in his or her possession at any time, including but not limited to
any materials which contain or embody any proprietary or
confidential information of the Company and any computers, mobile
telephones or other physical property.
(b) Exceptions
to Benefit Entitlement. An employee, including an employee
who otherwise is an Eligible Employee, will not receive benefits
under the Plan if the employee is terminated for Cause (as defined
herein), if the employee resigns without Good Reason (as defined
herein), or if the employee’s employment is terminated as a
result of the employee’s death or disability, in each case as
determined by the Company in its sole discretion.
Section
3. AMOUNT OF
BENEFIT.
(a) Termination
without Cause or Resignation for Good
Reason. If at
any time the Company terminates an Eligible Employee’s
employment without Cause (as defined herein), or the Eligible
Employee resigns for Good Reason (as defined herein), and such
termination constitutes a “separation from service” (as
defined above), the Company shall provide the Eligible Employee
with the following severance benefits:
(1)
A cash severance benefit in an
amount equal to the sum of (i) six (6) months of the Eligible
Employee’s Base Salary (as defined herein) and (ii) 50% of
the greater of (A) 80% of the Eligible Employee’s Target
Bonus (as defined herein) for the year in which the termination
occurs and (B) the prior year’s Target Bonus actually earned
by the Eligible Employee, subject to withholdings and deductions,
which aggregate amount shall be paid in the form of substantially
equal installments on the Company’s regular payroll dates for
the first six (6) months following the date of the Eligible
Employee’s termination; provided, however , no
payments shall be made prior to the effective date of the Eligible
Employee’s release of claims. On the first regular
payroll date following the effective date of the Eligible
Employee’s release of claims, the Company will pay the
Eligible Employee the payments that would have been paid on and
through such date pursuant to the prior sentence but for the delay
pending the effectiveness of the release, with the balance of the
payments paid thereafter on the original schedule;
(2)
Acceleration of the vesting of the
unvested shares of common stock held by the Eligible Employee that
were issued pursuant to his or her compensatory equity awards and
the unvested shares of common stock subject to unexercised stock
options then held by the Eligible Employee such that the shares
that would have vested under such awards had the Eligible Employee
remained employed by the Company for six (6) months following the
termination of the Eligible Employee’s employment shall vest
and, in the case of options, become immediately exercisable (or, if
no shares would vest during such time under a specific award due to
a cliff vesting provision, then the number of shares vesting and
becoming exercisable pursuant to this paragraph shall equal the
product of (i) the total number of shares subject to the award and
(ii) a fraction, the numerator of which is six (6) and the
denominator of which is the total number of months in the vesting
schedule), with such vesting occurring as of the date of the
Eligible Employee’s termination (such acceleration of
vesting, the “ 6 Month Acceleration
”);
(3)
Extension of the post-termination
exercise period of all non-statutory stock options then held by the
Eligible Employee so that such options, to the extent vested, are
exercisable until the earlier of (i) the original term expiration
date for such award and (ii) the first anniversary of the Eligible
Employee’s termination date; and
(4)
Provided that the Eligible Employee
is eligible to continue coverage under a health, dental, or vision
plan sponsored by the Company under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“
COBRA ”) at the time of the Eligible
Employee’s termination and timely elects such continuation of
coverage under COBRA, the Company will pay COBRA premiums on behalf
of the Eligible Employee for a period of up to six (6) months
following the Eligible Employee’s termination of employment
(but in no event longer that the date on which the Eligible
Employee ceases to be eligible for COBRA). Upon the
conclusion of such period of insurance premium payments made by the
Company, the Eligible Employee will be responsible for the entire
payment of premiums required under COBRA for the duration of the
COBRA period. No provision of this Plan will affect the
continuation coverage rules under COBRA, except that the
Company’s payment of any applicable insurance premiums will
be credited as payment by the Eligible Employee for purposes of the
Eligible Employee’s payment required under
COBRA. Therefore, the period during which an Eligible
Employee may elect to continue the Company’s health, dental,
or vision plan coverage at his or her own expense under COBRA, the
length of time during which COBRA coverage will be made available
to the Eligible Employee, and all other rights and obligations of
the Eligible Employee under COBRA (except the obligation to pay
insurance premiums that the Company pays in accordance with the
foregoing) will be applied in the same manner that such rules would
apply in the absence of this Plan. For purposes of this
Section 3(a)(3), (i) references to COBRA shall be deemed to refer
also to analogous provisions of state law and (ii) any applicable
insurance premiums that are paid by the Company shall not include
any amounts payable by the Eligible Employee under an Internal
Revenue Code Section 125 health care reimbursement plan, which
amounts, if any, are the sole responsibility of the Eligible
Employee.
