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Exhibit
10.17
3PAR, INC.
EMPLOYMENT
AGREEMENT
This Agreement is made by and
between 3PAR, Inc. (the “Company”), and David C-A Scott
(“Executive”).
1. Duties and Scope of
Employment .
(a) Positions; CEO
Employment Commencement Date; Duties . The Company shall employ
the Executive as the President and Chief Executive Officer of the
Company reporting to the Board of Directors of the Company (the
“Board”). The period of Executive’s employment
hereunder is referred to herein as the “Employment
Term.” During the Employment Term, Executive shall render
such business and professional services in the performance of his
duties, consistent with Executive’s position within the
Company as shall reasonably be assigned to him by the
Board.
(b) Obligations .
During the Employment Term, Executive shall devote his full
business efforts and time to the Company. Executive agrees, during
the Employment Term, not to actively engage in any other
employment, occupation or consulting activity for any direct or
indirect remuneration without the prior approval of the Board;
provided, however, that Executive may serve in any capacity with
any civic, educational or charitable organization, or as a member
of corporate Boards of Directors or committees thereof, without the
approval of the Board, unless there is a conflict of
interest.
(c) Employee Benefits
. During the Employment Term, Executive shall be eligible to
participate in the employee benefit plans maintained by the Company
that are applicable to other senior management to the full extent
provided for under those plans.
2. At-Will Employment
. Executive and the Company understand and acknowledge that
Executive’s employment with the Company constitutes
“at-will” employment. Subject to the Company’s
obligation to provide severance benefits as specified herein,
Executive and the Company acknowledge that this employment
relationship may be terminated at any time, upon written notice to
the other party, with or without good cause or for any or no cause,
at the option either of the Company or Executive.
3. Compensation
.
(a) Base Salary .
While employed by the Company, the Company shall pay the Executive
as compensation for his services a base salary at the annualized
rate of three hundred and fifty thousand dollars ($350,000) (the
“Base Salary”). Such salary shall be paid periodically
in accordance with normal Company payroll practices and subject to
the usual, required withholding. Executive’s Base Salary
shall be reviewed annually by the Compensation Committee of the
Board for possible adjustments in light of Executive’s
performance and competitive data.
(b) Target Bonus .
Executive shall be eligible to earn an annual target bonus based
upon the Company’s fiscal year equal to one hundred percent
(100%) of his Base Salary (“Target Bonus”). The
actual bonus, if any, Executive will receive may be greater or
lesser and will depend upon the extent to which the applicable
performance goal(s) specified by the Compensation Committee are
achieved or exceeded. Any Target Bonus earned pursuant hereto will
be paid to Executive within two and one-half months of the end of
the fiscal year to which the Target Bonus relates.
(c) Equity Grants . In
addition to the equity compensation awards that Executive has
already received, Executive will be eligible to receive additional
equity grants on a periodic basis consistent with the normal
compensation practices of the Company.
4. Severance Benefits
.
(a) Involuntary
Termination other than for Cause, Death or Disability; Voluntary
Termination for Good Reason During Change of Control Period .
If, within eighteen (18) months following a Change of Control
(the “Change of Control Period”), Executive’s
employment is terminated (i) involuntarily by the Company
other than for Cause, Death or Disability or (ii) due to a
Voluntary Termination for Good Reason, then, subject to Executive
entering into and not revoking a standard form of release of claims
with the Company and further subject to Executive complying with
the provisions of Section 7 hereof, the Company shall provide
Executive with the following benefits:
(i) Severance Payment
. Three hundred percent (300%) of the Executive’s Base
Salary, payable in a lump-sum within thirty (30) days
following Executive’s termination of employment (subject to
delayed payment to avoid additional taxation under
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”),);
(ii) Equity Compensation
Accelerated Vesting . One hundred percent (100%) of the
unvested portion of any stock option, restricted stock or other
Company equity compensation held by the Executive shall
automatically be accelerated in full so as to become completely
vested.
