Exhibit 10.1

 

TELADOC HEALTH, INC. SENIOR LEADER SEVERANCE PLAN

 

The Company has adopted this Severance Plan (the “Plan”) for the benefit of
certain employees of the Company and its subsidiaries, on the terms and
conditions hereinafter stated. All capitalized terms used herein are defined in
Section 1 hereof. The Plan, as set forth herein, is intended to help retain
qualified employees, maintain a stable work environment and provide economic
security to eligible employees in the event of certain terminations of
employment.

 

SECTION 1.                 DEFINITIONS.  As hereinafter used:

 

1.1         “Affiliate” means, with respect to any individual or entity, any
other individual or entity who, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with, such
individual or entity. For purposes of this definition, “control,” when used with
respect to any person or entity, means the power to direct the management and
policies of such person or entity, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

 

1.2         “Base Salary” means an Eligible Employee’s base salary at the rate
in effect on the Severance Date (disregarding any decrease in such base salary
that constitutes a Good Reason event).

 

1.3         “Board” means the Board of Directors of the Company.

 

1.4         “Cause” shall mean: (A) the willful and continued failure by an
Eligible Employee to substantially perform his or her duties to the Company
(other than any such failure resulting from the Eligible Employee’s incapacity
due to physical or mental illness), after written demand for substantial
performance is delivered by the Company that identifies with reasonable
specificity the manner in which the Company believes the Eligible Employee has
not substantially performed his or her duties, which is not cured within thirty
(30) days after notice of such failure has been given to the Eligible Employee
by the Company; (B) the willful engaging by an Eligible Employee in misconduct
(including any conduct that is in violation of the written employee workplace
policies of the Company) that is materially injurious to the Company,
monetarily, in reputation or otherwise, including any conduct that is in
violation of the written employee workplace policies of the Company; or (C) an
Eligible Employee’s commission of any felony, or any crime involving dishonesty
in respect of the business or affairs of the Company or any of its subsidiaries.
No act, or failure to act, on an Eligible Employee’s part shall be considered
“willful” unless done, or omitted to be done by him or her not in good faith and
without reasonable belief that his or her action or omission was in the best
interest of the Company.

 

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1.5         “Change in Control” shall mean (i) any transaction or series of
related transactions resulting in the consummation of merger, combination,
consolidation or other reorganization of the Company with or into any third
party, other than any such merger, combination, consolidation or reorganization
following which the holders of capital stock of the Company immediately prior to
such merger, combination, consolidation or reorganization continue to hold,
solely in respect of their interests in the Company’s capital stock immediately
prior to such merger, combination, consolidation or reorganization, at least
fifty-five percent (55%) of the voting power of the outstanding capital stock of
the Company or the surviving or acquiring entity; (ii) any transaction or series
of related transactions resulting in the consummation of the sale, lease,
exclusive or irrevocable licensing or other transfer of all or substantially all
of the assets of the Company to a third party, other than any such sale, lease,
exclusive or irrevocable licensing or transfer following which the holders of
capital stock of the Company immediately prior to such sale, lease, exclusive or
irrevocable licensing or transfer continue to hold, solely in respect of their
interests in the Company’s capital stock immediately prior to such sale, lease,
exclusive or irrevocable licensing or transfer, at least fifty-five percent
(55%) of the voting power of the outstanding capital stock of the acquiring
entity; or (iii) any transaction or series of related transactions resulting in
the transfer or issuance, whether by merger, combination, consolidation or
otherwise, of Company securities to a person or group if, after such transfer or
issuance, such person or group would hold fifty-five percent (55%) of the voting
power of the outstanding capital stock of the Company; provided that, with
respect to any payments or benefits payable to an Eligible Employee pursuant to
this Plan that may be considered deferred compensation under Section 409A of the
Code (“Section 409A”), the transaction or event described in clause (i), (ii) or
(iii) shall only constitute a Change in Control for purposes of this Plan if
such transaction or event also constitutes a “change in control event,” as
defined in Treasury Regulation Section 1.409A-3(i)(5).

