Exhibit 10.1
TRANSITION AND SEPARATION
AGREEMENT
RECITALS
This Transition and Separation
Agreement (“Agreement”) is made by and between Kim
Niederman (“Employee”) and Polycom, Inc.
(“Company”) (jointly referred to as the
“Parties”):
WHEREAS, Employee is employed by the
Company;
WHEREAS, around January 3,
2003, the Company and Employee entered into a Proprietary
Information and Invention Agreement (the “Proprietary
Information Agreement”);
WHEREAS, on March 5, 2005, the
Company and Employee entered into the Company’s
Indemnification Agreement (the “Indemnification
Agreement”);
WHEREAS, effective June 1,
2005, the Company and Employee entered into a Change of Control
Severance Agreement (the “Change of Control
Agreement”);
WHEREAS, the Company and Employee
have entered into certain written stock option agreements to
purchase common stock of the Company pursuant to certain Company
stock option plans (the “Stock Agreements”);
WHEREAS, Employee will tender his
resignation from employment with the Company in connection with the
Company’s restructuring to be effective on the earlier of
(1) the end of the quarter in which the employment start date
occurs of Employee’s replacement or
(2) December 31, 2005 (the “Termination
Date”) and the Company has accepted that
resignation;
WHEREAS, the Parties wish to resolve
any and all disputes, claims, complaints, grievances, charges,
actions, petitions and demands that the Employee may have against
the Company as defined herein, including, but not limited to, any
and all claims arising out of, or related to, Employee’s
employment with, or separation from, the Company;
NOW THEREFORE, in consideration of
the promises made herein, the Parties hereby agree as
follows:
COVENANTS
1. Consideration .
(a) Transition Period .
Except as provided in Section 5 below, until the Termination
Date, the Company agrees to pay Employee his normal standard
compensation and benefits package as extended to him in his
January 2, 2003 offer letter, including 100% of the quarterly
incentive payment provided under the 2005 Executive Bonus Plan, if
Employee works any day in the respective quarter, but only to the
extent such quarterly incentive payment is earned under
[***] Portions of this exhibit have
been omitted pursuant to a request for confidential treatment filed
pursuant to Rule 24b-2 promulgated under the Securities Exchange
Act of 1934, as amended, and the omitted portions represented by
[***] have been separately filed with the Securities and Exchange
Commission.
the applicable provisions and
performance goals as pursuant to the 2005 Executive Bonus Plan.
Until the Termination Date, the Company agrees not to change
Employee’s title or demote Employee without Cause (as defined
in Section 6(c) below). In addition, the Company agrees to pay
Employee the annual incentive payment provided under the 2005
Executive Bonus Plan, calculated on actual base salary earnings for
2005 (i.e. prorated accordingly), but only to the extent such
annual incentive payment is earned under the applicable provisions
and performance goals as pursuant to the 2005 Executive Bonus Plan.
The Company agrees that Employee is not required to be employed on
the February 2006 payment date to receive the annual incentive
payment.
(b) Quarterly Bonus. Until
the Termination Date, Employee is eligible to receive two quarterly
bonuses in the amount of $50,000 each, less applicable
withholdings, if the Company meets its revenue targets of [***] for
the third quarter and [***] for the fourth quarter as agreed to by
the Company and Employee, payable within thirty (30) days
following the end of the respective quarter.
(c) Resignation . On the
Termination Date, Employee will be deemed to have resigned
voluntarily from all Company positions held by him, without any
further required action by the Employee; provided however, if the
Company requests, Employee will execute any documents necessary to
reflect his resignation.
(d) Supplemental Release
Agreement . In consideration for the execution by Employee of a
Supplemental Separation Agreement and Release within ten
(10) business days after Employee’s Termination Date,
the form of which is attached hereto as Exhibit A (the
“Supplemental Agreement”), then as provided in the
Supplemental Agreement, the Company shall pay Employee the lump sum
of one hundred and fifty thousand dollars ($150,000) less
applicable withholdings (the “Supplemental Severance
Payment”). The Company shall make this Supplemental Severance
Payment to Employee within ten (10) business days following
the Effective Date of the Supplemental Agreement.
(e) COBRA . Employee’s
health insurance benefits will cease on the Termination Date,
subject to Employee’s right to continue his health insurance
under COBRA. As provided in the Supplemental Agreement, the Company
shall pay Employee a lump sum amount equal to the COBRA premiums
for a period of six (6) months payable within ten
(10) business days following the Effective Date of the
Supplemental Agreement, provided Employee elects to continue health
insurance under COBRA.
