Exhibit 10.7
CORPORATE CHANGE OF CONTROL AGREEMENT
EXECUTIVE TERMINATION OF EMPLOYMENT
This Agreement, dated as of December _________, 1999 between CommVault
Systems, Inc. (the "Company"), a Delaware corporation with offices located at ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ and _________ (the "Executive"), an
individual residing at _______________________________________.
WHEREAS, the achievements of the Company to date are attributable, in part,
to the contributions and efforts of the Executive;
WHEREAS, the Board recognizes that the continued services of Executive are
an essential component of maximizing the value of the Company and in completing
certain potential transactions involving a change in control;
NOW, THEREFORE, in consideration for the mutual promises contained herein
and to induce the Executive to remain in the employ of the Company, the parties
hereto do hereby agree as follows:
1. DEFINITIONS. The following terms shall have the following meanings for
purposes of this Agreement:
(a) "Change in Control" shall mean (i) the acquisition by any person, entity or
group of persons or entities, other than the DLJ Entities and their
affiliates (including investors in the DLJ Entities) directly or
indirectly, acting in concert of securities representing fifty percent
(50%) or more of the combined voting power of the Company's then
outstanding securities, whether acquired in one transaction or a series of
transactions, (ii) a merger, consolidation or similar transaction which
results in the Company's shareholders immediately prior to such transaction
not holding securities representing fifty percent (50%) or more of the
total voting power of the outstanding securities of the surviving
corporation or (iii) a sale of all or substantially all of the Company's
assets (other than to an entity owned by the Company or under common
ownership with the Company). Notwithstanding the foregoing, Change in
Control shall not be deemed any change due to a public offering or any
transfer of publicly traded securities.
(b) "Disability" shall mean Executive's inability to perform material duties
and responsibilities due to the same or related physical or mental reasons
for more than one hundred and eighty (180) consecutive days in any twelve
(12) month period.
(c) "DLJ Entity" means each of DLJ Merchant Banking Partners, L.P., DLJ
International Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant
Banking Funding, Inc. DLJ Capital Corporation, Sprout Growth II, L.P.,
Sprout Capital VI, L.P., Sprout CEO Fund L.P., and, to the extent any of
such entities shall have transferred any of their common stock to any
Permitted Transferees (as defined in that certain Stockholders Agreement
dated May 22, 1996 among the DLJ Entities, the Company and others.)
(d) "For Cause" means a termination by the Company effected by a written notice
of termination For Cause as a result of Executive's: (i) willful misconduct
with regard to the Company or its business, assets or employees; (ii)
refusal to follow the proper written direction of the Board of Directors of
the Company (the "Board") or a more senior officer of the Company, provided
that the foregoing refusal shall not be "For Cause" if in good faith
Executive believes that such direction is illegal, unethical or immoral and
Executive promptly so notifies the Board or the more senior officer
(whichever is applicable); (iii) conviction of (or pleading of nolo
contendere to) a felony (other than a traffic violation); (iv) breach of
any fiduciary duty owed to the Company or any affiliate; or (v) dishonesty,
misappropriation or fraud with regard to the Company (other than good faith
expense account disputes).
(e) "For Good Reason" means a termination of employment by Executive effected
by written notice of termination given within sixty (60) days after the
occurrence of any of the following events: (i) any material diminution of
Executive's positions, duties, responsibilities or scope of duties or
responsibilities; (ii) a material diminution in the total compensation
(i.e. salary, bonus and benefits)
provided by the Company to Executive; or (iii) a material relocation by the
Company of Executive's principal office from the location of such office at
the time of the Change in Control.
(f) "Options" shall mean any options to acquire securities of the Company now
or hereafter held by Executive.
(g) "Severance Compensation" shall mean an amount equal to one and a half (1
1/2) times the gross amount of (i) the Executive's annual base salary as in
effect immediately prior to the Change in Control and (ii) all bonus
payments made to Executive during the twelve (12) months preceding the date
of the Change in Control.
2. TERMINATION AFTER CHANGE IN CONTROL. The Executive shall be entitled to the
following benefits in the event a Change in Control shall occur and the
Executive's employment is terminated by the Company other than For Cause (other
than a termination resulting from a Disability) or the Executive terminates its
employment with the Company For Good Reason.
