FORM OF FIRST AMENDMENT TO
MANAGEMENT RETENTION
AGREEMENT
This AMENDMENT is
made and entered into pursuant to the MANAGEMENT RETENTION
AGREEMENT of
[ ]
(the “Agreement”) by and between 3Com Corporation (the
“Company”) and
[ ]
(“Employee”).
WHEREAS ,
the Company desires to amend the Agreement to comply with
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”).
NOW,
THEREFORE, it is hereby agreed that the Agreement is amended in
the following respects, effective as of January 1, 2009, or
such earlier date as required to comply with Code Section 409A
and guidance issued thereunder.
1. Paragraph
(a) of Section 3 is revised in its entirety to read as
follows:
“(a)
Involuntary Termination other than for Cause, death or
Disability or Voluntary Termination for Good Reason Within Three
(3) Months Prior to or Within Twelve (12) Months
Following a Change of Control . If, within three
(3) months prior to or within twelve (12) months
following a Change of Control, the Employee’s employment is
terminated (i) involuntarily by the Company other than for
Cause, death or Disability or (ii) by the Employee pursuant to
a Voluntary Termination for Good Reason, then, subject to the
Employee’s executing a mutual release, as provided in the
following paragraph, the Company shall provide the Employee with
the benefits described below upon such termination.
“Termination Date” shall mean herein the
Employee’s last date of employment with 3Com Corporation or,
if later, the date on which the Employee incurs a separation from
service with 3Com Corporation as defined in Treasury
Regulation Section 1.409A-1(h).
The receipt of
any severance or other benefits pursuant to this Section 3
will be subject to the Employee signing and returning to the
Company a separation agreement and release of claims in
substantially the form attached hereto as Exhibit A (as
updated at the Company’s discretion or to reflect applicable
local, state and federal law) (“Release Agreement”), by
no later than forty-five (45) days after the date of
termination of Employee’s employment. Failure to return the
Release Agreement by the forty-fifth (45 th )
day, or revoking the release of claims within the seven
(7) day revocation period, will result in a forfeiture of
severance pay. The Release Agreement shall be furnished to the
Employee in sufficient time to enable the Employee to comply with
the preceding sentence, taking into account the period of time that
the Employee must be given to consider the terms of the Release
Agreement under any applicable law.
(i) Lump-Sum
Payment . A lump-sum cash payment in an amount equal to one
hundred percent (100%) of the Employee’s Annual Compensation,
subject to all applicable taxes and withholdings, to be paid within
sixty-
five
(65) days of the Termination Date (the payment of which is
intended to be exempt from Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code) pursuant to the
short-term deferral rules of Treasury Regulation
1.409A-1(b)(4));
(ii)
Continued Employee Benefits . Company-paid health, dental,
vision, long-term disability, and life insurance coverage at the
same level of coverage and coverage tier as was provided to the
Employee and/or the Employee’s dependents immediately prior
to the termination of his/her employment 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”). Company-Paid Coverage shall
continue until the earlier of (i) two (2) years from the
date of termination, or (ii) the date upon which the Employee
and/or his/her dependents become covered under another
employer’s group health, dental, vision, long-term
disability, or life insurance plans that provide the Employee
and/or his dependents with comparable benefits and levels of
coverage. For purposes of Title X of the Consolidated Budget
Reconciliation Act of 1985 (“COBRA”), the date of the
“qualifying event” for the Employee and/or his/her
dependents shall be the date upon which the Company-Paid Coverage
commences, and each month of Company-Paid Coverage provided
hereunder shall offset a month of continuation coverage otherwise
due under COBRA. To the extent that the period during which the
continued provision of medical and dental benefits falls within the
applicable COBRA continuation period, such continued provision of
medical and dental benefits is exempt from Code Section 409A
under Treasury Regulation Section 1.409A-1(b)(9)(v)(B).
To the extent that the period during which the continued provision
of medical and dental benefits extends beyond the applicable COBRA
continuation period, the following shall apply: (a) the
premiums for continued medical and dental coverage shall be paid on
a monthly basis; (b) any amounts paid to or on behalf of the
Employee as reimbursement for medical and/or dental expenses shall
be paid on or before the last day of the year following the year in
which such expense was incurred; (c) any amounts paid to or on
behalf of the Employee as reimbursement for medical and/or dental
expenses during one year will not affect the Employee’s
eligibility for amounts paid to or on behalf of the Employee as
reimbursement for medical and/or dental expenses during any other
year; and (d) the right to continued coverage beyond the
applicable COBRA continuation period is not subject to liquidation
or exchange for another benefit. This paragraph shall be
administered and interpreted consistent with Treasury
Regulation Section 1.409A-3(i)(1)(iv);
(iii)
Pro-Rated Bonus Payment . A lump-sum cash payment equal to
one hundred percent (100%) of the Employee’s Target Bonus as
in effect for the fiscal year in which the Change of Control
occurs, pro-rated by multiplying such Target Bonus amount by a
fraction, the numerator of
2
which shall be
the number of calendar days prior to occurrence of the Change of
Control during such fiscal year, and the denominator of which shall
be three-hundred and sixty-five (365), subject to all applicable
taxes and withholdings, to be paid within sixty-five (65) days
of the Termination Date (the payment
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