Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into
on December 17, 2007 (the "Effective Date"), by and between Sprint
Nextel
Corporation, a Kansas corporation (the "Company") on behalf of
itself and any of
its subsidiaries, affiliates and related entities, and Daniel R.
Hesse (the
"Executive") (the Company and the Executive, collectively, the
"Parties," and
each, a "Party"). Certain capitalized terms are defined in Section
30.
WITNESSETH:
WHEREAS, the Company desires to employ Executive as President and
Chief
Executive Officer and the Executive desires to accept such
employment;
WHEREAS, the Executive and the Company desire to enter into
this
Agreement; and
NOW, THEREFORE, in consideration of the premises and of the
covenants
and agreements set forth herein and for other good and valuable
consideration,
the sufficiency and receipt of which are hereby acknowledged, the
Company and
the Executive agree as follows:
1.
Employment.
(a)
The Company
will employ the Executive, and the Executive will be
employed by the Company upon the terms and conditions set forth
herein.
(b)
The employment relationship between the Company and the Executive
shall
be governed by the general employment policies and practices of the Company,
including without
limitation, those
relating to the Company's Code of Conduct,
confidential information and avoidance of conflicts, except that when the terms
of this Agreement
differ from or are in
conflict with the
Company's general
employment policies or practices, this Agreement shall control.
2.
Term. Subject to termination under Section 9, the Executive's
employment
shall be for an initial term of 36 months commencing on the Effective
Date and
shall continue through the third anniversary of the Effective Date
(the "Initial
Employment Term").
At the end of the Initial Employment Term and on each
succeeding anniversary
of the Effective Date, the Employment Term will be
automatically extended
by an additional 12
months (each,
a "Renewal
Term"),
unless not less than 12 months prior to the end of the Initial
Employment
Term
or any Renewal Term,
either the
Executive or the Company has given the
other
written notice (in
accordance with
Section 20) of
non-renewal. The
Executive
shall provide
the Company with written notice of his intent to terminate
employment with the Company at least 30 days prior to the effective
date of such
termination.
3.
Position and Duties of
the Executive.
(a)
The Executive shall serve as the President and Chief Executive
Officer
of the Company and
shall have such duties and authority consistent with such
position as shall be
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determined from
time to time by the
Board of Directors
of the Company (the
"Board") and as is customary for the position of chief
executive officer of a
company of the size and nature of the business of the Company, and agrees to
serve as an officer of any enterprise and/or agrees to be an employee of any
Subsidiary as may be reasonably requested from time to time by the
Board, or any
committee of the Board. In such capacity, the Executive shall
report only to the
Board, shall be the
highest ranking
senior officer of the Company, and all
employees of the Company shall report, directly or indirectly, to
the Executive.
The Company will appoint the Executive to the Board on the
Effective Date and
thereafter will
nominate him for election to the Board by the Company's
shareholders at future annual shareholders' meetings.
(b)
During the Employment
Term, the Executive
shall, except as may from
time to time be otherwise agreed to in writing by the Company,
during reasonable
vacations (as set forth in Section 7 hereof) and authorized
leave and except
as
may from time to time
otherwise be permitted
pursuant to Section 3(c), devote
his best efforts, full
attention and energies during his normal working time to
the business of the Company, to any duties as may be delineated in
the Company's
Bylaws for the Executive's position and title and such other
related duties and
responsibilities as may from time to time be reasonably prescribed
by the Board,
or any committee
of the Board,
in each case, within the framework of the
Company's policies and objectives.
(c)
During the Employment
Term, and provided
that such activities
do not
contravene the
provisions
of Section 3(a) or
Sections 10, 11, 12 or 13 hereof
and, provided
further, the Executive does not engage in
any other substantial
business activity for gain, profit or other pecuniary advantage
which materially
interferes with the
performance
of his duties
hereunder,
the Executive may
participate in any
governmental,
educational,
charitable or other
community
affairs and, subject to the prior approval of the Board serve as a
member of the
governing board of any
such organization
or any private or
public for-profit
company. The Executive
may retain all fees and other compensation from any such
service, and the Company shall not reduce his compensation by the
amount of such
fees.
