Exhibit 10.1
March 16,
2009
VIA HAND
DELIVERY
Joel
Wachtler
c/o iPass
Inc.
3800 Bridge
Parkway
Redwood Shores,
CA 94065
Re: Separation
Agreement
Dear
Joel:
This letter
describes the separation agreement (the “ Agreement
”) which iPass Inc. (“the Company”) is offering
to you to aid in your employment transition.
1.
Separation
. Your last date of
employment with the Company will be Tuesday, March 31, 2009 (the
“ Separation Date ”). Between the
date you receive this Agreement and the Separation Date, you will
use your best efforts to continue to perform your assigned duties
(including transitioning your duties), and will continue to fully
comply with all of your legal obligations to the Company (including
complying with all Company policies). On the Separation
Date, the Company will pay you all accrued salary, and all accrued
and unused vacation earned through the Separation Date, subject to
standard payroll deductions and withholdings. You are
entitled to these payments regardless of whether or not you sign
this Agreement.
2.
Severance Benefits.
If: (i) you
timely sign, date and return this Agreement; and (ii) allow the
releases contained herein to become effective; and (iii) on or
after the Separation Date, you sign the Release Agreement attached
as Exhibit A to the iPass Inc. Executive Corporation Transaction
and Severance Benefit Plan (the “ Severance Plan
,” a copy of which is attached hereto as Attachment
A ) and allow the releases contained therein to become
effective; then you will receive the following severance benefits
(the “ Severance Benefits ”) pursuant to the
terms of the Severance Plan:
(a)
Severance Payment. The Company will pay you a
cash severance amount equal to the product of your current Base
Salary (as defined in the Severance Plan) multiplied by six (6)
months, less required deductions and withholdings (the “
Base Severance Payment ”). The Base
Severance Payment will be paid in a lump sum on the first payroll
date which follows both the Separation Date and the Effective Date
of the Release Agreement attached as Exhibit A to the Severance
Plan (as defined therein).
(b)
Bonus Severance Payment. The Company will pay you a cash
severance bonus amount equal to one quarter of your target bonus
under the Company’s annual bonus plan, less required
deductions and withholdings (the “ Bonus Severance
Payment ”). The Bonus Severance Payment will
be paid in a lump sum on the first payroll date which follows both
the Separation Date and the Effective Date of the Release Agreement
attached as Exhibit A to the Severance Plan (as defined
therein).
(c)
Health Insurance. To the extent provided by the
federal COBRA law or, if applicable, state insurance laws
(collectively, “ COBRA ”), and by the
Company’s current group health insurance policies, you will
be eligible to continue your group health insurance benefits at
your own expense. Later, you may be able to convert to
an individual policy through the provider of the Company’s
health insurance, if you wish. You will be provided with
a separate notice more specifically describing your rights and
obligations to continuing health insurance coverage under
COBRA. If you timely elect continued group health
insurance coverage pursuant to COBRA, the Company will, as an
additional severance benefit, pay your COBRA premiums sufficient to
continue group health insurance coverage for you and your covered
dependents (if applicable) at the level of coverage in effect as of
the Separation Date, through the earlier of either: (i) twelve (12)
months from the Separation Date, or (ii) the date that you become
eligible for group health insurance coverage through another
employer. You must promptly notify me in writing if you
become eligible for group health insurance coverage through another
employer prior to the expiration of the twelve month period after
the Separation Date.
(d)
Retention of Laptop Computer and Cell Phone. As an
additional severance benefit, the Company will permit you to retain
the Company’s laptop computer and cell phone provided for
your use in connection with your employment (the “
Electronic Equipment ”), and the Company will transfer
to you its ownership interest in the Electronic Equipment effective
as of the Separation Date. The Electronic
Equipment is being provided to you in “as is” condition
and without warranty or guarantee of any kind. You are
solely responsible for any tax consequences of the Company’s
transfer of its ownership interest in the Electronic
Equipment. In addition, prior to the Separation Date, at
the Company’s request you must provide the Electronic
Equipment to the Company for the purpose of deletion of
confidential and proprietary information, and licensed materials,
from the Electronic Equipment.
3.
Equity Awards.
