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As Of Filer Filing For·On·As Docs:Size 2/13/14 Cray Inc 10-K 12/31/13 115:14M |
Document/Exhibit Description Pages Size
1: 10-K Annual Report HTML 959K
2: EX-10.20 Material Contract HTML 127K
3: EX-10.22 Material Contract HTML 64K
4: EX-10.23 Material Contract HTML 33K
5: EX-10.35 Material Contract HTML 36K
6: EX-21.1 Subsidiaries List HTML 33K
7: EX-23.1 Consent of Experts or Counsel HTML 30K
8: EX-31.1 Certification -- §302 - SOA'02 HTML 35K
9: EX-31.2 Certification -- §302 - SOA'02 HTML 35K
10: EX-32.1 Certification -- §906 - SOA'02 HTML 32K
78: R1 Document and Entity Information HTML 58K
61: R2 Consolidated Balance Sheets HTML 143K
74: R3 Consolidated Balance Sheets (Parenthetical) HTML 50K
82: R4 Consolidated Statements of Operations HTML 116K
105: R5 Consolidated Statements of Comprehensive Income HTML 70K
63: R6 Consolidated Statements of Shareholders’ Equity HTML 88K
73: R7 Consolidated Statements of Cash Flows HTML 164K
55: R8 Summary of Significant Accounting Policies HTML 116K
45: R9 Description of Business HTML 33K
107: R10 Acquisition HTML 99K
84: R11 Sale of Interconnect Hardware Development Program HTML 33K
83: R12 Fair Value Measurements HTML 94K
90: R13 Accumulated Other Comprehensive Income/(Loss) HTML 62K
91: R14 Investments HTML 52K
88: R15 Accounts and Other Receivables, Net HTML 51K
92: R16 Inventory HTML 46K
75: R17 Property and Equipment, Net HTML 50K
79: R18 Service Inventory, Net HTML 38K
86: R19 Deferred Revenue HTML 45K
115: R20 Commitments and Contingencies HTML 51K
100: R21 Income Taxes HTML 183K
68: R22 Lines of Credit HTML 36K
85: R23 Shareholders' Equity HTML 175K
70: R24 Benefit Plans HTML 42K
36: R25 Segment Information HTML 123K
101: R26 Research and Development HTML 49K
111: R27 Interest Income (Expense) HTML 42K
50: R28 Quarterly Data (Unaudited) HTML 93K
49: R29 Schedule II - Valuation and Qualifying Accounts HTML 54K
53: R30 Summary of Significant Accounting Policies HTML 215K
(Policies)
54: R31 Summary of Significant Accounting Policies HTML 63K
(Tables)
56: R32 Acquisition (Tables) HTML 97K
25: R33 Fair Value Measurements (Tables) HTML 78K
98: R34 Accumulated Other Comprehensive Income/(Loss) HTML 77K
(Tables)
66: R35 Investments (Tables) HTML 45K
69: R36 Accounts and Other Receivables, Net (Tables) HTML 45K
40: R37 Inventory (Tables) HTML 40K
114: R38 Property and Equipment, Net (Tables) HTML 48K
17: R39 Service Inventory, Net (Tables) HTML 39K
58: R40 Deferred Revenue (Tables) HTML 43K
104: R41 Commitments and Contingencies (Tables) HTML 44K
38: R42 Income Taxes (Tables) HTML 165K
48: R43 Shareholders' Equity (Tables) HTML 156K
52: R44 Segment Information (Tables) HTML 114K
62: R45 Research and Development (Tables) HTML 47K
24: R46 Interest Income (Expense) (Tables) HTML 41K
44: R47 Quarterly Data (Unaudited) (Tables) HTML 88K
19: R48 Acquisition (Details) HTML 68K
103: R49 Acquisition Intangible Assets by Class (Details) HTML 38K
37: R50 Acquisition Acquisition, Pro Forma Information HTML 44K
(Details)
99: R51 Acquisition Carrying Amount, Net, of Amortizable HTML 45K
Intangible Assets (Details)
41: R52 Acquisition Future Amortization Expense (Details) HTML 48K
59: R53 Summary of Significant Accounting Policies Cash, HTML 37K
Cash Equivalents and Restricted Cash (Details)
18: R54 Summary of Significant Accounting Policies HTML 38K
Property and Equipment and Intangible Assets
(Details)
22: R55 Summary of Significant Accounting Policies Service HTML 30K
Inventory (Details)
51: R56 Summary of Significant Accounting Policies Foreign HTML 33K
Currency Translation and Transaction (Details)
