Exhibit 10.44
Palm, Inc.
MANAGEMENT RETENTION
AGREEMENT
This Management Retention Agreement
was previously entered into by and between Palm, Inc. (the
“Company”) and
(the “Employee”), and is hereby amended and restated
effective as of
,
(the “Effective Date”). This amended and restated
Management Retention Agreement shall be referred to as this
“Agreement.” For purposes of this Agreement, the
“Company” shall include any parent or subsidiary of the
Company, unless the context clearly requires otherwise.
R E C I T A L S
A. It is expected that the Company
from time to time may consider a Change of Control (as defined
below). The Board of Directors of Palm, Inc. (the
“Board”) recognizes that such consideration can be a
distraction to the Employee and can cause the Employee to consider
alternative employment opportunities. The Board has determined that
it is in the best interests of the Company and its stockholders to
assure that the Company will have the continued dedication and
objectivity of the Employee, notwithstanding the possibility,
threat or occurrence of a Change of Control of the
Company.
B. The Board believes that it is in
the best interests of the Company and its stockholders to provide
the Employee with an incentive to continue his or her employment
and to motivate the Employee to maximize the value of the Company
upon a Change of Control for the benefit of its
stockholders.
C. The Board believes that it is
imperative to provide the Employee with severance benefits upon the
Employee’s termination of employment preceding or following a
Change of Control that provides the Employee with enhanced
financial security and incentive and encouragement to remain with
the Company notwithstanding the possibility of a Change of
Control.
D. Certain capitalized terms used in
this Agreement are defined in Section 5 below.
The parties hereto agree as
follows:
1. Term of Agreement . This
Agreement shall terminate upon the date that all obligations of the
parties hereto with respect to this Agreement have been
satisfied.
2. At-Will Employment . The
Company and the Employee acknowledge that the Employee’s
employment is and shall continue to be at will, as defined under
applicable law, and may be terminated by either party at any time,
with or without cause or notice.
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3. Change of Control Benefits
.
(a) Involuntary Termination other
than for Cause, Death or Disability or Voluntary Termination for
Good Reason In Connection With a Change of Control . If, on or
within three (3) months prior to or thirteen (13) months
following a Change of Control, the Employee’s employment with
the Company 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 ((i)
and (ii) collectively referred to herein as a
“Triggering Event”), then, subject to the Employee
entering into a standard form of mutual release of claims with the
Company, the Company shall provide the Employee with the following
benefits upon such termination:
(i) Severance Payment . A
lump-sum cash payment in an amount equal to one hundred percent
(100%) of the Employee’s Annual Compensation, which
shall be paid promptly following such termination of
employment.
(ii) Continued Employee
Benefits . Company-paid medical, dental, vision and life
insurance coverage at the same level of coverage as was provided to
such Employee immediately prior to the Change of Control or
Triggering Event, whichever is higher (the “Company-Paid
Coverage”), and at the same ratio of Company premium payment
to the Employee premium payment as was in effect under the
Company-Paid Coverage. If the Employee’s dependents were
included under the Company-Paid Coverage, such dependents shall
also be covered at Company expense. Company-Paid Coverage shall
continue until the earlier of (A) eighteen (18) months
from the date of termination or (B) the date upon which the
Employee and his or her dependents become covered under another
employer’s group medical, dental, vision or life insurance
plans that provide the Employee and his or her dependents with
comparable benefits and levels of coverage. For purposes of
Title X of the Consolidated Omnibus Budget Reconciliation Act
of 1985 (“COBRA”), the date of the “qualifying
event” for the Employee and his or her dependents shall be
the date upon which the Triggering Event occurs, and each month of
Company-Paid Coverage provided hereunder shall offset a month of
continuation coverage otherwise due under COBRA.
(iii) Pro-Rated Bonus Payment
. With respect to the fiscal year in which a Triggering Event
occurs, to the extent not already paid in such fiscal year, a
lump-sum cash payment equal to one hundred percent (100%) of
the higher of (A) the Employee’s target bonus in effect
for the fiscal year in which the Change of Control occurs or
(B) the Employee’s target bonus in effect for the fiscal
year in which the Triggering Event occurs, pro-rated by multiplying
such bonus amount in clause (A) or (B), as applicable, by a
fraction, the numerator of which shall be the number of days prior
to the Employee’s termination during such fiscal year, and
the denominator of which shall be three hundred and sixty-five
(365).
(iv) Code Section 409A .
Notwithstanding the foregoing, if the aggregate benefits payable
under Sections 3(a)(i) and 3(a)(iii) hereof exceed the lesser of
(i) two times the sum of the Employee’s
“annualized compensation” (as such term is used in the
regulations to Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”)), based on the annual
rate of pay for services provided to the Company for the taxable
year, or (ii) two times the maximum
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amount that may be taken into
account under a qualified plan pursuant to Code
Section 401(a)(17), then the Employee shall receive a lump sum
payment equal to the limit imposed by Section 409A (under
(i) or (ii) above, as applicable) promptly following the
Employee’s termination of employment and the sum of the
benefits payable under Sections 3(a)(i) and 3(a)(iii) in excess of
the limit imposed by Section 409A shall be paid in a lump sum
cash payment promptly following the six-month (6-month) anniversary
of the Employee’s termination of employment.
