Severance Agreement - Centigram Communications Corp. and Dennis Barsema
October 2, 1997
Dennis Barsema
18140 Barnard Road
Morgan Hill, Ca 95037
Dear Dennis,
Pursuant to our discussions, it has been mutually agreed that
as of November 3, 1997, your position with Centigram
Communications Corporation has been eliminated.
Attached you will find a Summary Plan Document outlining the
terms and conditions of your separation from Centigram. These
outlined benefits will be paid to you provided you sign the
General Release and Termination Certificate documents which are
also attached. Please review these documents carefully and let
me know if you have any questions that I or Carrie Perzow can
answer.
Dennis, I have appreciated the contributions you have made to
Centigram and in particular the leadership role you assumed on
the operating committee over these last several months. Once
again, I am available to answer any further questions you may
have or provide assistance as you approach your next career
endeavor.
Sincerely,
Dean O. Morton
Chairman, Centigram Communications Corporation
Severance Package Compensation Elements
I, Dennis Barsema, understand that upon my consent and affixing
of my signature to the attached General Release and Termination
Certificate, Centigram agrees to:
1. provide me with 4 weeks of notification commencing
November 3, 1997 through December 1, 1997, at my
current salary of $3,462 per week and car allowance
of $400 per month.
2. pay me a continuous payout for 48 weeks of severance
at my current salary of $3,462 per week and car
allowance of $400 per month
3. pay me 50% of my FY'98 executive bonus at target of
$118,800 ($59,400) after the end of the 1998 fiscal
year. Pay me the remaining 50% of my FY'98 executive
bonus at target of $118,800 against the following
criteria:
- $39,800 will be paid against achievement of the
FY'97 Q4 revenue at the following percentages and
payouts: Minimum of $29M in revenue equals 100%
payout, minimum of $28M in revenue equals 50%
payout, minimum of $27M in revenue equals 25%
payout.
- $19,600 will be paid against achievement of the
following development criteria: 1) A plan for
reengineering 6.0 base software should be presented
to CEO by 11/3/97, and
2) by 11/3/97 we will deliver 6.1 to a beta
customer, and we will have an agreed to
list of at least three (3) beta customers, as well
as a beta plan for those customers.
4. continue my vacation until December 1,1997, and pay
all unused, accrued vacation at that time.
5. should I elect it, Centigram will pay COBRA premiums
for medical dental and vision coverage under the
existing Centigram plan through November 2, 1998 or
until such time as I secure other coverage, whichever
comes first.
6. permit my options to continue to vest through November
2, 1998 and, if vested, to be exercised until 30 days
from that date.
7. I agree to execute the attached General Release and
Termination Certificate and abide by Centigram's
Employee Nondisclosure and Assignment of Inventions
Agreement and to refrain from disclosing any non-
public information about Centigram or its business
that I may have acquired during my period of
employment with the company.
8. I understand that I may file for unemployment
compensation and that my claim will not be contested
by Centigram.
9. I agree to notify Centigram promptly upon the
acceptance of other employment, at such time a lump
sum payout for remaining severance due will be made
and stock options will cease to continue to vest and
may be exercised 30 days from that date.
10. I agree that these terms fully satisfy Centigram's
obligation to me.
------------------------------------- ---------
Dennis Barsema Date
------------------------------------- ---------
Dean O. Morton Date
Chairman, Centigram Communications Corporation
<PAGE>
CENTIGRAM COMMUNICATIONS CORPORATION
SENIOR OFFICER SEPARATION PAY PLAN
AND
SUMMARY PLAN DESCRIPTION
Amended Plan Effective Date: September 10, 1997
CENTIGRAM COMMUNICATIONS CORPORATION
SEPARATION PAY PLAN
AND
SUMMARY PLAN DESCRIPTION
The Centigram Communications Corporation Officer Separation Pay Plan
(the "Plan") is primarily designed to provide eligible Senior Officers
of Centigram Communications Corporation (the "Company") whose
employment is terminated as a result of a work force reduction or job
elimination with financial assistance while they are seeking new
employment opportunities. The Plan is also intended to satisfy, where
applicable, the obligations of the Company under the federal Worker and
Retraining Notification ("WARN") Act. The Plan is effective for
eligible employees whose employment is terminated on or after September
10, 1997 and not later than April 30, 1998.
