Employment Agreement - Brocade Communications Systems Inc. and Don Jaworski
Attached is the employment offer letter originally given to Don Jaworski by
Brocade Communications Systems, Inc. (the "Company") in connection with his
initial employment. Subsequent to such time, the Company has agreed with Mr.
Jaworski that his base salary will be $375,000, and his target bonus for fiscal
year 2005 will be $187,500.
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COPY [BROCADE LOGO]
BROCADE
April 11,2003
Don Jaworskl
609 Arboleda Drive
Los Altos, CA 94024
Dear Don,
On behalf of Brocade Communications Systems, Inc. ("Brocade"), I am pleased to
offer you the position of Vice President, Engineering, reporting to myself.
Brocade is offering you a semi-monthly salary of $12,500.00 (which would equal
$300,000.00 annually), less applicable withholding, in accordance with Brocade's
normal payroll procedures. You are eligible to participate in the Brocade
Incentive Program ("BIP") at a rate of 50% of your annual salary paid annually,
if you and Brocade meet the established annual performance objectives. Brocade
retains the right to change or amend the BIP at any time. As an employee, you
are also eligible to receive certain employee benefits; the details of these
employee benefits are attached.
In addition, if you decide to join us, Brocade is offering you a one-time stock
option of 550,000 (five hundred fifty thousand) shares of Common Stock, subject
to Committee approval of the Board of Directors. The exercise price of the
option will be equal to the fair market value of Brocade's Common Stock on the
grant date. Vesting of this option will commence upon your start of employment
and is contingent on continued employment. After the first year of employment,
1/4th of the shares will vest; the remaining shares will vest monthly over the
following three years, at a rate of 1/48th of the entire option each month. You
agree to execute all agreements necessary to effectuate this grant. The option
grant shall be subject to the terms and conditions of Brocade's Stock Option
Plan and Stock Option Agreement. In addition, you will participate in our
ongoing stock option program. In 2004, Brocade will award you 25% stock option
refresh, subject to Committee approval of the Board of Directors.
In the event that Brocade terminates your employment for any reason other than
for Cause (as defined below), you will be eligible for 6 months separation
package equal to 6 months base salary, and 6 months COBRA benefit coverage
reimbursement, in exchange for a signed Separation Release and Agreement.
For purposes of this letter "Cause" shall mean (i) unauthorized use or
disclosure of the confidential information or trade secrets of the Company which
is materially injurious to the Company; (ii) any breach of this letter
agreement, the Employment, Confidential Information, Invention Assignment and
Arbitration Agreement between you and the Company, or any other agreement
between you and the Company, if the breach is materially injurious to the
Company, (iii) conviction of, or a plea of "guilty" or "no contest" to, a felony
under the lays of the United States or any state, (iv) willful misconduct which
is materially injurious to the Company or (v) gross negligence in the
performance of duties assigned to you.
In the event of a Change in Control (as defined below), if you are subject to a
Constructive Termination (as defined below) within one year after the Change in
Control, instead of the six month separation package defined above, you shall
receive 12 months severance equal to the sum of your base salary, BIP bonus at
target (1x) and 12 months of vesting of your remaining unvested initial stock
option grants. All tax in respect of such cash severance payment shall be
payable by you and the Company shall not be required to gross up such a payment.
Please note, this benefit is not available for any voluntary termination of
employment by you except for a constructive termination under this paragraph.
For purposes of this letter a "a Change in Control" shall mean 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.
BROCADE COMMUNICATIONS SYSTEMS, INC.
1745 Technology Drive, San Jose, CA 95110
T-408.487.8000 F 408.487.8101
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Constructive termination is defined as (i) a material reduction of your duties,
authority or responsibilities (ii) any reduction in your title, (iii) a change
in your reporting relationship (iv) a reduction in your salary or bonus, as in
effect immediately before the Change in Control, or (v) the relocation of your
principal place of employment, if the distance between your new office and you
office immediately before the relocation is more than 35 miles.
Brocade reserves the right to conduct background investigations and/or reference
checks on all of its potential employees. Your offer of employment, therefore,
is contingent upon a clearance of such a background investigation and/or
reference check, if any.
We also ask that, If you have not already done so, you disclose to Brocade any
and all agreements relating to your prior employment that may affect your
eligibility to be employed by Brocade or limit the manner in which you may be
employed. It is Brocade's understanding that any such agreements will not
prevent you from performing the duties of your position and you represent that
such is the case. Moreover, you agree that, during the term of your employment
with Brocade, you will not engage in any other employment, occupation,
consulting or other business activity directly related to the business in which
Brocade is now involved or becomes involved during the term of your employment,
nor will you engage in any other activities that conflict with your obligations
to Brocade. Similarly, you agree not to bring any third party confidential
information to Brocade, including that of your former employer, and that in
performing your duties for Brocade you will not in any way utilize any such
information.
As a Brocade employee, you will be expected to abide by Brocade rules and
standards, as outlined in Brocade Employee Handbook. As a condition of your
employment, you will also be required to sign and comply with an Employment,
Confidential Information, Invention Assignment and Arbitration Agreement which
requires, among other provisions, the assignment of patent rights to any
invention made during your employment at Brocade, and non-disclosure of
proprietary information. The Agreement also provides that in the event of any
dispute or claim relating to or arising out of our employment relationship, you
and Brocade agree that all such disputes shall be fully and finally resolved by
binding arbitration. However, we agree that this arbitration provision shall not
apply to any disputes or claims relating to or arising out of the misuse or
misappropriation of Brocade's trade secrets or proprietary information.
Your employment with Brocade is "at will" and may be terminated by either the
employee or employer at any time, for any reason. Nothing in this offer is to be
construed as a contract of employment for any specific length of time. Except
for the employee Invention Assignment and Confidentiality Agreement, and any
rights in employee benefits generally offered to employees of Brocade, this
offer represents the entire agreement related to your employment with Brocade
and supersedes all prior or contemporaneous oral or written Communications and
representations.
This letter, along with any agreements relating to proprietary rights between
you and Brocade, set forth the terms of your employment with Brocade and
supersede any prior representations or agreements, whether written or oral. This
letter including, but not limited to, its at will employment provision, may not
be modified or amended except by a written agreement, signed by Brocade Vice
President of Human Resources and yourself. This offer, if not accepted, will
expire in 3 (three) business days.
As a new Brocade employee, you will be expected to attend New Employee
Orientation on your first Monday of full-time employment, from 9:00 am until
approximately 12:00. Orientation will be held at 1745 Technology Drive,
Concourse 6 Building. For purposes of federal immigration law (Immigration
Reform and Control Act of 1986), you are required to provide documentary
evidence of your eligibility for employment in the United States. Please bring
the appropriate documentation as listed on the enclosed I-9 Form, with you on
your first day. Such documentation must be provided to us within 3 (three
business days of your date of hire, or our employment relationship with you may
be terminated.
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Please signify your acceptance of this offer by signing below faxing a copy of
your signed offer letter, employment application, and background release forms
to (408) 333-5060 no later than April 15, 2003. Subsequently, please forward
your original documents to the attention of Theresa Uchida, as soon as possible.
Sincerely,
BROCADE COMMUNICATIONS SYSTEMS, INC.
/s/ Greg Reyes
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Greg Reyes
CEO, Chairman of the Board
I agree and accept employment with Brocade Communications Systems, Inc. on the
terms set forth in this agreement.
/s/ Don Jaworski 4-11-03
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Don Jaworski Date
I will begin my employment on ______________(insert your start date).