Vesting of your
outstanding stock options and any other equity awards (the “
Options ”) will cease on the Separation Date and your
unvested Options shall terminate. Your Options,
including your rights to exercise any vested shares, are governed
by the terms of your operative agreements with the Company and the
applicable equity plan.
4.
No Other Compensation or
Benefits. You
acknowledge that, except as expressly provided in this Agreement,
you have not earned and will not receive from the Company any
additional compensation (including base salary, bonus, incentive
compensation, variable compensation, or equity), severance, or
benefits after the Separation Date, with the exception of any
vested right you may have under the express terms of a written
ERISA-qualified benefit plan (e.g., 401(k) account) or any vested
Options.
5.
Expense
Reimbursements. You agree that, within thirty (30)
days of the Separation Date, you will submit your final documented
expense reimbursement statement reflecting all business expenses
you incurred through the Separation Date, if any, for which you
seek reimbursement. The Company will reimburse you for
these expenses pursuant to its regular business
practice.
6.
Return of Company
Property . By the close
of business on the Separation Date, you agree to return to the
Company all Company documents (and all copies thereof) and other
Company property which you have in your possession or control,
including, but not limited to, Company files, notes, drawings,
records, plans, forecasts, reports, financial data, payroll
information, spreadsheets, studies, analyses, proposals,
agreements, research and development information, sales and
marketing information, customer lists, prospect information,
pipeline reports, sales reports, operational and personnel
information, specifications, code, software, databases,
computer-recorded information, tangible property and equipment
(including, but not limited to, computers, facsimile machines,
mobile telephones, servers), credit cards, entry cards,
identification badges and keys; and any materials of any kind which
contain or embody any proprietary or confidential information of
the Company (and all reproductions thereof in whole or in
part). You agree that you will make a diligent search to
locate any such documents, property and information within the
required timeframe. In addition, if you have used any
personally owned computer, server, or e-mail system to receive,
store, review, prepare or transmit any Company confidential or
proprietary data, materials or information, then within five (5)
business days after the Separation Date, you must provide the
Company with a computer-useable copy of such information and then
permanently delete and expunge such Company confidential or
proprietary information from those systems without retaining any
reproductions (in whole or in part); and you agree to provide the
Company access to your system as requested to verify that the
necessary copying and/or deletion is done. You agree
that, after the applicable timeframes noted above, you will neither
use nor possess Company property. Your timely
compliance with this paragraph is a condition precedent to your
receipt of the Severance Benefits.
7.
Proprietary Information
Obligations. You acknowledge your continuing obligations
under your Employee Confidentiality and Inventions Assignment
Agreement, which include but are not limited to your continuing
obligations not to use or disclose any confidential or proprietary
information of the Company. A copy of your Employee
Confidentiality and Inventions Assignment Agreement is attached
hereto as Attachment B .
8.
Nondisparagement.
You agree not to disparage the
Company, and the Company’s officers, directors, employees,
shareholders and agents, in any manner likely to be harmful to them
or their business, business reputation or personal reputation, and
the Company agrees to direct its officers and directors not to
disparage you in any manner likely to be harmful to your business,
business reputation or personal reputation; provided that all
parties may respond accurately and fully to any question, inquiry
or request for information when required by legal
process.
9.
No Admissions.
The promises and
payments in consideration of this Agreement shall not be construed
to be an admission of any liability or obligation by either party
to the other party, and neither party makes any such
admission.
10.
Cooperation and
Assistance. You agree that you will not
voluntarily provide assistance, information or advice, directly or
indirectly (including through agents or attorneys), to any person
or entity in connection with any claim or cause of action of any
kind brought against the Company, nor shall you induce or encourage
any person or entity to bring such claims. However, it
will not violate this Agreement if you testify truthfully when
required to do so by a valid subpoena or under similar compulsion
of law. Further, you agree to voluntarily cooperate with
the Company if you have knowledge of facts relevant to any
threatened or pending litigation against the Company by making
yourself reasonably available without further compensation for
interviews with the Company or its legal counsel, for preparing for
and providing deposition testimony, and for preparing for and
providing trial testimony.
11.
Nonsolicitation.
You agree that for one year
following the Separation Date, you will not, directly or
indirectly, solicit, induce or encourage, or attempt to solicit,
induce or encourage, any employee, consultant, or independent
contractor of the Company to terminate his or her relationship with
the Company in order to become an employee, consultant, or
independent contractor to or for any other person or
entity.