4.
Compensation.
(a)
Base Salary. During
the Employment Term,
the Company shall pay to the
Executive an annual base salary of $1,200,000 (the "Base Salary"), which Base
Salary shall be
payable at the times and in the
manner consistent with the
Company's general
policies regarding compensation of the Company's senior
executives. The Base
Salary will be reviewed periodically by the Compensation
Committee and may be increased (but not decreased, except for across-the-board
reductions generally applicable to the Company's senior executives)
from time to
time in the Compensation Committee's sole discretion.
(b)
Incentive
Compensation. The
Executive will be eligible to participate
in any short-term and long-term incentive compensation plans,
annual bonus plans
and such other
management incentive
programs or
arrangements
of the Company
approved by the Board
that are generally
available to the Company's senior
executives, including,
but not limited
to, the STIP and the
LTSIP. Incentive
compensation shall be
paid in accordance
with the terms and
conditions of the
applicable plans, programs and arrangements.
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(i) Annual
Performance
Bonus. During the Employment Term, the
Executive shall
be entitled to participate in the STIP, with such
opportunities as may
be determined by the
Compensation
Committee in its
sole
discretion ("Target Bonuses"); provided, however, that for the bonus
year
ending December 31,
2008 and thereafter
during the Employment
Term,
the
Executive will
participate
at an annual Target
Bonus opportunity
of
170%
of his Base Salary,
(as may be increased,
but not decreased,
except
for
across-the-board
reductions
generally applicable to the Company's
senior executives),
and the Executive shall be entitled to receive
full
payment of any award under the STIP up to a maximum annual bonus of
200% of
his
Target Bonus, determined pursuant to the STIP (a "Bonus
Award").
(ii) Long-Term
Performance Bonus.
During the
Employment
Term, the
Executive shall
be entitled to participate in the LTSIP with such
opportunities, if any,
as may be determined by the Compensation Committee
("LTSIP Target
Award Opportunities");
provided,
however,
that the
Executive's initial
LTSIP Target Award
Opportunity for 2008
will be at a
value of $10 million,
which shall be granted in the form of equity and/or
cash-based awards based on the Company's practices under the LTSIP for
its
senior executives.
(iii) Incentive
bonuses, if earned, shall be paid when incentive
compensation is
customarily
paid to the Company's
senior executives in
accordance with
the terms of the applicable plans, programs or
arrangements.
(iv) Pursuant to the Company's applicable incentive or bonus
plans as
in
effect from time to time, the Executive's incentive compensation during
the
term of this Agreement may be determined according to criteria
intended
to
qualify as
performance-based
compensation under
Section 162(m) of the
Code.
(c)
Equity Compensation.
The Executive shall be eligible to participate in
such equity incentive
compensation plans and
programs as the Company generally
provides to its senior
executives,
including,
but not limited to,
the LTSIP.
During the
Employment
Term, the Compensation Committee may, in its sole
discretion, grant
equity awards to the Executive, which would be subject to the
terms of the award agreements evidencing such grants and the
applicable plan or
program.
(d)
Sign-on Compensation.
(i) Sign-On
Cash Bonus Award. Not later than 15 days after the
Effective Date, the Company shall pay to the Executive a cash
sign-on bonus
in
the amount of $2,650,000.
(ii) Sign-On Option
Award. On the Effective Date the Compensation
Committee will
grant to the
Executive an option to purchase 3,275,000
shares of the Company's Common Stock under the LTSIP (the
"Sign-On Option
Award"). The
Sign-On Option Award will be subject to the terms and
conditions of the
option agreement attached hereto as Exhibit A. With
respect to 1 million shares underlying the Sign-On Option Award,
the Option
Price will equal the Market Value Per Share on the Date of Grant
(each term
as
defined in the LTSIP).
