Exhibit 10.29
3COM CORPORATION
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is by and between 3Com Corporation
(the "Company) and Xxxxxx Y. L. Mao ("Executive") and is as of August 7, 2006.
1. Duties and Scope of Employment.
(a) Positions and Duties. As of August 18, 2006 (the "Effective Date"),
Executive will serve as the Company's Executive Vice President, Corporate
Development and shall report directly to the Chief Executive Officer. As soon as
reasonably practicable thereafter, Executive will be appointed to the Board of
Directors of Huawei-3Com Co., Ltd. "H3C"). Executive's principal place of
employment will be in Beijing, China with regular travel to Hangzhou, China.
Executive shall render such business and professional services in the
performance of his duties, consistent with the terms of this Agreement and
Executive's position within the Company, as will reasonably be assigned to him
by the Chief Executive Officer. The period Executive is employed by the Company
under this Agreement is referred to herein as the "Employment Term."
(b) Obligations. During the Employment Term, Executive will devote
Executive's full business efforts and time to the Company and will use good
faith efforts to discharge Executive's obligations under this Agreement to the
best of Executive's ability and in accordance with each of the Company's
corporate guidance and ethics guidelines, conflict of interests policies and
code of conduct. For the duration of the Employment Term, Executive agrees not
to actively engage in any other employment, occupation, or consulting activity,
including membership of boards of directors, for any direct or indirect
remuneration without the prior approval of the Board (which approval will not be
unreasonably withheld); provided, however, that Executive may (i) serve on the
boards of directors of or continue to hold an interest in the companies
previously disclosed and submitted to the Company in writing prior to the
Effective Date and (ii) without the approval of the Board, serve in any capacity
with any civic, educational, or charitable organization, provided such services
do not interfere with Executive's obligations to Company.
(i) Executive hereby represents and warrants to the Company that
Executive is not party to any contract, understanding, agreement or policy,
written or otherwise, that would be breached (subject to the possible exception
referenced in Section 17 of this Agreement) by Executive's entering into, or
performing services under, this Agreement. Executive further represents that as
of the date of this Agreement there are no threatened, pending, or actual claims
against Executive of which he is aware as a result of his employment with his
current employer (or any other previous employer) or his membership on any
boards of directors.
(c) Other Entities. Executive agrees to serve and may be appointed, without
additional compensation, as an officer and director for each of the Company's
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subsidiaries, partnerships, joint ventures, limited liability companies and
other affiliates, including entities in which the Company has a significant
investment as determined by the Company. As used in this Agreement, the term
"affiliates" will include any entity controlled by, controlling, or under common
control of the Company.
2. At-Will Employment. Executive and the Company agree that Executive's
employment with the Company constitutes "at-will" employment. Executive and the
Company acknowledge that this employment relationship may be terminated at any
time, upon written notice to the other party, with or without Cause or Good
Reason (as each such term is defined in Section 10 below), at the option either
of the Company or the Executive. However, as described in this Agreement,
Executive may be entitled to severance benefits depending upon the circumstances
of Executive's termination of employment.
3. Compensation.
(a) Base Salary. As of the Effective Date, the Company will pay Executive
an annual salary of $400,000.00 as compensation for his services (such annual
salary, as is then effective, to be referred to herein as "Base Salary"). The
Base Salary will be paid periodically in accordance with the Company's normal
payroll practices and be subject to the usual, required withholdings.
(b) Annual Incentive. Executive will be eligible to receive annual cash
incentives payable for the achievement of performance goals established by the
Board of Directors of the Company (the "Board") or by the Compensation Committee
of the Board (the "Committee"). During the Employment Term, Executive's target
annual incentive ("Target Annual Incentive") will be not less than 100% of Base
Salary, with a maximum potential opportunity of 200% of Base Salary, subject to
the terms of the bonus plan approved by the Committee except that the terms of
this Agreement shall control to the extent that this Agreement provides for more
favorable terms with respect to the annual incentive as it applies to Executive.
