-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RAWYyglIA12MevimojHaaZZWrvY5JdYilsvjT5+v2hQjQwdNAHAq/UT+hQjZJIJc 2dzZwMn3oCQQwj05JMgAOg== 0000738076-06-000028.txt : 20060404 0000738076-06-000028.hdr.sgml : 20060404 20060403184714 ACCESSION NUMBER: 0000738076-06-000028 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20060329 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060404 DATE AS OF CHANGE: 20060403 FILER: COMPANY DATA: COMPANY CONFORMED NAME: 3COM CORP CENTRAL INDEX KEY: 0000738076 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576] IRS NUMBER: 942605794 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12867 FILM NUMBER: 06735160 BUSINESS ADDRESS: STREET 1: 350 CAMPUS DRIVE CITY: MARLBOROUGH STATE: MA ZIP: 01752-3064 BUSINESS PHONE: 508-323-5000 MAIL ADDRESS: STREET 1: 350 CAMPUS DRIVE CITY: MARLBOROUGH STATE: MA ZIP: 01752-3064 8-K 1 eightk40306.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):

March 29, 2006

 

3COM CORPORATION

 

(Exact name of registrant as specified in its charter)

 

Delaware

 

0-12867

 

94-2605794

(State or other jurisdiction of

incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

350 Campus Drive

Marlborough, Massachusetts

01752

(Address of Principal Executive Offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (508) 323-5000

 

 

(Former name or former address, if changed since last report)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

 

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

 

 

 

 

 


 

 

ITEM 1.01

Entry into a Material Definitive Agreement

 

On March 29, 2006, the Board of Directors of 3Com Corporation (the “Company”), upon the recommendation of the Compensation Committee of the Board of Directors, adopted:

 

(1) an amended and restated Section 16 Officer Severance Plan (“Section 16 Officer Plan”);

(2) a new Executive Team Severance Plan (“Executive Team Plan”, and together with the Section 16 Officer Plan, the “Plans”); and

(3) a form of Severance Benefits Agreement that will provide each Plan participant with contractual rights to the severance terms contained in the Plans (the “Form”).

 

The Plans and the Form are attached as exhibits to this Current Report on Form 8-K.

 

The terms of the Plans and the Form are substantially the same.

 

The only participants in the Section 16 Officer Plan are persons designated by the Board of Directors as “officers” under Section 16 of the Securities Exchange Act of 1934 (other than R. Scott Murray, the Company’s Chief Executive Officer and President). The participants in the Executive Team Plan are restricted to employees with a specified employee grade level (and above) that are not Section 16 officers.

 

The material terms and conditions of the Plans and the Form are summarized as follows:

 

Eligibility. Participants will only receive Plan benefits upon termination of employment without cause or for good reason (as defined in the Plans). The receipt of benefits is conditioned on signing, and complying with the terms of, a release agreement that includes non-solicitation, non-competition and non-disparagement provisions.

 

Severance Payments. Participants will receive:

one year of the participant’s annualized base salary as of the termination date; and

if earned, the participant’s incentive bonus for the bonus period in which the termination date occurs, pro-rated based on number of days worked during the bonus period

Payments will be made through regular (bi-weekly) payroll and bonus payment practices, and will be subject to applicable withholding and reduced by severance benefits pursuant to any other contract with the Company.

 

Health, Dental & Vision Benefits; Life Insurance. If elected, participants will receive continuation of coverage under health, dental, and vision insurance plans pursuant to COBRA and continuation of the Company-paid portion of the premiums for the elected coverage under the plans until the earlier of: (i) one year from the termination date, or (ii) the date upon which the person becomes eligible for coverage under another employer’s group health, dental, or vision insurance plan(s). In addition, participants will receive continued coverage under basic term life insurance for the same period.

 

Equity Compensation. Participants will receive:

six months of accelerated vesting of outstanding equity subject to time-based vesting; and

extension of the exercise period for vested stock options to the earlier of: (i) one hundred and sixty-five calendar days from the termination date; or (ii) the original term of the stock option grant

 

Tax Provision. Notwithstanding the foregoing, if the Company reasonably determines that Section 409A of the Internal Revenue Code will result in the imposition of additional taxes or penalties based on the payment of benefits within the first six months following the termination date, the Company will modify the payment schedule to provide that the payments will begin on the first regularly scheduled payroll date following the expiration of six months and one day after the termination date.

 

The Section 16 Officer Plan replaces in its entirety the “3Com Section 16 Officer Severance Plan” previously disclosed.

 

 

ITEM 9.01

Financial Statements and Exhibits

(c)

Exhibits

 

Exhibit Number

Description

 

10.1

Section 16 Officer Severance Plan, Amended and Restated Effective March 29, 2006

10.2

Executive Team Severance Plan effective March 29, 2006

 

10.3

Form of Severance Benefits Agreement

 

 

 


 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

3COM CORPORATION

 

 

 

 

Date:  April 4, 2006

By:

/S/ NEAL D. GOLDMAN

 

 

 

Neal D. Goldman

Senior Vice President, Management Services, General Counsel and Secretary

 

 

 


 

 

EXHIBIT INDEX

 

Exhibit Number

Description

 

10.1

Section 16 Officer Severance Plan, Amended and Restated Effective March 29, 2006

10.2

Executive Team Severance Plan effective March 29, 2006

 

10.3

Form of Severance Benefits Agreement

 

 

 

 

 

 

EX-10 2 exsevpl4306.htm

Exhibit 10.2

 

3Com Corporation

Executive Team Severance Plan

Plan Document and Summary Plan Description

 

Enacted Effective March 29, 2006

 

This Plan Document and Summary Plan Description (“Summary Plan Description”) is for all employees of 3Com Corporation (“3Com” or the “Company”) who are eligible under the terms of the 3Com Executive Team Severance Plan (the “Executive Team Plan”). All rights to participate in and receive benefits from the Executive Team Plan are governed solely by the terms and conditions of this Summary Plan Description.

 

I.

EFFECTIVE DATE

 

The Executive Team Plan is hereby enacted effective March 29, 2006.

 

II.