Centigram Communications Corporation competes within an industry where
technology, markets and competition change rapidly. Therefore, one of
our sources of competitive advantage is our ability to change more
quickly than the competition. This may result in evolving requirements
in terms of our financial plan, locations and employee core
competencies.
This policy is written to define a reduction in workforce, which
results in long-term employment losses, motivated by reasons of cost-
reduction, efficiency improvement, reorganization, loss of business,
plant or department closures, or other reasons unrelated to the
affected individual. This policy does not apply to employment
termination for reasons of misconduct or lack of performance.
Centigram is an employment at-will employer, meaning both the employee
and the employer have the right to terminate the employment
relationship at any time.
If you are an eligible Officer employee you will receive at least four
(4) weeks advance notice of your termination date. In the event the
Company does not provide you with the full notice period, you will
receive your base Salary (as that term is defined in Section II below)
for the four(4) week (as applicable) period, in addition to any
benefits that you are eligible to receive under this Plan.
This Plan is designed to be an "employee welfare benefit plan," as
defined in Section 3(1) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). This Plan is governed by ERISA and, to
the extent applicable, the laws of the State of California. This
document constitutes both the official plan document and the required
summary plan description under ERISA.
I. ELIGIBILITY
You will be generally eligible for severance benefits under this Plan
if:
- you are a regular full-time U.S. employee of the Company
with the title of Sr. Vice President or above;
- your active employment is involuntarily terminated as a
result of work force reduction or job elimination during
the term of the Plan;
- you execute the General Release Of All Claims, a copy of
which is attached as Exhibit A, within forty-five (45) days
of your date of termination if you are age forty (40) or
older, or you execute the General Release of All Claims, a
copy of which is attached as Exhibit B, within seven (7)
days of your date of termination if you are under age forty
(40); and
- you are not in one of the excluded categories listed below.
You are not eligible for severance benefits under this Plan if:
- you voluntarily terminate employment, unless such voluntary
termination occurs after you receive notice of an
involuntary termination which would otherwise qualify you
for severance benefits and the Plan Administrator
determines, in its sole discretion, that your earlier
voluntary termination is in the best interests of the
Company;
- you are employed by, or are offered continued employment
with, a successor employer which directly or indirectly
acquires (i) all or any portion of the assets or operations
of the Company or any subsidiary, (ii) all or any portion
of the outstanding capital stock of the Company, or (ii)
fifty percent (50%) or more of the capital stock of any
subsidiary of the Company;
- you are dismissed for a reason other than work force
reduction or job elimination (including, but not limited
to, poor performance, violation of Company policy or
procedures, insubordination, misconduct, the unauthorized
use or disclosure of confidential information or trade
secrets of the Company or any subsidiary), whether or not
you already received notice of an involuntary termination
which would otherwise qualify you for severance benefits;
- you are a temporary employee or work for the Company solely
as an independent contractor, consultant or agent;
- you are covered by any other severance or separation pay
plan or arrangement with the Company or by an employment
agreement with the Company;
- you die before you receive any or all of your severance
benefits under the Plan; or
- you are on a leave of absence (including disability leave),
except to the extent the Plan Administrator decides, in its
sole discretion, to provide you with severance benefits
upon your involuntary termination.
II. HOW THE PLAN WORKS
If you are eligible for severance benefits under the Plan, you will
receive those benefits in continuous payments unless you become
employed during the severance period, at which time the remaining
severance due would be made in a lump-sum payment . Payment of your
severance benefits will be made as soon as administratively practicable
after the occurrence of the following events:
- your termination of employment as a result of a work
force reduction or job elimination;
- the Company's receipt of your executed General
Release; and
- the expiration of any rescission period applicable to
your executed General Release.
The amount of your severance benefits will generally be determined in
accordance with the guidelines set forth below on the basis of the
following factors, measured as of the effective date of your
termination of active employee status: (i) your Salary, (ii) your
Year(s) of Service with the Company, and (iii) your job classification:
Severance Benefit Guidelines
- Notification Period: 4 weeks
- Severance: 48 weeks
- Executive Bonus: Paid at target after the end of
FY'98
Severance and Executive Bonus may be paid in either a
lump sum payment or continuous payout to be chosen or
changed at any time during the severance period. If
a lump sum payment is chosen, stock vesting ends the
date of payout. If continuous payout is chosen,
stock will continue to vest until the end of the
severance period.