A. Acceleration of Options. Notwithstanding anything to the contrary
contained in (a) any option or similar agreement between Executive and the
Company or (b) any stock option plan of the Company (including the Company's
1996 Stock Option Plan), in the event that a Change in Control shall occur and
Executive's employment is terminated by the Company other than For Cause (other
than a termination resulting from a Disability) or the Executive terminates its
employment with the Company For Good Reason: (i) all Options held by Executive
shall become immediately exercisable notwithstanding any vesting provision or
service requirement previously applicable to the Option; (ii) in the event that
the Change of Control involves a merger, consolidation or similar transaction or
a sale of all or substantially all of the Company's assets, the Company shall
provide adequate written notice and make adequate provision so that Executive
shall have the opportunity to exercise Options prior to the effective date of
the transaction; and, (iii) without duplication of (i) or (ii) above the Company
shall arrange for the surviving or acquiring entity to grant to Executive
substitute options to purchase securities of the surviving or acquiring entity
in exchange for Executive's Options. The underlying securities of such
substitute options shall have a fair market value equal to the fair market value
of the securities subject to the Options (as determined by reference to the
value ascribed to the Company in the transaction which triggers Executive's
rights under this paragraph, as such value may be equitably adjusted by the
Board of Directors to take into account amounts paid or payable for
non-competition consulting and/or similar agreements entered into in connection
with the transaction). The substitute options shall be issued with an aggregate
exercise price equal to the aggregate exercise price of the securities subject
to the Options and with terms and conditions comparable to the terms and
conditions applicable to such Options (other than the terms and conditions
imposed by virtue of this Agreement).
▇. ▇▇▇▇▇▇▇▇▇. In the event that a Change in Control occurs and Executive's
employment is terminated by the Company other than For Cause (other than a
termination resulting from a Disability) during the two year period immediately
following the date of the Change in Control; or a Change in Control occurs and
Executive terminates Executive's employment with the Company For Good Reason
during the two year period following the date of the Change in Control, then the
Executive shall be entitled to the applicable: (i) Severance Compensation
payable in a lump sum cash amount within thirty (30) days of the effective date
of termination; and, (ii) health insurance coverage for Executive and his/her
dependents for a period of time equal to the Severance Period, to the extent
possible, on terms comparable to the terms of such coverage in effect on the
date of the Change in Control or the effective date of termination (whichever is
more favorable to Executive).
3. PROTECTED INFORMATION. The Executive hereby recognizes and acknowledges that
during the course of its employment by the Company, the Company will furnish,
disclose or make available to the Executive confidential or proprietary
information related to the Company's business, including, without limitation,
confidential or proprietary information with respect to the Company's
operations, processes, products, inventions, business practices, finances,
principals, vendors, suppliers, customers, potential customers, marketing
methods, costs, prices, contractual relationships, regulatory status,
compensation paid to employees or other terms of employment, that such
confidential or proprietary information has been developed and will be developed
through the Company's expenditure of substantial time and
money, and that all such confidential information could be used by the Executive
and others to compete with the Company. The Executive hereby agrees that all
such confidential or proprietary information shall constitute trade secrets, and
further agrees to use such confidential or proprietary information only for the
purpose of carrying out its duties with the Company and not to directly or
indirectly, disclose, deliver, publish or use such information except pursuant
to section. No information otherwise in the public domain (other than by an act
of Executive in violation hereof) shall be considered confidential. The
Executive agrees that all memoranda, notices, files, records, computer programs
or similar repository and other documents of or containing any such confidential
or proprietary information or trade secrets, made or compiled by the Executive
during the period of its employment or made available to him, shall be the
Company's property and shall be delivered to the Company upon its request
therefor and in any event upon the termination of the Executive's employment
with the Company. The parties hereby stipulate and agree that as between them
the foregoing matters are important, material and confidential proprietary
information and trade secrets and affect the successful conduct of the
businesses of the Company (and any successor or assignee of the Company). The
restrictions in this Section shall survive the termination or expiration of this
Agreement and shall be in addition to any restrictions imposed upon the
Executive by statute or at common law.