With respect to 1 million shares
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underlying the Sign-On Option Award, the Option Price will equal
the Market
Value Per Share on the Date of Grant (each term as defined in the
LTSIP).
With
respect to 1 million shares underlying the Sign-On Option
Award, the
Option Price will
equal 120% of the Market Value Per Share on the Date of
Grant. With respect to
the remaining 1.275
million shares
underlying the
Sign-On Option Award,
the Option Price will equal 140% of the Market Value
Per
Share on the Date of Grant. Subject to the terms and
conditions of the
option agreement evidencing such grant, the Sign-On Option Award
shall vest
in
equal annual
installments on each of the first three anniversaries of
the
Date of Grant; provided, however, that to the extent the Sign-On
Option
Award is not assumed, converted or replaced with equivalent value
awards by
the
resulting entity in the event of a Change in Control (as defined in
the
LTSIP), the Sign-On
Option Award shall
immediately vest and
become fully
exercisable.
Except as otherwise provided in the Executive's award
agreement evidencing
the Sign-On
Option Award,
the Sign-on Option
Award
will
be governed by provisions of the LTSIP.
(iii) Sign-On
RSU Award. On the Effective Date the Compensation
Committee will grant to the Executive restricted stock units (the
"Sign-On
RSU
Award"). The Sign-On RSU Award will be subject to the terms and
conditions of the
restricted stock unit
agreement evidencing
such grant
attached as
Exhibit A. The Sign-On RSU Award will be granted at an
aggregate value of $10
million based on the
Market Value Per Share on the
Date
of Grant (each
term as defined in the
LTSIP) and shall vest in equal
annual installments on each of the first three anniversaries of the
Date of
Grant; provided,
however, that to the
extent the Sign-On RSU Award is not
assumed, converted
or replaced with equivalent value awards by the
resulting entity in
the event of a Change in Control (as defined in the
LTSIP), all
restrictions
with respect to any unvested portion of the
Sign-On RSU Award
shall immediately
lapse and the Sign-On
RSU Award will
become vested and
nonforfeitable.
Except as otherwise provided in the
Executive's award
agreement evidencing
the Sign-On RSU Award, the Sign-On
RSU
Award will be governed by provisions of the LTSIP. After the Sign-On
RSU
Award vests, the RSUs will remain outstanding and the Executive
will be
entitled to delivery of the shares underlying the vested Sign-On RSU
Award
on
the first business day
of the seventh month
following the
Executive's
termination of employment. On each date that the Company pays a
dividend on
the
Common Stock
underlying the Sign-On
RSU Award to the extent it is not
vested, the
unvested Sign-On RSU Award will accrue
additional
whole or
fractional RSUs equal
to the number of shares of Common Stock the dividend
would buy at the Market Value Per Share on the dividend payment
date. These
additional RSUs will
vest and be subject to
delivery at the same
time as
the
shares originally
payable under the
Sign-On RSU Award. To
the extent
the
Sign-On RSU Award is vested, on each date that the Company pays a
dividend on the Common Stock, the Executive will receive an
amount of cash
equal to the dividends
on the number of shares underlying the vested
Sign-On RSU Award in cash.
5.
Benefits.
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(a)
During the Employment
Term, the Company shall make
available to the
Executive, subject
to the terms and conditions of the applicable plans,
participation
for the Executive and his eligible dependents in: (i)
Company-sponsored
group health, major medical, dental, vision, life
insurance,
pension and profit
sharing, 401(k) and
employee benefit
plans, programs and
arrangements (the "Employee Plans") and such other usual and
customary benefits
in which senior
executives of the Company participate from time to time, and
(ii) such fringe
benefits and
perquisites as may be
made available to
senior
executives of the
Company as a group. The Executive shall be entitled to
indemnification on
terms and conditions
no less favorable than those made
available generally to the senior officers as such indemnification
arrangements
shall be in effect from time to time
(b)
The Executive
acknowledges
that the Company may change its benefit
programs from time to time which may result in certain benefit programs being
amended or terminated for its senior executives generally.
