|
Exhibit 10.21
CEO FORM
IOMEGA
CORPORATION
Executive Retention
Agreement
THIS EXECUTIVE RETENTION AGREEMENT (this
"Agreement") by and between Iomega Corporation, a Delaware
corporation (the "Company"), and Jonathan S. Huberman (the
"Executive") is made as of February 24, 2006 (the "Effective
Date").
WHEREAS, the Company recognizes that, as is the
case with many publicly-held corporations, the possibility of a
change in control of the Company exists and that such possibility,
and the uncertainty and questions which it may raise among key
personnel, may result in the departure or distraction of key
personnel to the detriment of the Company and its stockholders,
and
WHEREAS, the Board of Directors of the Company
(the "Board") has determined that appropriate steps should be taken
to reinforce and encourage the continued employment and dedication
of the Company’s key personnel without distraction from the
possibility of a change in control of the Company and related
events and circumstances.
NOW, THEREFORE, as an inducement for and in
consideration of the Executive remaining in its employ, the Company
agrees that the Executive shall receive the severance benefits set
forth in this Agreement in the event the Executive’s
employment with the Company is terminated under the circumstances
described below subsequent to a Change in Control (as defined in
Section 1.1).
1. Key Definitions.
As used herein, the following terms shall have
the following respective meanings:
1.1 " Change in Control " means an event
or occurrence set forth in any one or more of subsections
(a) through (d) below (including an event or occurrence
that constitutes a Change in Control under one of such subsections
but is specifically exempted from another such
subsection):
(a) the acquisition by an individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership of any capital stock of
the Company if, after such acquisition, such Person beneficially
owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 40% or more of either (i) the then-outstanding
shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the
then-outstanding securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided , however, that for purposes
of this subsection (a), the following acquisitions shall not
constitute a
Iomega Confidential
Page 1 of 13
CEO FORM
Change in Control: (i) any acquisition
directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for,
convertible into or exchangeable for common stock or voting
securities of the Company, unless the Person exercising, converting
or exchanging such security acquired such security directly from
the Company or an underwriter or agent of the Company),
(ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i) and (ii) of subsection (c) of this
Section 1.1; or
(b) such time as the Continuing Directors (as
defined below) do not constitute a majority of the Board (or, if
applicable, the Board of Directors of a successor corporation to
the Company), where the term "Continuing Director" means at any
date a member of the Board (i) who was a member of the Board
on the date of the execution of this Agreement or (ii) who was
nominated or elected subsequent to such date by at least a majority
of the directors who were Continuing Directors at the time of such
nomination or election or whose election to the Board was
recommended or endorsed by at least a majority of the directors who
were Continuing Directors at the time of such nomination or
election; provided , however , that there shall be
excluded from this clause (ii) any individual whose initial
assumption of office occurred as a result of an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies
or consents, by or on behalf of a person other than the Board;
or
(c) the consummation of a merger, consolidation,
reorganization, recapitalization or share exchange involving the
Company or a sale or other disposition of all or substantially all
of the assets of the Company in one or a series of transactions (a
"Business Combination"), unless, immediately following such
Business Combination, each of the following two conditions is
satisfied: (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a
corporation which as a result of such transaction owns the Company
or substantially all of the Company’s assets either directly
or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the "Acquiring Corporation")
in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities,
respectively; and (ii) no Person (excluding the Acquiring
Corporation or any employee benefit plan (or related trust)
maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 20% or more
of the then outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the
then-outstanding securities of such corporation entitled to vote
generally in the election of directors (except to the extent that
such ownership existed prior to the Business Combination);
or
Iomega Confidential
Page 2 of 13
CEO FORM
(d) approval by the stockholders of the Company
of a complete liquidation or dissolution of the Company.
1.2 " Change in Control Date " means the
first date during the Term (as defined in Section 2) on which
a Change in Control occurs. Anything in this Agreement to the
contrary notwithstanding, if (a) a Change in Control occurs,
(b) the Executive’s employment with the Company is
terminated prior to the date on which the Change in Control occurs,
and (c) it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a
third party who has taken steps reasonably calculated to effect a
Change in Control or (ii) otherwise arose in connection with
or in anticipation of a Change in Control, then for all purposes of
this Agreement the "Change in Control Date" shall mean the date
immediately prior to the date of such termination of
employment.
1.3 " Cause " means:
(a) the Executive’s willful and continued
failure to substantially perform his or her reasonable assigned
duties (other than any such failure resulting from incapacity due
to physical or mental illness or any failure after the Executive
gives notice of termination for Good Reason), which failure is not
cured within 30 days after a written demand for substantial
performance is received by the Executive from the Board of
Directors of the Company which specifically identifies the manner
in which the Board of Directors believes the Executive has not
substantially performed the Executive’s duties; or
(b) the Executive’s willful engagement in
illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Company.
For purposes of this Section 1.3, no act or
failure to act by the Executive shall be considered "willful"
unless it is done, or omitted to be done, in bad faith and without
reasonable belief that the Executive’s action or omission was
in the best interests of the Company.
1.4 " Good Reason " means the occurrence,
without the Executive’s written consent, of any of the events
or circumstances set forth in clauses (a) through
(f) below. Notwithstanding the occurrence of any such event or
circumstance, such occurrence shall not be deemed to constitute
Good Reason if, prior to the Date of Termination specified in the
Notice of Termination (each as defined in Section 3.2(a))
given by the Executive in respect thereof, such event or
circumstance has been fully corrected and the Executive has been
reasonably compensated for any losses or damages resulting
therefrom (provided that such right of correction by the Company
shall only apply to the first Notice of Termination for Good Reason
given by the Executive).
