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Exhibit 10.17
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of February 21, 1996, is entered into
by and between Tandem Computers Incorporated ("Employer") and ▇▇▇▇ ▇. ▇▇▇▇▇▇
("Executive"), and supersedes and replaces any prior employment agreement
previously entered into between Employer or any subsidiary thereof and
Executive.
In consideration of the respective undertakings of Employer
and Executive set forth below, Employer and Executive agree as follows:
1. Employment. Employer hereby employs Executive, and
Executive accepts such employment and agrees to perform services for Employer,
for the period and upon the other terms and conditions set forth in this
Agreement.
2. Term of Employment.
2.01 Period of Employment. The initial term of Executive's
employment pursuant to this Agreement will commence on March 1, 1996 (the
"Commencement Date") and, unless terminated at an earlier date in accordance
with Section 5.01 of this Agreement, shall continue in effect until September
30, 1998 or as extended to a later date under Section 5.03(a) or 5.03(e) of this
Agreement. The term of Executive's employment under the terms of this Agreement
commencing on the Commencement Date and ending pursuant to the terms hereof is
hereinafter referred to as the "Period of Employment." The initial Period of
Employment under this Agreement shall be subject to possible extension in twelve
month increments in the sole discretion of Employer as follows. Prior to
September 1 of each year during the Executive's Period of Employment, Employer
may elect (which election shall be made in writing), in its sole discretion, to
terminate Executive's employment on the third succeeding September 30. If no
such election is made, the term of Executive's employment pursuant to the terms
of this Agreement shall be automatically extended for an additional twelve month
period, under the terms and conditions in effect at the time of such extension,
or with such modifications as Employer and Executive may then agree.
2.02 Expiration of Employment. Executive may continue
employment with Employer after the expiration of the Period of Employment in
which case Executive's employment relationship with Employer will be governed by
such other terms as Executive and Employer may agree or as may apply under
applicable law, and Executive's only rights continuing under this Agreement
shall be those rights that have vested during the Period of Employment or
otherwise continue after the Period of Employment under Section 5.03 or other
express terms of this Agreement.
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3. Position and Duties.
(a) During the Period of Employment, Executive agrees to
perform such duties and executive functions as
Employer shall assign to him from time to time and
shall have the title of Senior Vice President and
General Manager of Worldwide Sales. Executive shall
devote his best efforts and (except as provided in
Section 5.03(e) hereof) full-time attention to the
performance of his duties.
(b) Except upon the prior written consent of Employer,
Executive, during the Period of Employment, shall not
(i) accept any other employment; or (ii) engage,
directly or indirectly, in any other business,
commercial or professional activity (whether or not
pursued for pecuniary advantage) that is or may be
competitive with Employer, that might create a
conflict of interest with Employer, or that otherwise
might interfere with the business of Employer, or any
affiliate of Employer.
4. Compensation.
4.01 Base Salary. Employer will pay to Executive during the
Period of Employment an annual base salary to be paid in substantially equal
installments in accordance with Employer's standard payroll procedures and
policies. The initial annual base salary will be at the rate currently being
paid to Executive, and the annual base salary may be increased from time to time
in the sole discretion of Employer (and may not be decreased except pursuant to
a reduction comparable to reductions generally applicable to similarly situated
employees of Employer imposed as part of a company wide cost-savings
initiative).
4.02 Annual Bonus. During the Period of Employment, Executive
will be entitled to participate in Employer's Targeted Income Plan, or any other
bonus plan or program made generally available to Employer's senior executives
(the "Plan"). The award of an annual bonus shall be subject to the terms and
provisions of the Plan, which may be modified from time to time, and the
Executive's annual incentive target bonus may be increased in the sole
discretion of Employer (and may not be decreased except pursuant to a reduction
comparable to reductions generally applicable to similarly situated employees of
Employer imposed as part of a company wide cost-savings initiative).
4.03 Stock Options. During the Period of Employment, Executive
will be eligible to receive grants of Employer's stock options or other stock
incentive awards under programs which are made generally available to Employer's
senior executives from time to time. Such grants are highly discretionary and
will be subject to the terms of the applicable plans and agreements adopted by
Employer from time to time.