ELIGIBILITY TO PARTICIPATE

 

Participation in the Executive Team Plan is restricted to active 3Com employees who are in position with a U.S. Salary Grade higher than 24 and have not been designated by the Company as being subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended (“Executives”).

 

III.

ELIGIBILITY TO RECEIVE BENEFITS

 

Executives who are employed by the Company are eligible to receive benefits upon the termination of their employment with 3Com under following circumstances: (a) an involuntarily termination without Cause; or (b) a Voluntary Termination for Good Reason. The receipt of benefits under the Executive Team Plan will be conditioned upon the Executive’s execution of and compliance with an agreement (the “Release Agreement”) including, but not limited to, (i) a release of claims against the Company, its affiliates and representatives; (ii) a non-solicitation provision prohibiting the Executive’s solicitation of any Company employee, business opportunity, client, customer, account, distributor or vendor for a period of one (1) year following the Termination Date; (iii) a non-competition provision prohibiting the Executive from directly or indirectly engaging in, participating in or having a material ownership interest in a business in competition with the Company for a period of one (1) year following the Termination Date; and (iv) a non-disparagement provision. The form and language of the Release Agreement shall be determined by the Company in its sole discretion.

 

IV.

BENEFITS

 

Executives who are eligible to receive benefits under the Executive Team Plan will be entitled to receive the following upon their execution and non-revocation (if applicable) of the Release Agreement:

 

A.

Severance Amounts.

1.    One (1) year of the Executive’s annualized base salary as of the Termination Date, subject to all applicable taxes and withholdings; and


 

 

2.    A pro-rated amount of the Executive’s earned incentive bonus for the bonus period in which the Termination Date occurs, to be calculated by multiplying the earned bonus amount (based on the Company’s actual attainment of applicable performance metrics) by a fraction, the numerator of which shall be the number of calendar days from the beginning of the applicable bonus period to the Termination Date and the denominator of which shall be the number of calendar days within the applicable bonus period, payable through the Company’s regular bonus payment practices (but no earlier than the effective date of the Executive’s Release Agreement) and subject to all applicable taxes and withholdings.

B.         Health, Dental & Vision Benefits. Continuation of coverage under the Company’s health, dental, and vision insurance plans (“Health Care Plans”) pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) at the same level of coverage as was provided to and elected by the Executive as of the Termination Date. If the Executive timely and properly elects to continue coverage under the Company’s Health Care Plans in accordance with COBRA, the Company shall continue to pay the Company-paid portion of the premiums for the Executive’s elected coverage under the Health Care Plans until the earlier of: (i) one (1) year from the Termination Date, or (ii) the date upon which the Executive becomes eligible for coverage under another employer’s group health, dental, or vision insurance plan(s). The Executive will remain obligated to pay the unsubsidized portion of the applicable premium(s) in order to continue Company-sponsored coverage. The Company-paid portion of any premium(s) is subject to change at the Company’s discretion. To be eligible for continuation of coverage under the Health Care Plans, an Executive must be actively enrolled in the applicable Health Care Plan(s) as of the Termination Date. For purposes of Title X of COBRA, the date of the “qualifying event” for the Executive and his/her covered dependents shall be the Termination Date, and each month of Company-sponsored coverage continuation provided hereunder shall offset a month of coverage continuation otherwise due under COBRA. Upon the expiration of the one (1) year period, the Executive will be required to pay 102% of the premium to continue Company-sponsored coverage. Any continuation of Company-sponsored coverage shall be governed by COBRA and the terms and conditions of the applicable plan documents.

C.         Life Insurance. Conversion of the Executive’s basic term life insurance in effect immediately prior to the Termination Date to continue coverage until the earlier of (i) one (1) year from the Termination Date, or (ii) the date upon which the Executive becomes eligible for coverage under another employer’s life insurance plan.

D.

Equity Compensation.

 

1.    Six (6) months of accelerated vesting of outstanding stock options, restricted stock, and restricted stock units issued to the Executive that are subject to time-based vesting. The accelerated vesting provided for herein will be effective as of the Termination Date.

 

2.    Extension of the exercise period for vested stock options issued to the Executive to the earlier of: (i) one hundred and sixty-five (165) calendar days from the Termination Date; or (ii) the original term of the stock option grant.

 

All other compensation (including, without limitation, salary, bonuses and commissions) and employee benefits (including, without limitation, short-term and long-term disability insurance, Paid Time Off accrual, and vesting of equity compensation) will cease on the Executive’s Termination Date. Payments under the Executive Team Plan will not be subject to 401(k) or Employee Stock Purchase Plan deductions. Except as provided herein, all equity compensation grants are subject to the terms and conditions of the applicable plan document(s).

 


 

 

V.

DEFINITIONS

 

A.         “Cause” shall mean (i) an act of theft, embezzlement or intentional dishonesty by the Executive in connection with his/her employment; (ii) the Executive being convicted of a felony, (iii) a willful act by the Executive which constitutes gross misconduct and which is injurious to the Company, or (iv) following delivery to the Executive of a written demand for performance from the Company which describes the basis for the Company’s reasonable belief that the Executive has not substantially performed his/her duties, continued violation(s) of the Executive’s obligations to the Company which are demonstrably willful and deliberate on the Executive’s part.

 

B.         “Termination Date” shall mean the Executive’s last date of employment with 3Com Corporation.

 

C.         “Voluntary Termination for Good Reason” shall mean the Executive’s voluntarily resignation after the occurrence of any of the following events without the Executive’s consent: (i) a material reduction of the Executive’s material duties or title, relative to the Executive’s material duties or title as in effect immediately prior to such reduction; (ii) a material reduction by the Company in the base salary of the Executive as in effect immediately prior to such reduction, other than a reduction generally applicable to other Executives; or (iii) the permanent relocation of the Executive to a work location more than fifty (50) miles from the Executive’s then present work location; provided, however, that no grounds for Voluntary Termination for Good Reason shall exist hereunder unless the Executive provides 3Com with thirty (30) days’ advance written notice of his/her resignation, specifying the purported grounds for the Voluntary Termination for Good Reason, and provides the Company with the opportunity to cure the above-referenced event(s) on which the resignation based.

 

VI.

