Exhibit 10.16
EXECUTIVE CHANGE OF CONTROL AGREEMENT
December 27, 2000
▇▇▇▇ ▇▇▇▇▇ EXECUTIVE
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▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RadiSys Corporation
an Oregon corporation
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ THE COMPANY
1. EMPLOYMENT RELATIONSHIP. Executive is currently employed by the
Company as Vice President and General Manager of one of the Company's divisions.
Executive and the Company acknowledge that either party may terminate this
employment relationship at any time and for any or no reason, provided that each
party complies with the terms of this Agreement.
2. RELEASE OF CLAIMS. In consideration for and as a condition precedent
to receiving the severance benefits outlined in this Agreement, Executive
agrees to execute a Release of Claims in the form attached as EXHIBIT A
("Release of Claims"). Executive promises to execute and deliver the Release of
Claims to the Company within the later of (a) 45 days from the date Executive
receives the Release of Claims or (b) the last day of Executive's active
employment.
3. ADDITIONAL COMPENSATION UPON CERTAIN TERMINATION EVENTS.
3.1. CHANGE OF CONTROL. In the event of a Termination of Executive's
Employment (as defined in Section 6.1) other than for Cause (as defined in
Section 6.2), death or Disability (as defined in Section 6.4), within 12 months
following a Change of Control (as defined in Section 6.3 of this Agreement) or
within three months preceding a Change of Control, and contingent upon
Executive's execution of the Release of Claims without revocation and
compliance with Section 8, Executive shall be entitled to the following
benefits:
(a) As severance pay and in lieu of any other compensation for
periods subsequent to the date of termination, the Company shall pay Executive,
in a single payment after employment has ended and eight days have passed
following execution of the Release of Claims without revocation, an amount in
cash equal to 12 months of Executive's annual base pay at the rate in effect
immediately prior to the date of termination.
(b) Executive is entitled to extend coverage under any group
health plan in which Executive and Executive's dependents are enrolled at the
time of termination of
employment under the COBRA continuation laws for the 18-month statutory period,
or so long as Executive remains eligible under COBRA. The Company will pay
Executive a lump sum payment in an amount equivalent to the reasonably
estimated cost Executive may incur to extend for a period of 12 months under
the COBRA continuation laws Executive's group health and dental plan coverage
in effect at the time of termination. Executive may use this payment, as well
as any payment made under Section 3.1(a), for such COBRA continuation coverage
or for any other purpose.
(c) All stock options granted to the Executive under the
Company's 1995 Stock Incentive Plan or any other equity plan shall become
immediately exercisable in full in accordance with the applicable provisions of
the relevant option agreement and plan, and such stock options that are not
Incentive Stock Options under the Internal Revenue Code or 1986, as amended,
shall also be amended to permit the Executive to exercise such stock options
for a period of 90 days after the effective date of the Executive's
termination.
3.2 CERTAIN LIMITATIONS. Notwithstanding the foregoing, if the
total payments and benefits to be paid to or for the benefit of Executive under
this Agreement would cause any portion of those payments and benefits to be
"parachute payments" as defined in section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended, or any successor provision, the total payments and
benefits to be paid to or for the benefit of Executive under this Agreement
shall be reduced to an amount that would not cause any portion of those
payments and benefits to constitute "parachute payments."
4. WITHHOLDING; SUBSEQUENT EMPLOYMENT.
4.1 WITHHOLDING. All payments provided for in this
Agreement are subject to applicable withholding obligations imposed by federal,
state and local laws and regulations.
4.2 OFFSET. The amount of any payment provided for in
this Agreement shall not be reduced, offset or subject to recovery by the
Company by reason of any compensation earned by Executive as the result of
employment by another employer after termination.
5. OTHER AGREEMENTS. If severance benefits are payable to
Executive under any other agreement with the Company in effect at the time of
termination (including but not limited to any employment agreement, but
excluding for this purpose any stock option agreement that may provide for
accelerated vesting or related benefits upon the occurrence of a change in
control), the benefits provided in this Agreement shall not be payable to
Executive. Executive may, however, elect to receive all of the benefits
provided for in this Agreement in lieu of all of the benefits provided in all
such other agreements. Any such election shall be made with respect to the
agreements as a whole, and Executive cannot select some benefits from one
agreement and other benefits from this Agrement.
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6. DEFINITIONS.
6.1 TERMINATION OF EXECUTIVE'S EMPLOYMENT. Termination of
Executive's Employment means that the Company has terminated Executive's
employment with the Company (including any subsidiary of the Company).
