3COM CORPORATION
STAND ALONE RESTRICTED STOCK AGREEMENT
3Com Corporation
has granted Ronald A. Sege (the “Participant”),
Restricted Stock shares in accordance with the Participant’s
Employment Agreement dated April 29, 2008 (“
Employment Agreement ”), subject to the following
terms and conditions as set forth in this Award Agreement. The
“Effective Date” of this Award Agreement shall be
May 6, 2008.
1.
Definitions; Vesting and Reacquisition Rights . As
used herein, the following definitions shall apply:
(a)
“ Administrator ” means the Board or any of its
Committees as shall be administering the Award.
(b)
“ Applicable Laws ” means the requirements
relating to the administration of restricted stock plans under U.S.
state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common
Stock is listed or quoted and any other applicable laws.
(c)
“ Award ” means, individually or collectively,
the grant of Restricted Stock under this Award Agreement and Notice
of Grant of Restricted Stock.
(d)
“ Award Agreement ” means this Stand Alone
Restricted Stock Agreement between the Company and the Participant
evidencing the terms and conditions of this Award.
(e)
“ Board ” means the Board of Directors of 3Com
Corporation.
(i) The
Participant’s willful and continued failure to perform the
duties and responsibilities of his position after there has been
delivered to the Participant a written demand for performance from
the Board which describes in reasonable detail the basis for the
Board’s belief that the Participant has not substantially
performed his duties and provides the Participant the opportunity
to present to the Board his good faith reasons for not so
performing and, if the Board does not agree with such reasons, with
thirty (30) days to take corrective action;
(ii) Any
act of personal dishonesty taken by the Participant in connection
with his responsibilities as an employee of the Company with the
intention or reasonable expectation that such action may result in
the substantial personal enrichment of the Participant;
(iii) The
Participant’s conviction of, or plea of nolo contendere to, a
felony;
(iv) A
breach of any fiduciary duty owed to the Company by the
Participant;
(v) The
Participant being found individually liable in any Securities and
Exchange Commission or other civil or criminal securities law
action or entering any cease and desist order with respect to such
action (regardless of whether or not the Participant admits or
denies liability);
(vi) The
Participant (A) obstructing or impeding; (B) endeavoring
to influence, obstruct or impede, or (C) failing to materially
cooperate with, any investigation authorized by the Board or any
governmental or self-regulatory entity (an “
Investigation ”). However, the
Participant’s
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failure to
waive attorney-client privilege relating to communications with the
Participant’s own attorney in connection with an
Investigation will not constitute “Cause”;
or
(vii) The
Participant’s disqualification or bar by any U.S.
governmental or self-regulatory authority from serving in the
capacity contemplated by the Employment Agreement or the
Participant’s loss of any U.S. governmental or
self-regulatory license that is reasonably necessary for the
Participant to perform his responsibilities to the Company under
the Employment Agreement, if (A) the disqualification, bar or
loss continues for more than thirty (30) days, and
(B) during that period the Company uses its good faith efforts
to cause the disqualification or bar to be lifted or the license
replaced. While any disqualification, bar or loss continues during
the Participant’s employment, the Participant will serve in
the capacity contemplated by the Employment Agreement to whatever
extent legally permissible and, if the Participant’s
employment is not permissible, the Participant will be placed on
leave (which will be paid to the extent legally
permissible).
(g)
“ Change in Control ” means the occurrence of
any of the following events:
(i) Any
Person becoming the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more
of the total voting power represented by the Company’s then
outstanding voting securities; or
(ii) The
approval by the stockholders of the Company, or if stockholder
approval is not required, approval by the Board, of a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company’s assets; or
(iii) The
consummation by the Company of a merger or consolidation of the
Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(iv) A
change in the composition of the Board within any twelve
(12) month period during the Term (as defined in the
Employment Agreement) and pursuant to a plan in which the proponent
proposes alternative directors to the Board, as a result of which
fewer than a majority are Incumbent Directors. “ Incumbent
Directors ” shall mean directors who either (A) are
directors of the Company as of the date of the Employment
Agreement, or (B) are elected, or nominated for election, to
the Board with the affirmative votes of at least a majority of
those directors whose election or nomination was not in connection
with any transactions described in subsections (i), (ii), or
(iii) of this Section 1(g) or in connection with an actual or
threatened proxy contest relating to the election of directors of
the Company.
(h)
“ Code ” means the U.S. Internal Revenue Code of
1986, as amended.
(i)
“ Committee ” means a committee, which may
consist of one or more persons whom may or may not be Board
members, as is consistent with the Applicable Laws, appointed by
the Board.
(j)
“ Common Stock ” means the common stock of the
Company.
(k)
“ Company ” shall mean 3Com Corporation and any
successor corporation thereto.
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(l)
“ Consultant ” means any person, including an
advisor, engaged by the Company or a Parent or Subsidiary as an
independent contractor to render services to such
entity.
(m)
“ Date of Restricted Stock Grant ” shall mean
the “Date of Grant” as set forth in the Notice of
Grant.
(n)
“ Director ” means a member 3Com’s Board
of Directors.
(o)
“ Disability ” means the Participant’s
inability to substantially perform his duties under the Employment
Agreement as a result of incapacity by reason of any medically
determinable physical or mental impairment that can be expected to
result in death or to last for a period of twelve
months.