29: R57 Summary of Significant Accounting Policies HTML 36K
Research and Development (Details)
108: R58 Summary of Significant Accounting Policies Income HTML 43K
Taxes (Details)
65: R59 Summary of Significant Accounting Policies HTML 32K
Advertising Costs (Details)
89: R60 Summary of Significant Accounting Policies EPS HTML 38K
(Details)
43: R61 Summary of Significant Accounting Policies HTML 38K
Accumulated Other Comprehensive Income (Loss)
(Details)
46: R62 Sale of Interconnect Hardware Development Program HTML 38K
(Details)
96: R63 Fair Value Measurements (Details) HTML 57K
93: R64 Fair Value Measurements Textuals (Details) HTML 49K
67: R65 Accumulated Other Comprehensive Income/(Loss) HTML 101K
(Details)
95: R66 Investments Schedule of HTML 44K
Available-for-Sale-Securities (Details)
42: R67 Accounts and Other Receivables, Net (Details) HTML 47K
71: R68 Accounts and Other Receivables, Net Textuals HTML 38K
(Details)
110: R69 Inventory (Details) HTML 42K
21: R70 Inventory Textuals (Details) HTML 42K
35: R71 Property and Equipment, Net (Details) HTML 51K
60: R72 Service Inventory, Net (Details) HTML 35K
27: R73 Deferred Revenue (Details) HTML 41K
113: R74 Deferred Revenue Textual (Details) HTML 34K
39: R75 Commitments and Contingencies (Details) HTML 85K
30: R76 Income Taxes Narrative (Details) HTML 62K
34: R77 Income Taxes Tax Provision (Details) HTML 76K
23: R78 Income Taxes Reconciliation of Statutory Federal HTML 64K
Tax Rate (Details)
26: R79 Income Taxes Deferred Tax Assets and Liabilities HTML 82K
(Details)
80: R80 Income Taxes Unrecognized Tax Benefits (Details) HTML 55K
32: R81 Lines of Credit (Details) HTML 39K
109: R82 Narrative (Details) HTML 96K
57: R83 Shareholders' Equity Assumptions (Details) HTML 46K
87: R84 Stock Activity (Details) HTML 69K
94: R85 Restricted Stock (Details) HTML 59K
31: R86 Shareholders' Equity Exercise Price Range HTML 63K
(Details)
33: R87 Expense (Details) HTML 40K
106: R88 Benefit Plans (Details) HTML 39K
28: R89 Segment Information (Details) HTML 56K
81: R90 Segment Information - Product and Services Revenue HTML 40K
and Long-Lived Assets (Details)
77: R91 Segment Information Textuals (Details) HTML 47K
97: R92 Research and Development (Details) HTML 40K
76: R93 Interest Income (Expense) (Details) HTML 38K
64: R94 Quarterly Data (Unaudited) (Details) HTML 72K
102: R95 Schedule II - Valuation and Qualifying Accounts HTML 38K
(Details)
112: XML IDEA XML File -- Filing Summary XML 173K
20: EXCEL IDEA Workbook of Financial Reports XLSX 282K
47: EXCEL IDEA Workbook of Financial Reports (.xls) XLS 2.03M
11: EX-101.INS XBRL Instance -- cray-20131231 XML 2.89M
13: EX-101.CAL XBRL Calculations -- cray-20131231_cal XML 305K
14: EX-101.DEF XBRL Definitions -- cray-20131231_def XML 784K
15: EX-101.LAB XBRL Labels -- cray-20131231_lab XML 2.10M
16: EX-101.PRE XBRL Presentations -- cray-20131231_pre XML 1.15M
12: EX-101.SCH XBRL Schema -- cray-20131231 XSD 222K
72: ZIP XBRL Zipped Folder -- 0000949158-14-000007-xbrl Zip 294K
| CRAY-12.31.2013- Ex 10.20 |
1. | Term
of Agreement. This Agreement shall commence on the date hereof and shall continue in effect until (a) your employment with the Company is terminated by you or the Company (i) other than in connection with a Potential Change of Control or a Change of Control pursuant to which you become entitled to receive the compensation and benefits described in Section 4(b), or (ii) pursuant to written agreement between the Company and you, or (b) the commencement of the twenty-fifth (25) month following the occurrence of a Change of Control. |
2. | Definitions.