6.
Expenses. The Company shall pay or reimburse the Executive for
reasonable and
necessary business expenses incurred by the Executive in
connection with his
duties on behalf of
the Company
in accordance with the
Company's Enterprise Financial Services--Employee Travel and
Expense Policy, as
may be amended from
time to time, or any
successor policy, plan program or
arrangement thereto
and any other of its expense policies applicable to senior
executives of
the Company, following submission by the Executive of
reimbursement expense forms in a form consistent with such expense
policies. Any
reimbursement or
provision of in-kind benefits made during the Executive's
lifetime pursuant
to the terms of this
Section 6 shall be
made not later than
December 31st of the year following the year in which the
Executive incurs
the
expense; provided,
however, that in no event will the amount
of expenses
so
reimbursed, or in-kind
benefits provided, by the Company in one year affect the
amount of expenses
eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year. Each provision of
reimbursement of expenses
or in-kind benefit
pursuant to this
Section 6 shall be
considered a
separate
payment and not one of a series of payments for purposes of Section 409A of
the
Code.
7.
Vacation. In addition
to such holidays, sick
leave, personal leave and
other paid leave as is allowed under the Company's policies
applicable to senior
executives generally,
the Executive
shall be entitled to
participate
in the
Company's vacation
policy at a minimum of
four (4) weeks vacation per calendar
year, in accordance
with the Company's
policy generally
applicable to
senior
executives.
8.
Place of Performance.
If the Company relocates the Executive's place of
work more than 50 miles from his place of work
prior to such
relocation,
the
Executive shall
relocate to a
residence within (a)
50 miles of such relocated
executive offices or
(b) such total miles that does not exceed the total number
of miles the Executive
commuted to his place of work prior to relocation of the
Executive's place of
work. To the extent the Executive relocates his residence
as provided in this Section 8, the Company will pay or reimburse
the Executive's
relocation
expenses in
accordance
with the Company's relocation policy
applicable to senior
executives.
Any reimbursement or provision of in-kind
benefits made
during the
Executive's
lifetime pursuant to the terms of this
Section 8 shall be made not later than December 31st of the year following the
year in which the Executive incurs the expense. In no event will the amount of
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expenses so reimbursed, or in-kind benefits provided, by the
Company in one year
affect the amount of expenses eligible for reimbursement, or
in-kind benefits to
be provided, in any
other taxable year.
Each provision of reimbursement of
expenses or in-kind
benefit pursuant to
this Section 8 shall
be considered a
separate payment
and not one of a
series of payments for
purposes of
Section
409A of the Code.
9.
Termination.
(a)
Termination
by the Company for
Cause or Resignation
by the Executive
Without Good Reason. If, during the Employment Term, the
Executive's
employment
is terminated by the Company for Cause, or if the Executive resigns
without Good
Reason, the
Executive shall not be eligible to receive Base Salary or to
participate in any
Employee Plans with respect to future periods after the date
of such termination or
resignation except for
the right to receive accrued but
unpaid cash
compensation
and vested benefits under any Employee Plan in
accordance with the terms of such Employee Plan and applicable
law.