The actual earned annual cash incentive, if any, payable to Executive for any
performance period will depend upon the extent to which the applicable
performance goal(s) specified by the Committee are achieved or exceeded and will
be adjusted for under- or over-performance. Any incentive earned during the
first half of fiscal 2007 will be pro-rated based on the Effective Date
(calculated by multiplying any incentive earned by Executive by a fraction with
a numerator equal to the number of days between the Effective Date and the close
of the first half of the fiscal year and a denominator equal to 182). The
Company will notify Executive of the performance goals in respect of fiscal 2007
within 60 days after the Effective Date.
(c) Stock Options.
(i) In connection with his initial service Executive will be granted
nonstatutory stock options to purchase 2,000,000 shares of Company common stock.
The exercise price of the first tranche of 1,000,000 options will be at a per
share exercise price equal to the closing price per share of Company common
stock on Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx ("Nasdaq") on the first Tuesday in the month immediately
succeeding the month in which Executive commences employment with the Company
(the "First Tuesday Exercise Price"). The second tranche of 1,000,000 options
will be awarded as soon as practicable after Executive becomes CEO of H3C in
accordance with the equity grant policy in effect at the time. No stock options
shall be deemed to have been accepted until Executive has signed the Company's
form of stock option agreement. The stock option grant described above will be
granted under and subject to the terms, definitions and provisions of the
Company's 2003 Stock Plan, as amended (the "2003 Plan"), and the Company's form
of stock option agreement, except that the terms of this Agreement shall control
to the extent that this Agreement provides for more favorable terms with respect
to the stock option grant. The stock option grant will be scheduled to vest at a
rate of 25% on each anniversary of the grants over four (4) years assuming
Executive's continued employment with the Company on each scheduled vesting
date, and will have the maximum term permitted in the 2003 Plan.
4. Employee Benefits.
(a) Generally. Executive will be eligible to participate in accordance with
the terms of all Company employee benefit plans, policies and arrangements that
are applicable to other executive officers of the Company, as such plans,
policies and arrangements may exist from time to time.
(b) Vacation. Executive will be entitled to receive paid annual vacation in
accordance with Company policy for other senior executive officers. In no event
will Executive receive less than four (4) weeks of paid vacation time per
calendar year.
5. Expenses. The Company will reimburse Executive for reasonable travel,
entertainment and other expenses incurred by Executive in the furtherance of the
performance of Executive's duties hereunder, in accordance with the Company's
expense reimbursement policy as in effect from time to time. Executive will be
provided access to a car and driver for his daily travel in connection with his
employment with the Company.
6. Term and Termination of Employment. In the event Executive's employment with
the Company terminates for any reason, Executive will be entitled to any (a)
unpaid Base Salary accrued up to the effective date of termination; (b) unpaid,
but earned and accrued annual incentive for any completed fiscal year as of his
termination of employment; (c) pay for accrued but unused vacation; (d) benefits
or compensation as provided under the terms of any employee benefit and
compensation agreements or plans applicable to Executive; (e) unreimbursed
business expenses required to be reimbursed to Executive; and (f) rights to
indemnification Executive may have under the Company's Articles of
Incorporation, Bylaws, the Agreement, or separate indemnification agreement, as
applicable. In addition, if the termination is by the Company without Cause or
Executive resigns for Good Reason, Executive will be entitled to amounts and
benefits specified in Section 8.
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7. Survival of Covenants.
(a) Non-solicitation and Non-competition. The Executive agrees that during
the Employment Term and for twelve (12) months thereafter, Executive will not
(i) solicit any employee of the Company (other than Executive's personal
assistant) for employment other than at the Company or one of its subsidiaries
or affiliates, or (ii) directly or indirectly sell products competitive to those
of 3Com (including H3C) to any person or entity with whom Executive had contact
while at 3Com; provided, however, that if Executive terminates his employment
for Good Reason pursuant to Section 10(d)(vii), or is terminated without Cause
prior to April 1, 2007 then the provisions of this section 7(a)(ii) shall not
apply.