As used in this Agreement: |
(a) | “Beneficial Owner” has the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). |
(b) | “Cause” means a termination of employment resulting from a good faith determination by the Board of Directors that: |
(i) | you
have willfully failed or refused in a material respect to follow reasonable policies or directives established by the Board of Directors or the Chief Executive Officer or willfully failed or refused to attend to material duties or obligations of your office (other than any such failure resulting from your incapacity due to physical or mental illness), which you have failed to correct within a reasonable period following written notice to you from the Chief Executive Officer or the Chairman of the Board that specifically identifies the manner in which you have not so performed your material duties and obligations, or |
(ii) | there has been an act by you involving wrongful misconduct, including without limitation
a conviction of or the entering into a plea of guilty or nolo contendere to a felony, which has a demonstrably adverse impact on or has caused material damage to the Company, or which constitutes a material misappropriation of the assets of the Company; or |
(iii) | you have engaged in an unauthorized disclosure of confidential information which has a demonstrably adverse impact on or has caused material damage to the
Company; or |
(iv) | you, while employed by the Company, have performed services for another company or person which competes with the Company, without the prior written approval of the Chief Executive Officer of the Company; or |
(c) | “Change of Control”
of the Company means and includes each and all of the following: |
(i) | The consummation of a merger, consolidation, share exchange or other reorganization of the Company with any other entity, other than a merger, consolidation, share exchange or reorganization which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities
of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger, consolidation, share exchange or reorganization; |
(ii) | The consummation of a sale, lease, exchange or other disposition (in one transaction or a series of related transactions) of all, or substantially all, of the Company’s assets; |
(iv) | The acquisition by any means by any Person as Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities except
pursuant to a negotiated agreement with the Company pursuant to which such securities are purchased from the Company; or |
(v) | At any time during any twenty-four (24) month period the individuals who at the beginning of such period constituted the Board (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof, provided, however, that the term “Incumbent Director” shall also include each new director elected during such twenty-four (24) month period whose nomination or election was approved
by two-thirds of the Incumbent Directors then in office. |
(d) | “COBRA” means 29 U.S. Code, Sections 1161 through 1168, as amended. |
(e) | “Code”
means the Internal Revenue Code of 1986, as amended from time to time. |
(f) | “Company” means Cray Inc., a Washington corporation, and if the context reasonably requires, any subsidiary of the Company, and any successor as provided in Section 8. |
(g) | “Compensation”
means the sum of (i) one year of base salary, at the highest per pay period base salary rate that you were paid by the Company in the twelve (12)-month period prior to the date of the Notice of Termination plus (ii) your 100% target incentive award under the Company’s annual cash incentive plan and any other cash incentive or bonus awards approved by the Board for the calendar year in which your Date of Termination occurs (assuming for this purpose that all conditions to payment at 100% of target awards and of other awards and bonuses, if any, have |
(h) | “Disability” has the meaning given such term in the
Company’s disability plans as in effect immediately prior to the earlier of a Potential Change of Control, if any, or Change of Control. |
(i) | “Good Reason” means a material negative change in the employment relationship between you and the Company, unless you otherwise agree, including without limitation: |
(i) | a
material reduction in your base salary in effect immediately prior to the earlier of a Potential Change of Control, if any, or Change of Control, which for purposes of this Agreement means a reduction by more than 5% (whether in one or a series of reductions) compared to your applicable base salary before the first such reduction; |
(ii) | a material reduction in your annual target award opportunity under the Company’s annual cash incentive plan, which shall be deemed to include reductions that would reduce your total target compensation (including base salary but excluding the value of any equity component) by more than
5% compared to your total target compensation for the immediately preceding year (including base salary but excluding the value of any equity component); |
(iii) | a material diminution of your status, title, position(s) or responsibilities from your status, title, position(s) and responsibilities (including reporting responsibilities) as in effect immediately prior to the earlier of the Potential Change of Control, if any, or Change of Control, or the assignment to you of any substantive duties or responsibilities which are inconsistent with such status, title, position(s) or responsibilities (in either case other than isolated, insubstantial or inadvertent actions which are remedied promptly after notice);
|