(a)
General Release. In exchange for the
consideration provided to you under this Agreement to which you
would not otherwise be entitled, including but not limited to the
Severance Benefits, and as required by the Severance Plan, you
hereby generally and completely release the Company and its current
and former directors, officers, employees, shareholders, partners,
agents, attorneys, predecessors, successors, parent and subsidiary
entities, insurers, affiliates, and assigns (collectively, the
“ Released Parties ”) of and from any and all
claims, liabilities and obligations, both known and unknown, that
arise out of or are in any way related to events, acts, conduct, or
omissions occurring prior to or on the date you sign this Agreement
(collectively, the “ Released Claims
”).
(b)
Scope of Release. The Released Claims include,
but are not limited to: (i) all claims arising out
of or in any way related to your employment with the Company, or
the termination of that employment; (ii) all claims related to
your compensation or benefits from the Company, including salary,
bonuses, commissions, vacation pay, expense reimbursements,
severance pay, fringe benefits, stock, stock options, or any other
ownership interests in the Company; (iii) all claims for
breach of contract, wrongful termination, and breach of the implied
covenant of good faith and fair dealing; (iv) all tort claims,
including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (v) all federal,
state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or
other claims arising under the federal Civil Rights Act of 1964 (as
amended), the federal Americans with Disabilities Act of
1990, the federal Age Discrimination in Employment Act of 1967
(as amended) (the “ ADEA ”), the California
Labor Code (as amended), and the California Fair Employment and
Housing Act (as amended).
(c)
Excluded Claims. Notwithstanding the foregoing, the
following are not included in the Released Claims (the “
Excluded Claims ”): (i) any rights or claims for
indemnification you may have pursuant to any written
indemnification agreement with the Company to which you are a
party, the charter, bylaws, or operating agreements of the Company,
or under applicable law; (ii) any rights which are not
waivable as a matter of law; and (iii) any claims for breach of
this Agreement. In addition, nothing in this Agreement
prevents you from filing, cooperating with, or participating in any
proceeding before the Equal Employment Opportunity Commission, the
Department of Labor, the California Department of Fair Employment
and Housing, or any other government agency, except that you
acknowledge and agree that you are hereby waiving your right to any
monetary benefits in connection with any such claim, charge or
proceeding. You hereby represent and warrant that, other
than the Excluded Claims, you are not aware of any claims you have
or might have against any of the Released Parties that are not
included in the Released Claims.
(d)
ADEA Waiver. You acknowledge that you are
knowingly and voluntarily waiving and releasing any rights you may
have under the ADEA, and that the consideration given for the
waiver and release in this Section 12 is in addition to anything of
value to which you are already entitled. You further
acknowledge that you have been advised, as required by the ADEA,
that: (i) your waiver and release do not apply to
any rights or claims that may arise after the date that you sign
this Agreement; (ii) you should consult with an attorney prior to
signing this Agreement (although you may choose voluntarily not to
do so); (iii) you have twenty-one (21) days from the date that you
received this Agreement in which to consider this Agreement
(although you may choose voluntarily to sign it earlier); (iv) you
have seven (7) days following the date you sign this Agreement to
revoke the Agreement (by providing written notice of your
revocation to me); and (v) this Agreement will not be effective
until the date upon which the revocation period has expired, which
will be the eighth day after the date that this Agreement is signed
by you provided that you do not revoke it (the “ Effective
Date ”).
(e)
Waiver of Unknown Claims. In giving the releases
set forth in this Agreement, which include claims which may be
unknown to you at present, you acknowledge that you have read and
understand Section 1542 of the California Civil Code which reads as
follows: “A general release does not extend to claims
which the creditor does not know or suspect to exist in his or her
favor at the time of executing the release, which if known by him
or her must have materially affected his or her settlement with the
debtor.” You hereby expressly waive and
relinquish all rights and benefits under that section and any law
or legal principle of similar effect in any jurisdiction with
respect to your release of claims herein, including but not limited
to the release of unknown and unsuspected claims.
13.
Representations.