2. Company Devices . After
the Termination Date, the Company shall allow Employee to keep his
Company-issued mobile phone, assigned telephone number and PDA
(respectively the “Company Devices”), pursuant to the
Company’s policy. The Company will issue an Internal Revenue
Service Form 1099 to Employee for the purpose of reporting the fair
market value of the Company Devices.
[***] Portions of this exhibit have
been omitted pursuant to a request for confidential treatment filed
pursuant to Rule 24b-2 promulgated under the Securities Exchange
Act of 1934, as amended, and the omitted portions represented by
[***] have been separately filed with the Securities and Exchange
Commission.
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3. Unemployment Benefits .
The Company agrees that Employee is entitled to apply for
unemployment benefits.
4. Stock . The Parties agree
that for purposes of determining the number of shares of the
Company’s common stock that Employee is entitled to purchase
from the Company, the Employee will be considered to have vested
through the Termination Date. The Parties also agree that a Closing
Statement, similar to Exhibit B as attached hereto, will be
provided on the Termination Date and will accurately reflect the
number of Employee’s vested and exercised options under each
of the Stock Agreements as of the Termination Date. The terms of
the existing Stock Agreements including the non-compete and
non-solicit provisions thereof, shall continue to govern the
exercise and vesting of Employee’s options to purchase common
stock of the Company. If Employee has any questions regarding his
stock options, he may contact Stock Administration at the
Company.
5. Benefits .
Employee’s participation in all benefits and incidents of
employment (including the vesting of stock options) shall cease on
the Termination Date. Employee will receive payment of his accrued
but unused vacation through the Termination Date and, following his
submission of proper expense reports, the total unreimbursed amount
of all expenses incurred by Employee in connection with his
employment with the Company that are reimbursable in accordance
with the Company’s policies.
6. Severance .
(a) Termination Without Cause or
Termination for Good Reason prior to Termination Date . If
Employee’s employment is terminated by the Company before the
Termination Date, either without Cause or by Employee for Good
Reason, Employee will receive all compensation and benefits as
contemplated under this Agreement and the Supplemental Agreement,
as if Employee met the December 31, 2005 termination date;
provided however, Employee must comply with this Agreement,
including signing and not revoking the Supplemental
Agreement.
(b) Termination for Cause or
Voluntary Termination without Good Reason prior to Termination
Date . If Employee’s employment is terminated by the
Company before the Termination Date, either for Cause or by
Employee without Good Reason, Employee will not receive any
compensation and benefits as contemplated under this Agreement and
the Supplemental Agreement.
(c) Cause . For purposes of
this Agreement, “Cause” means (i) Employee’s
willful and continued failure to perform the duties and
responsibilities of his position (without regard to financial
milestones) that is not corrected within a thirty (30) day
correction period that begins upon delivery to Employee of a
written demand for performance from the Company that describes the
basis for the Company’s belief that Employee has not
substantially performed his duties; (ii) any act of personal
dishonesty taken by Employee in connection with his
responsibilities as an employee of the Company with the intention
or reasonable expectation that such may result in substantial
personal enrichment of Employee; (iii) Employee’s
conviction of, or plea of nolo contendre to, a felony that the
Company reasonably believes has had or will have a material
detrimental effect on the Company’s reputation or business,
or (iv) Employee materially breaching
Employee’s
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Proprietary Information Agreement,
which breach is (if capable of cure) not cured within thirty
(30) days after the Company delivers written notice to
Employee of the breach.
(d) Good Reason . For
purposes of this Agreement, “Good Reason” means the
occurrence of any of the following, without Employee’s
consent: (i) a reduction in Employee’s Base Salary; or
(ii) the Company requiring Employee to relocate his principal
place of business or the Company relocating its headquarters, in
either case to a facility or location outside of a thirty-five
(35) mile radius from Employee ‘s current principal
place of employment; provided, however, that Employee only will
have Good Reason if the event or circumstances constituting Good
Reason specified in any of the preceding clauses is not cured
within thirty (30) days after Employee gives written notice to
the Company.
(e) Sole Right to Severance
Benefits . The Parties understand and acknowledge that this
Agreement and the Supplemental Agreement are intended to represent
Employee’s sole entitlement to severance payments and
benefits in connection with the termination of his employment. To
the extent Employee is entitled to receive severance payments or
benefits under any other Company program, including the Change of
Control Agreement, severance payments and benefits due Employee
under this Agreement and the Supplemental Agreement will be so
reduced so there will be no duplication of severance or
benefits.
7. Confidential