(b)
Termination
by the Company Without Cause or Resignation by the
Executive for Good Reason outside of the CIC Severance Protection Period. If,
during the Employment
Term, the Executive's employment is terminated by
the
Company without Cause
or the Executive
terminates for Good
Reason prior to or
following expiration of the CIC Severance Protection Period, the
Executive shall
be entitled to receive
from the Company: (1) the Executive's accrued, but
unpaid, Base Salary
through the date of
termination of employment, payable in
accordance with the Company's normal payroll practices, and (2)
conditioned upon
the Executive
delivering
to the Company a release in a form reasonably
satisfactory to the Company (the "Release") within 21 days after termination
of
the Executive's
employment,
with all periods for revocation expired (the
"Release Effective
Date"), in full
satisfaction of the Executive's rights and
any benefits the Executive might be entitled to under the
Separation
Plan and
this Agreement, unless
otherwise specified, during the Payment Period, the
Executive shall be entitled to:
(i) receive
from the Company periodic payments equal to his Base
Salary in effect prior to the termination of his employment, which
payments
shall be paid to the Executive in equal installments on the regular
payroll
dates under the Company's payroll practices applicable to the Executive at
the
time of termination
for the duration of the Payment Period, and each
such
payment shall be a separate payment and not one of a series of
payments for purposes of Section 409A of the Code;
(ii) (A) receive a pro rata payment of the Bonus Award for the
portion
of
the Company's
fiscal year prior to the date of termination of his
employment; (B)
receive a pro rata
payment of the Capped
Bonus Award for
the
portion of the Company's fiscal year following the date of
termination
of
his employment;
(C) receive for the
next fiscal
year following the
fiscal year during which termination of his employment occurs, the Capped
Bonus Award;
and (D) receive
payment of a pro rata
portion of the Capped
Bonus Award for the second year following the fiscal year during
which the
Executive's employment
terminates (for
purposes of this Section 9(b)(ii),
any
pro rata payment
shall be determined based on the
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methodology for
determining
pro rated awards
under the STIP,
each such
payment shall be payable in accordance with the provisions of the STIP
and
each
such payment shall be regarded as a separate payment and not one of a
series of payments for
purposes of Section
409A of the Code);
provided,
however, that to the
extent the Executive's
employment is
terminated for
Good
Reason due to a reduction of the Executive's Target Bonus, in
accordance with Section 29(x)(ii), the Executive's Target Bonus for the
purposes of this Section 9(b)(ii) shall be the Executive's Target Bonus
immediately prior to such reduction;
(iii) continued
participation in the
Company's group health plans at
then-existing
participation and
coverage levels for
the number of months
equal to the
period of continuation coverage the Executive would be
entitled to pursuant
to Section
4980B of the Code,
in accordance with
Section 409A of the
Code, comparable
to the terms in effect
from time to
time
for the Company's
senior executives,
including any
co-payment
and
premium payment
requirements and the Company shall deduct for each payment
payable to the
Executive pursuant to
Section 9(b)(i),
the amount of any
employee contributions necessary to maintain such coverage for such
period,
except that subject to Section 9(b)(iv), (A) following such period, the
Executive shall retain any rights to continue coverage under the Company's
group health plans under the benefits continuation provisions pursuant to
Section 4980B of the Code by paying the applicable premiums of such plans;
(B)
the Executive
shall no longer be
eligible to receive the benefits
otherwise receivable pursuant to this Section 9(b)(iii) as of the
date that
the
Executive becomes
eligible to receive
comparable benefits
from a new
employer; and (C) the Company will not provide for cash in lieu of
benefits
under this Section 9(b)(iii);
(iv) continued
participation
at the Executive's sole cost in the
Company's group health plans at then-existing participation and coverage
levels for the
six-month period following the period of continuation
coverage the Executive
would be entitled to,
if any, pursuant to
Section
9(b)(iii) above, in accordance with Section 409A of the Code,
comparable to
the
terms in effect from time to time for the Company's senior
executives,
but
only to the extent that the Executive makes a payment to the
Company in
an
amount equal to the
monthly premium
payments (both the employee and
employer portions)
required to maintain
such comparable coverage on or
before the
first day of each
calendar month commencing with the first
calendar month of the six-month period following the period of
continuation
coverage specified in
Section 9(b)(iii),
and the Company shall
reimburse