- Salary generally means your base salary and does not
include, for example, bonuses, overtime compensation,
incentive pay, compensation associated with employee stock
options, reimbursements, or expense allowances (with the
exception of car allowance)
- The Plan Administrator may, as it deems appropriate and in
its sole discretion, authorize severance benefits in an
amount different from the guidelines amount. Under certain
circumstances, the Plan Administrator may, in its sole
discretion, waive or modify, with respect to one or more
classes of employees, the eligibility requirements for
severance benefits or modify the method of calculating
their severance benefits.
- When an eligible employee's termination is deemed covered
by the WARN Act, the benefit payable under this Plan shall
be considered to be payments required by that Act.
If you are an eligible Officer employee, you will also receive the
following benefits:
- Your existing group health coverage (and, if applicable,
the existing group health coverage of your eligible
dependents) will end as of your date of termination. You
may then be eligible to elect temporary continuation
coverage of the Company's group health plan under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"). If you are eligible and elect COBRA
continuation coverage, then the Company will pay for such
coverage for 48 weeks that you will receive severance
benefits (pursuant to the guidelines formula specified
above). You (and, if applicable, your eligible dependents)
will be provided with a COBRA election form and notice
which describes your right to continuation coverage under
COBRA. In no case, will you or your dependents receive
Company-paid or employee-paid group health coverage beyond
the period provided under COBRA.
III. OTHER IMPORTANT INFORMATION
Plan Administration. As the Plan Administrator, the Company has full
discretionary authority to administer and interpret the Plan, including
discretionary authority to determine eligibility for severance benefits
under the Plan. The Plan Administrator hereby delegates to the Vice
President of Human Resources all of its administrative duties.
Accordingly, the Vice President of Human Resources on behalf of the
Plan Administrator, has full discretionary authority to carry out its
delegated duties. Any determination by the Vice President of Human
Resources will be final and conclusive upon all persons. The Company,
as the Plan Administrator, will indemnify and hold harmless the Vice
President of Human Resources for carrying out the responsibilities of
the Plan Administrator; provided, however, the Vice President of Human
Resources does not act with gross negligence or wilful misconduct.
Benefits. When benefits are due, they will be paid from the general
assets of the Company. The Company is not required to establish a
trust to fund the Plan. The benefits provided under this Plan are not
assignable.
Claims Procedure. If you believe you are incorrectly denied a benefit
or are entitled to a greater benefit than the benefit you receive under
the Plan, you may submit a signed, written application to the Plan
Administrator within ninety (90) days of your termination. You will be
notified of the approval or denial of this claim within ninety (90)
days of the date that the Plan Administrator receives the claim, unless
special circumstances require an extension of time for processing the
claim. If your claim is denied, the notification will state specific
reasons for the denial and you will have sixty (60) days from receipt
of the written notification of the denial of your claim to file a
signed, written request for a review of the denial with the Plan
Administrator. This request should include the reasons you are
requesting a review, facts supporting your request and any other
relevant comments. Pursuant to its discretionary authority to
administer and interpret the Plan, and to determine eligibility for
benefits under the Plan, the Plan Administrator will generally make a
final, written determination of your eligibility for benefits within
sixty (60) days of receipt of your request for review.
Plan Terms. This Plan supersedes and any and all previous existing
separation, severance, retention and salary continuation arrangements,
programs and plans which were previously offered by the Company to
employees eligible to receive benefits under this Plan.
Plan Amendment or Termination. The Plan is effective only for
employees who are terminated on or after May 1, 1997 and no later than
April 30, 1998. The Vice President, Human Resources, on behalf of the
Company, reserves the right to terminate or amend the Plan at any time
and in any manner. Because the provisions of the Plan are intended to
serve as mere guidelines for the payment of severance benefits under
certain prescribed circumstances, it is not intended that any employee
obtain any vested right to severance benefits. Accordingly, any
termination or amendment of the Plan may be made effective immediately
with respect to any benefits not yet paid, whether or not prior notice
of such amendment or termination has been given to affected employees.
In no event, however, will the Plan be effective after April 30, 1998.
Taxes. The Company will withhold taxes and other payroll deductions
from any severance payment.
No Right to Employment. This Plan does not provide you with any right
to continue employment with the Company or affect the Company's right,
which right is hereby expressly reserved, to terminate the employment
of any individual at any time for any reason with or without cause.
