Severance Agreement - Virage Inc. and Paul G. Lego
June 17, 2003
Dear Paul,
This letter agreement formalizes our prior discussions and agreement on
the terms of a severance arrangement, as previously agreed upon by the company's
board of directors, in order to incent you to remain with the company. Virage,
Inc. and you agree, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, as follows:
In the event that both (A) Virage, Inc. executes a definitive agreement
for an acquisition, merger, consolidation, sale of all or substantially all of
its assets, change in control transaction or other similar corporate
reorganization, and (B) thereafter you are ever subject to termination or
constructive termination by Virage, Inc. or its successor entity(ies), then
Virage, Inc. and its successor entity(ies) shall immediately pay you, at a
minimum, the greater of (a) twelve (12) months of your then-current base salary,
or (b) Two Hundred Fifty Thousand Dollars (US $250,000). For purposes of this
agreement, "constructive termination" includes, without limitation, (i) a
reduction of your duties, title, authority, reporting structure or
responsibilities, relative to your duties, title, authority, reporting structure
or responsibilities as in effect immediately prior to such reduction, or the
assignment to you of such reduced duties, title, authority, reporting structure
or responsibilities, or (ii) a reduction in your base salary or bonus plan as in
effect immediately prior to such reduction, or (iii) a reduction in the
aggregate level of employee benefits to which you were entitled immediately
prior to such reduction with the result that your aggregate benefits package is
reduced, or (iv) the relocation of you to a facility or a location more than
twenty-five (25) miles from your then present location, or (v) any act or set of
facts or circumstances which would, under California case law or statute
constitute a constructive termination of you. Any acquisition, merger, sale of
all or substantially all of the assets, change in control transaction or other
similar corporate reorganization of Virage, Inc. shall be subject to the
successor entity agreeing in writing to assume and be bound by all the
obligations of Virage, Inc. herein, to agree in writing to the assignment of
this letter agreement to it, and to agree to bind any subsequent successor
entities to it to these same obligations.
This letter agreement shall be governed by the laws of the state of
California and both parties agree to the exclusive jurisdiction in the state and
federal courts in San Francisco, California. The prevailing party in any legal
action or proceeding related to this letter agreement shall recover its
reasonable attorneys' fees incurred in connection therewith.
Signatures below indicate both parties' assent and agreement to the
terms and conditions of this letter agreement, and executes this letter
agreement as of the date first set forth above.
Sincerely,
Virage, Inc.
/s/ Scott Gawel /s/ William H. Younger, Jr.
Scott Gawel William H. Younger, Jr.
Vice President, Finance Compensation Committee
Virage, Inc. Chairman
Agreed to and Accepted by:
Paul G. Lego
/s/ Paul G. Lego
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Signature
June 17, 2003
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Date