the
Executive, in
accordance with the
terms of Section 6 hereof, for the
amount of such
premiums, if any, in
excess of any employee
contributions
necessary to maintain
such coverage and each payment pursuant to this
Section 9(b)(iv) shall
be regarded as a separate payment and not one of a
series of payments for
purposes of Code Section 409A, except that (A)
following such period,
the Executive
shall retain any
rights to continue
coverage under
the Company's group health plans under the benefits
continuation provisions pursuant to Section 4980B of the Code by
paying the
applicable premiums of
such plans; (B) the
Executive shall no longer be
eligible to
receive
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the
benefits otherwise
receivable pursuant to
this Section 9(b)(iv) as of
the
date that the Executive becomes eligible to receive comparable
benefits
from
a new employer; and
(C) the Company will not provide for cash in lieu
of
benefits under this Section 9(b)(iv);
(v) continued
participation in the Company's employee life insurance
plans at then-existing
participation
and coverage levels for 24 months
following the Release
Effective Date, comparable to the terms in
effect
from
time to time
for the Company's senior executives, including any
co-payment and premium
payment requirements
and the Company shall
deduct
for
each payment payable to the Executive pursuant to Section 9(b)(i),
the
amount of any employee
contributions
necessary to maintain
such coverage
for
such period, except
that (A) the Executive shall no longer be eligible
to
receive the benefits
otherwise receivable pursuant to this Section
9(b)(v) as of the date
that the Executive
becomes eligible to receive
comparable benefits
from a new
employer; and (C) the Company will not
provide for cash in lieu of benefits under this Section
9(b)(v);
(vi) accelerated vesting of any unvested portion of the Sign-On
Option
Award;
(vii) all restrictions
with respect to any
unvested portion of the
Sign-On RSU Award
shall immediately
lapse and the Sign-On
RSU Award will
become vested and
nonforfeitable, and
the Executive
will be entitled
to
payment on the first
business day of the seventh month following the
Executive's termination of employment; and
(viii) receive outplacement services by a firm selected by the
Company
at
its expense in an amount not to exceed $35,000, and the Company
will not
provide for cash in lieu of this benefit; provided, however, that all such
outplacement services
must be completed,
and all payments by
the Company
must
be made, by December
31st of the second
calendar year
following the
calendar year in which the Executive's separation from service
occurs.
Notwithstanding anything in this Section 9(b) to the contrary, to
the extent the
Executive has not signed the Release with all periods for
revocation expired as
provided in this Section 9(b) and the Release, such determination
to be made at
the conclusion of the applicable revocation period, the Executive
will forfeit
any right to receive the payments and benefits specified in this
Section 9(b).
(c)
Termination
by the Company Without Cause or Resignation by the
Executive for Good Reason During the CIC Severance Protection Period. If prior
to the expiration of the Employment Term and during the CIC
Severance Protection
Period, the Executive's employment is terminated by the Company
without Cause or
the Executive
terminates his
employment for Good Reason, subject to the terms
and conditions of the
CIC Severance Plan,
the Executive
shall be entitled
to
severance compensation
and benefits pursuant
to the terms of the CIC Severance
Plan. To the extent that the Executive is not a Participant in
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the CIC Severance
Plan at the
time of termination, the Executive shall be
entitled to severance compensation and benefits pursuant to the
terms of Section
9(b). Furthermore, the
Executive will be entitled to accelerated vesting of any
unvested portion of the Sign-On Option Award, and all restrictions
with respect
to any unvested portion of the Sign-On RSU Award shall immediately
lapse and the
Sign-On RSU Award will become vested and nonforfeitable,
and the Executive
will
be entitled to payment on the first business day of the seventh
month following
the Executive's
termination of
employment.
(d)
Termination by Death. If the Executive dies during the Employment
Term,
the Executive's employment will terminate and the Executive's
beneficiary or if
none, the Executive's estate, shall be entitled to receive from the
Company, the
Executive's accrued,
but unpaid Base Salary
through the date of termination of
employment and any vested benefits under any Employee Plan in
accordance with
the terms of such Employee Plan and applicable law. Upon the
Executive's death,
any unvested portion of the Sign-On Option Award shall immediately
vest, and all
restrictions with respect to any unvested portion of the Sign-On
RSU Award shall
immediately lapse and
the Sign-On RSU Award will become vested, nonforfeitable
and payable upon the Executive's death.