Termination of Executive's Employment shall also include termination by
Executive by written notice to the Company also for "Good Reason" based on:
(a) a significant reduction by the
Company or the surviving company in Executive's base
pay as in effect immediately prior to the Change of
Control, other than a salary reduction that is part
of a general salary reduction affecting employees
generally;
(b) a significant reduction by the
Company or the surviving company in total benefits
available to Executive under cash incentive, stock
incentive and other employee benefit plans after the
Change of Control compared to the total package of
such benefits as in effect prior to the Change of
Control;
(c) The Company or the surviving
company requires Executive to be based more than 50
miles from where Executive's office is located
immediately prior to the Change of Control except
for required travel on company business to an extent
substantially consistent with the business travel
obligations which Executive undertook on behalf of
the Company prior to the Change of Control; or
(d) The assignment of Executive to a
different title, job or responsibilities that
results in a material decrease in the level of
responsibility of Executive with respect to the
surviving company after the Change of Control when
compared to Executive's level of responsibility for
the Company's operations prior to the Change of
Control; provided, that Good Reason shall not exist
if Executive continues to have substantially the
same or a greater general level of responsibility
with respect to the former operations of the Company
after the Change of Control as Executive had prior
to the Change of Control even if the former such
operations are a subsidiary or division of the
surviving company.
6.2 CAUSE. Termination of Executive's Employment for
"Cause" shall mean termination upon (a) the willful and continued failure by
Executive to perform substantially Executive's reasonably assigned duties with
the Company (other than any such failure resulting from Executive's incapacity
due to physical or mental illness) after a demand for substantial
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performance is delivered to Executive by the Board of Directors, the
Chief Executive Officer or the President of the Company which
specifically identifies the manner in which the Board of Directors or
the Company believes that Executive has not substantially performed
Executive's duties or (b) the willful engaging by Executive in illegal conduct
which is materially and demonstrably injurious to the Company. No act, or
failure to act, on Executive's part shall be considered "willful" unless done,
or omitted to be done, by Executive without reasonable belief that Executive's
action or omission was in, or not opposed to, the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board of Directors shall be conclusively
presumed to be done, or omitted to be done, by Executive in the best interests
of the Company.
6.3 CHANGE OF CONTROL. A Change of Control shall mean that one of the
following events has taken place:
(a) The shareholders of the Company approve one of the following:
(i) Any merger or statutory plan of exchange involving the
Company ("Merger") in which the Company is not the continuing or
surviving corporation or pursuant to which Common Stock would be
converted into cash, securities or other property, other than a Merger
involving the Company in which the holders of Common Stock immediately
prior to the Merger continue to represent more than 50 percent of the
voting securities of the surviving corporation after the Merger; or
(ii) Any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company.
(b) A tender or exchange offer, other than one made by the Company,
is made for Common Stock (or securities convertible into Common Stock) and
such offer results in a portion of those securities being purchased and the
offeror after the consummation of the offer is the beneficial owner (as
determined pursuant to Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), directly or indirectly, of
securities representing more than 50 percent of the voting power of
outstanding securities of the Company.
(c) The Company receives a report on Schedule 13D of the Exchange Act
reporting the beneficial ownership by any person of securities representing
more than 50 percent of the voting power of outstanding securities of the
Company, except that if such receipt shall occur during a tender offer or
exchange offer
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described in (b) above, a Change of Control shall not take
place until the conclusion of such offer.
Notwithstanding anything in the foregoing to the contrary, no Change of Control
shall be deemed to have occurred for purposes of this Agreement by virtue of
any transaction which results in Executive, or a group of persons which
includes Executive, acquiring, directly or indirectly, securities representing
20 percent or more of the voting power of outstanding securities of the
Company.
6.4 DISABILITY. "Disability" means Executive's absence
from Executive's full-time duties with the Company for 180 consecutive days as
a result of Executive's incapacity due to physical or mental illness, unless
within 30 days after notice of termination by the Company following such
absence Executive shall have returned to the full-time performance of
Executive's duties. This Agreement does not apply if the Executive is
terminated due to Disability.
7. SUCCESSORS; BINDING AGREEMENT. This Agreement shall be
binding on and inure to the benefit of the Company and its successors and
assigns. This Agreement shall inure to the benefit of and be enforceable by
Executive and Executive's legal representatives, executors, administrators and
heirs.
8. RESIGNATION OF CORPORATE OFFICES; REASONABLE ASSISTANCE.
Executive will resign Executive's office, if any, as a director, officer or
trustee of the Company, its subsidiaries or affiliates and of any other
corporation or trust of which Executive serves as such at the request of the
Company, effective as of the date of termination of employment. Executive
further agrees that, if requested by the Company or the surviving company
following a Change of Control, Executive will continue his employment with the
Company or the surviving company for a period of up to six months following the
Change of Control in any capacity requested, consistent with Executive's area of
expertise, provided that the Executive receives the same salary and
substantially the same benefits as in effect prior to the Change of Control.
Executive agrees to provide the Company such written resignation(s) and
assistance upon request and that no severance will be paid until after such
resignation(s) or services are provided.
9. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of Oregon.
10. AMENDMENT. No provision of this Agreement may be modified
unless such modification is agreed to in a writing signed by
Executive and the Company.
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11. SEVERABILITY. If any of the provisions or terms of this
Agreement shall for any reason be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other terms of this
Agreement, and this Agreement shall be construed as if such unenforceable term
had never been contained in this Agreement.
RADISYS CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 1/2/2001
Chief Executive Officer and President
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