FORM OF PAYMENT

 

The severance amount provided for in Section IV(A)(1) above shall be paid through the Company’s regular, bi-weekly payroll practices and shall continue for twelve (12) months (twenty-four (24) Company payroll periods) following the effective date of the Executive’s Release Agreement, provided that the Executive continues to comply with all terms and conditions of the Release Agreement during the twelve (12) month period.

 

VII.

MITIGATION

 

Any severance benefits which the Executive is entitled to receive under the Executive Team Plan shall be reduced by any corresponding severance benefits the Executive is entitled to receive pursuant to any contract or agreement (written or verbal) between the Executive and the Company.

 

VIII.

INTERNAL REVENUE CODE SECTION 409A

 

Notwithstanding any other provisions of this Summary Plan Description, if the Company reasonably determines in its discretion that Section 409A of the Internal Revenue Code, as amended, will result in the imposition of additional taxes or penalties based on the payment of the benefits provided under Section IV(A) above to an Executive within the first six (6) months following the Termination Date, the Company will modify the payment schedule to provide that the payments will begin on the first regularly scheduled payroll date following the expiration of six (6) months and one (1) day after the Termination Date. If the payment schedule is modified pursuant to this Section VII, the Executive will receive the one (1) year of annualized salary paid through the Company’s regular payroll practices over the twelve (12) payroll periods immediately following the expiration of six (6) months and one (1) day after the Termination Date.


 

 

IX.

FUNDING

 

Benefits provided pursuant to the Executive Team Plan shall be paid solely out of 3Com’s general assets. 3Com shall not be required to fund or otherwise provide for the payment of benefits provided hereunder in any other manner.

 

X.

CLAIMS AND REVIEW PROCEDURES

 

If an Executive believes that he/she is entitled to a benefit under the Executive Team Plan, or a benefit in an amount greater than he/she has received, the Executive may file a claim by writing to the Executive Team Plan Administrator. The Executive Team Plan Administrator is the named fiduciary that has the discretionary power and authority to act with respect to any appeal from a denial of a claim for benefits under the Executive Team Plan by performing a full and fair review of the denial, and such actions shall be final and binding on all persons. Benefits under the Executive Team Plan shall be payable only if the Executive Team Plan Administrator determines, in its sole discretion, that an eligible Executive is entitled to them. Any claim must be filed no later than forty-five (45) days after the Executive’s Termination Date.

 

A.         Initial Claim. The Executive Team Plan Administrator will notify the Executive in writing within ninety (90) days (or 180 days if special circumstances require an extension of time for processing the claim) of receipt of the claim as to whether the claim is granted or denied. Note that if an extension is necessary, the Executive Team Plan Administrator will provide the Executive with written notice of the extension (including the circumstances requiring extension and date by which a decision is expected to be rendered) before the initial ninety (90) day period expires. If the claim is denied, the Executive will be given (1) specific reasons for the denial, (2) specific reference to the Executive Team Plan provision(s) on which the denial is based, (3) a description of any information or material necessary to support the claim and an explanation of why such information or material is necessary, (4) an explanation of the Executive Team Plan’s claim appeal procedure (including a statement of the Executive’s right to bring a civil action under the Employee Retirement Income Security Act of 1974 (“ERISA”) following a denial of the claim upon appeal), and (5) a statement that the Executive is entitled to receive, upon request and free of charge, reasonable access to, and copies of all documents, records or other information relevant (as defined by Department of Labor regulation section 2560.503-1(m)) to the claim.

 

B.         Appeals. If the claim is denied, the Executive has sixty (60) days after notice of the denial to file a written appeal with the Executive Team Plan Administrator. During the review process, the Executive has the right to submit written comments, documents, records, and other information relating to the claim for benefits, which will be considered without regard to whether such items were considered in the initial benefit determination. Also, the Executive may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant (as defined by Department of Labor regulation section 2560.503-1(m)) to the claim for benefits.

 

The Executive Team Plan Administrator will notify the Executive in writing within sixty (60) days (or 120 days if special circumstances require an extension of time for processing the appeal) of receipt of the appeal as to its decision on review, unless the Executive Team Plan Administrator determines that special circumstances exist requiring an extension of time. If the Executive Team Plan Administrator determines that an extension is necessary, the Executive Team Plan Administrator will provide the Executive with written notice (including the circumstances requiring the extension and date by which a decision is expected to be rendered) before the initial sixty (60) day period expires.


 

 

If the Executive Team Plan Administrator denies the appeal, it will provide a written denial of the claim upon appeal. The written denial shall include the specific reason or reasons for the denial, specific references to the Executive Team Plan provisions on which the denial is based, a statement that the Executive is entitled to receive, upon request and free of charge, reasonable access to, and copies of all documents, records or other information relevant (as defined in Department of Labor regulation section 2560.503-1(m)) to the claim, and a statement of the Executive’s right to bring an action under Section 502(a) of ERISA.

 

All determinations, interpretations, rules, and decisions of the Executive Team Plan Administrator or its delegate shall be conclusive and binding upon all persons having or claiming to have any interest or right under the Executive Team Plan and shall be given deference in any judicial or other proceeding.

 

C.         Exhaustion of Claims Procedures. In no event shall an Executive or any other person be entitled to challenge a decision of the Executive Team Plan Administrator in court or in any other administrative proceeding unless and until the claim and appeal procedures described above have been fully complied with and exhausted.

 

XI.

ADMINISTRATION

 

The Executive Team Plan Administrator administers the Executive Team Plan. The Executive Team Plan Administrator is exclusively authorized to interpret the provisions of this Summary Plan Description. The Executive Team Plan Administrator’s interpretation and/or application of any term or provision of the Executive Team Plan shall be final and binding. The Executive Team Plan Administrator shall have full and unfettered authority and responsibility for administration of the Executive Team Plan, including the discretionary authority to determine eligibility for benefits and amounts of benefit entitlements and to interpret the terms of the Executive Team Plan.

 

XII.

AMENDMENT AND TERMINATION

 

The Company reserves the right to amend or terminate the Executive Team Plan at any time, with or without notice. All material changes to the Executive Team Plan must be approved by the 3Com Corporation Board of Directors (the “Board”) or the Compensation Committee of the Board.