(iv) | a request by the Company for you to relocate (except for office relocations that would not increase your one-way commute by more than 25 miles), or a change of your customary office location which results in substantially increased air or other travel compared to such travel during the twelve (12) month period immediately prior to the earlier of a Potential Change of Control, if any, or Change of Control (an increase for a reasonably sustained period of 25% per week and/or 25% of the time shall be deemed to be substantially increased travel, excluding increased travel for temporary projects or arrangements, and
it being understood that in general you can expect to travel at least 25% of the time); or |
(i) | the discontinuance of, or a reduction in, benefit plans or other policies of the Company intended to benefit the Company’s employees in which you participated immediately prior to the earlier of a Potential Change of Control, if any, or Change of Control where the consequence to you is a material overall reduction in benefits, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan or plans) has been made with
respect to such plans, or the failure by the Company to continue your participation therein (or in such substitute or alternative plans) on a basis not materially less favorable, both in terms of the amounts of benefits provided and the level of your participation relative to other participants, as existed immediately prior to the earlier of a Potential Change of Control, if any, or Change of Control; or |
(vi) | the failure of the Company to obtain the assumption of the Agreement as required by Section 8. |
(A) | it agrees with your Notice of Termination, in which event Good Reason shall be deemed to have occurred, |
(B) | it intends to correct fully the circumstances giving rise to the claim of Good Reason and within
thirty (30)-days of the receipt of the Notice of Termination, it corrects, rescinds or otherwise substantially reverses the circumstances supporting your claim for termination for Good Reason, in which event “Good Reason” shall be deemed not to have occurred, or |
(C) | a dispute exists concerning whether Good Reason exists, and Sections 3(d) and 9(i) shall apply to such dispute. |
(j) | “Person” has the meaning given such term in Section 3(a)(9) of the Exchange Act and as used in Sections
13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act, but excluding the Company and any subsidiary and any employee benefit plan sponsored or maintained by the Company or any subsidiary (including any trustee of such plan acting as Trustee). |
(k) | “Potential Change of Control” of the Company means the occurrence of any of the following: |
(i) | the
Company enters into an agreement, the consummation of which would result in the occurrence of a Change of Control of the Company; |
(ii) | any Person or the Company publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change of Control of the Company; or |
(iii) | the
Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change of Control of the Company has occurred. |
(l) | “Retirement” means your voluntary termination of employment on or after your 65th birthday, or at an earlier age pursuant to a written agreement between you and the Company with respect to retirement. |
(m)
| “Specified Employee” has the meaning given such term in Section 409A of the Code and the final regulations thereunder, as in effect from time to time (“Final 409A Regulations”), provided, however, that, as permitted in the Final 409A Regulations, the Company’s Specified Employees and the application of the six (6)-month delay rule of Section 409A(a)(2)(B)(i) of the Code shall be determined in accordance with rules adopted by the Board, which shall be applied consistently, with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement and similar agreements with other officers of the
Company. |
(a) | Any purported termination by the Company or by you shall be communicated by written Notice of Termination to the other party hereto. |
(b) | For purposes of this Agreement, a “Notice of Termination”
shall mean a notice in writing which indicates the specific termination provision(s) in this Agreement relied upon, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision(s) so indicated, and sets forth the applicable Date of Termination. |
(c) | For purposes of this Agreement, the “Date of Termination” means, unless the Company and you agree to a different Date of Termination: |
(ii)
| if your employment is terminated by the Company for Cause, the date on which a Notice of Termination is given unless a subsequent Date of Termination is specified in such Notice, |
(iii) | if your employment is terminated by the Company other than for Cause, or if your employment is terminated by you without a claim of Good Reason, the date specified in the Notice of Termination, or |
(iv) | if you claim that you are terminating your employment for Good Reason, the date thirty (30) days after the date on which the Notice of Termination is given, unless: |
(A) | an earlier Date of Termination has been specified or designated by the Company either in advance of, or after, receiving such Notice of Termination, pursuant to clauses (c)(ii) or (c)(iii) above, or |
(B) | there
is a dispute about whether Good Reason exists, in which case the Date of Termination shall be determined as set forth in Section 3(d) below. |
(e) | Notwithstanding anything to the contrary in this Agreement, (i) if at any time before the Date of Termination determined pursuant to this Agreement with respect to any purported termination by you of your employment with the Company, there exists a good faith basis for the Company to terminate your employment