(v) Equity Compensation
Accelerated Vesting . One hundred percent (100%) of the
unvested portion of any stock options, restricted stock, restricted
stock units (also known as performance shares) or other Company
equity compensation held by the Employee shall be automatically
accelerated in full (and, as applicable, the Company’s right
of repurchase shall terminate) so as to become completely vested
and shall be immediately paid or issued, as the case may be (except
for any stock options, the underlying shares of which shall be
issued upon exercise), less any applicable withholding
tax.
Notwithstanding the foregoing, in
the event the Employee is employed by a subsidiary of the Company
at the time of a Spin-Off of such subsidiary, then the Employee
shall not be deemed to have been terminated for Cause nor shall the
Employee be permitted to terminate his or her employment pursuant
to a Voluntary Termination for Good Reason and receive the benefits
provided for in this Section 3(a) as a result of such
Spin-Off, but rather the Former Subsidiary shall assume the
obligations under this Agreement as provided for in
Section 7.
(b) Voluntary Resignation;
Termination for Cause . If the Employee’s employment with
the Company terminates by reason of the Employee’s voluntary
resignation (and is not a Voluntary Termination for Good Reason),
or if the Employee is terminated for Cause, then the Employee shall
not be entitled to receive severance or other benefits except for
those (if any) as may separately be provided under another of the
Company’s then-existing severance and benefits plans or
pursuant to other written agreements with the Company.
(c) Disability; Death . If
the Employee’s employment with the Company terminates as a
result of the Employee’s Disability, or if the
Employee’s employment is terminated due to the death of the
Employee, then the Employee shall not be entitled to receive
severance or other benefits except for those (if any) as may
separately be provided under another of the Company’s
then-existing severance and benefits plans or pursuant to other
written agreements with the Company.
(d) Termination Apart from Change
of Control . In the event the Employee’s employment is
terminated for any reason, either more than three (3) months
prior to the occurrence of a Change of Control or after the
thirteen (13) month period following a Change of Control, then
the Employee shall be entitled to receive severance and any other
benefits only as may separately be provided under another of the
Company’s then-existing severance and benefits plans or
pursuant to other written agreements with the Company, including
the Employee’s Severance Agreement. Any severance payments or
severance benefits provided to the Employee by the Company in
connection with the same termination of employment under another
then-existing severance or benefits plan or pursuant to another
written agreement with the Company shall reduce the Company’s
obligation hereunder, if any, by an equivalent amount (but not
below zero).
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4. Golden Parachute Excise
Tax .
(a) In the event that the benefits
provided for in this Agreement or otherwise provided by the Company
to the Employee (including, but not by way of limitation, any
accelerated vesting on equity awards) (the “Total
Payments”) would subject the Employee to an excise tax (the
“Excise Tax”) imposed under Section 4999 of the
Code, then the Company will pay the Employee (i) an amount
sufficient to pay the Excise Tax and (ii) an additional amount
sufficient to pay the Excise Tax and federal, state and local
income and employment taxes arising from the payments made by the
Company pursuant to Section 4(a)(i). Any amount required to be
paid to the Employee pursuant to the preceding sentence shall be
referred to as the “Gross-Up Payment.”
(b) The determination of the
Employee’s Excise Tax liability and the amount, if any,
required to be paid under this Section 4 will be made in
writing by (i) the Company’s independent auditors,
(ii) one of the four (4) largest United States accounting
firms, or (iii) an accounting firm mutually agreed to by the
Employee and the Company (the “Accountants”). For
purposes of making the calculations required by this
Section 4, the Employee shall be deemed to pay federal, state
and local income taxes at the highest marginal rate in effect in
the calendar year in which the Gross-Up Payment will be made, based
on the Employee’s residence. The Accountants may make
reasonable assumptions and approximations concerning applicable
taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code.
The Company and the Employee shall furnish to the Accountants such
information and documents as the Accountants may reasonably request
in order to make a determination under this Section 4. The
Company will pay all costs the Accountants may reasonably incur in
connection with any calculations contemplated by this
Section 4.
(c) The Accountants shall promptly
determine the Gross-Up Payment after the Employee’s
termination of employment (but in no event later than fifteen
(15) days after the termination). The Gross-Up Payment shall
be paid to the Employee within five (5) days after such
Accountants’ determination. In addition, the Accountants
shall make a determination of any Gross-Up Payment prior to the
Employee’s termination of employment upon written request of
the Employee and assuming the Employee has a reasonable basis at
that time for believing that he or she may be entitled to a
Gross-Up Payment under this Agreement. In the event that the
initial Gross-Up Payment made to the Employee is finally determined
to be too large or small, the following rules shall apply. If the
initial Gross-Up Payment was too small, the Company shall promptly
make an additional payment to the Employee equal to the shortfall
plus any interest, penalties or additional amounts payable by the
Employee with respect thereto. If the initial Gross-Up Payment is
too