(b) Termination
without Cause or Resignation for Good Reason Following a Change of
Control. If
the Company terminates an Eligible Employee’s employment
without Cause, or the Eligible Employee resigns for Good Reason, at
any time during the period commencing on the effective date of a
Change of Control (as defined herein) and ending eighteen (18)
months following the effective date of the Change of Control, and
provided such termination constitutes a separation from service,
then the Eligible Employee shall be entitled to the benefits set
forth in Section 3(a); provided, however , that in lieu of
the 6 Month Acceleration, the vesting (and, in the case of options,
exercisability) of each then-unvested equity award held by the
Eligible Employee shall be accelerated as to that number of shares
equal to the greater of (1) the 6 Month Acceleration and (2) fifty
percent (50%) of the then-unvested shares subject to such award,
with such accelerated vesting (and exercisability) effective as of
the date of the Eligible Employee’s termination of
employment. In the event of a termination of employment
on the effective date of a Change of Control, the vesting in
Section 3(c) shall apply first and the vesting in this Section 3(b)
shall apply second.
(c) Single
Trigger Vesting.
(1)
Immediately prior to a Change of
Control, and subject to the Eligible Employee’s continued
employment with the Company through such time, 25% of the
then-unvested shares subject to each then-outstanding equity award
(or such lesser number as then remain unvested) held by the
Eligible Employee shall become fully vested, and, as applicable,
exercisable.
(2)
In addition, in the event of a
Change of Control in which either (i) the acquiring or surviving
entity does not agree to assume or otherwise continue an Eligible
Employee’s outstanding equity awards, or (ii) the acquiring
or surviving entity does assume or otherwise continue the Eligible
Employee’s outstanding equity awards but such awards cease to
cover shares of common stock that are readily tradable on an
established securities market, then 100% of the shares subject to
each then-outstanding unvested equity award held by the Eligible
Employee shall become fully vested, and, as applicable,
exercisable.
(1)
For purposes of this Plan, “
Cause ” shall mean (A) conviction of any felony
or any crime involving moral turpitude or dishonesty; (B)
perpetration of a material fraud or act of dishonesty against the
Company; (C) in the event of a termination prior to a Change of
Control, persistent, willful and material breach of the Eligible
Employee’s duties that has not been cured within 30 days
after written notice from the Company’s Board of Directors of
such breach; or (D) material breach of any Proprietary Information
and Inventions Agreement between the Eligible Employee and the
Company that has not been cured within thirty (30) days after
written notice from the Company’s Board of Directors, or has
cause irreparable damage incapable of cure.
(2)
For purposes of this Plan, “
Good Reason ” shall mean the Eligible
Employee’s resignation from all positions he or she
then-holds with the Company if (A) (I) there is a material adverse
change in the Eligible Employee’s position causing such
position to be of materially reduced stature or responsibility,
(II) there is a material reduction of the Eligible Employee’s
base compensation, or (III) the Eligible Employee is required to
relocate his or her primary work location to a facility or location
that would increase the Eligible Employee’s one way commute
distance by more than twenty (20) miles from the Eligible
Employee’s primary work location as of immediately prior to
such change, (B) the Eligible Employee provides written notice to
the Company’s General Counsel within the 60-day period
immediately following such material change or reduction, (C) such
material change or reduction is not remedied by the Company within
thirty (30) days following the Company’s receipt of such
written notice and (D) the Eligible Employee’s resignation is
effective not later than ninety (90) days after the expiration of
such thirty (30) day cure period.
(3) Change of
Control. For purposes of
the Plan, a “ Change of Control ” shall
mean any of the following in connection with which the Eligible
Employee receives cash or readily marketable securities in exchange
for all or substantially all of the Eligible Employee’s
shares of capital stock of the Company: (A) a sale, lease or other
disposition in one transaction or a series of transactions, of all
or substantially all of the assets of the Company, (B) a merger or
consolidation in which the Company is not the surviving entity or
if the Company is the surviving entity, as a result of which the
shares of the Company’s capital stock are converted into or
exchanged for cash, securities of another entity, or other
property, unless (in any case) the holders of the Company’s
outstanding shares of capital stock immediately before such
transaction own more than fifty percent (50%) of the combined
voting power of the outstanding securities of the surviving entity
immediately after the transaction, (C) the Company’s
stockholders approve a plan or proposal to liquidate or dissolve
the Company or (D) a person or group hereafter acquires beneficial
ownership of more than fifty percent (50%) of the outstanding
voting securities of the Company (all within the meaning of Section
13(d) of the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder).
