FIRST AMENDMENT TO EMPLOYMENT
AGREEMENT
This AMENDMENT is
made and entered into pursuant to the EMPLOYMENT AGREEMENT of
April 29, 2008 (the “Agreement”) by and between
3Com Corporation (the “Company”) and Ronald A. Sege
(“Executive”).
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. A new
sentence is added at the end of Section 3(b) to read as
follows:
“Annual cash
incentives shall be paid in a lump sum as soon as practicable
following the determination that specified goals have been met. In
no event shall payment be made later than March 15
th of the year following the year in which the
incentive was earned or, if later, the 15 th day of the third month following the end of the
Company’s taxable year following the year in which the
incentive was earned.”
2. Paragraph
(a) of Section 8 is revised in its entirety to read as
follows:
“(a)
Termination Without Cause or Resignation for Good Reason other
than in Connection with a Change of Control . If
Executive’s employment is terminated by the Company without
Cause or if Executive resigns for Good Reason, and such termination
is not in Connection with a Change of Control, then, subject to
Section 8(d), Executive will receive:
(i) the aggregate
of twelve (12) months of Executive’s Base Salary plus
the Target Annual Incentive for the year in which the termination
occurs (less applicable tax withholdings), with payment to occur as
follows:
On the first day
following the six (6) month anniversary of Executive’s
termination of employment (as determined pursuant to Treasury
Regulation Section 1.409A-1(h)), Executive shall receive
a lump sum equal to the aggregate amount Executive would have
received through such date had payments commenced upon termination
of employment in bi-weekly installments in accordance with the
Company’s normal payroll policies. Thereafter, the amount
remaining shall be paid in bi-weekly installments in accordance
with the Company’s normal payroll policies.
(ii) with respect
to Executive’s then outstanding, unvested equity awards,
other than performance-based awards, twelve (12) months
accelerated vesting, with payment to occur as follows:
(a) Awards Exempt
from Code Section 409A:
(1) Stock
Options: stock options may be exercised pursuant to paragraph
[iii], with underlying shares to be delivered to Executive as soon
as administratively practicable following Executive’s
exercise of such options.
(2) Restricted stock: all restrictions
placed upon the shares of stock shall lapse upon Executive’s
termination of employment.
(3) Restricted stock units: shares
underlying those restricted stock units that are exempt from Code
Section 409A shall be transferred to Executive as soon as
administratively practicable, but in no event later than the
sixtieth (60th) day following Executive’s termination of
employment.
(b) Restricted
Stock Units Subject to Code Section 409A: Shares underlying
those restricted stock units that are subject to Code
Section 409A shall be transferred to Executive on the first
market day following the six (6) month anniversary of
Executive’s termination of employment.
(iii) extension of
the exercise period for all Executive’s outstanding stock
options to the earlier of 165 calendar days from the date of
termination or the expiration date of the stock options;
(iv) reimbursement
for premiums paid for continued health benefits for Executive (and
any eligible dependents) under the Company’s health plans
until the earlier of (x) eighteen (18) months, payable
when such premiums are due (provided Executive validly elects to
continue coverage under the Consolidated Omnibus Budget
Reconciliation Act (‘COBRA’) or (y) th