 

1.6         “CIC Qualifying Termination” means (i) a termination by an Eligible
Employee of the Eligible Employee’s employment with the Company for Good Reason
or (ii) a termination by the Company of an Eligible Employee’s employment with
the Company other than for death, Disability or Cause, in either case, that
occurs on or within twelve (12) months following a Change in Control.

 

1.7         “Code” means the Internal Revenue Code of 1986, as amended.

 

1.8         “Committee” means the Compensation Committee of the Board.

 

1.9         “Company” means Teladoc Health, Inc. and any successors thereto and,
where the context requires, its subsidiaries.

 

1.10       “Disability” means a physical or mental condition entitling an
Eligible Employee to benefits under the applicable long-term disability plan of
the Company or any its subsidiaries, or if no such plan exists, a “permanent and
total disability” (within the meaning of Section 22(e)(3) of the Code).

 

1.11       “Effective Date” shall mean May 1, 2020.

 

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1.12       “Eligible Employee” means any full-time employee of the Company or
any Affiliate at the employment level of twelve (12) or above, as designated by
the Company’s Human Resources department, who is not otherwise entitled to any
severance pay or benefits or prior notice of employment termination (or pay in
lieu of such prior notice) under any binding contract or agreement with the
Company or its Affiliate (except as otherwise expressly provided therein).

 

1.13       “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

 

1.14       “Good Reason” means the occurrence of any of the following events
without an Eligible Employee’s written consent: (a) a reduction by the Company
or its successor in an Eligible Employee’s annual base salary; (b) a material
reduction in an Eligible Employee’s overall responsibilities or authority, or
scope of duties below those existing immediately prior to such reduction; or (c)
a change in the geographic location of an Eligible Employee’s principal place of
employment to any location more than thirty-five (35) miles from the Eligible
Employee’s principal place of employment immediately prior to such change,
provided that the Eligible Employee must deliver written notice to the Company
setting forth with specificity any circumstance he or she believes in good faith
constitutes Good Reason within ninety (90) days after initial occurrence of such
circumstance or be foreclosed from raising such circumstance thereafter. The
Company shall have an opportunity to cure any claimed event of Good Reason (if
capable of cure) within thirty (30) days of notice from the Eligible Employee
before the Eligible Employee may terminate for Good Reason. Any voluntary
termination for “Good Reason” following such 30-day cure period must occur no
later than the date that is 30 days following the expiration of the Company’s
cure period.

 

1.15       “Non-CIC Qualifying Termination” means (i) a termination by an
Eligible Employee of the Eligible Employee’s employment with the Company for
Good Reason or (ii) a termination by the Company of an Eligible Employee’s
employment with the Company due to the elimination by the Company of the
Eligible Employee’s job position (and excluding, for the avoidance of doubt, a
termination by the Company of an Eligible Employee’s employment with the Company
due to death or Disability or for Cause), in any case, that does not occur on or
within twelve (12) months following a Change in Control.

 

1.16       “Plan” means the Teladoc Health, Inc. Senior Leader Severance Plan,
as set forth herein, as it may be amended from time to time.

 

1.17       “Plan Administrator” means the Committee or such other person or
persons appointed from time to time by the Committee to administer the Plan.

 

1.18       “Qualifying Termination” means either (i) a CIC Qualifying
Termination or (ii) a Non-CIC Qualifying Termination.

 

1.19       “Severance Date” means the date on which an Eligible Employee’s
Qualifying Termination is effective.

 

1.20       “Standard Severance Period” means the number of weeks following the
Severance Date equal to the sum of (i) sixteen (16) weeks plus (ii) two (2)
additional weeks for each completed year of service with the Company and its
subsidiaries, provided that the Standard Severance Period shall not be greater
than twenty-six (26) weeks.