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4.04 Participation in Other Benefit Plans. During the Period
of Employment, Executive will be entitled to participate in Employer's
retirement plans, medical and dental plans, disability plans, life insurance
plans, and other Employer benefits not described elsewhere in this Section 4
which are made generally available to Employer's senior executives from time to
time to the extent that Executive's age, position and other factors qualify him
for such benefits.
4.05 Fringe Benefits and Perquisites: Vacation and Sick Leave.
During the Period of Employment, Employer will provide Executive with such
fringe benefits, perquisites, vacation and sick leave as Employer from time to
time makes generally available to its senior executives.
5. Termination and Change in Control.
5.01 Grounds for Termination. The Period of Employment will
terminate prior to the expiration of the term set forth in Section 2 of this
Agreement in the event that:
(a) Executive dies.
(b) Executive becomes permanently disabled and qualifies
for payments under Employer's disability plans for a
period covering 90 consecutive days.
(c) Employer terminates the Period of Employment for
Cause. "Cause" means termination upon (i) willful and
substantial failure by Executive to perform his
duties with Employer (other than due to disability);
(ii) willful engaging by Executive in conduct which
is demonstrably and materially injurious to Employer
or that demonstrates gross unfitness for service;
(iii) Executive's conviction of a felony which
impairs his ability substantially to perform his
duties with Employer or other felony involving
dishonesty or breach of trust; or (iv) any material
breach by Executive of the terms of this Agreement.
Executive will not be subject to termination for
"Cause" without (A) reasonable written notice to
Executive setting forth the reasons for Employer's
intention to terminate Executive and (B) an
opportunity for Executive to cure any of the actions
or omissions forming the basis for such intended
termination, if possible, within 15 days after
receipt of such written notice.
(d) Executive terminates the Period of Employment for
Good Reason. "Good Reason" means termination by
Executive due to (i) a material reduction in
Executive's position (status, offices, titles, or
reporting requirements) , authorities, duties or
responsibilities; (ii) a reduction in Executive's
annual base salary or target annual bonus, other than
a reduction comparable to
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reductions generally applicable to similarly situated
employees of Employer imposed as part of a company
wide cost-savings initiative; (iii) a requirement for
Executive to move his principal office in excess of
30 miles from the present location of Executive's
principal office; or (iv) any material breach by
Employer of the terms of this Agreement. Executive
may not terminate his employment for "Good Reason"
without (A) reasonable written notice to Employer
setting forth the reasons for Executive's intention
to terminate employment and (B) an opportunity for
Employer to cure any of the actions or omissions
forming the basis for such intended termination, if
possible, within 15 days after receipt of such
written notice.
(e) Employer terminates the Period of Employment without
Cause, other than pursuant to Section 5.01(a) or (b)
above.
(f) Executive voluntarily terminates the Period of
Employment without Good Reason, other than pursuant
to Section 5.01(a) or (b) above.
5.02 Effect of Termination.
(a) In the event of termination of the Period of
Employment pursuant to the provisions of Section
5.01(a) above, Executive's estate will be entitled to
be paid the annual base salary otherwise payable to
Executive pursuant to Section 4.01 of this Agreement
only through the date of termination, and Employer
will continue to provide Executive with the benefits
described in Sections 4.04 and 4.05 above through the
date of termination. In addition, Executive's
beneficiaries will be entitled to any benefits
provided under Employer's life insurance plans.
(b) In the event of termination of the Period of
Employment pursuant to the provisions of Section
5.01(b) above, Executive will be entitled to be paid
the annual base salary otherwise payable to Executive
pursuant to Section 4.01 of this Agreement only
through the date of termination, and Employer will
continue to provide Executive with the benefits
described in Sections 4.04 and 4.05 above through the
date of termination. Executive will also be entitled
to benefits in accordance with the terms and
conditions of Employer's disability plans.
(c) In the event of termination of the Period of
Employment pursuant to the provisions of Section
5.0l(c) or (f) above, Employer will have no further
obligations
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hereunder, except that (i) Employer will pay
Executive his annual base salary and continue to
provide Executive with the benefits described in
Sections 4.04 and 4.05 above through the date of
termination and shall remain obligated under Sections
5.03(h) and the first and third sentences of Section
7.06(a), and (ii) in the event of a termination
pursuant to Section 5.01(f) because Executive does
not accept Employer's offer under clause (A) of
Section 5.03(e)(ii), Employer shall remain obligated
under Section 5.03(c)(v) and (viii). Executive will
not be paid any annual bonus pursuant to Section 4.02
of this Agreement for the fiscal year in which the
termination occurs or any subsequent fiscal year,
unless otherwise provided in section 5.03(e).