for Cause, then the Company may, regardless of whether or not you have given Notice of Termination for Good Reason and regardless of whether or not Good Reason exists, terminate your employment for Cause, in which event you shall not be entitled to the compensation and benefits provided in this Agreement, and (ii) if you die or your employment is terminated based on Disability after you have given Notice of Termination for Good Reason and before the Date of Termination specified in that Notice of Termination and if it is subsequently finally determined that Good Reason existed at the time your employment terminated, then termination of your employment shall be deemed to have occurred for Good Reason (and not due to your death or Disability), and you shall be entitled to the compensation and benefits provided in Section 4. |
4. | Termination
and Resulting Compensation and Benefits. |
(a) | If, after the occurrence of a Potential Change of Control (and during the pendency of a Change of Control resulting from such Potential Change of Control), concurrent with a Change of Control, or within twenty-four (24) months after a Change of Control, your employment by the Company shall be terminated by the Company without Cause or due to Disability or death, or you terminate your employment for Good Reason, then you or your estate shall be entitled to receive the
following: |
(i) | Your full base salary through the Date of Termination to be paid pursuant to the Company’s standard payroll procedures, subject to Section 8, if applicable; |
(ii) | Your accrued vacation pay, if any, which shall be paid in accordance with the Company’s practice for paying accrued vacation to terminating
employees; and |
(iii) | All amounts payable under the Company’s annual cash incentive plan for the calendar year immediately prior to the year in which the Date of Termination occurs which have not been paid to you on or before the Date of Termination, provided, if the Board has not yet approved the payment of any such amount for the prior calendar year by the date of your Notice of Termination, you will be paid your 100% target award under the Company’s annual cash incentive plan for that prior
calendar year (in calculating such awards it shall be assumed for this purpose that all conditions to payment at 100% of target awards have been satisfied), with such amounts to be paid on the earlier of the date on which the non-terminated officers of the Company receive their payments under the cash incentive plan for such preceding calendar year or March 15 of the year in which the Date of Termination occurs; and |
(iv) | All
other compensation and benefits earned but not yet paid at the Date of Termination and all benefits as may be provided under the Company’s insurance and other benefit plans, programs and arrangements that provide you with the greatest of the benefits in effect immediately prior to the Potential Change of Control, if any, or the Change of Control or as in effect on the date of the Notice of Termination, such compensation and benefits to be paid or provided in the normal course pursuant to such plans, programs and arrangements. |
(b) | If, after the occurrence of a Potential Change of Control (and during the pendency of a
Change of Control resulting from such Potential Change of Control), concurrent with a Change of Control, or within twenty-four (24) months after a Change of Control, your employment by the Company shall be terminated by the Company without Cause, or you terminate your employment for Good Reason, then you, in addition to the payments specified in Section 4(a), shall be entitled to receive the following from the Company in lieu of any other severance compensation or benefits: |
(i) | As
severance pay and in lieu of any further salary for periods subsequent to the Date of Termination, an amount of cash in a single lump sum equal to two times your Compensation (“Termination Payment”), subject to the provisions of Section 8; and |
(ii) | The following benefits: |
(A) | For a period of up to eighteen (18) months from your Date of Termination, if you elect to continue coverage under COBRA for medical, dental, vision and orthodontia
benefits that you and any dependents were receiving immediately prior to the Date of Termination, the Company will pay the entire cost of the COBRA coverage you had last elected for yourself, your spouse and your dependents under the Company’s medical, dental, vision and orthodontia plans prior to the date of the Notice of Termination or any lesser level of such benefits that you elect, and |
(B) | The Company will reimburse you for the cost of an individual
term life insurance policy on you for the period from the Date of Termination up to twenty-four (24) months with coverage up to the coverage amount provided by the Company to you immediately prior to the Notice of Termination of employment or, if greater, provided immediately prior to the Potential Change of Control, if any, or the Change of Control (currently a maximum of $500,000); if you cannot reasonably obtain such a life insurance policy for reasons of insurability, then, pursuant and subject to the limitations of the Company’s group insurance plan then in effect, which may include a lower level of insurance coverage and a shorter term, you may elect to convert your group coverage to individual coverage and the Company
will pay the cost thereof, such conversion being effectuated no later than the time limits then applicable under the Company’s group insurance plan (currently thirty-one (31) days following the Date of Termination); provided that you shall submit appropriate evidence of such insurance and the premiums you paid within three (3) months of obtaining such insurance, and the Company shall reimburse you in the normal course for reimbursement of expenses and in any event within 3 (three) months of receipt of the appropriate documentation and information, |