 

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SECTION 2.                 SEVERANCE BENEFITS

 

2.1         Severance Upon a CIC Qualifying Termination. Subject to the terms of
the Plan, if an Eligible Employee experiences a CIC Qualifying Termination, the
Eligible Employee shall be entitled to receive the following payments and
benefits:

 

(a)    The Company shall continue paying the Eligible Employee’s Base Salary for
a period of six (6) months following the Severance Date in accordance with the
Company’s ordinary payroll practices;

 

(b)    The Company shall pay the Eligible Employee a cash amount equal to fifty
percent (50%) of the Eligible Employee’s target annual bonus for the year in
which the Severance Date occurs (disregarding any decrease in the Eligible
Employee’s target annual bonus that provides a basis for Good Reason), payable
in a lump sum within seventy-three (73) days following the Severance Date in
accordance with the Company’s ordinary payroll practices;

 

(c)    The Company will pay the Eligible Employee any earned and unpaid annual
bonus for the calendar year immediately prior to the year in which the Severance
Date occurs, as determined by the Board (or an authorized committee) in its good
faith discretion, payable in a lump sum at the same time annual bonuses are paid
to other Company employees generally but in no event later than June 30 of the
year in which the Severance Date occurs;

 

(d)    If the Eligible Employee timely elects continued coverage pursuant to
COBRA for the Eligible Employee and the Eligible Employee’s covered dependents
under the Company’s group health (medical, dental or vision) plans following
such CIC Qualifying Termination, then the Company shall pay the COBRA premiums
necessary to continue the Eligible Employee’s and his or her covered dependents’
health insurance coverage in effect on the Severance Date until the earliest of
(x) six (6) months following the Severance Date (the “CIC COBRA Severance
Period”), (y) the date when the Eligible Employee becomes eligible for
substantially equivalent health insurance coverage in connection with new
employment and (z) the date the Eligible Employee ceases to be eligible for
COBRA continuation coverage for any reason, including plan termination (such
period from the Severance Date through the earlier of (x)-(z), the “CIC COBRA
Payment Period”). Notwithstanding the foregoing, if at any time the Company
determines that its payment of COBRA premiums on the Eligible Employee’s behalf
would result in a violation of applicable law (including but not limited to the
2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health
Care and Education Reconciliation Act) or an excise tax, then in lieu of paying
COBRA premiums pursuant to this Section 2.1(d), the Company shall pay the
Eligible Employee on the last day of each remaining month of the CIC COBRA
Payment Period, a fully taxable cash payment equal to the COBRA premium for such
month, subject to applicable tax withholding, such payment to be made without
regard to the Eligible Employee’s payment of COBRA premiums; and

 

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(e) All unvested equity or equity-based awards granted to the Eligible Employee
under any equity compensation plans of the Company that have not vested as of
the Severance Date shall become immediately vested as to time, with any such
awards that are subject to performance-based vesting conditions remaining
eligible to vest to the extent the performance conditions are satisfied.

 

2.2         Severance Upon a Non-CIC Qualifying Termination. Subject to the
terms of the Plan, if an Eligible Employee experiences a Non-CIC Qualifying
Termination, the Eligible Employee shall be entitled to receive the following
payments and benefits:

 

(a)    The Company shall continue paying the Eligible Employee’s Base Salary
during the Standard Severance Period in accordance with the Company’s ordinary
payroll practices;

 

(b)    The Company will pay the Eligible Employee any earned and unpaid annual
bonus for the calendar year immediately prior to the year in which the Severance
Date occurs, as determined by the Board (or an authorized committee) in its good
faith discretion, payable in a lump sum at the same time annual bonuses are paid
to other Company employees generally but in no event later than June 30 of the
year in which the Severance Date occurs; and

 