(d) In the event of termination of the Period of
Employment pursuant to the provisions of Section
5.01(d) or (e) above, Employer will (i) pay Executive
his annual base salary through the date of
termination at the rate in effect at the time notice
of termination is given; (ii) pay Executive a
pro-rated annual bonus for the fiscal year in which
termination occurs for the portion of the fiscal year
prior to the date of termination, based on Employer's
performance through the end of the fiscal quarter in
which the termination occurs; (iii) (except as
provided in section 5.03(f)) pay to Executive, not
later than 30 days following the date of termination,
a lump sum payment equal to three times the sum of
(A) Executive's annual base salary at the rate in
effect at the time notice of termination is given
plus (B) Executive's annual incentive target bonus
under the Plan at the time notice of termination is
given as if such bonus in paid at 100% of the
potential payout under such Plan; (iv) continue to
provide for a period of three years from the date of
termination the benefits described in Section 4.04
(with disability benefits to be calculated as of the
date of termination) to which Executive was entitled
on the date of termination; (v) continue to provide
for a period of three years from the date of
termination the fringe benefits and perquisites
described in Section 4.05 to which Executive was
entitled on the date of termination; (vi) (except as
provided in section 5.03(e)) make a lump sum payment
to Executive in the amount of $500,000.00 or, in the
alternative, if Executive elects in writing within
thirty (30) days from commencement of employment, a
$500,000.00 one hundred percent (100%) vested
Employer contribution to the Tandem Computers
Incorporated Deferred Compensation Plan; (vii) pay
for individual outplacement counseling services to
Executive up to a maximum of $50,000; and
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(viii) extend any Employer loan guarantees and renew
any Employer loans to Executive for a period of three
years from the date of termination.
(e) Notwithstanding any other provision of this
Agreement, Employer shall have the right in its sole
discretion at any time, upon notice to Executive, to
terminate Executive's employment without Cause as
provided in Section 5.01(e). In the event of any such
termination, Employer may condition making payment of
the amounts contemplated to be paid under this
Agreement upon Executive's execution and delivery of
a release and settlement agreement in favor of
Employer of all claims by Executive for payments
under this Agreement or otherwise arising out of
Executive's employment with Employer, except for any
claims which Executive may have based on race, sex or
age discrimination. Any decision of Employer to
terminate Executive's employment without Cause shall
not be subject to arbitration under this Agreement,
nor may a termination without Cause be challenged for
any reason in any court of law or before any federal
or state administrative agency or in any other legal
proceeding; provided that nothing in this paragraph
(e) shall preclude arbitration of any claim for
failure to pay amounts owed to Executive as expressly
provided herein.
5.03 Provisions For Change In Control. The following special
provisions will apply in connection with a Change in Control which is publicly
announced during the Period of Employment. As used in this Agreement, "Change in
Control" shall have the meaning given to it in Section 7.12. Unless otherwise
expressly provided, the benefits under this Section 5.03 will be in addition to
all other benefits to which Executive may be entitled under other provisions of
this Agreement.
(a) When Employer publicly announces during the Period of
Employment execution by Employer of a letter of
intent or definitive agreement to consummate a
transaction that would constitute a Change in
control, Employer will pay to Executive a special
incentive bonus in the amount of $300,000.00. The
period following such announcement until the Change
in Control occurs or the transaction is abandoned
shall be included within the period of Employment for
all purposes of this Agreement, and the Period of
Employment shall thereby be extended to the
expiration of such period.
(b) Upon the change in Control contemplated by the
announcement described in Section 5.03(a), if
Executive has remained in Employer's employment
through the Change in Control or Executive's
employment is terminated after the announcement
described in Section
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5.03(a) either by Employer without Cause or by
Executive for Good Reason, Employer will pay to
Executive a special extraordinary efforts bonus for
special efforts to accomplish the successful
consummation of the Change in Control transaction.
