Change of Control Arrangement - Brocade Communications Systems Inc. and Paul Bonderson
CHANGE OF CONTROL ARRANGEMENT WITH PAUL BONDERSON
Brocade Communications Systems, Inc. (the "Company") has entered into an
agreement with Mr. Bonderson, with respect to options to purchase 423,555
shares, which provides the following:
In the event that Participant is Terminated without "Cause" (as defined
below), or if Participant's employment is terminated as a result of "Certain
Reasons" (as defined below) other than for Cause, at any time during the first
year following the closing of (i) a consolidation or merger of the Company with
or into any other corporation or corporations in which the holders of the
Company's outstanding shares immediately before such consolidation or merger do
not, immediately after such consolidation or merger, retain stock representing a
majority of the voting power of the surviving corporation of such consolidation
or merger; or (ii) a sale of all or substantially all of the assets of the
Company, then on the Termination Date all Unvested Shares shall become Vested
Shares. The number of Shares that are Vested Shares or Unvested Shares will be
proportionally adjusted to reflect and stock dividend, stock split, reverse
stock split or recapitalization of the Common Stock of the Company occurring
after the Date of Grant. If application of the vesting percentage causes a
fractional Share, such Share shall be rounded down to a whole Share.
For the purpose of the Option Agreement "Cause" shall mean Participant's
(i) failure to perform such assigned duties and responsibilities as shall be
consistent with the duties and responsibilities of an employee of the Company in
a similar job position after receipt of a written notice of specific
deficiencies consistent with the Company's performance review policies in effect
at such time and a reasonable period not to exceed thirty days for Participant
to cure any such deficiencies; (ii) engaging in gross negligence or willful
misconduct which is or is likely to be materially injurious to the Company;
(iii) committing a felony, an act of fraud against, or the misappropriation of
property belonging to the Company; or, (iv) breaching in any material respect
the terms of any employment agreement or any confidentiality or proprietary
information agreement between participant and the Company; a majority vote of
the board of directors of the Company authorizes a for Cause termination after
the occurrence of (i), (ii), (iii) or (iv) as set forth above.
For the purpose of this Option Agreement "Certain Reason" shall mean (i) a
reduction in cash compensation (exclusive of bonuses) or a material reduction in
benefits, except as part of a salary or benefit reduction program by the Company
that is applicable generally to employees of participant's level, (ii)
assignment to a position materially not commensurate with Participant's training
and abilities, or (iii) relocation of Participant's workplace to any place more
than fifty miles from Santa Clara, California, provided, in each case, that the
Participant has given the Company written notice of Participant's intention to
terminate for Certain Reason, citing the Certain Reasons, and the Company has
not cured the Certain Reasons within thirty days after receipt of the letter.