Executive Severance Policy for Senior Vice Presidents - PeopleSoft Inc.
PEOPLESOFT, INC.
EXECUTIVE SEVERANCE POLICY - SENIOR VICE PRESIDENTS
Effective January 1, 2003
If an Executive's employment with the Company is involuntarily terminated by the
Company other than for Cause, then, subject to the Executive's executing and not
revoking a general release of claims in favor of the Company, the Executive will
receive the following:
- 6 months' base salary at the rate in effect on the date of termination;
- 6 months of Executive's target bonus pursuant to the Company's Employee
Incentive Compensation Plan at the rate in effect on the date of
termination, assuming 100% achievement of Executive's and Company's
objectives, and excluding any other bonuses, such as the annual bonus
subject to the discretion of the Board of Directors;
- Credit for 6 months of employment toward vesting of stock options,
stock appreciation rights, restricted stock awards and stock purchase
rights ("Options") granted prior to the date Executive's employment is
terminated, unless the plan under which the Options were granted
prohibits such credit or acceleration or provides for alternative
vesting;
- Reimbursement of COBRA premiums, if Executive is eligible for COBRA,
for up to 6 months from the date of termination.
Any amounts owed hereunder will be reduced by any other salary, severance, bonus
or benefits to which Executive is entitled under any applicable laws or
regulations, including, but not limited to, WARN.
If (i) there is a Change of Control, and (ii) within one (1) year of a Change of
Control, an Executive's employment is either involuntarily terminated other than
for "Cause" or terminates by the Executive on the basis of Constructive
Discharge, and (iii) the Executive executes and does not revoke a general
release of claims in favor of the Company or surviving entity, the Executive
will receive the items listed above and the following:
- All unvested Options granted to Executive prior to the date Executive's
employment is terminated, will vest, unless the plan under which the
Options were granted prohibits such vesting or provides for alternative
vesting.
The foregoing severance terms do not change the at-will nature of any
Executive's employment with PeopleSoft. Any disputes, controversies, or claims
arising out of or relating to this Policy must be resolved under PeopleSoft's
Internal Dispute Solution (IDS) process.
DEFINITIONS
"Cause" means (i) a material act of dishonesty by Executive in connection with
the Executive's employment with the Company; (ii) the Executive's conviction of,
or plea of nolo contendere to, a felony; (iii) the Executive's gross misconduct
in connection with the performance of his or her duties; (iv) Executive's death
or permanent disability preventing him or her from performing the usual and
necessary functions of his or her office; (v) the Executive's material breach of
his or
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her obligations as an officer of the Company; or (vi) the Executive's failure to
materially comply with the Company's policies. With respect to clauses (iii),
(v) and (vi), such actions shall not constitute Cause if they are cured by the
Executive within thirty (30) days following delivery to the Executive of a
written explanation specifying the basis for the Company's belief that it has
Cause, provided that the Company deems such action capable of being cured.
"Constructive Discharge" means (i) the occurrence of one or more of the
following ("Constructive Discharge Events"): (a) a material reduction in the
Executive's Base Salary or target bonus potential under the Employee Incentive
Compensation Plan other than for Cause, ; (b) a material reduction in
Executive's authority or duties (other than a material reduction in authority or
duties occurring solely by virtue of a Change of Control, as for example, when
an Executive retains the position in the Company but the Company is a
wholly-owned, privately-held subsidiary or division of a larger company, or a
reduction other than for Cause); or (c) relocation of Executive's position
outside of the metropolitan area where Executive is currently employed, and (ii)
a Constructive Discharge Event continues for more than thirty (30) days after
delivery of written notice by the Executive to the Company specifying the
circumstances of the alleged Constructive Discharge, which notice must be
delivered to the Company within five (5) business days of the Constructive
Discharge Event, and (iii) Executive resigns from all positions with the Company
or its successor within ten (10) days of the expiration of Company's 30 day cure
period, where such Constructive Discharge Event is still ongoing.
"Change of Control" means:
(a) Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended) becomes
the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing
forty-five percent (45%) or more of the total voting power represented
by the Company's then outstanding voting securities; or
(b) A change in the composition of the Board occurring
within a two-year period, 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 date
hereof, or (B) are elected, or nominated for elections, to the Board
with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not
include an individual whose election or nomination is in connection
with an actual or threatened proxy contest relating to the election of
directors to the Company); or
(c) The consummation 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) at least fifty-five percent (55%)
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
The consummation of the sale or disposition by the Company of all or
substantially all of the Company's assets.
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