EXHIBIT 10.30
ALTERA
CORPORATION
SEVERANCE
AGREEMENT
This Severance
Agreement (the “Agreement”) is entered into on March
13, 2006 and made effective as of November 30, 2005 (the
“Effective Date”) by and between John Daane
(hereinafter referred to as “Executive”) and Altera
Corporation (the “Company”).
WHEREAS
, Executive is
employed by the Company as its Chief Executive Officer
(“CEO”);
WHEREAS
, the Company
desires to continue to employ Executive as its CEO;
WHEREAS
, the Company
considers it essential to the best interests of its stockholders to
foster the continuous employment of key management personnel, and
in this connection, the Board of Directors of the Company (the
“Board”) recognizes that, as is the case with many
publicly held corporations, the possibility of a change in control
of the Company may exist and that such possibility, and the
uncertainty and questions that it may raise among management, may
result in the departure or distraction of management personnel to
the detriment of the Company and its stockholders;
WHEREAS
, the Board has
determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the
Company’s senior management to their assigned duties without
distraction in the face of the possibility of a change in control
of the Company;
WHEREAS
, Executive and
Company are parties to a Change of Control Severance Agreement and
Severance Agreement (the “Original Agreements”), as
amended, each dated as of November 30, 2000, and such Original
Agreements expire November 30, 2005;
WHEREAS
, Executive and
Company wish to continue certain benefits contained in the Original
Agreements; and
WHEREAS
, the Company and
Executive agree that Executive shall be eligible for severance
under the circumstances set forth in this Agreement;
Accordingly, the
parties agree as follows:
1. Term of Agreement .
This Agreement shall commence on the Effective Date, and terminate
on the date which is five (5) years following such date, unless the
term of this Agreement is extended at the sole discretion of the
Company’s Board of Directors. Nothing in this Agreement shall
be construed as creating an obligation to extend the term of the
Agreement.
2. Executive’s
Eligibility for Severance . Executive shall be entitled to the
“Severance Package” as defined in Section 3 of this
Agreement if (but only if) the Company terminates Executive’s
employment for reasons other than (A) Executive’s death, (B)
for Cause, or (C) if Executive is eligible to receive the Change in
Control Severance Package, as defined herein. Executive is not
entitled to the Severance Package if Executive terminates his
employment for any reason. In addition, as a condition
of
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Executive receiving the
Severance Package, Executive and the Company agree to sign a
release agreement in the form attached hereto as Exhibit
“A” within thirty days of the effective date of
Executive’s termination and prior to Executive receiving the
Severance Package.
3. Severance Package .
In the event Executive is entitled to the Severance Package
pursuant to Section 2, above, it shall be payable within thirty
days of Executive’s termination. The Severance Package shall
consist of (i) payment equivalent to twenty-four months of
Executive’s then-current base salary, and (ii) one year of
accelerated stock vesting, which applies to all Executive’s
restricted stock, stock options, or other equity in the Company.
Subject to earlier termination of the stock options or other equity
awards to the extent not assumed in connection with a merger of the
Company or the sale of substantially all of the assets of the
Company (as set forth in Section 12(c) of the Company’s 1996
Stock Option Plan, Section 21 of the 2005 Equity Incentive Plan or
comparable provision of any successor equity incentive plan),
Executive shall have one (1) year from the date of termination to
exercise any stock options; provided that the exercise period for
any stock option shall not be extended to cause the stock option to
provide for the deferral of compensation under Code Section 409A
(or any official guidance thereunder).
4. Change in
Employment Status .
(a) Any
termination of Executive’s employment following a Change in
Control, as such term is defined herein, by the Company or by
Executive shall be communicated by written notice of termination to
the other party hereto in accordance with Section 9, which notice
shall specify the effective date of such termination and specify
the provisions of this Agreement, if any, upon which such
termination is based.
