Change of Control and Severance Agreement - Informix Corp. and Robert C. McBride
INFORMIX CORPORATION
CHANGE OF CONTROL AND SEVERANCE AGREEMENT
This Change of Control and Severance Agreement (the "Agreement") is
made and entered into by and between Robert C. McBride (the "Executive") and
Informix Corporation (the "Company"), effective as of the last date set forth by
the signatures of the parties below (the "Effective Date").
RECITALS
A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other Change of Control (as
defined below). The Board of Directors of the Company (the "Board") recognizes
that such consideration, and the possibility that the Executive's employment
could be terminated by the Company for a reason other than for cause, can be
distractions to the Executive and can cause the Executive to consider
alternative employment opportunities. The Board has determined that it is in the
best interests of the Company and its stockholders to assure that the Company
will have the continued dedication and objectivity of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control of
the Company or the termination by the Company of the Executive's employment for
a reason other than for cause.
B. The Board believes that it is in the best interests of the Company
and its stockholders to provide the Executive with an incentive to continue his
or her employment with the Company, or a wholly-owned subsidiary of the Company,
as the case may be, and to motivate the Executive to maximize the value of the
Company upon a Change of Control for the benefit of its stockholders.
C. The Board believes that it is imperative to provide the Executive
with certain benefits upon a Change of Control or upon the termination by the
Company of the Executive's employment for a reason other than cause, thereby
encouraging the Executive to remain with the Company notwithstanding the
possibility of a Change of Control or termination of employment for a reason
other than for cause.
The Company and the Executive hereby agree as follows:
1. Term of Agreement. This Agreement shall terminate upon the date that
all obligations of the Company and the Executive with respect to this Agreement
have been satisfied.
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2. At-Will Employment. The Company and the Executive acknowledge that
the Executive's employment is and shall continue to be at-will, as defined under
applicable law, and may be terminated at any time by either party, with or
without cause.
3. Change of Control. In the event a Change of Control (as defined
below) occurs within six months following the effective date of options granted
to the Executive to purchase the Company's common stock, and if the Executive is
employed by the Company as of the date of the Change of Control, the Executive's
stock options shall have their vesting accelerated as to two years' additional
vesting. In the event that stock option vesting is accelerated pursuant to the
preceding sentence, the remaining stock options, if any, shall continue to vest
at a monthly rate equal to the total number of shares originally subject to the
option divided by the number of months in the original vesting schedule. If a
Change of Control occurs on or after six months following the effective date of
options granted to the Executive to purchase the Company's common stock, and if
the Executive is employed by the Company as of the date of the Change of
Control, the Executive's Stock Options shall have their vesting accelerated in
full so as to become 100% vested.
For the purposes of this Agreement, "Change of Control" shall mean:
(a) the approval by the stockholders of the Company of a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) fifty percent (50%) or more of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or
(b) any approval by the stockholders of the Company of a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets;
or
(c) any "person" (as that 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 the Securities Exchange Act
of 1934, as amended), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the Company's
then outstanding voting securities; or
(d) a change in the composition of the Board, as a result of
which fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either: (a) are directors of the Company as
of the Effective Date; 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 transaction described in
subsections (a), (b), or (c) above, or in connection with an actual or
threatened proxy contest relating to the election of directors of the Company.
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4. Golden Parachute Excise Taxes. Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any payment
or distribution, or any acceleration of vesting of any benefit or award, by the
Company or its affiliated companies to or for the benefit of the Executive,
payable within the meaning of Section 280G of the Internal Revenue Code (the
"Code") (whether paid or payable, distributed or distributable or accelerated or
subject to acceleration pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required under this
Section 4) (a "Payment") would be subject to the excise tax imposed by Section
4999 of the Code, or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the "Excise
Tax"), then the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") on an amount such that after payment by the Executive of all
taxes imposed upon the Gross-Up Payment and any interest or penalties imposed
with respect to such taxes, the Executive retains an amount of the Gross-Up
Payment equal to the sum of: (a) the Excise Tax imposed upon the Payments; and
(b) the product of any deductions disallowed because of the inclusion of the
Gross-Up Payment in the Executive's adjusted gross income and the highest
applicable marginal rate of federal income taxation for the calendar year in
which the Gross-Up Payment is to be made. For purposes of determining the amount
of the Gross-Up Payment, the Executive shall be deemed to have: (a) paid federal
income taxes at the highest marginal rates of federal income taxation for the
calendar year in which the Gross-Up Payment is to be made; (b) paid applicable
state and local income taxes at the highest rate of taxation for the calendar
year in which the Gross-Up Payment is to be made, net of the maximum reduction
in federal income taxes which could be obtained from deduction of such state and
local taxes; and (c) otherwise allowable deductions for federal income tax
purposes at least equal to those which would be disallowed because of the
inclusion of the Gross-Up Payment in the Executive's adjusted gross income. The
payment of a Gross-Up Payment under this Section 4 shall in no event be
conditioned upon the Executive's termination of employment or the receipt of
severance benefits under this Agreement.