 

Information Required By ERISA:

 

Plan Name

3Com Executive Team Severance Plan

 

Plan Sponsor

3Com Corporation

350 Campus Drive

Marlborough, MA 01752-3064

 

Plan Administrator

The Executive Team Plan Administrator shall be the Compensation Committee of the Board. Communications with the Executive Team Plan Administrator must be in writing and addressed to:

 

Senior Vice President, Human Resources

3Com Corporation

350 Campus Drive

Marlborough, MA 01752-3064


 

 

Type of Plan

The Executive Team Plan is a welfare plan providing for severance benefits.

 

Employer Identification Number

The 3Com Employer Identification Number is 94-2605794. When writing about the Executive Team Plan, an Executive should include this number.

 

Plan Number

For the purpose of identification, 3Com has assigned the Executive Team Plan the number 517. All communications concerning the Executive Team Plan should include this reference number.

 

Service of Legal Process

Service of legal process may be made on the Executive Team Plan Administrator at the address above.

 

XIII.

ENTIRE PLAN; AMENDMENTS

 

This Summary Plan Description contains all the terms, conditions and benefits relating to the Executive Team Plan. No employee, officer, or director of the Company has the authority to alter, vary or modify the terms of the Executive Team Plan, other than by means of an authorized written amendment to the Executive Team Plan approved by the Executive Team Plan Administrator. No oral or written representations contrary to the terms of the Executive Team Plan and its written amendments shall be binding upon the Executive Team Plan, the Executive Team Plan Administrator or the Company.

 

XIV.

NO CONTRACT OF EMPLOYMENT

 

Nothing herein is intended to or shall be considered a contract of employment or for any period of employment or a guarantee of future employment with the Company.

 

XV.

NO ASSIGNMENT OF RIGHTS

 

No eligible Executive shall have the right to assign, delegate or otherwise transfer, either in full or in part, any of his/her rights or obligations under the Executive Team Plan and any such assignment, delegation or other such transfer shall be void.

 

XVI.

APPLICABLE LAW; VENUE

 

Except where preempted by ERISA, the Executive Team Plan shall be construed in accordance with, and all disputes hereunder shall be governed by, the laws of the Commonwealth of Massachusetts without regard to its conflict of laws rules. All legal actions arising under or relating to the Executive Team Plan shall be subject to the jurisdiction and venue of the United States District Court for the District of Massachusetts sitting in Boston, Massachusetts.

 

XVII.

ERISA RIGHTS  

 

If you are an eligible Executive who is a participant in the Executive Team Plan, you are entitled to certain rights and protections under ERISA.


 

 

Receive Information About Your Plan and Benefits. ERISA provides that you are entitled to:

 

(1)

Examine, without charge, at the office of the Executive Team Plan Administrator or its delegate all Executive Team Plan documents, including copies of any documents filed by the Executive Team Plan with the U.S. Department of Labor, such as Executive Team Plan descriptions.

 

(2)

Obtain copies of all Executive Team Plan documents and other Executive Team Plan information upon written request to the Executive Team Plan Administrator. The Executive Team Plan Administrator may impose a reasonable charge for the copies.

 

(3)

Receive a copy of the Executive Team Plan’s financial report, if any. The Executive Team Plan Administrator may be required by law to furnish each participant with a copy of the summary annual report.

 

Prudent Actions By Fiduciaries. In addition to creating rights for the Executive Team Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Executive Team Plan. The people who operate the Executive Team Plan, called “fiduciaries” of the Executive Team Plan, have a duty to do so prudently and in the interest of you and other Executive Team Plan participants and beneficiaries.

 

No one may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA.

 

Enforce Your Rights. If your claim for a Executive Team Plan benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

 

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Executive Team Plan and do not receive them within thirty (30) days, you may file suit in a federal court. In such case, the court may require the Executive Team Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Executive Team Plan Administrator.

 

If you have a claim for a benefit that is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that Executive Team Plan fiduciaries misuse the Executive Team Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

 

Assistance With Your Questions. If you have questions about the statements made in this summary or your rights under ERISA, you should contact the Executive Team Plan Administrator or the nearest Area Office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, Washington, D.C. 20210.

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Exhibit 10.3

 

SEVERANCE BENEFITS AGREEMENT

This Severance Benefits Agreement (the “Agreement”) is made and entered into by and between [NAME] (the “Executive”) and 3Com Corporation (“3Com” or the “Company”), effective as of [DATE] (the “Effective Date”). 3Com and the Executive shall each individually be referred to herein as a “Party” and together as the “Parties.”

 

WHEREAS, the Executive is currently employed by the Company as its [TITLE] and is eligible to receive severance benefits pursuant to the Company’s [PLAN NAME] (as amended, the “Plan”); and

WHEREAS, the Company seeks to confirm the Executive’s eligibility for severance benefits to ensure the continued dedication and objectivity of the Executive and to provide the Executive with additional financial security.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree to the terms and conditions set forth in this Agreement.

1.    Interpretation/Administration. The terms of this Agreement shall be governed by and administered pursuant to the provisions of the Plan. To the extent that there is any conflict between this Agreement and the terms of the Plan, the Plan provisions shall supersede and control; provided however that, notwithstanding any amendments to the Plan after the Effective Date, the severance benefits for which the Executive is eligible shall not be less than the severance benefits set forth in this Agreement.

2.    Term of Agreement. This Agreement shall be effective as of the Effective Date and shall terminate upon the Executive’s last date of employment with the Company (the “Termination Date”).

3.    Eligibility to Receive Severance Benefits. The Company shall provide the Executive with the severance benefits described in Section 4 below upon the Company’s involuntary termination of the Executive’s employment with 3Com without Cause or the Executive’s Voluntary Termination for Good Reason, as such terms are defined under the Plan, provided that the Executive signs and does not revoke an agreement (the “Release Agreement”) including, but not limited to, (i) a release of claims against the Company, its affiliates and representatives; (ii) a non-solicitation provision prohibiting the Executive’s solicitation of any Company employee, business opportunity, client, customer, account, distributor or vendor for a period of one (1) year following the Termination Date; (iii) a non-competition provision prohibiting the Executive from directly or indirectly engaging in, participating in or having a material ownership interest in a business in competition with the Company for a period of one (1) year following the Termination Date; and (iv) a non-disparagement provision. The form and language of the Release Agreement shall be determined by the Company in its sole discretion.