(c)    If the Eligible Employee timely elects continued coverage pursuant to
COBRA for the Eligible Employee and the Eligible Employee’s covered dependents
under the Company’s group health (medical, dental or vision) plans following
such Non-CIC Qualifying Termination, then the Company shall pay the COBRA
premiums necessary to continue the Eligible Employee’s and his or her covered
dependents’ health insurance coverage in effect on the Severance Date until the
earliest of (x) the last day of the Standard Severance Period, (y) the date when
the Eligible Employee becomes eligible for substantially equivalent health
insurance coverage in connection with new employment and (z) the date the
Eligible Employee ceases to be eligible for COBRA continuation coverage for any
reason, including plan termination (such period from the Severance Date through
the earlier of (x)-(z), the “Standard COBRA Payment Period”). Notwithstanding
the foregoing, if at any time the Company determines that its payment of COBRA
premiums on the Eligible Employee’s behalf would result in a violation of
applicable law (including but not limited to the 2010 Patient Protection and
Affordable Care Act, as amended by the 2010 Health Care and Education
Reconciliation Act) or an excise tax, then in lieu of paying COBRA premiums
pursuant to this Section 2.2(c), the Company shall pay the Eligible Employee on
the last day of each remaining month of the Standard COBRA Payment Period, a
fully taxable cash payment equal to the COBRA premium that the Eligible Employee
would be required to pay to continue the Eligible Employee’s and the Eligible
Employee’s covered dependent’s group health coverage in effect on the Separation
Date for such month, subject to applicable tax withholding, such payment to be
made without regard to the Eligible Employee’s payment of COBRA premiums.

 

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2.3         Release. As a condition to an Eligible Employee’s receipt of any
amounts set forth in Section 2.1 or Section 2.2, the Eligible Employee shall,
within the 60-day period following the Severance Date, deliver (without
revoking) prior to receipt of such severance benefits, an effective, release of
claims in favor of the Company or its successor, its subsidiaries and their
respective directors, officers and stockholders in a customary form reasonably
acceptable to the Company or its successor. The form of the release will be
provided to the Eligible Employee not later than five (5) days following the
Severance Date.

 

2.4         Accrued Rights. Upon termination of an Eligible Employee’s
employment with the Company for any reason, the Eligible Employee will be
entitled to receive payment of any earned but unpaid Base Salary and any other
amounts or benefits, including accrued paid time off to the extent payable upon
termination pursuant to the Company’s policies, under the Company’s employee
benefit plans, programs or arrangements to which the Eligible Employee is
entitled pursuant to the terms of such plans, programs or arrangements or
applicable law, payable in accordance with the terms of such plans, programs or
arrangements or as otherwise required by applicable law.

 

SECTION 3.                 PLAN ADMINISTRATION.

 

3.1         The Plan Administrator shall administer the Plan and may interpret
the Plan, prescribe, amend and rescind rules and regulations under the Plan and
make all other determinations necessary or advisable for the administration of
the Plan, subject to all of the provisions of the Plan.

 

3.2         The Plan Administrator may delegate any of its duties hereunder to
such person or persons from time to time as it may designate.

 

3.3         The Plan Administrator is empowered to engage accountants, legal
counsel and such other personnel as it deems necessary or advisable to assist it
in the performance of its duties under the Plan. The functions of any such
persons engaged by the Plan Administrator shall be limited to the specified
services and duties for which they are engaged, and such persons shall have no
other duties, obligations or responsibilities under the Plan. Such persons shall
exercise no discretionary authority or discretionary control respecting the
management of the Plan. All reasonable expenses thereof shall be borne by the
Company.

 

SECTION 4.                 PLAN MODIFICATION OR TERMINATION.

 

The Plan may be terminated or amended by the Board at any time; provided,
however, that during the one year period following a Change in Control, (a) the
Plan may not be terminated and (b) the Plan may not be amended if such amendment
would in any manner be adverse to the interests of any Eligible Employee. For
the avoidance of doubt, (a) any action taken by the Company or the Plan
Administrator to cause an Eligible Employee to no longer be designated as an
Eligible Employee or to decrease the benefits under the Plan for which an
Eligible Employee is eligible, and (b) any amendment to this Section 4 following
the occurrence of a Change in Control shall be treated as an amendment to the
Plan which is adverse to the interests of any Eligible Employee.

 

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SECTION 5.                 GENERAL PROVISIONS.

 

5.1         Except as otherwise provided herein or by law, no right or interest
of any Eligible Employee under the Plan shall be assignable or transferable, in
whole or in part, either directly or by operation of law or otherwise, including
without limitation by execution, levy, garnishment, attachment, pledge or in any
manner; no attempted assignment or transfer thereof shall be effective; and no
right or interest of any Eligible Employee under the Plan shall be liable for,
or subject to, any obligation or liability of such Eligible Employee. When a
payment is due under this Plan to a severed employee who is unable to care for
his or her affairs, payment may be made directly to his or her legal guardian or
personal representative.