(c) Upon the Change in Control aforementioned in Section
5.03(b), if Executive has remained in Employer's
employment through the Change in Control or
Executive's employment is terminated after the
announcement described in Section 503(a) either by
Employer without Cause or by Executive for Good
Reason, Employer shall use its best efforts to cause
all stock options then held by Executive which have
not yet vested to be assumed by the acquiring
company, or to cause stock options with similar terms
and conditions in the acquiring company to be
substituted therefor, and, in either case, Executive
shall continue to vest in such stock options in the
acquiring company in accordance with their terms
during additional employment and consulting periods
described in paragraph (e) below and during such
other periods as may apply pursuant to the terms of
such stock options. The time to exercise any stock
options in the acquiring company shall not terminate
before 90 days following the end of the additional
employment and consulting periods described in
paragraph (e) below.
(d) Upon the Change in Control aforementioned in Section
5.03(b), if Executive has remained in Employer's
employment through the Change in Control or
Executive's employment is terminated after the
announcement described in Section 5.03(a) either by
Employer without Cause or by Executive for Good
Reason, Employer will pay to Executive the full
(instead of pro-rated) annual bonus which would be
payable to Executive for the entire fiscal year in
which the Change in Control occurs, based on the
assumption that Employer would have continued to
perform for the full fiscal year at the same level of
performance which it had achieved through the date of
the Change in Control. All special payments which are
made and expenses which are incurred on account of
the Change in Control will be disregarded in
measuring Employer's performance. Upon receipt of
such payment, Executive shall not thereafter be
entitled to receive any payment pursuant to Section
5.02 (d) (ii).
(e) (i) Employer agrees to employ Executive, and
Employee hereby accepts employment, as a
full-time employee for the first six months
following the Change in Control
aforementioned in Section 3.03(b) and to
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pay Executive (I) a monthly base salary at
twice the monthly rate of base salary in
effect immediately prior to the change in
Control and (II) a bonus equal to
Executive's annual incentive target bonus
under the Plan at the time of the Change in
Control (for the entire fiscal year in which
the change in control occurs) as if such
bonus is paid at 100% of the potential
payout under such Plan.
(ii) Employer further agrees to offer to retain
Executive during the second six months
following the Change in Control either:
(A) as a full-time employee, in which
event Employer will pay Executive
seventy-five percent (75%) of the
monthly base salary and bonus which
is payable to Executive under the
preceding sentence during the first
six months following the Change in
Control, or
(B) as a part-time consultant or
employee, in which event Employer
will pay Executive fifty percent
(50%) of the monthly base salary
and bonus which is payable to
Executive under the preceding
sentence during the first six
months following the Change in
Control.
(iii) If Employer does not offer to retain
Executive as a full-time employee pursuant
to subparagraph (ii)(A) above, such action
by Employer shall be deemed to be a
termination of Executive's employment by
Employer without Cause for purposes of this
Agreement, including Section 5.03(f) below;
provided, however, that nothing in this
Section 5.03(e) shall affect or interfere
with Employer's right to terminate Executive
for Cause during Executive's full-time
employment in accordance with the provisions
of Section 5.01(c).
(iv) If Employer does offer to retain Executive
as a full-time employee pursuant to
subparagraph (ii)(A) above, and Executive
accepts such offer and is employed as a
full-time employee for such second six-month
period, the Period of Employment will expire
on the first anniversary of the Change in
Control. Executive's employment with
Employer shall continue thereafter at the
level of monthly base salary and bonus which
were in effect immediately prior to the
Change in Control, or upon such other terms
as Employer and Executive may agree, until
terminated for any reason.
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(v) If Employer does offer to retain Executive
as a full-time employee pursuant to
subparagraph (ii)(A) above, and Executive
does not accept such offer, Executive may
elect to be a part-time employee or
consultant during the second six months
following the Change in Control on the terms
described in subparagraph (ii)(B) above. If
Executive elects such position as a
part-time employee or consultant, his
employment with Employer sha11 terminate
upon the expiration of such second six-month
period. Such election by Executive shall be
deemed to be a voluntary termination of
employment by Executive without good Reason
at the end of such second six month period
for purposes of this Agreement, including
section 5.03(f) below; provided, however,
that nothing in this section 5.03(e) shall
affect or interfere with Executive's right
to terminate employment for Good Reason
during Executive's full-time employment in
accordance with the provisions of Section
5.01(d).