5. Severance.
(a) If, within one year of a Change of Control, the
Executive's employment is terminated by the surviving entity, for any reason
other than for Cause (as defined in Section 5(d) below), the Executive shall
receive severance in the amount of two years' base salary plus two years'
payment pursuant to the Company's Executive Incentive Compensation Plan.
(b) If the Executive's employment is terminated by the Company
for any reason other than for cause (as defined in Section 5(d) below), the
Executive shall receive severance in the amount of two years' base salary.
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(c) If the Executive's employment is terminated by the Company
for Cause (as defined in Section 5(d) below), or the Executive voluntarily
resigns or otherwise terminates his employment, the Executive shall not receive
severance.
(d) For purposes of this Agreement, "Cause" shall mean the
occurrence of one or more of the following: (i) Executive's conviction by, or
entry of a plea of guilty or nolo contendre in, a court of competent
jurisdiction for any crime which constitutes a felony in the jurisdiction in
which the conduct alleged to constitute the felony occurred; (ii) Executive's
misappropriation of funds or property or commission of an act of fraud, whether
prior or subsequent to the Effective Date; (iii) gross negligence or
recklessness by the Executive in the scope of the Executive's services to the
Company; (iv) a breach by the Executive of a material provision of this
Agreement which is not cured within 30 days of notice; (v) a willful failure by
the Executive substantially to perform his or her duties and responsibilities as
an employee after notice of such failure; or (vi) a material breach by the
Executive of the Company's policies or procedures.
6. Attorney Fees, Costs and Expenses. The Company promptly shall
reimburse the Executive, on a monthly basis, for the reasonable attorney fees,
costs and expenses incurred by the Executive in connection with any action
brought by Executive to enforce his or her rights under this Agreement,
regardless of the outcome of he action.
7. Successors.
(a) Company's Successors. Any successor to the Company
(whether direct or indirect and whether by purchase, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall assume the obligations under this Agreement and agree
expressly to perform the obligations under this Agreement in the same manner and
to the same extent as the Company would be required to perform such obligations
in the absence of a succession. For all purposes under this Agreement, the term
"Company," shall include any successor to the Company's business and/or assets
which executes and delivers an assumption agreement described in this Section
5(a), or which becomes bound by the terms of this Agreement by operation of law.
(b) Executive's Successors. The terms of this Agreement and
all rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees.
8. Miscellaneous Provisions.
(a) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Executive and by an authorized officer of the
Company (other than the Executive). No waiver by either party of any breach of,
or of compliance with, any
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condition or provision of this Agreement by the other party shall be considered
a waiver of any other condition or provision or of the same condition or
provision at another time.
(b) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement
represents the entire understanding of the Company and the Executive with
respect to the subject matter of this Agreement and this Agreement supersedes
all prior agreements, arrangements and understandings regarding the subject
matter of this Agreement, the Executive agrees that he or she shall not be
entitled to any additional stock option vesting pursuant to a prior agreement,
arrangement or understanding.
(c) Choice of Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Massachusetts.
(d) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
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(e) Counterparts. This Agreement may be executed in
counterparts each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
set forth below.
COMPANY INFORMIX CORPORATION
/s/Eileen Bergquist
Dated: Effective June 21, 2001
EXECUTIVE /s/ Robert C. McBride
Dated: Effective June 21, 2001