(4)
For purposes of calculating Plan
benefits, “ Base Salary ” shall mean the
Eligible Employee’s base pay (excluding incentive pay,
premium pay, commissions, overtime, bonuses and other forms of
variable compensation), at the rate in effect during the last
regularly scheduled payroll period immediately preceding the
Eligible Employee’s termination (ignoring any reduction in
Base Salary that is the basis for the Eligible Employee’s
resignation for Good Reason, as applicable).
(5)
For purposes of calculating Plan
benefits, “ Target Bonus ” shall mean the
Eligible Employee’s target bonus amount as most recently
determined for the year of termination by the Company, generally
(but not necessarily) expressed as a percentage of Base
Salary.
(e) Other
Employee Benefits. All other benefits (such as life insurance,
disability coverage, and 401(k) plan coverage) terminate as of the
Eligible Employee’s termination date (except to the extent
that a conversion privilege may be available
thereunder).
(f) Certain
Reductions. The Company shall reduce an Eligible
Employee’s severance benefits, in whole or in part, by any
other severance benefits, pay in lieu of notice, or other similar
benefits payable to the Eligible Employee by the Company that
become payable in connection with the Eligible Employee’s
termination of employment pursuant to (i) any applicable legal
requirement, including, without limitation, the Worker Adjustment
and Retraining Notification Act (the “ WARN Act
”), or (ii) any Company policy or practice providing for
the Eligible Employee to remain on the payroll for a limited period
of time after being given notice of the termination of the Eligible
Employee’s employment. The benefits provided under
this Plan are intended to satisfy, in whole or in part, any and all
statutory obligations that may arise out of an Eligible
Employee’s termination of employment, and the Plan
Administrator shall so construe and implement the terms of the
Plan. In the Company’s sole discretion, such
reductions may be applied on a retroactive basis, with severance
benefits previously paid being recharacterized as payments pursuant
to the Company’s statutory obligation.
Section
4. LIMITATIONS
ON PAYMENTS.
(a) Taxes and
Offsets. All
payments under the Plan will be subject to applicable withholding
for federal, state and local taxes. If an Eligible
Employee 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 Employee’s separation from service or prior to the
effective date of the release described in Section
2(a)(2).
(b) Best After
Tax. If any
payment or benefit (including payments and benefits pursuant to
this Agreement) that an Eligible Employee would receive in
connection with a Change of Control from the Company or otherwise
(“ Payment ”) would (i) constitute a
“parachute payment” within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the “
Code ”), and (ii) but for this sentence, be
subject to the excise tax imposed by Section 4999 of the Code (the
“ Excise Tax ”), then the Company shall
cause to be determined, before any amounts of the Payment are paid
to the Eligible Employee, which of the following two alternative
forms of payment would maximize the Eligible Employee’s
after-tax proceeds: (i) payment in full of the entire amount of the
Payment (a “ Full Payment ”), or (ii)
payment of only a part of the Payment so that the Eligible Employee
receives the largest payment possible without the imposition of the
Excise Tax (a “ Reduced Payment ”),
whichever amount results in the Participant ’s
receipt, on an after-tax basis, of the greater amount of the
Payment notwithstanding that all or some portion of the Payment may
be subject to the Excise Tax. For purposes of
determining whether to make a Full Payment or a Reduced Payment,
the Company shall cause to be taken into account all applicable
federal, state and local income and employment taxes and the Excise
Tax (all computed at the highest applicable marginal rate, net of
the maximum reduction in federal income taxes which could be
obtained from a deduction of such state and local
taxes). If a Reduced Payment is made, (i) the Payment
shall be paid only to the extent permitted under the Reduced
Payment alternative, and the Eligible Employee shall have no rights
to any additional payments and/or benefits constituting the
Payment, and (ii) reduction in payments and/or benefits shall occur
in the following order: (1) reduction of cash payments; (2)
cancellation of accelerated vesting of equity awards other than
stock options; (3) cancellation of accelerated vesting of stock
options; and (4) reduction of other benefits paid to the Eligible
Employee. In the event that acceleration of compensation
from the Eligible Employee’s equity awards is to be reduced,
such acceleration of vesting shall be canceled in the reverse order
of the date of grant.