(vi) The Period of Employment shall be extended
to the expiration of both such six month
periods described in subparagraphs (e)(i)
and (ii) above, unless and until Executive
declines Employer's offer of full or
part-time employment or consultancy as
described in subparagraphs (e)(i) and (ii)
above, provided, that the compensation and
bonus payments described in subparagraphs
(e)(i) and (ii) above shall be in lieu of
all amounts otherwise owing pursuant to
Sections 4.01 or 4.02 hereof with respect to
such periods.
(vii) If Executive is employed as a full-time
employee for the first six months and
retained as a full or part-time employee or
consultant for the second six months after
the Change in Control under the terms
described above in this paragraph (e), and
Employer performs its obligations under this
paragraph (e), Executive shall not be
entitled to receive any contribution or
payment pursuant to Section 5.02(d)(vi).
(viii) Upon any breach of Employer's obligations
under this paragraph (e) (which breach
continues following written notice by
Executive and the expiration of a reasonable
opportunity for cure), Executive shall be
entitled to receive the payment or
contribution specified in Section
5.02(d)(vi), in addition to the amounts
provided in section 5.03(f) below to the
extent applicable.
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(f) In the event of termination of Executive's employment
by Employer without Cause (other than due to
Executive's death or permanent disability) or by
Executive for Good Reason at any time within 36
months after the Change in Control aforementioned in
Section 5.03(b), Employer will pay to Executive, not
later than 30 days following the date of termination,
a lump sum Payment equal to two and one-half times
the sum of (A) Executive's annual base salary at the
rate in effect immediately prior to the Change in
Control plus (B) Executive's annual incentive target
bonus under the Plan at the time of the Change in
Control as if such bonus is paid at 100% of the
potential payout under such Plan. Upon receipt of
such payment, Executive shall not be entitled to
receive any payment pursuant to Section 5.02(d)(iii).
(g) In the event of termination of Executive's employment
by Employer without Cause (other than due to
Executive's death or permanent disability) or by
Executive for Good Reason any time within 36 months
after the Change in Control aforementioned in Section
5.03(b), Employer will continue to provide the
benefits described in Sections 5.02(d)(iv) and (v)
for a period of three years from the date of
termination and will pay for individual outplacement
counseling services described in Section
5.02(d)(vii). If Employer is unable for any reason to
continue Executive's coverage under its medical
benefits plan, Employer shall provide equivalent
benefits coverage through insurance.
(h) In the event a Change in Control occurs and Executive
becomes entitled to payments under this Agreement,
Employer shall cause its independent auditors
promptly to review, at Employer's sole expense, the
applicability to such payments of Section 4999 of the
Internal Revenue Code of 1986, as amended (the
"Code"). If such auditors shall determine that any
payment or distribution of any type by Employer to
Executive or for his benefit, whether paid or payable
or distributed or distributable pursuant to the terms
of this Agreement or otherwise (the "Total
Payments"), would be subject to the excise tax
imposed by Section 4999 of the Code, or any interest
or penalties with respect to such excise tax (such
excise tax, together with any such interest and
penalties are collectively referred to as the "Excise
Tax"), then Executive shall be entitled to receive an
additional cash payment from Employer (a "Gross-Up
Payment") within 30 days of such determination equal
to an amount such that after payment by Executive of
all taxes (including any interest or penalties
imposed with respect to such taxes), including any
Excise Tax and employment taxes imposed upon the
Gross-Up Payment, Executive would retain an amount of
the Gross-Up Payment equal to the Excise Tax imposed
upon the Total Payments; provided, however, that
Executive will
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be entitled to receive a Gross-Up Payment only if the
amount of the payment defined in Section 28OG(b)(2)
of the Code exceeds the sum of (A) $100,000 plus (B)
2.99 times the Executive's "base amount" as defined
in Section 28OG(b)(3) of the Code, and provided
further, that if Executive is not entitled to receive
a Gross-Up payment, Executive will receive only an
amount of Total Payments that would not include any
payment defined in Section 28OG(b)(1) of the Code.