(C) | Each of the benefits identified in this Section 4(b)(ii) will be provided for a period ending on the earlier of (I) with respect to the payment or reimbursement of COBRA premiums for medical, dental, vision and orthodontia coverage, a period of no more than the eighteen (18) month COBRA period from the Date of Termination, and with respect to the life insurance benefits, for a period of no more than twenty-four (24) months from the Date of Termination, or (II) when you are employed by an employer (including the Company) that provides medical, dental, vision, orthodontia and/or life insurance benefits, as the case may be, and you are eligible to receive any such benefits. You hereby agree to notify the Company promptly if you accept employment
with another employer and to provide the Company with relevant information regarding the benefits provided by such employer; and |
(iii) | The Company agrees that, in addition to the Termination Payment, all outstanding stock options previously granted to you prior to the Change of Control (including any options issued in substitution or assumption of such options as a result of a Change of Control), whether vested or unvested, shall immediately have their vesting accelerated upon such termination, and such options shall be exercisable for the
full number of shares covered thereby (including any portion not previously vested) and all such outstanding options shall be exercisable at any time before the earliest of (A) the respective expiration dates of the options, assuming that your employment had not been terminated, (B) the tenth (10th) anniversary of the original date of grant of |
(iv) |
If you hold any restricted shares of the Company’s common stock (including any restricted shares issued in substitution or assumption of such shares as a result of a Change of Control), then the vesting of such shares shall be accelerated to the extent, if at all, provided by the terms of the agreement governing such restricted shares; and |
(v) | The Company will pay for outplacement services (Lee Hecht Harrison LLC Executive Transition Services or equivalent) with the Key Executive Level program for the Chief Executive Officer, the
Chief Financial Officer and Senior Vice Presidents and the ProSearch 6 program for Vice Presidents) for a period ending the earliest of (A) when you complete the outplacement services program, (B) when you accept employment with another employer, provided that you commence such outplacement services within six (6) months following your Date of Termination. If the Company reimburses you for the expense of such services, you shall submit the expense to the Company within three (3) months of your receipt of the statement for such services and the Company shall reimburse you in the normal course for reimbursement of expenses and in any event within three (3) months of receipt of the statement and all other appropriate
documentation and information. |
(c) | The payments provided for in Section 4(b)(i) shall be made not later than the fifth (5th) business day after you execute and deliver the agreement and release required under Section 5 and the expiration of required revocation periods contained therein, provided, however, that if authorization of payment of such amount at that time or the actual payment of such amount at that time would cause such payment to be subject to Section 409A of the Code, the payment will
be made as set forth in Section 8, and provided further that, if the amount of such payment due on the fifth (5th) business day following your execution and delivery of the agreement and release required under Section 5 and the lapse of any revocation period following such release cannot be finally determined on or before that payment date, the Company shall pay to you on such date an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the fifteenth (15th) day after you return the executed agreement
and release under Section 5 and the revocation period has expired. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, you shall be obligated to repay such excess amount on the fifth (5th) business day after receipt of written demand by the Company, together with interest at the rate provided in Section 1274(b)(2)(B) of the Code. At the time that payments are made under this Section, the Company will provide you with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including any opinions or other advice the Company received
from Tax Counsel, outside counsel, auditors or consultants. |
(d) | If the Company terminates your employment for Cause or, except as set forth in Section 4(a) for Disability or death, your employment is terminated due to Disability, death or retirement, or you voluntarily resign without Good Reason, then this Agreement does not apply and any payments due you or your estate shall be pursuant to applicable law or other applicable insurance and benefit plans, programs, arrangements and policies of the Company. |
5. | Conditions
to Payments. Before making any payments and providing any benefits specified in Sections 4(b), the Company has the right to require you to execute and return to the Company no later than the March 1 of the year following the year in which your Date of Terminations occurs the Company’s standard termination agreement and general release and any required revocation or waiting period shall have expired. The Company shall deliver in good faith its standard agreement and general release as soon as is reasonably practicable but no later than ten (10) business days following receipt of your Notice of Termination (unless