IV. STATEMENT OF ERISA RIGHTS
As a participant in the Centigram Communications Corporation Separation
Pay Plan (the "Plan"), you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). ERISA provides that all Plan participants shall
be entitled to:
1. Examine, without charge, at the Plan Administrator's
office, all Plan documents, including all documents filed
by the Plan with the U.S. Department of Labor.
2. Obtain copies of all Plan documents and other Plan
information upon written request to the Plan Administrator.
The Plan Administrator may make a reasonable charge for
the copies.
3. Receive a summary of the Plan's annual financial report.
The Plan Administrator is required by law to furnish each
participant with a copy of this summary financial report.
4. File suit in a federal court, if you, as a participant,
request materials and do not receive them within thirty
(30) days of your request. In such a case, the court may
require the Plan Administrator to provide the materials and
to pay you a fine of up to $100 for each day's delay until
the materials are received, unless the materials were not
sent because of reasons beyond the control of the Plan
Administrator.
In addition to creating rights for certain employees of the Company
under the Plan, ERISA imposes obligations upon the people who are
responsible for the operation of the Plan. The people who operate the
Plan (called "fiduciaries") have a duty to do so prudently and in the
interest of the Company's employees who are covered by the Plan.
No one, including your employer or any other person, may fire you or
otherwise discriminate against you in any way to prevent you from
obtaining a benefit to which you are entitled under the Plan or from
exercising your rights under ERISA.
If your claim for a severance benefit is denied or ignored, in whole or
in part, you have a right to file suit in a federal or a state court.
If Plan fiduciaries are misusing the Plan's assets (if any) or if you
are discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor or file suit in a federal
court. The court will decide who will pay court costs and legal fees.
If you are successful in your lawsuit, the court may, if it so
decides, order the party you have sued to pay your legal costs,
including attorney fees. However, if you lose, the court may order you
to pay these costs and fees, for example, if it finds that your claim
or suit is frivolous.
If you have any questions about the Plan, this statement or your rights
under ERISA, you should contact the Plan Administrator or the nearest
Area Office of the U.S. Labor-Management Services Administration,
Department of Labor.
ADDITIONAL PLAN INFORMATION
Name of Plan: Centigram Communications Corporation Separation
Pay Plan
Company Sponsoring Centigram Communications Corporation
Plan:
Employer Identification 94-2418021
Number:
Plan Number: 5B
Plan Year: The twelve (12) consecutive month period beginning May 1, 1997.
Plan Administrator: Centigram Communications Corporation
c/o Vice President, Human Resources
91 East Tasman Drive
San Jose, California 95134
(408) 944-0250
Agent for Service of Legal Process: Plan Administrator
Type of Plan: Severance Plan/Employee Welfare Benefit Plan
Plan Costs: The cost of the Plan is paid by Centigram
Communications Corporation
<PAGE>
GENERAL RELEASE OF ALL CLAIMS
In consideration of the benefits offered to me under the
Centigram Communications Corporation 1997 Severance Plan (the "Plan")
as described in the Summary Plan Description provided to me, and in
connection with the termination of my employment as a result of
Centigram's reduction in force or job elimination, on behalf of myself,
my heirs, executors, administrators, successors, and assigns, I hereby
fully and forever RELEASE and DISCHARGE Centigram, its officers,
directors, agents, employees, affiliates, representatives, successors
and assigns (hereinafter, collectively called the "Company") from any
and all claims and causes of action arising out of or relating in any
way to my employment with the Company, including, but not limited to,
the offer and termination of my employment.
1. I understand and agree that this RELEASE is a full
and complete waiver of all claims, including, but not limited to,
claims of wrongful discharge, breach of contract, breach of the
covenant of good faith and fair dealing, violation of public
policy, defamation, personal injury, emotional distress, claims
under Title VII of the 1964 Civil Rights Act, as amended, the
California Fair Employment and Housing Act, the Equal Pay Act of
1963, California Labor Code Section 1197.5, the Age
Discrimination in Employment Act of 1967, as amended, the
Americans with Disabilities Act, the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and any other laws
and regulations relating to employment or employment
discrimination. The only exceptions are claims I may have for
unemployment compensation and workers' compensation.
2. I understand and agree that the Company will not
provide me with any enhanced severance benefits, as outlined in
the Plan, unless I execute this RELEASE. I further understand
that I have received or will receive, regardless of the execution
of this RELEASE, all salary owed to me together with any accrued
but unused vacation pay, less deductions, in my final paycheck
earned through my termination date.