(e)
Termination by Disability. If the Executive becomes Disabled,
prior to
the expiration of the Employment Term, the Executive's employment
will terminate
and the Executive shall be entitled to:
(i) receive periodic payments equal to his Base Salary in effect
prior
to
the termination of his
employment, which
payments shall be paid to the
Executive in equal
installments
on the regular
payroll dates under the
Company's payroll
practices applicable to the Executive at the time of
termination for the
longer of 12 months or the applicable waiting period
under the Company's long-term disability plan (the "LTD Plan")
(reduced by
any
amounts paid under the LTD Plan) now or
hereafter sponsored by the
Company (calculated on a monthly basis)); provided, however, that in the
event that the Executive is a "specified employee" (within the meaning of
Section 409A of the
Code and determined
in accordance with procedures
adopted by the
Company), any such payments that constitute deferred
compensation within
the meaning of Section 409A of the Code will not
commence until
earliest to occur of (A) the first business day of the
seventh month
following the date of the Executive's "separation from
service," or (B) death, except that the Executive on such date will
be paid
a
lump-sum cash payment equal to the aggregate amount of any such payments
that constitute
deferred compensation within the meaning of Section 409A of
the
Code that the Executive would have been entitled to
receive during the
six-month period following the Executive's "separation from service",
and
the
Executive shall
receive the remaining
payments for six months payable
in
equal installments
on the regular
payroll dates under the Company's
payroll practices
applicable to the
Executive at the time of termination
commencing on the
first business day of
the seventh month
following the
date
of the Executive's
"separation
from service," as specified in this
Section 9(e)(i), and each payment pursuant to this Section 9(e)(i)
shall be
regarded as a separate
payment and not one of a series of
payments for
purposes of Code Section 409A;
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<PAGE>
(ii) continued
participation in the
Company's group health
plans at
then-existing participation and coverage levels for the longer of
12 months
or
the waiting period under the LTD Plan comparable to the terms in
effect
from
time to time
for the Company's senior executives, including any
co-payment and premium payment requirements; provided, however, that the
Company will not
provide for cash in lieu of these
benefits under this
Section 9(e)(ii);
provided further that if the Executive would not be
eligible for
participation under
the Company's group health plans but for
this
Section 9(e)(ii), such continued participation will be at the
Executive's sole cost
and only to the extent the Executive makes a payment
to
the Company in an amount equal to the monthly premium payments
(both the
employee and employer portions) required to maintain such comparable
coverage on or
before the first day of each calendar month of such
coverage, and the Company shall reimburse the Executive, in
accordance with
the
terms of Section 6 hereof, for the amount of such
premiums, and each
payment pursuant to
this Section 9(e)(ii)
shall be regarded as a separate
payment and not one of a series of payments for purposes of Code Section
409A;
(iii) accelerated
vesting of any
unvested portion of the Sign-On
Option Award; and
(iv) all restrictions
with respect to any unvested portion of the
Sign-On RSU Award
shall immediately
lapse and the Sign-On
RSU Award will
become vested and
nonforfeitable, and
the Executive
will be entitled
to
payment on the first
business day of the seventh month following the
Executive's termination of employment.
(f)
No Mitigation
Obligation.
No amounts
paid under Section 9 will be
reduced by any earnings that the Executive may receive from any other
source.
The Executive's
coverage under the Company's medical, dental, vision and
employee life
insurance plans will
terminate as of the date that the Executive
is eligible for
comparable benefits
from a new employer.
The Executive
shall
notify the Company
within 30 days after
becoming eligible for
coverage of any
such benefits.
(g)
Forfeiture.