(b) Executive
shall be entitled to the benefits provided in Section 5 if (but
only if) within 24 months following a Change in Control one or more
of the following events (the “Trigger Events”) occur:
(i) the Company terminates Executive’s employment with an
effective date within such 24 month period for reasons other than
(A) Executive’s death or (B) for Cause, (ii) Executive is
reassigned by the Company to a position other than CEO and
Executive terminates his employment with an effective date within
90 days of such reassignment; or (iii) the Company moves its
headquarters more than 60 miles from the location of its present
headquarters and Executive terminates his employment with an
effective date within 90 days of such move. In addition, as a
condition of Executive receiving the Change in Control Severance
Package, Executive and the Company agree to sign a release
agreement in the form attached hereto as Exhibit “A”
within thirty days of the effective date of Executive’s
termination and prior to Executive receiving the Change in Control
Severance Package.
5. Severance Upon the
Occurrence of a Trigger Event . In the event of the occurrence
of a Trigger Event, Executive shall receive from the Company within
thirty (30) days of the date of termination the “Change in
Control Severance Package”, as hereinafter defined. The
Change in Control Severance Package shall consist of (i) payment
equivalent to twenty-four months of Executive’s then-current
base salary, (ii) a
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bonus equivalent to two times
Executive’s target bonus for the fiscal year in which the
Change in Control occurs, and (iii) accelerated vesting of all
restricted stock, stock options or other equity in the Company
which have been granted or issued at least six months prior to the
Change in Control. Subject to earlier termination of the stock
options or other equity awards to the extent not assumed in
connection with a merger of the Company or the sale of
substantially all of the assets of the Company (as set forth in
Section 12(c) of the Company’s 1996 Stock Option Plan,
Section 21 of the 2005 Equity Incentive Plan or comparable
provision of any successor equity incentive plan), Executive shall
have one (1) year from the date of termination to exercise any
stock options for which vesting is accelerated pursuant to
subsection (iii); provided that the exercise period for any stock
option or other equity award shall not be extended to any extent
such extension would cause the stock option or equity award to
provide for the deferral of compensation under Code Section 409A
(or any official guidance thereunder). The Change in Control
Severance Package (or Limited Payment Amount, as defined in Section
6) provided for herein shall be paid in lieu of any other severance
to Executive, including but not limited to the benefits described
in Section 3 hereof.
6. Limits on
Amounts Payable .
(a)
Notwithstanding anything contained in this Agreement to the
contrary, to the extent that any payment or benefit (within the
meaning of Section 280G(b)(2) of the Code) to Executive or for
Executive’s benefit, paid or payable or distributed or
distributable pursuant to Section 5 of this Agreement
(“Payment” or “Payments”), would be subject
to the excise tax imposed under Code Section 4999, or any interest
or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
“Excise Tax”), the Payments shall be reduced (but not
below zero) if and to the extent that a reduction in the Payments
would result in Executive retaining a larger amount, on an
after-tax basis (taking into account federal, state and local
income taxes and the Excise Tax), than if Executive received all of
the Payments (any such reduced amount is hereinafter referred to as
the “Limited Payment Amount”). Unless Executive shall
have given prior written notice specifying a different order to the
Company to effectuate the Limited Payment Amount, the Company shall
reduce or eliminate the Payments by (i) first reducing or
eliminating those Payments which are not payable in cash, and then
(ii) by reducing or eliminating cash Payments. Any notice given by
Executive pursuant to the preceding sentence shall take precedence
over the provisions of any other plan, arrangement or agreement
governing Executive’s rights and entitlements to any benefits
set forth in Section 5.
(b) An initial
determination as to whether the Payments shall be reduced to the
Limited Payment Amount and the amount of such Limited Payment
Amount shall be made, at the Company’s expense, by a
nationally recognized accounting firm that is the Company’s
independent accounting firm as of the date of the Change of Control
(the “Accounting Firm”). The Accounting Firm shall
provide its determination (the “Determination”),
together with detailed supporting calculations and documentation,
to the Company and Executive within five (5) days of
Executive’s termination date, if applicable, or such other
time as requested by the Company or by Executive
(provided
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Executive reasonably believes
that any of the Payments may be subject to the Excise Tax). If the
Accounting Firm determines that no Excise Tax is payable by
Executive with respect to a Payment or Payments, it shall furnish
Executive with an opinion reaso