You hereby represent that you
have been paid all compensation owed and for all hours worked, have
received all the leave and leave benefits and protections for which
you are eligible pursuant to the Family and Medical Leave Act, the
California Family Rights Act, any applicable law, or Company
policy, and have not suffered any on-the-job injury for which you
have not already filed a workers’ compensation
claim.
14.
Dispute Resolution.
To ensure rapid and
economical resolution of any disputes regarding this Agreement, the
parties hereby agree that any and all claims, disputes or
controversies of any nature whatsoever arising out of, or relating
to, this Agreement, or its interpretation, enforcement, breach,
performance or execution, your employment with the Company, or the
termination of such employment, shall be resolved, to the fullest
extent permitted by law, by final, binding and confidential
arbitration in San Francisco, CA conducted before a single
arbitrator by JAMS, Inc. (“ JAMS ”) or its
successor, under the then applicable JAMS arbitration
rules. The parties each acknowledge that by agreeing
to this arbitration procedure, they waive the right to resolve any
such dispute, claim or demand through a trial by jury or judge or
by administrative proceeding. You will have the
right to be represented by legal counsel at any arbitration
proceeding. The arbitrator shall: (a) have
the authority to compel adequate discovery for the resolution of
the dispute and to award such relief as would otherwise be
available under applicable law in a court proceeding; and (b) issue
a written statement signed by the arbitrator regarding the
disposition of each claim and the relief, if any, awarded as to
each claim, the reasons for the award, and the arbitrator’s
essential findings and conclusions on which the award is
based. The arbitrator, and not a court, shall also be
authorized to determine whether the provisions of this paragraph
apply to a dispute, controversy, or claim sought to be resolved in
accordance with these arbitration procedures. Nothing in
this Agreement is intended to prevent either you or the Company
from obtaining injunctive relief in court to prevent irreparable
harm pending the conclusion of any arbitration.
15.
Miscellaneous
. This Agreement,
including Attachments A and B, constitutes the complete, final and
exclusive embodiment of the entire agreement between you and the
Company with regard to the subject matter hereof. It is
entered into without reliance on any promise or representation,
written or oral, other than those expressly contained herein, and
it supersedes any other agreements, promises, warranties or
representations concerning its subject matter. This
Agreement may not be modified or amended except in a writing signed
by both you and a duly authorized officer of the
Company. This Agreement will bind the heirs, personal
representatives, successors and assigns of both you and the
Company, and inure to the benefit of both you and the Company,
their heirs, successors and assigns. If any provision of
this Agreement is determined to be invalid or unenforceable, in
whole or in part, this determination shall not affect any other
provision of this Agreement and the provision in question shall be
modified so as to be rendered enforceable in a manner consistent
with the intent of the parties insofar as possible under applicable
law. This Agreement shall be construed and enforced in
accordance with the laws of the State of California without regard
to conflicts of law principles. Any ambiguity in this
Agreement shall not be construed against either party as the
drafter. Any waiver of a breach of this Agreement, or
rights hereunder, shall be in writing and shall not be deemed to be
a waiver of any successive breach or rights
hereunder. This Agreement may be executed in
counterparts which shall be deemed to be part of one original, and
facsimile signatures shall be equivalent to original
signatures.
If this
Agreement is acceptable to you, please sign and date below within
twenty-one (21) days after you receive it and then send me the
fully signed Agreement. The Company’s offer
contained herein will automatically expire if we do not receive the
fully signed Agreement from you within this timeframe.
I wish you the
best in your future endeavors and thank you for your contributions
to the Company.