4.    Severance Benefits. If the conditions provided in Section 3 above are fully satisfied, the Executive will be entitled to receive the following severance benefits:

A.

Severance Amounts.

i.           One (1) year of the Executive’s annualized base salary as of the Termination Date, subject to all applicable taxes and withholdings, paid through the Company’s regular, bi-weekly payroll practices and continuing for twelve (12) months (twenty-four (24) Company payroll periods) following the effective date of the Executive’s Release Agreement, provided that the Executive continues to comply with all terms and conditions of the Release Agreement during the twelve (12) month period; and

ii.          A pro-rated amount of the Executive’s earned incentive bonus for the bonus period in which the Termination Date occurs, to be calculated by multiplying the earned bonus amount (based on the Company’s actual attainment of applicable performance metrics) by a fraction, the numerator of which shall be the number of calendar days from the beginning of the applicable bonus period to the Termination Date and the denominator of which shall be the number of calendar days within the applicable bonus period, payable through the Company’s regular bonus payment practices (but no earlier than the effective date of the Executive’s Release Agreement) and subject to all applicable taxes and withholdings.

B.               Health, Dental & Vision Benefits. Continuation of coverage under the Company’s health, dental, and vision insurance plans (“Health Care Plans”) pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) at the same level of coverage as was provided to and elected by the Executive as of the Termination Date. If the Executive timely and properly elects to continue coverage under the Company’s Health Care Plans in accordance with COBRA, the Company shall continue to pay the Company-paid portion of the premiums for the Executive’s elected coverage under the Health Care Plans until the earlier of: (i) one (1) year from the Termination Date, or (ii) the date upon which the Executive becomes eligible for coverage under another employer’s group health, dental, or vision insurance plan(s). The Executive will remain obligated to pay the unsubsidized portion of the applicable premium(s) in order to continue Company-sponsored coverage. The Company-paid portion of any premium(s) is subject to change at the Company’s discretion. To be eligible for continuation of coverage under the Health Care Plans, an Executive must be actively enrolled in the applicable Health Care Plan(s) as of the Termination Date. For purposes of Title X of COBRA, the date of the “qualifying event” for the Executive and his/her covered dependents shall be the Termination Date, and each month of Company-sponsored coverage continuation provided hereunder shall offset a month of coverage continuation otherwise due under COBRA. Upon the expiration of the one (1) year period, the Executive will be required to pay 102% of the premium to continue Company-sponsored coverage. Any continuation of Company-sponsored coverage shall be governed by COBRA and the terms and conditions of the applicable plan documents.

C.   Life Insurance. Conversion of the Executive’s basic term life insurance in effect immediately prior to the Termination Date to continue coverage until the earlier of (i) one (1) year from the Termination Date, or (ii) the date upon which the Executive becomes eligible for coverage under another employer’s life insurance plan.

D.

Equity Compensation.

 

i.     Six (6) months of accelerated vesting of outstanding stock options, restricted stock, and restricted stock units issued to the Executive that are subject to time-based vesting. The accelerated vesting provided for herein will be effective as of the Termination Date.

 

ii.    Extension of the exercise period for vested stock options issued to the Executive to the earlier of: (a) one hundred and sixty-five (165) calendar days from the Termination Date; or (b) the original term of the stock option grant.

All other compensation (including, without limitation, salary, bonuses and commissions) and employee benefits (including, without limitation, short-term and long-term disability insurance, Paid Time Off accrual, and vesting of equity compensation) will cease on the Executive’s Termination Date. The payments provided for in Section 4(A) above will not be subject to 401(k) or Employee Stock Purchase Plan deductions. Except as provided herein, all equity compensation grants are subject to the terms and conditions of the applicable plan document(s).

5.         Internal Revenue Code Section 409A. Notwithstanding any other provisions of this Agreement, if the Company reasonably determines in its discretion that Section 409A of the Internal Revenue Code, as amended, will result in the imposition of additional taxes or penalties based on the payment of the benefits provided under Section 4(A) above to the Executive within the first six (6) months following the Termination Date, the Company will modify the payment schedule to provide that the payments will begin on the first regularly scheduled payroll date following the expiration of six (6) months and one (1) day after the Termination Date. If the payment schedule is modified pursuant to this Section 5, the Executive will receive the one (1) year of annualized salary paid through the Company’s regular payroll practices over the twelve (12) payroll periods immediately following the expiration of six (6) months and one (1) day after the Termination Date.

6.          At-Will Employment. The Company and the Executive hereby acknowledge and agree that this Agreement is not intended to be and shall not be considered a contract for a term of employment. The Parties further acknowledge and agree that the Executive’s employment with 3Com is and shall continue to be at-will, as defined under applicable law, and may be terminated by either Party at any time, for any reason or no reason, with or without notice. If the Executive’s employment terminates for any reason other than the conditions specified in Section 2 of this Agreement, then the Executive shall not be entitled to receive severance or other benefits under this Agreement or any severance and/or benefit plans sponsored by the Company; provided, however, that the Executive will remain eligible to receive benefits under the terms and conditions of the Management Retention Agreement between the Company and the Executive (the “Management Retention Agreement”).

7.    Entire Agreement/Integration. No agreements, representations or understandings (whether verbal or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either Party with respect to the subject matter hereof. This Agreement represents the entire understanding of the Parties hereto with respect to the Executive’s eligibility to receive severance benefits from the Company and supersedes all prior arrangements and understandings regarding such benefits; provided, however, that the Executive shall remain eligible to receive benefits under the Management Retention Agreement.

To the extent that Executive is eligible for or receives benefits under the Management Retention Agreement, he/she shall not be eligible to receive any severance benefits under this Agreement.