4. PROHIBITED SOLICITATION AND COMPETITION. The Executive hereby agrees, in
consideration hereunder and in view of the confidential position to be held by
the Executive hereunder, that at any time during Executive's employment with the
Company and for a period of time equal to the Severance Period following the
Executive's termination of employment, the Executive will not directly or
indirectly without the prior written consent of the Company's Board of
Directors: (i) engage in, or have any interest in, or manage or operate any
person, firm, corporation, partnership or business (whether as director,
officer, employee, agent, representative, partner, security holder, consultant
or otherwise) that engages in any business which then competes with any business
of the Company or any subsidiary anywhere in the world (each, a "Competitor")
(other than beneficial ownership of up to 5% of the outstanding voting stock of
a publicly traded company); or (ii) induce any employee of the Company or its
subsidiaries to terminate such employment or to become employed by any
Competitor. The restrictions in this Section shall survive the termination of
this Agreement and shall be in addition to any restrictions imposed upon the
Executive by statute or at common law.
The parties hereby acknowledge that the restrictions in this Section have
been specifically negotiated and agreed to by the parties hereto and are limited
only to those restrictions necessary to protect the Company from unfair
competition. The parties hereby agree that in the event the agreement in this
Section shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too great a period of time or over
too great a geographical area or by reason of its being too extensive in any
other respect, it will be interpreted to extend only over the maximum period of
time for which it may be enforceable, and/or over the maximum geographical area
as to which it may be enforceable and/or to the maximum extent in all other
respects as to which it may be enforceable, all as determined by such court in
such action. Each provision, paragraph and subparagraph of this Section is
separable from every other provision, paragraph, and subparagraph and
constitutes a separate and distinct covenant.
5. INJUNCTIVE RELIEF. The Executive hereby expressly acknowledges that any
breach or threatened breach by the Executive of any of the terms set forth in
Sections 3 and 4 of this Agreement may result in significant and continuing and
irreparable injury to the Company, the monetary value of which would be
difficult or impossible to establish and that the remedies at law for any such
breach or threatened breach will be inadequate. Therefore, the Executive agrees
that the Company shall be entitled to specific performance and injunctive relief
in a court of appropriate jurisdiction in addition to any other remedy that may
be available at law or in equity. The provisions of this Section shall survive
the Employment Term.
6. TERMINATION. Notwithstanding those Sections herein which specifically survive
termination of this Agreement, this Agreement shall terminate in the event that
Executive's employment with the Company shall terminate for any reason prior to
the date of a Change in Control.
7. NO EFFECT ON OTHER RIGHTS. Nothing contained in this Agreement shall be
construed as limiting or otherwise adversely affecting any of the Executive's
rights under any other agreement or plan in effect as of the date hereof.
8. NO EMPLOYMENT AGREEMENT. It is understood and agreed between Executive and
Company that this Agreement is intended to provide only for certain rights in
the event of a Change in Control. This Agreement shall not be construed as a
contract of employment nor shall anything herein be construed as providing
employment to Executive for any fixed term. Executive acknowledges that he is an
employee at will and that both the Company and the Executive have the absolute
right to terminate the Executive's employment at any time.
9. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors, assigns, heirs, executors
and administrators. If any provision of this Agreement shall conflict with or be
contrary to any provision in any other agreement between the Executive and
Company, the terms and conditions of this Agreement shall control. Any
paragraph, sentence, phrase or other provision of this Agreement which is or
becomes in conflict with any applicable statute, rule or other law shall be
deemed, if possible, to be modified or altered to conform thereto or, if not
possible, to be omitted herefrom. If any provision of this Agreement shall be or
become illegal or unenforceable in whole or in part for any reason whatsoever,
the remaining provisions shall nevertheless be deemed valid, binding and
subsisting.
10. GOVERNING LAW. This Agreement has been negotiated and executed within the
State of New Jersey, and the validity, interpretation and enforcement of this
Agreement shall be governed by the laws of the State of New Jersey.
11. NOTICE. Notices authorized or required to be sent pursuant to this Agreement
shall be in writing and sent by personal delivery or postage prepaid, by
Certified or Registered Mail, return receipt requested, directed to the other
party at its address as may be designated by notice from time to time. Notices
to CommVault shall be addressed to the attention of the Chief Executive Officer.
Notice shall be deemed given on the date the envelope in which such notice is
enclosed, as provided above, is deposited for mailing in a mailbox or post
office.
12. HEADINGS. The headings of Sections in this Agreement are for convenience
only and form no part of this Agreement and shall not affect its interpretation.
IN WITNESS WHEREOF, the parties have executed the Agreement as of the date
first above written.
CommVault Systems, Inc.
By:
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Its: CEO
Executive
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