By:
/s/ J. Michael Badgis
Vice President,
Human Resources
Attachment A
– iPass Inc. Executive Corporate Transaction and Severance
Benefit Plan
Attachment B
-- Employee Confidentiality and Inventions Assignment
Agreement
Joel
Wachtler
Attachment
A
IPASS
INC. EXECUTIVE CORPORATION TRANSACTION AND SEVERANCE BENEFIT
PLAN
The iPass Inc. Executive Corporate Transaction
and Severance Benefit Plan (the “ Plan ”)
is hereby established effective August 9th, 2007 (the
“ Effective Date ”) and is hereby amended
and restated effective December 23, 2008. The purpose of
the Plan is to provide for the payment of severance benefits to
certain eligible executive employees of iPass Inc. (the “
Company ”) or its Affiliates (as such term is
defined below) in the event that such employees are subject to
qualifying employment terminations, and additional benefits if such
qualifying employment terminations occur within eighteen (18)
months following a Corporate Transaction (as such term is defined
below). In addition, Section 7 below provides certain
benefits upon the consummation of a Corporate Transaction without
regard to a qualifying employment termination. This Plan
shall supersede any generally applicable severance or change in
control plan, policy, or practice, whether written or unwritten,
with respect to each employee who becomes a Participant in the
Plan. For the purposes of the foregoing sentence, a
generally applicable severance or change in control plan, policy or
practice is a plan, policy or practice in which benefits are not
conditioned upon (i) being designated a participant, (ii) receiving
an award such as a stock option, or (iii) the employee electing to
participate. This Plan shall not supersede any
individually negotiated employment contract or agreement, or any
written plans that are not of general application, and, except as
set forth in the Participation Notice, such Participant’s
severance benefit, if any, shall be governed by the terms of such
individually negotiated employment contract, agreement, or written
plan, and shall be governed by this Plan only to the extent that
the reduction pursuant to Section 5(b) below does not entirely
eliminate benefits under this Plan. This document also
constitutes the Summary Plan Description for the Plan.
For purposes of the Plan, except as set forth in
an applicable Participation Notice, the following terms are defined
as follows:
(a)
“ Affiliate
” means a “parent corporation” of the Company or
a “subsidiary corporation” of the Company (whether now
or hereafter existing), as those terms are defined in Sections
424(e) and (f), respectively, of the Code.
(b)
“ Base Salary
” means the Participant’s monthly base pay (excluding
incentive pay, premium pay, commissions, overtime, bonuses and
other forms of variable compensation).
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“
Board ” means the Board of Directors of iPass
Inc.
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(d)
“ Cause ”
shall mean the occurrence of any of the following (and only the
following): (i) conviction of the Participant of any felony
involving fraud or act of dishonesty against the Company or its
Affiliates; (ii) conduct by the Participant which, based upon good
faith and reasonable factual investigation and determination of the
Board, demonstrates gross unfitness to serve; or (iii) intentional,
material violation by the Participant of any contractual,
statutory, or fiduciary duty of the Participant to the Company or
its Affiliates.
(e)
“ COBRA ”
means the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended.
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“
Code ” means the Internal Revenue
Code of 1986, as amended.
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(g)
“ Company
” means iPass Inc. or, following a Corporate Transaction
which is a sale of assets or a merger in which iPass Inc. is not
the surviving entity, the entity to which the assets are sold or
the surviving entity resulting from such transaction,
respectively.
(h)
“ Constructive
Termination ” means a resignation of employment by a
Participant no later than twelve (12) months after an action or
event which constitutes Good Reason is undertaken by the Company or
occurs and such termination results in a “separation from
service” with the Company within the meaning of Treasury
Regulation Section 1.409A-1(h) (without regard to any permissible
alternative definition of “termination of employment”
thereunder).
(i)
“ Corporate
Transaction ” shall mean the occurrence of either of
the following events:
(i)
the sale of all or substantially all
of the assets of the Company; or
(ii)
a merger of the Company with or into
another entity in which the stockholders of the Company immediately
prior to the closing of the transaction own less than a majority of
the ownership interest of the Company immediately following such
closing; provided, however , for purposes of determining
whether the stockholders of the Company prior to the occurrence of
a transaction described above own less than fifty percent (50%) of
the voting securities of the relevant entity afterwards, only the
lesser of the voting power held by a person either before or after
the transaction shall be counted in determining that person’s
ownership afterwards.
Once a Corporate Transaction has occurred, no
future events shall constitute a Corporate Transaction for purposes
of the Plan.
(j)
“ Corporate Transaction
Termination ” means a Covered Termination which
occurs within eighteen (18) months after a Corporate
Transaction.