3. In addition, and in further consideration of the
foregoing, I acknowledge that I may hereafter discover facts
different from or in addition to those which I now know or
believe to be true and that this RELEASE shall be and remain
effective in all respects notwithstanding such different or
additional facts or the discovery thereof. Furthermore, in
consideration of the foregoing, I hereby expressly waive any and
all rights and benefits conferred upon me by the provisions of
Section 1542 of the Civil Code of the State of California and/or
any analogous law of any other state, which states as follows:
A general release does not extend
to claims which the creditor
[employee] does not know or
suspect to exist in his favor at
the time of executing the release,
which if known by him must have
materially affected his settlement
with the debtor [Company].
4. As part of my existing and continuing obligation to
the Company, I have returned or, within seven (7) days of my
termination will return to the Company all Company Information,
including files, records, computer access codes and instruction
manuals, as well as any Company assets or equipment that I have
in my possession or under my control. I further agree not to
keep any copies of Company Information. I affirm my obligation
to keep all Company Information confidential and not to disclose
it to any third party in the future. I understand that the term
"Company Information" includes, but is not limited to, the
following:
(a) Confidential information, including information
received from third parties under confidential
conditions; and
(b) Other technical, scientific, marketing, business,
product development or financial information, the use
or disclosure of which might reasonably be determined
to be contrary to the interests of the Company,
including solicitation of employees.
The Company's Proprietary Information Agreement is incorporated
herein by this reference.
5. I agree to keep this RELEASE confidential and not to
reveal its contents to anyone except my lawyer, my spouse and/or
my financial consultant.
6. All disputes under this RELEASE will be settled by
arbitration in the County of Santa Clara, in accordance with the rules
of the American Arbitration Association, or its successor, and judgment
upon the award rendered may be entered in any court with jurisdiction.
If there is a dispute with respect to this RELEASE, the prevailing
party will be entitled to its reasonable attorney fees and other costs
and expenses incurred in resolving the dispute.
7. This RELEASE contains the entire agreement between
the Company and me with respect to any matters referred to in the
RELEASE and supercedes any previous oral or written agreements.
I understand and agree that this RELEASE shall not be deemed or
construed at any time as an admission of liability or wrongdoing
by either myself or the Company.
8. If any one or more of the provisions contained in
this RELEASE is, for any reason, held to be unenforceable, that
holding will not affect any other provision of this RELEASE, but,
with respect only to that jurisdiction holding the provision to
be unenforceable, this Release shall then be construed as if such
unenforceable provision or provisions had never been contained
therein.
9. Before executing this RELEASE, I obtained sufficient
information to intelligently exercise my own judgment about the
terms of the RELEASE. I understand that I may discuss this
RELEASE with an attorney of my own choosing before signing this
RELEASE. The Company has also given me forty-five (45) days in
which to consider this RELEASE, if I wish. I also understand for
a period of seven (7) days after I sign this RELEASE, I may
revoke this RELEASE and that the RELEASE will not become
effective until seven (7) days after I sign it, and only then if
I do not revoke it. In order to revoke this RELEASE, I must
deliver to the Company's Vice President of Human Resources, by no
later than seven (7) days after I execute this RELEASE, a letter
stating that I am revoking it.
10. The Plan provides that enhanced severance pay may be
paid in a lump-sum payment as soon as administratively feasible
but not earlier than seven (7) days following my execution of
this RELEASE. If I choose to revoke this RELEASE within seven
(7) days after I sign it, any enhanced severance benefits to
which I was otherwise entitled to receive, will not be due and
payable, and the RELEASE will have no effect. If I do not elect
to sign this RELEASE, I will receive the basic severance pay and
I will not be eligible to receive the enhanced severance benefits
as outlined in the Plan.
11. The following information is attached to this RELEASE
and has been provided to me:
(a) Attachment "A" to this RELEASE is a copy of
the Plan which contains the eligibility
requirements and time limits applicable to the
Plan.
EMPLOYEE'S ACCEPTANCE OF RELEASE
BEFORE SIGNING MY NAME TO THIS RELEASE, I STATE THAT: I HAVE READ IT;
I UNDERSTAND IT AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS; I AM
AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING IT; AND I
HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.
Date delivered to employee , 199 .
Executed this day of , 199 .
Employee's Signature
Printed Name and Employee No.