(a) the assignment to the Executive of duties
inconsistent in any material respect with the Executive’s
position (including status, offices, titles and reporting
requirements), authority or responsibilities in effect immediately
prior to the earliest to occur of (i) the Change in Control
Date, (ii) the date of the execution by the Company of the
initial written agreement or instrument providing for the Change in
Control or (iii) the date of the adoption by the Board of
Directors of a resolution providing for the Change in Control (with
the earliest to occur of such dates referred to herein as the
"Measurement Date"), or any other action or omission by the Company
which results in a material diminution in such position, authority
or responsibilities;
Iomega Confidential
Page 3 of 13
CEO FORM
(b) a reduction in the Executive’s annual
base salary as in effect on the Measurement Date or as the same was
or may be increased thereafter from time to time;
(c) the failure by the Company to
(i) continue in effect any material compensation or benefit
plan or program (including without limitation any life insurance,
medical, health and accident or disability plan and any vacation or
automobile program or policy) (a "Benefit Plan") in which the
Executive participates or which is applicable to the Executive
immediately prior to the Measurement Date, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan or program,
(ii) continue the Executive’s participation therein (or
in such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amount of benefits provided
and the level of the Executive’s participation relative to
other participants, than the basis existing immediately prior to
the Measurement Date or (iii) award cash bonuses to the
Executive in amounts and in a manner substantially consistent with
past practice in light of the Company’s financial
performance;
(d) a change by the Company in the location at
which the Executive performs his or her principal duties for the
Company to a new location that is both (i) outside a radius of
50 miles from the Executive’s principal residence immediately
prior to the Measurement Date and (ii) more than 50 miles from
the location at which the Executive performed his or her principal
duties for the Company immediately prior to the Measurement Date;
or a requirement by the Company that the Executive travel on
Company business to a substantially greater extent than required
immediately prior to the Measurement Date;
(e) the failure of the Company to obtain the
agreement from any successor to the Company to assume and agree to
perform this Agreement, as required by Section 6.1;
or
(f) any failure of the Company to pay or provide
to the Executive any portion of the Executive’s compensation
or benefits due under any Benefit Plan within seven days of the
date such compensation or benefits are due, or any material breach
by the Company of this Agreement or any employment agreement with
the Executive.
In addition, the termination of employment by the
Executive for any reason or no reason during the 30-day period
beginning on the first anniversary of the Change in Control Date
shall be deemed to be termination for Good Reason for all purposes
under this Agreement.
The Executive’s right to terminate his or
her employment for Good Reason shall not be affected by his or her
incapacity due to physical or mental illness.
1.5 " Disability " means the
Executive’s absence from the full-time performance of the
Executive’s duties with the Company for 180 consecutive
calendar days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to
the Executive or the Executive’s legal
representative.
Iomega Confidential
Page 4 of 13
CEO FORM
2. Term of Agreement . This Agreement, and
all rights and obligations of the parties hereunder, shall take
effect upon the Effective Date and shall expire upon the first to
occur of (a) the date 24 months after the Change in Control
Date, if the Executive is still employed by the Company as of such
later date or (b) the fulfillment by the Company of all of its
obligations under Sections 4, 5.2 and 5.3 if the Executive’s
employment with the Company terminates within 24 months following
the Change in Control Date (the "Term").
3. Employment Status; Termination Following
Change in Control .
3.1 Not an Employment Contract . The
Executive acknowledges that this Agreement does not constitute a
contract of employment or impose on the Company any obligation to
retain the Executive as an employee and that this Agreement does
not prevent the Executive from terminating employment at any time.
If the Executive’s employment with the Company terminates for
any reason and subsequently a Change in Control shall occur, the
Executive shall not be entitled to any benefits under this
Agreement except as otherwise provided pursuant to
Section 1.2.
3.2 Termination of Employment .
(a) If the Change in Control Date occurs during
the Term, any termination of the Executive’s employment by
the Company or by the Executive within 24 months following the
Change in Control Date (other than due to the death of the
Executive) shall be communicated by a written notice to the other
party hereto (the "Notice of Termination"), given in accordance
with Section 7. Any Notice of Termination shall:
(i) indicate the specific termination provision (if any) of
this Agreement relied upon by the party giving such notice,
(ii) to the extent applicable, set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision
so indicated and (iii) specify the Date of Termination (as
defined below). The effective date of an employment termination
(the "Date of Termination") shall be the close of business on the
date specified in the Notice of Termination (which date may not be
less than 15 days or more than 120 days after the date of delivery
of such Notice of Termination), in the case of a termination other
than one due to the Executive’s death, or the date of the
Executive’s death, as the case may be. In the event the
Company fails to satisfy the requirements of Section 3.2(a)
regarding a Notice of Termination, the purported termination of the
Executive’s employment pursuant to such Notice of Termination
shall not be effective for purposes of this Agreement.
(b) The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively,
from asserting any such fact or circumstance in enforcing the
Executive’s or the Company’s rights
hereunder.
(c) Any Notice of Termination for Cause given by
the Company must be given within 90 days of the occurrence (or if
later, the discovery) of the event(s) or
Iomega Confidential
Page 5 of 13
CEO FORM
circumstance(s) which constitute(s) Cause. Prior
to any Notice of Termination for Cause being given
| 