8.          Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the federal Employee Retirement Income Security Act of 1974 (“ERISA”). To the extent not governed by ERISA, the Agreement shall be interpreted under laws of the Commonwealth of Massachusetts. The Parties hereby agree and consent to the jurisdiction of the United States District Court for the District of Massachusetts, sitting in Boston, Massachusetts, as the exclusive venue for settling any disputes arising hereunder.

9.          Amendments. This Agreement may not be modified, amended, supplemented or superseded unless by means of a written document signed by the Executive and the Company’s President and Chief Executive Officer or General Counsel.

10.        Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF, WHEREFORE, the Parties have read this Agreement, have carefully considered its provisions, have had an opportunity to discuss it with their attorneys, and attest that they are fully competent to execute this Agreement and that they fully understand and knowingly accept its terms and conditions in their entirety and without reservation.

3COM CORPORATION

 

R. SCOTT MURRAY

President and Chief Executive Officer

EXECUTIVE

 

 

 

[NAME]

[TITLE]

 

 

IMS_Last_Page

 

 

EX-10 5 exsec16sevpl.htm

Exhibit 10.1

 

3Com Corporation

Section 16 Officer Severance Plan

Plan Document and Summary Plan Description

 

Amended and Restated Effective March 29, 2006

 

This Plan Document and Summary Plan Description (“Summary Plan Description”) is for all employees of 3Com Corporation (“3Com” or the “Company”) who are eligible under the terms of the 3Com Section 16 Officer Severance Plan (the “Section 16 Plan”). All rights to participate in and receive benefits from the Section 16 Plan are governed solely by the terms and conditions of this Summary Plan Description. This Summary Plan Description supercedes and replaces all prior plan documents and summary plan descriptions governing the Section 16 Plan.

 

I.

EFFECTIVE DATE

 

The Section 16 Plan is hereby amended and restated effective March 29, 2006.

 

II.

ELIGIBILITY TO PARTICIPATE

 

Participation in the Section 16 Plan is restricted to active 3Com employees who have been designated by the Company, at its discretion and consistent with applicable law, as being subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended (“Officers”). The Company’s President and Chief Executive Officer (the “CEO”) shall not be considered an Officer for purposes of the Section 16 Plan and shall not be a participant in the Section 16 Plan.

 

III.

ELIGIBILITY TO RECEIVE BENEFITS

 

Officers who are employed by the Company are eligible to receive benefits upon the termination of their employment with 3Com under following circumstances: (a) an involuntarily termination without Cause; or (b) a Voluntary Termination for Good Reason. The receipt of benefits under the Section 16 Plan will be conditioned upon the Officer’s execution of and compliance with an agreement (the “Release Agreement”) including, but not limited to, (i) a release of claims against the Company, its affiliates and representatives; (ii) a non-solicitation provision prohibiting the Officer’s solicitation of any Company employee, business opportunity, client, customer, account, distributor or vendor for a period of one (1) year following the Termination Date; (iii) a non-competition provision prohibiting the Officer from directly or indirectly engaging in, participating in or having a material ownership interest in a business in competition with the Company; and (iv) a non-disparagement provision. The form and language of the Release Agreement shall be determined by the Company in its sole discretion.

 

IV.

BENEFITS

 

Officers who are eligible to receive benefits under the Section 16 Plan will be entitled to receive the following upon their execution and non-revocation (if applicable) of the Release Agreement:

 

A.

Severance Amounts.

1.    One (1) year of the Officer’s annualized base salary as of the Termination Date, subject to all applicable taxes and withholdings; and


 

 

2.    A pro-rated amount of the Officer’s earned incentive bonus for the bonus period in which the Termination Date occurs, to be calculated by multiplying the earned bonus amount (based on the Company’s actual attainment of applicable performance metrics) by a fraction, the numerator of which shall be the number of calendar days from the beginning of the applicable bonus period to the Termination Date and the denominator of which shall be the number of calendar days within the applicable bonus period, payable through the Company’s regular bonus payment practices (but no earlier than the effective date of the Officer’s Release Agreement) and subject to all applicable taxes and withholdings.

B.         Health, Dental & Vision Benefits. Continuation of coverage under the Company’s health, dental, and vision insurance plans (“Health Care Plans”) pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) at the same level of coverage as was provided to and elected by the Officer as of the Termination Date. If the Officer timely and properly elects to continue coverage under the Company’s Health Care Plans in accordance with COBRA, the Company shall continue to pay the Company-paid portion of the premiums for the Officer’s elected coverage under the Health Care Plans until the earlier of: (i) one (1) year from the Termination Date, or (ii) the date upon which the Officer becomes eligible for coverage under another employer’s group health, dental, or vision insurance plan(s). The Officer will remain obligated to pay the unsubsidized portion of the applicable premium(s) in order to continue Company-sponsored coverage. The Company-paid portion of any premium(s) is subject to change at the Company’s discretion. To be eligible for continuation of coverage under the Health Care Plans, an Officer must be actively enrolled in the applicable Health Care Plan(s) as of the Termination Date. For purposes of Title X of COBRA, the date of the “qualifying event” for the Officer and his/her covered dependents shall be the Termination Date, and each month of Company-sponsored coverage continuation provided hereunder shall offset a month of coverage continuation otherwise due under COBRA. Upon the expiration of the one (1) year period, the Officer will be required to pay 102% of the premium to continue Company-sponsored coverage. Any continuation of Company-sponsored coverage shall be governed by COBRA and the terms and conditions of the applicable plan documents.

C.         Life Insurance. Conversion of the Officer’s basic term life insurance in effect immediately prior to the Termination Date to continue coverage until the earlier of (i) one (1) year from the Termination Date, or (ii) the date upon which the Officer becomes eligible for coverage under another employer’s life insurance plan.

D.

Equity Compensation.

 

1.    Six (6) months of accelerated vesting of outstanding stock options, restricted stock, and restricted stock units issued to the Officer that are subject to time-based vesting. The accelerated vesting provided for herein will be effective as of the Termination Date.

 

2.    Extension of the exercise period for vested stock options issued to the Officer to the earlier of: (i) one hundred and sixty-five (165) calendar days from the Termination Date; or (ii) the original term of the stock option grant.