(k)
“ Covered
Termination ” means either (i) an Involuntary
Termination Without Cause, or (ii) a Constructive
Termination. Termination of employment of a Participant
due to death or disability shall not constitute a Covered
Termination unless a voluntary termination of employment by the
Participant immediately prior to the Participant’s death or
disability would have qualified as a Constructive
Termination. The foregoing notwithstanding, the
following events shall not constitute a Covered
Termination: (i) the Participant resigns his or her
employment with the Company in order to accept employment with
another entity that is controlled (directly or indirectly) by the
Company or is otherwise an Affiliate of the Company; (ii) the
Participant’s employment is terminated, but the Participant
is subsequently rehired within 32 days after such termination of
employment by the Company or an Affiliate for a Substantially
Equivalent or Comparable Position as the Participant’s last
position with the Company or an Affiliate; and (iii) in connection
with a Corporate Transaction, the Participant’s employment is
terminated but prior to such termination the Participant is offered
but does not accept a Substantially Equivalent or Comparable
Position with the Company or an Affiliate of the Company or the
entity acquiring the Company or its assets pursuant to the
Corporate Transaction.
(l)
“ Eligible
Employee ” means an individual who is
(i) employed by the Company or its Affiliates at the Vice President
level and above (excluding the Chief Executive Officer), and (ii)
has been designated an Eligible Employee by the Plan Administrator
in its sole discretion (either by a specific designation or by
virtue of being a member of a class of employees who have been so
designated).
(m)
“ ERISA ”
means the Employee Retirement Income Security Act of
1974, as amended.
(n)
“ Good Reason
” shall mean either of the following actions or events: (i)
the Company requires that the Participant relocate to a worksite
that is more than sixty (60) miles from its principal executive
office as of the Effective Date; or (ii) the Company materially
reduces the Participant’s Base Salary below its then-existing
gross rate; provided however that, in order to qualify as
“Good Reason,” the Participant must submit to the
Company a written notice, within ninety (90) days after the
occurrence of either of the actions or events described in (i) and
(ii) above, describing the applicable actions or events, and
provide the Company with at least thirty (30) days from its receipt
of the Participant’s written notice in which to cure such
actions or events prior to termination of the Participant’s
employment, and provided further that , the
Participant’s employment must terminate no later than twelve
(12) months after the applicable actions or events described in (i)
and (ii) above.
(o)
“ Involuntary
Termination Without Cause ” means a termination by
the Company of a Participant’s employment relationship with
the Company or an Affiliate of the Company for any reason other
than for Cause and such termination results in a “separation
from service” with the Company within the meaning of Treasury
Regulation Section 1.409A-1(h) (without regard to any permissible
alternative definition of “termination of employment”
thereunder).
(p)
“ Participant
” means an individual (i) who is an Eligible Employee and
(ii) who has received a Participation Notice from the Company and
executed and returned such Participation Notice to the
Company. The Participation Notice shall designate the
Participant as either a “Tier I Participant” or a
“Tier II Participant,” provided that, in the
absence of such specific designation, the Participant shall be
deemed a Tier II Participant for purposes of the
Plan. The determination of whether an employee is a
Participant, and the designation of either a Tier I Participant or
a Tier II Participant, shall be made by the Plan Administrator, in
its sole discretion, and such determination shall be binding and
conclusive on all persons.
(q)
“ Participation
Notice ” means the latest notice delivered by the
Company to a Participant informing the employee that the employee
is a Participant in the Plan, substantially in the form of Annex
I hereto.
(r)
“ Plan
Administrator ” means the Board or any committee duly
authorized by the Board to administer the Plan. The Plan
Administrator may, but is not required to be, the Compensation
Committee of the Board. The Board may at any time
administer the Plan, in whole or in part, notwithstanding that the
Board has previously appointed a committee to act as the Plan
Administrator.
(s)
“ Severance
Period ” means (i) in the case of a Covered
Termination that is not a Corporate Transaction Termination, three
(3) months for a Tier II Participant and six (6) months for a Tier
I Participant, and (ii) in the case of a Corporate Transaction
Termination, six (6) months for a Tier II Participant and nine (9)
months for a Tier I Participant.
(t)
“ Substantially
Equivalent or Comparable Position ” is one that
offers the Participant substantially the same Base Salary;
provided, however , that a position shall not be considered
to be a “Substantially Equivalent or Comparable
Position” if a resignation of employment by the Participant
would constitute a Constructive Termination.
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Eligibility For
Benefits.
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(a)
General Rules.