(b) Nondisparagement. During the Employment Term and for twelve (12) months
thereafter, Executive will not knowingly and materially disparage, criticize, or
otherwise make any derogatory statements regarding the Company, and the members
of the Chief Executive staff and the Board will not knowingly and materially
disparage, criticize, or otherwise make any derogatory comments regarding
Executive. Notwithstanding the foregoing, nothing contained in this Agreement
will be deemed to restrict Executive, the Company or any of the Company's
current or former officers and/or directors from providing information to any
governmental or regulatory agency (or in any way limit the content of any such
information) to the extent they are requested or required to provide such
information pursuant to applicable law or regulation.
(c) Confidentiality. During the Employment Term and thereafter, Executive
will continue to comply with the terms of the Restrictive Covenant Agreement.
8. Severance.
(a) Termination Without Cause or Resignation for Good Reason other than in
Connection with a Change of Control. If Executive's employment is terminated by
the Company without Cause or if Executive resigns for Good Reason, and such
termination is not in Connection with a Change of Control, then, subject to
Section 8(d), Executive will receive: (i) continued payment of the aggregate of
executive's Base Salary plus the Target Annual Incentive for the year in which
the termination occurs (less applicable tax withholdings) for twelve (12)
months, such amounts to be paid out bi-weekly in accordance with the Company's
normal payroll policies; (ii) twelve (12) months accelerated vesting with
respect to Executive's then outstanding, unvested equity awards, other than
performance-based awards, (iii) extension of the exercise period for all
Executive's outstanding stock options to the earlier of 165 calendar days from
the date of termination or the expiration date of the stock options (iv)
reimbursement for premiums paid for continued health benefits for Executive (and
any eligible dependents) under the Company's health plans until the earlier of
(x) eighteen (18) months, payable when such premiums are due (provided Executive
validly elects to continue coverage under the Consolidated Omnibus Budget
Reconciliation Act ("COBRA")), or (y) the date upon which Executive and
Executive's eligible dependents become covered under similar plans, and (v)
conversion of the Executive's basic term life insurance in effect
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immediately prior to the date of termination to continue coverage until the
earlier of (x) one (1) year from the date of termination or (y) the date upon
which the Executive becomes eligible for coverage under another employer's life
insurance plan.
(b) Termination Without Cause or Resignation for Good Reason in Connection
with a Change of Control. If Executive's employment is terminated by the Company
without Cause or by Executive for Good Reason, and the termination is in
Connection with a Change of Control, then, subject to Section 8(d), Executive
will receive: (i) continued payment of two (2) year's Base Salary, less
applicable tax withholdings, in accordance with the Company's normal payroll
policies; (ii) two (2) payments each equal to 100% of Executive's Target Annual
Incentive for the year in which the termination occurs, less applicable tax
withholdings, paid in two equal annual installments in accordance with the
Company's normal schedule for the payment of annual cash incentives; (iii) full
vesting with respect to Executive's then outstanding unvested equity awards,
other than performance-based awards; (iv) extension of the exercise period for
all Executive's outstanding stock options to the earlier of 165 calendar days
from the date of termination or the expiration date of the stock options (v)
reimbursement for premiums paid for continued health benefits for Executive (and
any eligible dependents) under the Company's health plans until the earlier of
(x) eighteen (18) months, payable when such premiums are due (provided Executive
validly elects to continue coverage under COBRA), or (y) the date upon which
Executive and Executive's eligible dependents become covered under similar
plans, and (vi) conversion of the Executive's basic term life insurance in
effect immediately prior to the date of termination to continue coverage until
the earlier of (x) one (1) year from the date of termination or (y) the date
upon which the Executive becomes eligible for coverage under another employers
life insurance plan.
(c) Voluntary Termination Without Good Reason or Termination for Cause. If
Executive's employment is terminated voluntarily, including due to death or
Disability, without Good Reason or is terminated for Cause by the Company, then,
except as provided in Section 6, (i) all further vesting of Executive's
outstanding equity awards will terminate immediately; (ii) all payments of
compensation by the Company to Executive hereunder will terminate immediately,
and (iii) Executive will be eligible for severance benefits only in accordance
with the Company's then established plans.