For purposes of the foregoing determination,
Executive's income tax rate shall be deemed to be the
highest statutory marginal Federal and California
income tax rates (on a combined basis) applicable to
individuals which are then in effect. Employer's
independent auditors shall make their determination
based upon a substantial authority standard under
Section 6662 of the Code. The intent of the parties
is that Employer shall be solely responsible for, and
shall pay, any Excise Tax on the Total Payments and
Gross-up Payment and any income and employment taxes
(including, without limitation, penalties and
interest) imposed on any Gross-Up Payment, as well as
any loss of tax deduction caused by the Gross-Up
Payment. An example of the calculation of the
Gross-Up Payment is set forth in Appendix A. If no
determination by Employer's auditors is made prior to
the time a tax return reflecting any portion of the
Total Payments is required to be filed by Executive,
Executive will be entitled to receive a Gross-Up
Payment calculated on the basis of the Total Payments
reported by Executive in such tax return, within 30
days of the filing of such tax return. In all events,
if any tax authority determines that a greater Excise
Tax should be imposed upon the Total Payments than is
determined by Employer's independent auditors or
reflected in Executive's tax returns, Executive shall
be entitled to receive the full Gross-Up Payment
calculated on the basis of the amount of Excise Tax
determined to be payable by such tax authority from
Employer within 30 days of such determination.
6. Taxes. All payments to be made to Executive under this Agreement
will be net of required withholding of federal, state income and employment
taxes.
7. Miscellaneous.
7.01 Governing Law. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of
California.
7.02 Successors. This Agreement shall be binding upon and
inure to the benefit of Executive and Executive's heirs and estate and of
Employer and its successors. Employer will require any successor (whether by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or assets of Employer to expressly assume this
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Agreement. Failure of Employer to obtain such assumption of this Agreement prior
to the consummation of any such succession shall be a breach of this Agreement.
In any case where a successor assumes Employer's obligations under this
Agreement by operation of law, the requirements imposed in thus Section 7.02
will be satisfied if the successor acknowledges to Executive in writing that it
shall assume or has assumed Employer's obligations under this Agreement by
operation of law within 30 days of receipt of a written notice from Executive
requesting such acknowledgment.
7.03 Amendments. No amendment or modification of this
Agreement will be deemed effective unless made in writing and signed by each
party hereto.
7.04 No Waiver. No term or condition of this Agreement will be
deemed to have been waived, nor will there by any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver will not be deemed a continuing waiver unless specifically stated, will
operate only as to the specific term or condition waived and will not constitute
a waiver of such term or condition for the future or as to any act other than
that specifically waived.
7.05 Assignment. This Agreement is not assignable, in whole or
in part, by any party without the written consent of the other party.
7.06 Legal and Accounting Fees.
(a) Employer will pay legal and accounting fees
charged by ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ and Price
Waterhouse in connection with entering into
this Agreement. In addition, upon
Executive's request, Employer will also pay
or reimburse Executive for the cost, not to
exceed $15,000, of professional accounting
and tax services in connection with the
receipt of payments under Section 5.03 of
this Agreement unless the Period of
Employment terminated under Section 5.01(c)
or (f). Employer will make a tax gross-up
payment to Executive, if necessary, to
offset any taxable income which is reported
for or realized by Executive with respect to
these legal and accounting fees.
(b) Each party will bear its own legal and
accounting fees in connection with any claim
or dispute arising out of or relating to
this Agreement.
7.07 Severability. To the extent that any provision of this
Agreement shall be determined to be invalid or unenforceable, the invalid or
unenforceable portion of such provision will be deleted from this Agreement, and
the validity and enforceability of the remainder of such provision and of this
Agreement will not be affected.
7.08 Notices. All notices under this Agreement will be in
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writing and will be deemed effective when delivered in person (in Employer's
case, to its Secretary) or twenty four (24) hours after deposit thereof in the
U.S. mails, postage prepaid, for delivery as registered or certified mail --
addressed, in the case of Executive, to him at his last residential address
known by Employer and, in the case of Employer, to its corporate headquarters,
attention to its Secretary, or to such other address as Executive or Employer
may designate in writing at any time or from time to time to the other party. In
lieu of notice by deposit in the U.S. mails, a party may give notice by
telegram, telex or telecopy, in which case such notice will be deemed effective
upon receipt.
