Exhibit 10.58
BLUE COAT SYSTEMS,
INC.
EXECUTIVE SEPARATION
POLICY
Effective November 15, 2007 and
clarified on December 31, 2008
WHEREAS, each executive of Blue Coat
Systems, Inc. (the “Company”) is employed on an
“at will” basis;
WHEREAS, the Company acknowledges
that, in the event an executive’s employment is terminated by
the Company, it is likely that it will take the executive a period
of time to locate new employment.
WHEREAS, the Company has previously
agreed to make limited separation payments to certain executives in
the event such executives’ employment is terminated other
than for cause and believes it appropriate to establish an
Executive Separation Policy that is applicable to its Executive
Officers (within the meaning of Section 16 of the Securities
Exchange Act of 1934) and such other executives as may be
designated by the Compensation Committee of the Board of Directors
of the Company (the “Compensation Committee”) from time
to time (“Executives”).
The following is the Company’s
policy with respect to separation compensation payable to
Executives:
In the event an Executive’s
employment with the Company is terminated either by the Company
without Cause, or as a result of the Executive’s resignation
for Good Reason, and subject to the Executive’s execution,
before he or she receives any of the benefits provided for in this
paragraph, of a release of claims against the Company in
substantially the terms set forth in Exhibit A (attached
hereto) and such release becoming effective in accordance with its
terms, the Executive will be entitled to receive an amount equal to
six months of his or her base salary as in effect on the date
employment terminates (the “Separation Payment’). The
Separation Payment will be subject to applicable income and
employment tax withholding and will be paid in accordance with the
Company’s standard payroll procedures.
The Separation Payment under this
Separation Policy shall be paid in one lump sum from the general
assets of the Company on the first scheduled payroll date of the
Company following the latest of the following dates: the
Executive’s last day of employment, the date the Company
receives the Executive’s signed release, or the date the
revocation period (if any) specified in the release expires. The
Company shall complete the form of release and deliver it to the
Executive within 30 days after his or her employment terminates.
The form of the release will specify how much time such Executive
has to sign it and whether there is a revocation period; provided
that in any event Executive shall be required to sign the release
and let it become effective within a period of time such that the
Separation Payment shall be paid no later than two and one-half
months after the end of the Executive’s taxable year in which
the termination of employment occurs.
1
This Separation Policy and the
Separation Payments provided for under this policy are intended to
qualify for the short-term deferral exception to Section 409A
described in Treasury Regulation Section 1.409A-1(b)(4) to the
maximum extent possible, and to the extent they do not so qualify,
they are intended to qualify for the involuntary separation pay
plan exception to Section 409A described in Treasury
Regulation Section 1.409A-1(b)(9)(iii) to the maximum extent
possible. Notwithstanding anything to the contrary in this
Agreement, if Executive is a “specified employee”
within the meaning of Section 409A and the regulations
thereunder, as determined by the Compensation Committee, as of the
date of Executive’s “separation from service” as
defined in Treasury Regulation Section 1.409A-1(h) (or any
successor regulation) and if any payments or entitlements provided
for in this Agreement constitute a “deferral of
compensation” within the meaning of Section 409A and
cannot be paid or provided in the manner provided herein without
subjecting Executive to additional tax, interest or penalties under
Section 409A, then any such payment and/or entitlement which
is payable during the first six months following Executive’s
“separation from service” shall be paid or provided to
Executive in a lump sum on the first business day immediately
following the six-month anniversary of Executive’s
“separation from service”. If this provision applies,
it shall supersede any contrary provision of this Separation
Policy.
The following definitions apply to
this Separation Policy:
(A)
“Cause” for
termination of an Executive’s employment relationship with
the Company will exist under only the following
circumstances:
(i) any willful and material act of personal
dishonesty taken by the Executive in connection with his or her job
responsibilities which is intended to result in the
Executive’s substantial personal enrichment;
(ii) any willful act of fraud, embezzlement or other
misconduct that materially damages the Company;
(iii) any willful failure to follow the legal
directives of the Executive’s immediate supervisor (other
than failure to meet performance goals, objectives or measures), in
each case in a manner that results in material damage to the
Company and that is not corrected within thirty (30) days
following written notice thereof to the Executive by his or her
immediate supervisor, such notice to state with specificity the
nature of the failure; provided that if the failure cannot be
reasonably be corrected by the Executive within thirty
(30) days of written notice thereof, correction shall be
commenced by the Executive within thirty (30) days and may be
corrected within a reasonable period thereafter; or
(iv) any willful and material breach of any agreement
with the Company that is not corrected within thirty (30) days
following written notice thereof to the Executive by his or her
immediate supervisor, such notice to state with specificity the
nature of the breach; provided that if the breach cannot reasonably
be corrected within thirty (30) days of written notice
thereof, correction shall be commenced by the Executive within
thirty (30) days and may be corrected within a reasonable
period thereafter.
2
(B) “Good
Reason” for the
Executive to voluntarily terminate his or her employment
relationship with the Company will exist under only the following
circumstances:
(i) without the Executive’s express written
consent, a material diminution in the authority, duties or
responsibilities of the supervisor to whom the Executive is
required to report, or a material diminution in the
Executive’s duties, authority or responsibilities relative to
his or her duties, authority or responsibilities in effect
immediately prior to such reduction, or the Executive’s
removal from such authority, duties and responsibilities, unless he
or she is provided with comparable duties, position and
responsibilities that do not represent a material
diminution;
(ii) without the Executive’s express written
consent, a material diminution by Blue Coat of his or her base
salary as in effect immediately prior to such reduction, other than
in connection with an action affecting a majority of the Executives
covered by the Separation Policy;
(iii
