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Exhibit
10.41
BLUE COAT SYSTEMS,
INC.
EXECUTIVE SEPARATION
POLICY
Effective November 15,
2007
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.
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.
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(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 reduction by Blue Coat
of his or her base salary as in effect immediately prior to such
reduction, other than in connection with an ac
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