 

5.2         If the Company or any subsidiary thereof is obligated by law to pay
severance pay, a termination indemnity, notice pay, or the like, or if the
Company or any subsidiary thereof is obligated by law to provide advance notice
of separation (“Notice Period”), then any severance pay hereunder shall be
reduced (including to zero) by the amount of any such severance pay, termination
indemnity, notice pay or the like, as applicable, and by the amount of any
compensation received during any Notice Period. For the avoidance of doubt, the
severance pay hereunder shall not be duplicative of severance pay, termination
indemnity, notice pay, compensation received during any Notice Period or the
like, as applicable, payable under applicable law.

 

5.3         Neither the establishment of the Plan, nor any modification thereof,
nor the creation of any fund, trust or account, nor the payment of any benefits
shall be construed as giving any Eligible Employee, or any person whomsoever,
the right to be retained in the service of the Company or any subsidiary
thereof, and all Eligible Employees shall remain subject to discharge to the
same extent as if the Plan had never been adopted. Nothing in this Plan will
prevent or limit an Eligible Employee’s continuing or future participation in
any plan, contract, agreement, practice, policy or program provided by the
Company or any Affiliate thereof for which the Eligible Employee may qualify (an
“Other Arrangement”), nor will anything in this Plan limit or otherwise affect
any rights the Eligible Employee may have under any Other Arrangement with the
Company or any Affiliate thereof, provided that the benefits received under this
Plan and an Other Arrangement shall not be duplicative.

 

5.4         If any provision of this Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and this Plan shall be construed and enforced as if such
provisions had not been included.

 

5.5         This Plan shall inure to the benefit of and be binding upon the
heirs, executors, administrators, successors and assigns of the parties,
including each Eligible Employee, present and future, and any successor to the
Company. If a severed employee shall die while any amount would still be payable
to such severed employee hereunder if the severed employee had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Plan to the executor, personal representative
or administrators of the severed employee’s estate.

 

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5.6         The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Plan, and shall not be
employed in the construction of the Plan.

 

5.7         The Plan shall not be required to be funded unless such funding is
authorized by the Board. Regardless of whether the Plan is funded, no Eligible
Employee shall have any right to, or interest in, any assets of any Company
which may be applied by the Company to the payment of benefits or other rights
under this Plan.

 

5.8         Any notice or other communication required or permitted pursuant to
the terms hereof shall be provided in writing and shall have been duly given
when delivered or mailed by United States Mail, first class, postage prepaid,
addressed to the intended recipient at his, her or its last known address.

 

5.9         This Plan shall be construed and enforced according to the laws of
the State of Delaware to the extent not preempted by federal law, which shall
otherwise control.

 

5.10       The Company and any of its Affiliates may deduct and withhold from
any amounts payable under this Plan such federal, state, local, foreign or other
taxes as are required to be withheld pursuant to any applicable law or
regulation. All benefits hereunder shall be reduced by applicable withholding
and shall be subject to applicable tax reporting, as determined by the Plan
Administrator.

 

5.11       The Plan, as a “severance pay arrangement” within the meaning of
Section 3(2)(B)(i) of ERISA, is intended to be excepted from the definitions of
“employee pension benefit plan” and “pension plan” set forth under section 3(2)
of ERISA, and is intended to meet the descriptive requirements of a plan
constituting a “severance pay plan” within the meaning of regulations published
by the Secretary of Labor at Title 29, Code of Federal Regulations §2510.3-2(b).

 

5.12       The provisions of the Plan shall apply to Eligible Employees outside
the United States, provided, however, that the Plan Administrator may make such
changes to the terms of the Plan (A) to the extent necessary to comply with
applicable local law and (B) to reduce the amounts payable hereunder to the
extent of any statutory or other severance due to the Eligible Employee in the
applicable jurisdiction.