(d) Separation Agreement and Release of Claims. The receipt of any
severance or other benefits pursuant to this Section 8 will be subject to
Executive signing and not revoking a separation agreement and release of claims
appended hereto as Exhibit A. No severance or other benefits will be paid or
provided until the separation agreement and release agreement becomes effective.
(e) No Duty to Mitigate. Executive will not be required to mitigate the
amount of any payment contemplated by this Agreement, nor will any earnings that
Executive may receive from any other source reduce any such payment.
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9. Excise Tax Gross-Up. In the event that the benefits provided for in this
Agreement constitute "parachute payments" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code") and will be subject
to the excise tax imposed by Section 4999 of the Code, then Executive will
receive (i) a payment from the Company sufficient to pay such excise tax, and
(ii) an additional payment from the Company sufficient to pay the federal and
state and local income and employment taxes and additional excise taxes arising
from the payments made to Executive by the Company pursuant to this sentence.
However the Company may elect not to make payments under the preceding sentence
to the extent it reasonably determines that (a) the "parachute payments" arise
from the acceleration of options with exercise prices exceeding the price at
which the underlying shares could be sold on the date of the Change in Control
and (b) any payments under the preceding sentence would not significantly
benefit the Executive. Unless Executive and the Company agree otherwise in
writing, the determination of Executive's excise tax liability, if any, and the
amount, if any, required to be paid under this Section 9 will be made in writing
by a certified public accounting firm selected by the Company and reasonably
acceptable to the Executive (the "Accountants"). For purposes of making the
calculations required by this Section 9, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. Executive and the Company agree to furnish such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section 9. The Company will bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 9.
10. Definitions.
(a) Cause. For purposes of this Agreement, "Cause" will mean:
(i) Executive's willful and continued failure to perform the duties
and responsibilities of his position after there has been delivered to Executive
a written demand for performance from the Board which describes in reasonable
detail the basis for the Board's belief that Executive has not substantially
performed his duties and provides Executive the opportunity to present to the
Board his good faith reasons for not so performing and, if the Board does not
agree with such reasons, with thirty (30) days to take corrective action;
(ii) Any act of personal dishonesty taken by Executive in connection
with his responsibilities as an employee of the Company with the intention or
reasonable expectation that such action may result in the substantial personal
enrichment of Executive;
(iii) Executive's conviction of, or plea of nolo contendere to, a
felony that the Board reasonably believes has had or will have a material
detrimental effect on the Company's reputation or business;
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(iv) A breach of any fiduciary duty owed to the Company by Executive
that has a material detrimental effect on the Company's reputation or business;
(v) Executive being found liable in any Securities and Exchange
Commission or other civil or criminal securities law action or entering any
cease and desist order with respect to such action (regardless of whether or not
Executive admits or denies liability); or
(vi) Executive (A) obstructing or impeding; (B) endeavoring to
influence, obstruct or impede, or (C) failing to materially cooperate with, any
investigation authorized by the Board or any governmental or self-regulatory
entity (an "Investigation"). However, Executive's failure to waive
attorney-client privilege relating to communications with Executive's own
attorney in connection with an Investigation will not constitute "Cause".
(b) Change of Control. For purposes of this Agreement, "Change of Control"
will mean the occurrence of any of the following events:
(i) The consummation by the Company or by H3C of a merger or
consolidation with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company or the voting power
of H3C, as the case may be, outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the total voting power
represented by the voting securities of the Company or the voting power of H3C
or such surviving entity outstanding immediately after such merger or
consolidation;
(ii) The approval by the stockholders of the Company or H3C, or if
stockholder approval is not required, approval by the Board, of a plan of
complete liquidation of the Company or H3C or an agreement for the sale or
disposition by the Company or H3C of all or substantially all of the Company's
or H3C's assets;
(iii) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended) becoming the "beneficial
owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company or H3C representing 50% or more of the total voting
power represented by the Company's or H3C's then outstanding voting securities;
or
(iv) A change in the composition of the Board within any twelve (12)
month period during the Term and pursuant to a plan in which the proponent
proposes alternative directors to the Board, and as a result of which fewer than
a majority are Incumbent Directors. "Incumbent Directors" will mean directors
who either (A) are directors of the Company as of the date hereof, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of those directors whose election or nomination was not in
connection with any transactions described in
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subsections (i), (ii), or (iii) or in connection with an actual or threatened
proxy contest relating to the election of directors of the Company.