(p)
“ Employee ” means any person, including
Officers and Directors, employed by the Company or any Parent or
Subsidiary of the Company. A Service Provider shall not cease to be
an Employee in the case of (i) any leave of absence approved
by the Company or any leave for which a return to employment is
guaranteed under Applicable Laws, or (ii) transfers between
locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. Neither service as a Director nor
payment of a director’s fee by the Company shall be
sufficient to constitute “employment” by the
Company.
(q)
“ Exchange Act ” means the Securities Exchange
Act of 1934, as amended.
(r)
“ Good Reason ” means the occurrence of any of
the following, without the Participant’s express written
consent; provided however, that Participant must provide the
Company notice of Good Reason within 30 days of the initial
existence of one of the above conditions, upon which notice Company
shall then have 30 days in which to remedy the condition,
under which circumstances Company shall not be required to pay any
amounts specified in Section 8 of the Employment
Agreement:
(i) A
material diminution in Participant’s authority, duties or
responsibilities in effect immediately prior to such
reduction;
(ii) A
material diminution in Participant’s Base Salary or Target
Annual Incentive (as such terms are defined in the Employment
Agreement) as in effect immediately prior to such reduction other
than pursuant to a reduction that also is applied to substantially
all other executive officers of the Company and which reduction
reduces the Base Salary and/or annual cash incentive by a
percentage reduction that is no greater 15%;
(iii) A
material diminution in the kind or level of employee benefits to
which Participant is entitled immediately prior to such reduction
with the result that Participant’s overall benefits package
is significantly reduced other than pursuant to a reduction that is
also applied to substantially all other executive officers of the
Company that reduces the level of employee benefits by a percentage
reduction that is no greater that 15%;
(iv) The
relocation of Participant to a facility or location outside the
United States;
(v) The
failure of the Company to obtain the assumption of the Employment
Agreement by a successor and an agreement that Participant will
retain the same role and responsibilities in the merged or
surviving parent company as he had prior to the merger under
Section 1 of the Employment Agreement or, if more favorable,
the same role and responsibilities that Participant had immediately
prior to the merger; or
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(vi) The
failure of the Company to appoint Participant as its Chief
Executive Officer by April 30, 2011, or the appointment of another
as Chief Executive Officer after the Effective Date (as such term
is defined in the Employment Agreement).
(s)
“ In Connection with a Change of Control ” means
within three (3) months prior to or twelve (12) months
following a Change of Control.
(t)
“ Initial Vesting Date ” shall be the date
occurring one (1) year after the Date of Restricted Stock
Grant.
(u)
“ Notice of Grant ” shall mean the “NOTICE
OF GRANT OF RESTRICTED STOCK”. The Notice of Grant is part of
this Award Agreement.
(v)
“ Number of Restricted Stock ” shall mean the
“Total Number of Restricted Stock Granted” as set forth
in the Notice of Grant.
(w) Intentionally
Omitted.
(x)
“ Officer ” means a person who is an officer of
the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated
thereunder.
(y)
“ Parent ” means a “parent
corporation,” whether now or hereafter existing, as defined
in Section 424(e) of the Code.
(z)
“ Restricted Stock ” means shares of Common
Stock or units/rights to acquire shares of Common Stock granted
pursuant to this Agreement that are subject to vesting, as adjusted
in accordance with this Agreement.
(aa)
“ Service Provider ” means an Employee, Director
or Consultant.
(bb) Intentionally
omitted.
(cc)
“ Subsidiary ” means a “subsidiary
corporation”, whether now or hereafter existing, as defined
in Section 424(f) of the Code and also include partnerships,
limited liability companies and other entities that are at least
30% owned by the Company.
Vesting, Restrictions on Unvested Shares and Unvested Share
Reacquisition Right .
Vesting . Subject to the terms and conditions of this Award
Agreement, and provided that the Participant remains a Service
Provider through each vesting date, the Restricted Stock shall
become “ Vested Shares ” for purposes of this
Award Agreement in three (3) equal, annual installments,
commencing on the Initial Vesting Date. Until the shares of
Restricted Stock vest and become Vested Shares, which unvested
shares shall be called Unvested Shares (as defined below), neither
the Unvested Shares, nor any right with respect to the Unvested
Shares of Restricted Stock under this Agreement, may be sold,
assigned, transferred, pledged, hypothecated (by operation of law
or otherwise) or otherwise conveyed or encumbered and shall not be
subject to execution, attachment or similar process. Any attempted
sale, assignment, transfer, pledge, hypothecation or other
conveyance or encumbrance shall be void and unenforceable against
the Company or any affiliate of the Company. Upon becoming Vested
Shares, such restrictions shall lapse. A legend or legends may be
affixed to share certificates representing the Restricted Stock
evidencing these restrictions.
Notwithstanding
the foregoing, in the event that Participant’s employment is
terminated by the Company without Cause or if Participant resigns
for Good Reason, and such termination is not in Connection with a
Change of Control, then Participant will receive twelve
(12) months accelerated vesting with respect to
Participant’s then outstanding unvested portion of the Award,
at which time such
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additionally
vested shares shall become Vested Shares, provided that Participant
signs the separation agreement and release of claims as set forth
in Section 8(d) of the Employment Agreement and otherwise complies
with such section.
Notwithstanding
the foregoing, in the event that Participant’s employment is
terminated by the Company without Cause or if Participant resigns
for Good Reason, and such termination is in Connection with a
Change of Control, then Participant will become fully vested in
Participant’s then outstanding unvested portion of the Award,
at which time such additionally vested shares shall become Vested
Shares, provided that Participant signs the separation
agree
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