 

All other compensation (including, without limitation, salary, bonuses and commissions) and employee benefits (including, without limitation, short-term and long-term disability insurance, Paid Time Off accrual, and vesting of equity compensation) will cease on the Officer’s Termination Date. Payments under the Section 16 Plan will not be subject to 401(k) or Employee Stock Purchase Plan deductions. Except as provided herein, all equity compensation grants are subject to the terms and conditions of the applicable plan document(s).


 

 

 

V.

DEFINITIONS

 

A.         “Cause” shall mean (i) an act of theft, embezzlement or intentional dishonesty by the Officer in connection with his/her employment; (ii) the Officer being convicted of a felony, (iii) a willful act by the Officer which constitutes gross misconduct and which is injurious to the Company, or (iv) following delivery to the Officer of a written demand for performance from the Company which describes the basis for the Company’s reasonable belief that the Officer has not substantially performed his/her duties, continued violation(s) of the Officer’s obligations to the Company which are demonstrably willful and deliberate on the Officer’s part.

 

B.         “Termination Date” shall mean the Officer’s last date of employment with 3Com Corporation.

 

C.         “Voluntary Termination for Good Reason” shall mean the Officer’s voluntarily resignation after the occurrence of any of the following events without the Officer’s consent: (i) a material reduction of the Officer’s material duties or title, relative to the Officer’s material duties or title as in effect immediately prior to such reduction; (ii) a material reduction by the Company in the base salary of the Officer as in effect immediately prior to such reduction, other than a reduction generally applicable to other Officers; or (iii) the permanent relocation of the Officer to a work location more than fifty (50) miles from the Officer’s then present work location; provided, however, that no grounds for Voluntary Termination for Good Reason shall exist hereunder unless the Officer provides 3Com with thirty (30) days’ advance written notice of his/her resignation, specifying the purported grounds for the Voluntary Termination for Good Reason, and provides the Company with the opportunity to cure the above-referenced event(s) on which the resignation based.

 

VI.

FORM OF PAYMENT

 

The severance amount provided for in Section IV(A)(1) above shall be paid through the Company’s regular, bi-weekly payroll practices and shall continue for twelve (12) months (twenty-four (24) Company payroll periods) following the effective date of the Officer’s Release Agreement, provided that the Officer continues to comply with all terms and conditions of the Release Agreement during the twelve (12) month period.

 

VII.

MITIGATION

 

Any severance benefits which the Officer is entitled to receive under the Section 16 Plan shall be reduced by any corresponding severance benefits the Officer is entitled to receive pursuant to any contract or agreement (written or verbal) between the Officer and the Company.

 

VIII.

INTERNAL REVENUE CODE SECTION 409A

 

Notwithstanding any other provisions of this Summary Plan Description, if the Company reasonably determines in its discretion that Section 409A of the Internal Revenue Code, as amended, will result in the imposition of additional taxes or penalties based on the payment of the benefits provided under Section IV(A) above to an Officer within the first six (6) months following the Termination Date, the Company will modify the payment schedule to provide that the payments will begin on the first regularly scheduled payroll date following the expiration of six (6) months and one (1) day after the Termination Date. If the payment schedule is modified pursuant to this Section VII, the Officer will receive the one (1) year of annualized salary paid through the Company’s regular payroll practices over the twelve (12) payroll periods immediately following the expiration of six (6) months and one (1) day after the Termination Date.


 

 

 

IX.

FUNDING

 

Benefits provided pursuant to the Section 16 Plan shall be paid solely out of 3Com’s general assets. 3Com shall not be required to fund or otherwise provide for the payment of benefits provided hereunder in any other manner.

 

X.

CLAIMS AND REVIEW PROCEDURES

 

If an Officer believes that he/she is entitled to a benefit under the Section 16 Plan, or a benefit in an amount greater than he/she has received, the Officer may file a claim by writing to the Section 16 Plan Administrator. The Section 16 Plan Administrator is the named fiduciary that has the discretionary power and authority to act with respect to any appeal from a denial of a claim for benefits under the Section 16 Plan by performing a full and fair review of the denial, and such actions shall be final and binding on all persons. Benefits under the Section 16 Plan shall be payable only if the Section 16 Plan Administrator determines, in its sole discretion, that an eligible Officer is entitled to them. Any claim must be filed no later than forty-five (45) days after the Officer’s Termination Date.

 

A.         Initial Claim. The Section 16 Plan Administrator will notify the Officer in writing within ninety (90) days (or 180 days if special circumstances require an extension of time for processing the claim) of receipt of the claim as to whether the claim is granted or denied. Note that if an extension is necessary, the Section 16 Plan Administrator will provide the Officer with written notice of the extension (including the circumstances requiring extension and date by which a decision is expected to be rendered) before the initial ninety (90) day period expires. If the claim is denied, the Officer will be given (1) specific reasons for the denial, (2) specific reference to the Section 16 Plan provision(s) on which the denial is based, (3) a description of any information or material necessary to support the claim and an explanation of why such information or material is necessary, (4) an explanation of the Section 16 Plan’s claim appeal procedure (including a statement of the Officer’s right to bring a civil action under the Employee Retirement Income Security Act of 1974 (“ERISA”) following a denial of the claim upon appeal), and (5) a statement that the Officer is entitled to receive, upon request and free of charge, reasonable access to, and copies of all documents, records or other information relevant (as defined by Department of Labor regulation section 2560.503-1(m)) to the claim.

 

B.         Appeals. If the claim is denied, the Officer has sixty (60) days after notice of the denial to file a written appeal with the Section 16 Plan Administrator. During the review process, the Officer has the right to submit written comments, documents, records, and other information relating to the claim for benefits, which will be considered without regard to whether such items were considered in the initial benefit determination. Also, the Officer may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant (as defined by Department of Labor regulation section 2560.503-1(m)) to the claim for benefits.

 

The Section 16 Plan Administrator will notify the Officer in writing within sixty (60) days (or 120 days if special circumstances require an extension of time for processing the appeal) of receipt of the appeal as to its decision on review, unless the Section 16 Plan Administrator determines that special circumstances exist requiring an extension of time. If the Section 16 Plan Administrator determines that an extension is necessary, the Section 16 Plan Administrator will provide the Officer with written notice (including the circumstances requiring the extension and date by which a decision is expected to be rendered) before the initial sixty (60) day period expires.