(c) Disability. For purposes of this Agreement, "Disability" will mean
Executive's absence from his responsibilities with the Company on a full-time
basis for 120 calendar days in any consecutive twelve (12) month period as a
result of Executive's mental or physical illness or injury.
(d) Good Reason. For purposes of this Agreement, "Good Reason" means the
occurrence of any of the following, without Executive's express written consent:
(i) A significant reduction of Executive's duties, position, or
responsibilities, relative to Executive's duties, position, or responsibilities
in effect immediately prior to such reduction;
(ii) A substantial reduction by the Company of the facilities and
perquisites (including office space and location) available to Executive
immediately prior to such reduction;
(iii) A material reduction in the kind or level of employee benefits
to which Executive is entitled immediately prior to such reduction with the
result that Executive's overall benefits package is significantly reduced other
than pursuant to a reduction that also is applied to substantially all other
executive officers of the Company and that reduces the level of employee
benefits by a percentage reduction that is no greater than 15%;
(iv) A reduction in Executive's Base Salary or annual cash incentive
as in effect immediately prior to such reduction other than pursuant to a
reduction that also is applied to substantially all other executive officers of
the Company and which reduction reduces the Base Salary and/or annual cash
incentive by a percentage reduction that is no greater than 15%;
(v) The relocation of Executive to a facility or location more than
fifty (50) miles from Beijing, China;
(vi) The failure of the Company to obtain the assumption of the
employment agreement by a successor and an agreement that Executive will retain
the same role and responsibilities in the merged or surviving parent company as
he had prior to the merger under Section 1 of this Agreement or, if more
favorable, the same role and responsibilities that Executive had immediately
prior to the merger; or
(vii) The failure of the Company to cause the appointment of Executive
as Chief Executive Officer of H3C by April 1, 2007; provided however for
purposes of this section 10 (d)(vii) only Executive's sole and exclusive benefit
shall be the payment to him by the Company of $800,000, payable in a lump sum by
May 1, 2007.
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(e) In Connection with a Change of Control. For purposes of this Agreement,
a termination of Executive's employment with the Company is "in Connection with
a Change of Control" if Executive's employment is terminated within three (3)
months prior or twelve (12) months following a Change of Control.
11. Indemnification. Subject to applicable law, Executive will be provided
indemnification to the maximum extent permitted by the Company's Articles of
Incorporation or Bylaws, including, if applicable, any directors and officers
insurance policies, with such indemnification to be on terms determined by the
Board or any of its committees, but on terms no less favorable than provided to
any other Company executive officer or director and subject to the terms of any
separate written indemnification agreement.
12. Confidential Information. Executive will execute the Company's standard form
of confidential information, intellectual property, non-competition and
non-solicitation agreement, appended hereto as Exhibit B (the "Restrictive
Covenant Agreement").
13. Assignment. This Agreement will be binding upon and inure to the benefit of
(a) the heirs, executors and legal representatives of Executive upon Executive's
death, and (b) any successor of the Company. Any such successor of the Company
will be deemed substituted for the Company under the terms of this Agreement for
all purposes. For this purpose, "successor" means any person, firm, corporation,
or other business entity which at any time, whether by purchase, merger, or
otherwise, directly or indirectly acquires all or substantially all of the
assets or business of the Company. None of the rights of Executive to receive
any form of compensation payable pursuant to this Agreement may be assigned or
transferred except by will or the laws of descent and distribution. Any other
attempted assignment, transfer, conveyance, or other disposition of Executive's
right to compensation or other benefits will be null and void.