(iii) Continued
Benefits . Company-paid group health, dental, vision and life
insurance coverage at the same level of coverage as was provided to
such Executive immediately prior to the Change of Control and at
the same ratio of Company premium payment to Executive premium
payment as was in effect immediately prior to the Change of Control
(the “Company-Paid Coverage”). If such coverage
included the Executive’s dependents immediately prior to the
Change of Control, such dependents shall also be covered at Company
expense. Company-Paid Coverage shall continue until the earlier of
(i) one year from the date of termination, or (ii) the
date upon which the Executive and his dependents become covered
under another employer’s group health, dental, vision or life
insurance plans that provide Executive and 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 Executive and his or 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.
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(b) Involuntary
Termination Other than for Cause or Voluntary Termination for Good
Reason Outside of Change of Control Period; Termination Due to
Death or Disability . If the Executive’s employment with
the Company terminates (i) as a result of the
Executive’s Disability, (ii) due to the death of the
Executive, (iii) involuntarily by the Company for any reason
other than for Cause outside of the Change of Control Period, or
(iv) due to a Voluntary Termination for Good Reason outside of
the Change of Control Period, then, subject to Executive (or his
estate or personal representative) entering into and not revoking a
standard form of release of claims with the Company and further
subject to Executive complying with the provisions of
Section 7 hereof (except in the case of Executive’s
death), the Company shall provide Executive with the following
benefits upon such termination:
(i) Severance Payment
. Three hundred percent (300%) of the Executive’s Base
Salary, payable in a lump-sum within thirty (30) days
following Executive’s termination of employment (subject to
delayed payment to avoid additional taxation under Code
Section 409A);
(ii) Equity Compensation
Accelerated Vesting . Any stock option, restricted stock or
other Company equity compensation held by the Executive shall
receive one year’s accelerated vesting.
(iii) Continued
Benefits . Company-paid group health, dental, vision and life
insurance coverage at the same level of coverage as was provided to
such Executive immediately prior to the Change of Control and at
the same ratio of Company premium payment to Executive premium
payment as was in effect immediately prior to the Change of Control
(the “Company-Paid Coverage”). If such coverage
included the Executive’s dependents immediately prior to the
Change of Control, such dependents shall also be covered at Company
expense. Company-Paid Coverage shall continue until the earlier of
(i) one year from the date of termination, or (ii) the
date upon which the Executive and his dependents become covered
under another employer’s group health, dental, vision, or
life insurance plans that provide Executive and 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 Executive and his or 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.
(c) Voluntary Resignation
other than for Good Reason; Termination For Cause . If the
Executive’s employment terminates by reason of the
Executive’s voluntary resignation (and is not a Voluntary
Termination for Good Reason), or if the Executive is terminated for
Cause, then the Executive shall not be entitled to receive
severance or other benefits except for those (if any) as may then
be established under the Company’s then existing severance
and benefits plans or pursuant to other written agreements with the
Company.
(d) Code
Section 409A . Notwithstanding any other provision of this
Agreement, if the Executive is a “key employee” under
Code Section 409A and a delay in making any payment
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or providing any benefit under this Plan
is required to avoid additional taxation under Code
Section 409A, such payments or benefits shall not be made or
provided until the end of six (6) months following the date of
the Employee’s separation from service as required by Code
Section 409 A.
5. Golden Parachute Excise
Taxes . In the event that the benefits provided for in this
Agreement or otherwise constitute “parachute payments”
within the meaning of Section 280G of the Code would be
subject to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), and the aggregate value of such
parachute payments, as determined in accordance with
Section 280G of the Code and the Treasury Regulations
thereunder is less than the product obtained by multiplying 3.59 by
Executive’s “base amount” within the meaning of
Code Section 280G(b)(3), then such benefits shall be reduced
to the extent necessary (but only to that extent) so that no
portion of such benefits will be subject to the Excise Tax.
Alternatively, in the event that the benefits provided for in this
Agreement or otherwise constitute
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