The independent professional firm engaged by the
Company for general tax audit purposes as of the day prior to the
effective date of the Change of Control shall make all
determinations required to be made under this Section
4(b). If the firm so engaged by the Company is serving
as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Company shall appoint a
nationally recognized independent professional firm to make the
determinations required hereunder. The Company shall
bear all expenses with respect to the determinations by such firm
required to be made hereunder.
The firm engaged to make the determinations
hereunder shall provide its calculations, together with detailed
supporting documentation, to the Company and the Eligible Employee
within fifteen (15) calendar days after the date on which the
Eligible Employee’s right to a Payment is triggered (if
requested at that time by the Company or the Eligible Employee) or
such other time as requested by the Company or the Eligible
Employee. If the firm determines that no Excise Tax is
payable with respect to a Payment, either before or after the
application of the Reduced Amount, it shall furnish the Company and
the Eligible Employee with an opinion reasonably acceptable to the
Eligible Employee that no Excise Tax will be imposed with respect
to such Payment. Any good faith determinations of the
firm made hereunder shall be final, binding and conclusive upon the
Company and the Eligible Employee.
(c) Code Section
409A. If the
Company (or, if applicable, the successor entity thereto)
determines that the severance payments and benefits provided under
the Plan (the “ Plan Payments ”)
constitute “deferred compensation” under Code Section
409A (together, with any state law of similar effect, “
Section 409A ”) and an Eligible Employee is a
“specified employee” of the Company or any successor
entity thereto, as such term is defined in Section 409A(a)(2)(B)(i)
(a “ Specified Employee ”) on his or her
separation from service, then, solely to the extent necessary to
avoid the incurrence of the adverse personal tax consequences under
Section 409A, the timing of the Plan Payments shall be delayed as
follows: on the earlier to occur of (i) the date that is
six months and one day after the date of his or her separation from
service or (ii) the date of the Eligible Employee’s death
(such earlier date, the “ Delayed Initial Payment
Date ”), the Company (or the successor entity
thereto, as applicable) shall (A) pay to the Eligible Employee a
lump sum amount equal to the sum of the Plan Payments that the
Eligible Employee would otherwise have received through the Delayed
Initial Payment Date (including reimbursement for any premiums paid
by the Eligible Employee for health insurance coverage under COBRA)
if the commencement of the payment of the Plan Payments had not
been delayed pursuant to this Section 4(c) and (B) commence paying
the balance of the Plan Payments in accordance with the applicable
payment schedules set forth in Section 3 above. It is
intended that (i) each installment of the Plan Payments provided
under this Plan is a separate “payment” for purposes of
Section 409A, (ii) all of the Plan Payments satisfy, to the
greatest extent possible, the exemptions from the application of
Section 409A provided under of Treasury Regulation 1.409A-1(b)(4),
1.409A-1(b)(5) and 1.409A-1(b)(9), and this Plan will be construed
to the greatest extent possible as consistent with those
provisions.
In the event of an Eligible Employee’s
reemployment by the Company during the period of time in respect of
which Plan Payments have been paid, the Company, in its sole
discretion, may require such Eligible Employee to repay to the
Company all or a portion of such Plan Payments as a condition of
reemployment.
Section
6. RIGHT TO
INTERPRET PLAN; AMENDMENT AND TERMINATION.
(a) Exclusive
Discretion. The Plan Administrator (set forth in
Section 11(d)) shall have the exclusive discretion and authority to
establish rules, forms, and procedures for the administration of
the Plan and to construe and interpret the Plan and to decide any
and all questions of fact, interpretation, definition, computation
or administration arising in connection with the operation of the
Plan, including, but not limited to, the eligibility to participate
in the Plan and amount of benefits paid under the
Plan. The rules, interpretations, computations and other
actions of the Plan Administrator shall be binding and conclusive
on all persons.
(b) Amendment or
Termination. The Company reserves the right to
amend or terminate this Plan (including Appendix A) or the benefits
provided hereunder at any time prior to a Change of Control;
provided, however, that no such amendment or termination
shall affect the right to any unpaid benefit of any Eligible
Employee whose termination date has occurred prior to amendment or
termination of the Plan. Any purported amendment or
termination of this Plan (and the exhibits and appendices
heret
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