mutually extended by you and the Company). |
6. | No Mitigation. You
shall not be required to mitigate the amount of any payment provided for in Section 4 hereof by seeking other employment or otherwise, nor, except as set forth in Section 4(b)(ii), shall the amount of such payment be reduced by reason of compensation or other income you receive for services rendered after your termination of employment with the Company. |
7. | Company's Successors. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company, to expressly assume and agree to perform the obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. As used in this Section 7, "Company" includes any successor to its business or assets as aforesaid which executes and delivers this Agreement or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. |
8. | Section 409A. Notwithstanding
anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of your separation from service when you are a Specified Employee, then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(iv) (payment of employment taxes), the following shall apply: |
(a) | If the payment or distribution is payable in a lump
sum, your right to receive payment or distribution of such non-exempt deferred compensation will be delayed until the earlier of your death or the first (1st) day of the seventh (7th) month following your separation from service; and |
(b) | If the payment or distribution is payable over time, the amount of such non-exempt deferred compensation that would otherwise be payable during the six (6)-month period immediately following your separation from service will be accumulated and your right to receive payment or distribution of such accumulated amount will be delayed until
the earlier of your death or the first (1st) day of the seventh (7th) month following your separation from service, whereupon the accumulated amount will be paid or distributed to you, or to your estate, and the normal payment or distribution schedule for any remaining payments or distributions will resume. |
9. | Miscellaneous. |
(a) | Notices.
Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or five (5) business days after deposit with postal authorities transmitted by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the Company at its corporate headquarters, attention of the General Counsel, and to you at the addresses set forth on the last page of this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. |
(b) | Amendment
or Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing by you and the Company. No waiver of either party at any time of the breach of, or lack of compliance with, any conditions or provisions of this Agreement shall be deemed a waiver of the provisions or conditions hereof. |
(c) | Sole Agreement. This Agreement represents the entire agreement between you and the Company with respect to the matters
set forth herein and supersedes and replaces all prior agreements with respect to the subject matter of this Agreement in their entirety. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter of this Agreement have been made by either party that are not set forth expressly herein. |
(d) | Employee's Successors. This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while any amounts are still payable to you hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of the Agreement to your devisee, legatee or other designee or, if there be no such designees, to your estate. |
(e) | Fees and Expenses. Except as otherwise specifically set forth in this Agreement, each party shall bear its own costs and attorney’s fees that have been incurred. Notwithstanding the preceding, the Company shall pay, upon receipt of reasonable documentation, all
legal fees and related expenses incurred by you, at least monthly, in connection with any legal proceedings, whether instituted by the Company or you, relating to the interpretation or enforcement of this Agreement as a result of (i) your termination under circumstances described in Sections 4(b) (including all such fees and expenses, if any, incurred in your contesting or disputing in good faith any such termination) or (ii) your seeking to obtain or enforce in good faith any right or benefit provided by this Agreement, provided, that if you instituted the proceeding and a finding (no longer subject to appeal) is entered that you instituted the proceeding in bad faith, you shall pay all of your costs and expenses, including attorneys’ fees and disbursements and reimburse the
Company for any and all attorneys’ fees and disbursements the Company had paid on your behalf. |
(f) | Survival. The respective obligations of, and benefits afforded to, the Company and you as provided in Sections 4, 5, 8, 9(e) and 9(i) of this Agreement shall survive termination of this Agreement. |
(g) | Funding. This
Agreement shall be funded from the Company's general assets. |
(h) | Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect. |
(i) | Litigation. Any dispute
or controversy arising under or in connection with this Agreement shall be settled by litigation in a court of competent jurisdiction located in Seattle, Washington, and all parties consent to the jurisdiction and venue of such courts. |
(j) | Applicable Law. This Agreement shall be interpreted and enforced in accordance with the internal laws of the State of Washington without reference to its conflicts of laws provisions. |
(k) | 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. |
A. | In May the court decides that X had Good Reason What compensation and benefits does X receive? |