This Employment
Agreement (the “Agreement”) is entered into on
April 27, 2009 (the “Effective Date”) by and
between:
Hangzhou H3C
Technologies Co., Ltd., a company with its legal address at 310
Ljuhe Road, Zhijang Science Park, Hangzhou 310053, P.R. China, the
current legal representative being Neal D. Goldman,
(“H3C” or the “Company”), which is a
subsidiary of 3Com Corporation (“3Com”); and Dr.
Shusheng Zheng (the “Employee”).
In consideration
of the mutual covenants and promises set forth herein, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as
follows:
The Company hereby
agrees to employ the Employee and the Employee hereby accepts
employment with the Company, on the terms and conditions set forth
herein. For the period starting on the Effective Date and extending
through July 6, 2009, the Employee shall have the title of
Executive Vice President, 3Com, and Chief Operating Officer, H3C.
Starting on July 7, 2009 and continuing thereafter, the
Employee shall have the title of Executive Vice President, 3Com,
and Chief Executive Officer, H3C. The Employee will work primarily
out of the Company’s Hangzhou facility. At the
Company’s discretion and subject to the approval of the 3Com
Board of Directors, the Employee may be designated by the Company
as a Section 16 officer of 3Com, and thus would be subject to
the reporting requirements of Section 16 of the U.S.
Securities Exchange Act of 1934 and the regulations relating
thereto. The Company reserves the right to change the
Employee’s title, responsibilities, reporting relationship,
and work location pursuant to the Company’s business needs
and in line with the Employee’s professional, technical or
physical abilities and work performance.
The Employee
understands and agrees that his position with Company is and will
be a position of importance and trust. The Employee further
understands and agrees that, in the course of and due to his
employment with H3C, he will develop and/or have access to and
responsibility for the Company’s and 3Com’s business
secrets and proprietary and confidential information.
During the
Employee’s period of employment with the Company, the
Employee agrees to devote his full business efforts, time and
attention to the business and interests of the Company and the
Employee will fulfill his duties to the best of his abilities. The
Employee understands and agrees to act in accordance with
3Com’s Code of Ethics and Business Conduct as well as all of
the other 3Com and H3C corporate guidance and ethics guidelines,
conflict of interest policies, and other policies and
practices.
The Employee
hereby warrants that he is not a party to any contract,
understanding, agreement or policy, written or otherwise, that
would be breached by the Employee’s entering into, or
performing services under, this Agreement.
The Company hereby
agrees to employ the Employee, and the Employee agrees to be
employed by the Company, for a period of three (3) years from
the Effective Date (the “Employment Term”), unless
terminated earlier in accordance with the provisions
below.
3.
Compensation, Leave and Holidays .
(a) Base
Salary . For the period starting on the Effective Date and
extending through July 6, 2009, the Company will pay the
Employee a base salary of 2,400,000 RMB annualized. Starting on
July 7, 2009 and continuing thereafter, the Company will pay
the Employee a base salary of 2,950,000 RMB annualized, to be
adjusted by the Compensation Committee from time to time. The
Company will pay the base salary periodically in accordance with
H3C’s normal payroll practices, subject to the applicable
taxes, withholdings and deductions. The Employee’s salary
shall be subject to periodic review and adjustment by
3Com.
(b) Annual
Bonus . The Employee will be eligible to participate in
3Com’s discretionary bonus plan (the “3Bonus
Plan”), with an annualized bonus opportunity of 1,600,000 for
the period starting on the Effective Date and extending though
July 6, 2009, and an annualized bonus opportunity of 1,966,667
RMB for the period starting on July 7, 2009 and continuing
thereafter. Payments under the 3Bonus Plan are discretionary and
are based on various factors, including, but not limited to, H3C
and individual performance, and subject to approval by 3Com. The
Company may, at its discretion, take into account such other
factors as it may consider relevant. Except as provided herein and
to the extent as permitted by law, the 3Bonus Plan is and will be
subject to amendment or termination at any time at the
Company’s discretion.
(c) Long-Term
Incentive Plan. The Employee will be eligible to participate in
a long-term incentive plan (“LTI Plan”) to be designed
by the Company. The provision of benefits under the LTI Plan will
be discretionary and will be based on various factors, including,
but not limited to, the Company and individual performance. The
Company may, at its discretion, take into account such other
factors as it may consider relevant. At the Company’s
discretion, benefits under the LTI Plan may be payable in cash or
3Com equity.
(d)
Benefits . The Employee shall be eligible to participate in
the H3C benefit programs that the Company establishes, the coverage
and benefit levels of which will be substantially similar to those
the Company makes available to its senior employees. To the extent
as permitted by law, all H3C benefit programs are subject to
change, including termination, at the Company’s discretion.
As applicable to the benefit plans for which the Employee is
eligible, and to the extent permitted under the provisions of those
plans, the Employee’s first day of employment with H3C will
be used to determine his service period and the level of benefits
for which the Employee is eligible.
(e)
Expenses . The Company will reimburse the Employee for
reasonable travel, entertainment and other expenses incurred by the
Employee in the furtherance of the performance of his duties on
behalf of the Company, in accordance with the Company’s
business expense reimbursement policy, subject to amendment at the
Company’s discretion.
(f) Leave and
Holiday . The Company will provide the Employee with days of
rest, leave, and public holidays in accordance with applicable
laws, regulations, and Company rules.
(g) Working
Hours . The Employee hereby acknowledges and agrees that
because of the special nature of the Employee’s duties, he is
subject to the Flexible Working Hours System.
2
The Employee
hereby agrees to provide any assistance necessary for and fully
cooperate with the Company in applications for the Employee to work
under the Flexible Working Hours System.
(h)
Section 16 Officer Benefits . If designated as a
Section 16 officer of 3Com, the Employee will be eligible to
participate in benefit programs available to the Company’s
Section 16 officers including, without limitation, the
Company’s Section 16 Officer Severance Plan (the
“Section 16 Plan”). In that event, among other
things, the Employee will receive and be invited to execute a
Management Retention Agreement (“MRA”) confirming his
eligibility for severance benefits in the event of a Change of
Control of the Company, as defined under the MRA. Any benefits
payable under the Section 16 Plan or the MRA will be offset
and reduced by any severance benefits for which the Employee is
eligible under this Agreement.
4.
Termination of Employment .
Notwithstanding
the three-year term of this Agreement, the Employee’s
employment with the Company shall terminate upon the occurrence of
any of the following:
(a) At the
election of the Employee with one (1) mont
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