14. Notices. All notices, requests, demands and other communications called for
hereunder will be in writing and will be deemed given (a) on the date of
delivery if delivered personally; (b) one (1) day after being sent overnight by
a well-established commercial overnight service, or (c) four (4) days after
being mailed by registered or certified mail, return receipt requested, prepaid
and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:
If to the Company:
Attn: Chairman of the Compensation Committee c/o Corporate Secretary
3Com Corporation
000 Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
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If to Executive:
at the last residential address known by the Company
With a copy to:
Xxxxx X. Xxxxxxxxx
Xxxxxxxx & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
15. Severability. If any provision hereof becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable, or void, this Agreement
will continue in full force and effect without said provision.
16. Arbitration.
(a) Except as provided below, any dispute arising out of or relating to
this Agreement or the breach, termination or validity hereof shall be finally
settled by binding arbitration conducted expeditiously in accordance with the
J.A.M.S./Endispute Streamlined Arbitration Rules and Procedures (the "J.A.M.S.
Rules"). The arbitration shall be governed by the United States Arbitration Act,
9 U.S.C. Sections 1-16, and judgment upon the award rendered by the arbitrators
may be entered by any court having jurisdiction thereof. The place of
arbitration shall be Boston, Massachusetts.
(b) The parties covenant and agree that the arbitration shall commence
within 60 days of the date on which a written demand for arbitration is filed by
either party hereto. The parties (or their legal representatives) will promptly
confer to select a single arbitrator mutually acceptable to both parties. The
arbitrator must be a licensed attorney, primarily engaged as a practicing lawyer
in the field of employment law and related litigation for at least ten (10)
years, or primarily engaged in the practice of arbitrating or mediating
executive employment law disputes for at least ten (10) years, and must not have
any existing or prior relationship with the Company or any of its subsidiaries
or affiliates, on the one hand, or Executive, on the other hand.
If the parties are unable to agree upon an arbitrator, one will be selected,
meeting the above criteria, in accordance with the J.A.M.S. Rules. In connection
with the arbitration proceeding, the arbitrator shall have the power to order
the production of documents by each party and any third-party witnesses. In
addition, each party may take up to three (3) depositions as of right, and the
arbitrator may in his or her discretion allow additional depositions upon good
cause shown by the moving party. However, the arbitrator shall not have the
power to order the answering of interrogatories or the response to requests for
admission. In connection with any arbitration, each party shall provide to the
other, no later than seven (7) business days before the date of the arbitration,
the identity of all persons that may testify at the arbitration and a copy of
all documents that may be introduced at the arbitration or considered or used by
a party's witness or expert. The
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arbitrator's decision and award shall be made and delivered within six (6)
months of the selection of the arbitrator. The arbitrator's decision shall set
forth a reasoned basis for any award of damages or finding of liability. The
arbitrator shall not have power to award damages in excess of actual
compensatory damages and shall not multiply actual damages or award punitive
damages or any other damages that are specifically excluded under this
Agreement, and each party hereby irrevocably waives any claim to such damages.
(c) The parties covenant and agree that they will participate in the
arbitration in good faith. This Section 16 applies equally to requests for
temporary, preliminary or permanent injunctive relief, except that in the case
of temporary or preliminary injunctive relief any party may proceed in court
without prior arbitration for the limited purpose of avoiding immediate and
irreparable harm.
(d) Each of the parties hereto (i) hereby irrevocably submits to the
jurisdiction of any United States District Court of competent jurisdiction for
the purpose of enforcing the award or decision in any such proceeding, (ii)
hereby waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution (except as protected
by applicable law), that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof may not be enforced in or by
such court, and hereby waives and agrees not to seek any review by any court of
any other jurisdiction which may be called upon to grant an enforcement of the
judgment of any such court. Each of the parties hereto hereby consents to
service of process by registered mail at the address to which notices are to be
given. Each of the parties hereto agrees that its or his submission to
jurisdiction and its or his consent to service of process by mail is made for
the express benefit of the other party hereto. Final judgment against either
party hereto in any such action, suit or proceeding may be enforced in other
jurisdictions by suit, action or proceeding on the judgment, or in any other
manner provided by or pursuant to the laws of such other jurisdiction.