7.09 Counterparts. This Agreement may be executed by the
parties hereto in counterparts, each of which will be deemed to be an original,
but all such counterparts will together constitute one and the same instrument.
7.10 Headings. The headings of sections herein are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
7.11 Arbitration.
(a) All disputes between Executive (and his
attorneys, successors, and assigns) and
Employer (and its employees, agents,
successors, attorneys and assigns) of any
kind whatsoever, including, without
limitation, all disputes relating in any
manner to the employment or termination of
Executive and all disputes arising under
this Agreement, but excluding any claims by
Executive based on race, sex or age
discrimination ("Arbitrable Claims") shall
be resolved by arbitration. All persons and
entities specified in the preceding sentence
(other than Employer and Executive) shall be
considered third party beneficiaries of the
rights and obligations created by this
Section on Arbitration. Arbitration shall be
final and binding upon the parties and shall
be the exclusive remedy for all Arbitrable
Claims. THE PARTIES HEREBY WAIVE ANY RIGHTS
THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO
ARBITRABLE CLAIMS.
(b) Arbitration of Arbitrable Claims shall be in
accordance with the Employment Dispute
Resolution Rules of the American Arbitration
Association ("AAA Employment Rules"), except
as provided otherwise in this Agreement. The
arbitrator shall be selected from a source
provided by the Judicial Arbitration and
Mediation Service ("J.A.M.S."). In any
arbitration, the burden of proof shall be
allocated as provided by applicable law.
Either party may bring an action in court to
compel arbitration under this Agreement and
to enforce an arbitration award. Otherwise,
neither party shall initiate or prosecute
any lawsuit or administrative action in any
way related to any
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Arbitrable Claim. All arbitration hearings under this Agreement shall
be conducted in San Francisco, California. The Federal Arbitration Act
shall govern the interpretation and enforcement of this Section 7.11.
The fees of the arbitrator shall be split between both parties equally.
(c) All proceedings and all documents prepared in
connection with any Arbitrable Claim shall be
confidential and, unless otherwise required by law,
the subject matter thereof shall not be disclosed to
any person other than the parties to the proceedings,
their counsel, witnesses and experts, the arbitrator,
and, if involved, the court and court staff.
(d) The rights and obligations of Executive and Employer
set forth in this Section 7.11 with respect to
arbitration shall survive the termination of
Executive's employment and the expiration of this
Agreement.
7.12 Change in Control. A "Change in Control" shall be deemed to have
occurred upon: (i) the acquisition by any Person, other than Employer or one or
more Persons controlling, controlled by or under common control with Employer,
of beneficial ownership (as determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of eighty-five percent (85%) or
more of Employer's outstanding voting securities, or (ii) a change in the
composition of the Board of Directors of Employer (the "Board") over any period
of thirty-six (36) consecutive months or less such that a majority of the Board
members (determined by rounding up to the next whole number) cease to be
comprised of individuals who either (A) were Continuing Directors at the start
of such period or (B) were elected or nominated for election as Board members
during such period by at least a majority of the Continuing Directors in office
at the time such election or nomination was approved by the Board.
The 85% test in subparagraph (i) of the Change in Control definition
shall be measured at the time the transaction resulting in the Change in Control
first commences, and there shall be excluded from such calculation, to the
extent provided pursuant to Section 203 (or any successor provision) of the
Delaware General Corporation Law, shares owned by (i) persons who are both
officers and directors of Employer and (ii) employee stock plans in which
employee participants do not have the right to determine confidentiality whether
shares held subject to the plan are to be tendered in a tender or exchange
offer.
"Continuing Director" shall mean any member of the Board who has served
continually as such Board member from and before the commencement of the
transaction resulting in the Change of Control.
"Person" shall mean any individual firm, partnership, corporation or
other entity and shall include any successor of such entity and all
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Affiliates, Associates and Subsidiaries (as such terms are defined in Rule 12b-2
of the Securities Exchange Act of 1934, as amended) of such entity.
IN WITNESS WHEREOF, Employer and Executive have executed this Agreement
as of the date set forth in the first paragraph above.
EMPLOYER: TANDEM COMPUTERS INCORPORATED
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Its Chief Executive Officer
---------------------------------
EXECUTIVE: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
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