Subject to the
limitations set forth in this Section 3 and Section
5, in the event of a Covered Termination, the Company shall provide
the severance benefits described in Section 4 to each affected
Participant. Upon the consummation of a Corporate
Transaction, the Company shall provide each Participant the
benefits described in Section 7. For the avoidance of
doubt, a person who is not (and was not) a Participant shall not be
eligible for benefits pursuant to the Plan whether or not such
person is (or was) an Eligible Employee.
(b)
Exceptions to Benefit
Entitlement. A Participant will not receive
benefits under the Plan (or will receive reduced benefits under the
Plan) in the following circumstances, as determined by the Plan
Administrator in its sole discretion:
(i)
The Participant has executed an
individually negotiated employment contract or agreement with the
Company relating to severance or change in control benefits that is
in effect on his or her termination date and which provides
benefits that the Plan Administrator, in its sole discretion,
determines to be of greater value than the benefits provided for in
this Plan, in which case such Participant’s severance
benefit, if any, shall be governed by the terms of such
individually negotiated employment contract or agreement and shall
be governed by this Plan only to the extent that the reduction
pursuant to Section 5(b) below does not entirely eliminate benefits
under this Plan.
(ii)
The Participant is entitled to
receive benefits under another severance benefit plan maintained by
the Company ( e.g. , the iPass Inc. Severance Benefit Plan)
on his or her termination date and which provides benefits that the
Plan Administrator, in its sole discretion, determines to be of
greater value than the benefits provided for in this Plan, in which
case such Participant’s severance benefit, if any, shall be
governed by the terms of such other severance benefit plan and
shall be governed by this Plan only to the extent that the
reduction pursuant to Section 5(b) below does not entirely
eliminate benefits under this Plan.
(iii)
The Participant’s employment
terminates or is terminated for any reason other than a Covered
Termination.
(iv)
The Participant does not confirm in
writing that he or she shall be subject to the Company’s
Employee Proprietary Information and Inventions
Agreement.
(v)
The Participant has failed to
execute or has revoked the release within the applicable period of
time specified in Section 5(a).
(vi)
The Participant has failed to return
all Company Property. For this purpose, “
Company Property ” means all paper and
electronic Company documents (and all copies thereof) created
and/or received by the Participant during his or her period of
employment with the Company and other Company materials and
property which the Participant has in his or her possession or
control, including, but not limited to, Company files, notes,
drawings records, plans, forecasts, reports, studies, analyses,
proposals, agreements, financial information, research and
development information, sales and marketing information,
operational and personnel information, specifications, code,
software, databases, computer-recorded information, tangible
property and equipment (including, but not limited to, leased
vehicles, computers, computer equipment, software programs,
facsimile machines, mobile telephones, servers), credit and calling
cards, entry cards, identification badges and keys; and any
materials of any kind which contain or embody any proprietary or
confidential information of the Company (and all reproductions
thereof in whole or in part). As a condition to
receiving benefits under the Plan, Participants must not make or
retain copies, reproductions or summaries of any such Company
documents, materials or property. However, a Participant
is not required to return his or her personal copies of documents
evidencing the Participant’s hire, termination, compensation,
benefits and stock options and any other documentation received as
a shareholder of the Company.
(c)
Termination of
Benefits. A
Participant’s right to receive benefits under this Plan shall
terminate immediately if, at any time prior to or during the period
for which the Participant is receiving benefits hereunder, the
Participant, without the prior written approval of the Plan
Administrator:
(i)
willfully breaches a material
provision of the Company’s Employee Proprietary Information
and Inventions Agreement;
(ii)
encourages or solicits any of the
Company’s then current employees to leave the Company’s
employ for any reason or interferes in any other manner with
employment relationships at the time existing between the Company
and its then current employees; or
(iii)
induces any of the Company’s
then current clients, customers, suppliers, vendors, distributors,
licensors, licensees or other third party to terminate their
existing business relationship with the Company or interferes in
any other manner with any existing business relationship between
the Company and any then current client, customer, supplier,
vendor, distributor, licensor, licensee or other third
party.
In the event of
a Participant’s Covered Termination, the Participant shall be
entitled to receive the benefits provided by this Section 4 except
as may otherwise be provided in the Participant’s
Participation Notice.