17. Tax Equalization, Home Leave and Equity Claw-back Indemnification. Executive
shall be entitled to receive reimbursement, annually, for the cost of one round
trip business class airline ticket on the airline of the Executive's reasonable
choice for Executive, his spouse and one additional family member for home leave
purposes. The Company shall indemnify and reimburse Executive for tax
equalization purposes as set forth on Exhibit C. The Company will also reimburse
Executive for reasonable tax preparation expenses up to an annual cap of
$10,000.00. The Company shall indemnify Executive for any losses Executive may
incur as a result of equity "clawbacks" stemming from his prior employment due
to his employment with the Company or 1-13C, provided that Executive submits
appropriate documentation to verify any losses, provided further that the
Company has the right but not the obligation to control the defense of any such
claim, and provided further that such indemnification shall not exceed
$750,000.00.
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18. Integration. This Agreement, together with the Restrictive Covenant
Agreement and the standard forms of equity award agreement that describe
Executive's outstanding equity awards, except as otherwise provided herein,
represents the entire agreement and understanding between the parties as to the
subject matter herein and, except as otherwise provided herein, supersedes all
prior or contemporaneous agreements whether written or oral, including but not
limited to, the Company's Section 16 Officer Severance Plan and the Company's
form of Management Retention Agreement. No waiver, alteration, or modification
of any of the provisions of this Agreement will be binding unless in writing and
signed by duly authorized representatives of the parties hereto. In entering
into this Agreement, no party has relied on or made any representation,
warranty, inducement, promise, or understanding that is not in this Agreement.
To the extent that any provisions of this Agreement conflict with those of any
other agreement, including but not limited to the standard Restrictive Covenant
Agreement to be signed upon Executive's hire, the bonus plan referred to in
Section 3(b), and the Company's 2003 Stock Plan and corresponding agreement to
be signed by Executive in conjunction with his option grants, the terms in this
Agreement will prevail.
19. Waiver of Breach. The waiver of a breach of any term or provision of this
Agreement, which must be in writing, will not operate as or be construed to be a
waiver of any other previous or subsequent breach of this Agreement.
20. Survival. The Restrictive Covenant Agreement and Sections 6 through 13, 15,
16, 18 through 23, and 26 will survive the termination of this Agreement.
21. Headings. All captions and Section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.
22. Tax Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable taxes.
23. Governing Law. This Agreement will be governed by the laws of the
Commonwealth of Massachusetts without regard to its conflict of laws provisions.
24. Acknowledgment. Executive acknowledges that he has had the opportunity to
discuss this matter with and obtain advice from his private attorney, has had
sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement.
25. Conditions. This offer is conditioned upon Executive providing to Company
references relating to Executive's employment in a form acceptable to the
Company, and Company's satisfactory review of such references.
26. Code Section 409A. Notwithstanding anything to the contrary in this
Agreement, if the Company reasonably determines that Section 409A of the Code
will result in the imposition of additional tax to an earlier payment of any
severance or other benefits otherwise due to Executive on or within the six (6)
month period following Executive's
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termination, the severance benefits will accrue during such six (6) month period
and will become payable in a lump sum payment on the date six (6) months and one
(1) day following the date of Executive's termination. All subsequent payments,
if any, will be payable as provided in this Agreement. Additionally, if any
other provision of this Agreement contravenes 409A of the Code, the regulations
promulgated thereunder or any related guidance issued by the U.S. Treasury
Department, the Company, after consultation with the Executive, will reform this
Agreement or any provision hereof to maintain to the maximum extent practicable
the original intent of the provision without violating the provisions of 409A of
the Code.
27. Counterparts. This Agreement may be executed in counterparts, and each
counterpart will have the same force and effect as an original and will
constitute an effective, binding agreement on the part of each of the
undersigned.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by a duly authorized officer, as of the day and year written
below.
COMPANY:
3COM CORPORATION
By: /s/ Xxxx X. Xxxxxxx Date: 8/7, 2006
---------------------------------
EXECUTIVE:
/s/ Xxxxxx Xxx Date: 8/7, 2006
-------------------------------------
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