 

If the Section 16 Plan Administrator denies the appeal, it will provide a written denial of the claim upon appeal. The written denial shall include the specific reason or reasons for the denial, specific references to the Section 16 Plan provisions on which the denial is based, a statement that the Officer is entitled to


 

receive, upon request and free of charge, reasonable access to, and copies of all documents, records or other information relevant (as defined in Department of Labor regulation section 2560.503-1(m)) to the claim, and a statement of the Officer’s right to bring an action under Section 502(a) of ERISA.

 

All determinations, interpretations, rules, and decisions of the Section 16 Plan Administrator or its delegate shall be conclusive and binding upon all persons having or claiming to have any interest or right under the Section 16 Plan and shall be given deference in any judicial or other proceeding.

 

C.         Exhaustion of Claims Procedures. In no event shall an Officer or any other person be entitled to challenge a decision of the Section 16 Plan Administrator in court or in any other administrative proceeding unless and until the claim and appeal procedures described above have been fully complied with and exhausted.

 

XI.

ADMINISTRATION

 

The Section 16 Plan Administrator administers the Section 16 Plan. The Section 16 Plan Administrator is exclusively authorized to interpret the provisions of this Summary Plan Description. The Section 16 Plan Administrator’s interpretation and/or application of any term or provision of the Section 16 Plan shall be final and binding. The Section 16 Plan Administrator shall have full and unfettered authority and responsibility for administration of the Section 16 Plan, including the discretionary authority to determine eligibility for benefits and amounts of benefit entitlements and to interpret the terms of the Section 16 Plan.

 

XII.

AMENDMENT AND TERMINATION

 

The Company reserves the right to amend or terminate the Section 16 Plan at any time, with or without notice. All material changes to the Section 16 Plan must be approved by the 3Com Corporation Board of Directors (the “Board”) or the Compensation Committee of the Board.

 

Information Required By ERISA:

 

Plan Name

3Com Section 16 Officer Severance Plan

 

Plan Sponsor

3Com Corporation

350 Campus Drive

Marlborough, MA 01752-3064

 

Plan Administrator

The Section 16 Plan Administrator shall be the Compensation Committee of the Board. Communications with the Section 16 Plan Administrator must be in writing and addressed to:

 

Senior Vice President, Human Resources

3Com Corporation

350 Campus Drive

Marlborough, MA 01752-3064

 

Type of Plan

The Section 16 Plan is a welfare plan providing for severance benefits.


 

 

Employer Identification Number

The 3Com Employer Identification Number is 94-2605794. When writing about the Section 16 Plan, an Officer should include this number.

 

Plan Number

For the purpose of identification, 3Com has assigned the Section 16 Plan the number 517. All communications concerning the Section 16 Plan should include this reference number.

 

Service of Legal Process

Service of legal process may be made on the Section 16 Plan Administrator at the address above.

 

XIII.

ENTIRE PLAN; AMENDMENTS

 

This Summary Plan Description contains all the terms, conditions and benefits relating to the Section 16 Plan. No employee, officer, or director of the Company has the authority to alter, vary or modify the terms of the Section 16 Plan, other than by means of an authorized written amendment to the Section 16 Plan approved by the Section 16 Plan Administrator. No oral or written representations contrary to the terms of the Section 16 Plan and its written amendments shall be binding upon the Section 16 Plan, the Section 16 Plan Administrator or the Company.

 

XIV.

NO CONTRACT OF EMPLOYMENT

 

Nothing herein is intended to or shall be considered a contract of employment or for any period of employment or a guarantee of future employment with the Company.

 

XV.

NO ASSIGNMENT OF RIGHTS

 

No eligible Officer shall have the right to assign, delegate or otherwise transfer, either in full or in part, any of his/her rights or obligations under the Section 16 Plan and any such assignment, delegation or other such transfer shall be void.

 

XVI.

APPLICABLE LAW; VENUE

 

Except where preempted by ERISA, the Section 16 Plan shall be construed in accordance with, and all disputes hereunder shall be governed by, the laws of the Commonwealth of Massachusetts without regard to its conflict of laws rules. All legal actions arising under or relating to the Section 16 Plan shall be subject to the jurisdiction and venue of the United States District Court for the District of Massachusetts sitting in Boston, Massachusetts.

 

XVII.

ERISA RIGHTS  

 

If you are an eligible Officer who is a participant in the Section 16 Plan, you are entitled to certain rights and protections under ERISA.

 

Receive Information About Your Plan and Benefits. ERISA provides that you are entitled to:

 

(1)

Examine, without charge, at the office of the Section 16 Plan Administrator or its delegate all Section 16 Plan documents, including copies of any documents filed by the Section 16 Plan with the U.S. Department of Labor, such as Section 16 Plan descriptions.

 


 

 

(2)

Obtain copies of all Section 16 Plan documents and other Section 16 Plan information upon written request to the Section 16 Plan Administrator. The Section 16 Plan Administrator may impose a reasonable charge for the copies.

 

(3)

Receive a copy of the Section 16 Plan’s financial report, if any. The Section 16 Plan Administrator may be required by law to furnish each participant with a copy of the summary annual report.

 

Prudent Actions By Fiduciaries. In addition to creating rights for the Section 16 Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Section 16 Plan. The people who operate the Section 16 Plan, called “fiduciaries” of the Section 16 Plan, have a duty to do so prudently and in the interest of you and other Section 16 Plan participants and beneficiaries.

 

No one may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA.

 

Enforce Your Rights. If your claim for a Section 16 Plan benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

 

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Section 16 Plan and do not receive them within thirty (30) days, you may file suit in a federal court. In such case, the court may require the Section 16 Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Section 16 Plan Administrator.

 

If you have a claim for a benefit that is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that Section 16 Plan fiduciaries misuse the Section 16 Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

 

Assistance With Your Questions. If you have questions about the statements made in this summary or your rights under ERISA, you should contact the Section 16 Plan Administrator or the nearest Area Office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, Washington, D.C. 20210.

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