(a)
Cash Severance
Benefits. The
Company shall make a cash severance payment to the Participant in
an amount equal to the product of (i) the Participant’s Base
Salary, as in effect on the date of a Covered Termination,
multiplied by (ii) the number of months in the Severance
Period. In addition, provided that the Participant
received an overall performance rating equivalent to or greater
than “Meets Expectations” in the most recent
performance evaluation cycle preceding termination of the
Participant’s employment, the Company shall make an
additional cash severance payment to the Participant as
follows: (i) in the case of a Covered Termination that
is not a Corporate Transaction Termination, in an amount equal to
one quarter of the Participant’s target bonus amount under
the Company’s annual bonus plan, and (ii) in the case of
a Corporate Transaction Termination, in an amount to be determined
by the Plan Administrator but no greater than the product of (i)
one-twelfth (1/12 th )
of the Participant’s target bonus amount under the
Company’s annual bonus plan, multiplied by (ii) the number of
months in the Severance Period. Such severance payments
shall be paid in accordance with Section 6.
(b)
Health Continuation
Coverage.
(i)
Provided that the Participant is
eligible for, and has made an election at or timely after the
Covered Termination pursuant to COBRA under a health, dental, or
vision plan sponsored by the Company, each such Participant shall
be entitled to payment by the Company of all of the applicable
premiums (inclusive of premiums for the Participant’s
dependents for such health, dental, or vision plan coverage as in
effect immediately prior to the date of the Covered Termination)
for such health, dental, or vision plan coverage for a period of
months following the date of the Covered Termination equal to two
times the Severance Period, with such coverage counted as coverage
pursuant to COBRA.
(ii)
No such premium payments (or any
other payments for health, dental, or vision coverage by the
Company) shall be made following the Participant’s death or
the effective date of the Participant’s coverage by a health,
dental, or vision insurance plan of a subsequent
employer. Each Participant shall be required to notify
the Plan Administrator immediately if the Participant becomes
covered by a health, dental, or vision insurance plan of a
subsequent employer. Upon the conclusion of such period
of insurance premium payments made by the Company, the Participant
will be responsible for the entire payment of premiums required
under COBRA for the duration of the COBRA period.
(iii)
For purposes of this Section 4(b),
(i) references to COBRA shall be deemed to refer also to analogous
provisions of state law, and (ii) any applicable insurance premiums
that are paid by the Company shall not include any amounts payable
by the Participant under an Internal Revenue Code Section 125
health care reimbursement plan, which amounts, if any, are the sole
responsibility of the Participant.
(c)
Option Grant and Restricted Stock
Vesting Acceleration . Upon a Corporate Transaction
Termination, (i) the vesting and exercisability of all outstanding
options to purchase the Company’s common stock and all
restricted stock issued pursuant to any equity incentive plan of
the Company that are held by the Participant on such date shall be
accelerated in full, and (ii) any reacquisition or repurchase
rights held by the Company with respect to common stock issued or
issuable (or with respect to similar rights or other rights with
respect to stock of the Company issued or issuable pursuant to any
equity incentive plan of the Company) pursuant to any other stock
award granted to the Participant by the Company shall
lapse. Notwithstanding the provisions of this Section
4(c), in the event that the provisions of this Section 4(c)
regarding acceleration of vesting of a stock award would adversely
affect a Participant’s stock award (including, without
limitation, its status as an incentive stock option under Section
422 of the Code) that is outstanding on the date the Participant
commences participation in the Plan, such acceleration of vesting
shall be deemed null and void as to such option or other stock
award unless the affected Participant consents in writing to such
acceleration of vesting as to such option or other stock award
within thirty (30) days after becoming a Participant in the
Plan.
(d)
Other Employee
Benefits. All
other benefits (such as life insurance, disability coverage, and
401(k) plan coverage) shall terminate as of the Participant’s
termination date (except to the extent that a conversion privilege
may be available thereunder).
(e)
Additional
Benefits. Notwithstanding the foregoing, the Plan
Administrator may, in its sole discretion, provide benefits in
addition to those pursuant to Sections 4(a), 4(b), and 4(c) to one
or more Participants chosen by the Plan Administrator, in its sole
discretion, and the provision of any such benefits to a Participant
shall in no way obligate the Company to provide such benefits to
any other Participant, even if similarly situated.
(a)
Release. In order to be eligible to receive
benefits under the Plan, a Participant must
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