Notwithstanding the foregoing, any right of the Executive
to receive termination payments and benefits hereunder shall be
forfeited to the
extent of any amounts
payable after any
breach of Section 10, 11, 12, 13 or 15
by the Executive.
10.
Confidential Information; Statements to Third Parties.
(a)
During the Employment
Term and on a permanent basis upon and following
termination of the Executive's employment, the Executive
acknowledges that:
(i) all information,
whether or not reduced
to writing (or in a form
from
which information can be obtained, translated, or derived into
reasonably usable form) and whether compiled or created by the
Company, any
of
its Subsidiaries
or any affiliates of
the Company or its
Subsidiaries
(collectively, the
"Company Group"),
which derives
independent
economic
value from not being
10
<PAGE>
readily known to or
ascertainable by proper means by others who can obtain
economic value
from the disclosure or use of such information, of a
proprietary, private, secret or confidential (including, without
exception,
inventions, products, processes, methods, techniques, formulas,
compositions,
compounds, projects,
developments, sales strategies, plans,
research data,
clinical data,
financial data,
personnel data,
computer
programs,
customer and
supplier lists, trademarks, service marks,
copyrights (whether registered or unregistered), artwork, and contacts at
or
knowledge of customers or prospective customers) nature concerning the
Company Group's
business, business relationships or financial affairs
(collectively,
"Proprietary
Information") shall be the exclusive property
of
the Company Group.
(ii) reasonable
efforts have been put
forth by the Company
Group to
maintain the secrecy of its Proprietary Information;
(iii) such
Proprietary
Information
is and will remain the sole
property of the
Company Group; and
(iv) any retention or use by the Executive of Proprietary
Information
after the termination
of the Executive's services for the Company Group
will
constitute
a misappropriation of the Company Group's Proprietary
Information.
(b)
The Executive
further acknowledges and agrees that he will take
all
affirmative steps reasonably necessary or required by the Company
to protect the
Proprietary
Information from
inappropriate
disclosure
during and after his
employment with the Company.
(c)
All materials
or copies thereof and all tangible things and other
property of the Company Group that constitute Proprietary Information in the
Executive's custody or
possession
shall be delivered to the Company (to the
extent the Executive has not already returned) in good condition,
on or before
five business days subsequent to the earlier of: (i) a request by
the Company or
(ii) the Executive's termination of employment for any reason or Cause,
including for
nonrenewal of this
Agreement,
Disability,
termination
by the
Company or termination
by the Executive.
After such
delivery, the Executive
shall not retain any such materials or portions or copies thereof or any such
tangible things
and other property and shall execute any statements or
affirmations of compliance under oath that the Company may
require.
(d)
The Executive further
agrees that his obligation not to disclose or to
use information and
materials of the types set forth in Sections 10(a), 10(b)
and 10(c) above, and his obligation to return materials and tangible
property,
set forth in Section
10(c) above, also
extends to such types
of information,
materials and tangible
property of customers of the Company Group, consultants
for the Company Group,
suppliers to the Company Group, or other third parties
who may have disclosed
or entrusted the same to the Company
Group or to the
Executive.
(e)
The Executive further
acknowledges and agrees that he will continue to
keep in strict
confidence, and will
not, directly or indirectly, at any time,
disclose, furnish,
disseminate, make available, use or suffer to be used in any
manner any Proprietary Information
11
<PAGE>
of the Company Group without limitation as to when or how the
Executive may have
acquired such
Proprietary
Information
and that he will not disclose any
Proprietary Information to any person or entity other than
appropriate employees
of the Company or use the same for any purposes (other than in the performance
of his duties as an employee of the Company) without written approval of the
Board, either during or after his employment with the Company.
(f)
Further the Executive acknowledges that his obligation of
confidentiality will
survive, regardless of
any other breach of this Agreement
or any other agreement, by any party hereto, until and unless such
Proprietary
Information of the Company Group has become, through no fault of the
Executive,
generally known to the
public. In the event
that the Executive is
required by
law, regulation,
or court order to