 

5.13       Section 409A.

 

(a)    The payments and benefits under this Plan are intended to comply with or
be exempt from Section 409A and, accordingly, to the maximum extent permitted,
this Plan shall be interpreted to be in compliance therewith. Notwithstanding
any provision of this Plan to the contrary, in the event that the Plan
Administrator determines that any amounts payable hereunder will be immediately
taxable to any Eligible Employee under Section 409A, the Plan Administrator may
(without any obligation to do so or to indemnify the Eligible Employee for
failure to do so) (A) adopt such amendments to this Plan or adopt such other
policies and procedures (including amendments, policies and procedures with
retroactive effect) that it determines to be necessary or appropriate to
preserve the intended tax treatment of the benefits provided by this Plan or the
economic benefits of this Plan and (B) take such other actions it determines to
be necessary or appropriate to exempt the amounts payable hereunder from Section
409A or to comply with the requirements of Section 409A and thereby avoid the
application of penalty taxes thereunder.

 

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(b)    Notwithstanding anything in this Plan to the contrary, any compensation
or benefits payable under this Plan upon an Eligible Employee’s termination of
employment shall be payable only upon the Eligible Employee’s “separation from
service” with the Company within the meaning of Section 409A (a “Separation from
Service”) and, except as provided below, any such compensation or benefits shall
not be paid, or, in the case of installments, shall not commence payment, until
the 60th day following the Eligible Employee’s Separation from Service (the
“First Payment Date”). Any installment payments that would have been made to an
Eligible Employee during the 60 day period immediately following the Eligible
Employee’s Separation from Service but for the preceding sentence shall be paid
to the Eligible Employee on the First Payment Date and the remaining payments
shall be made as provided in this Plan.

 

(c)    Notwithstanding any provision of this Plan to the contrary, if an
Eligible Employee is deemed by the Company at the time of the Eligible
Employee’s Separation from Service to be a “specified employee” for purposes of
Section 409A, to the extent delayed commencement of any portion of the benefits
to which the Eligible Employee is entitled under this Plan is required in order
to avoid a prohibited distribution under Section 409A, such portion of the
Eligible Employee’s benefits will not be provided to the Eligible Employee prior
to the earlier of (i) the expiration of the six-month period measured from the
date of the Eligible Employee’s Separation from Service or (ii) the date of the
Eligible Employee’s death. As promptly as possible following the expiration of
the applicable Section 409A period, all payments and benefits deferred pursuant
to the preceding sentence will be paid in a lump sum to an Eligible Employee (or
the Eligible Employee’s estate), and any remaining payments due to the Eligible
Employee under this Plan will be paid as otherwise provided herein.

 

(d)    An Eligible Employee’s right to receive any installment payments under
this Plan shall be treated as a right to receive a series of separate payments
and, accordingly, each such installment payment shall at all times be considered
a separate and distinct payment as permitted under Section 409A.

 

5.14     Section 280G

 

(a)    Notwithstanding any other provisions of this Plan, in the event that any
payment or benefit by the Company or otherwise to or for the benefit of an
Eligible Employee, whether paid or payable or distributed or distributable
pursuant to the terms of this Plan (all such payments and benefits, including
the payments and benefits under Section 2.1 or Section 2.2 of the Plan, being
hereinafter referred to as the “Total Payments”), would be subject (in whole or
in part) to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then the Total Payments shall be reduced (in the order provided in
subsection (b) below) to the minimum extent necessary to avoid the imposition of
the Excise Tax on the Total Payments, but only if (i) the net amount of such
Total Payments, as so reduced (and after subtracting the net amount of federal,
state and local income and employment taxes on such reduced Total Payments and
after taking into account the phase out of itemized deductions and personal
exemptions attributable to such reduced Total Payments), is greater than or
equal to (ii) the net amount of such Total Payments without such reduction (but
after subtracting the net amount of federal, state and local income and
employment taxes on such Total Payments and the amount of the Excise Tax to
which the Eligible Employee would be subject in respect of such unreduced Total
Payments and after taking into account the phase out of itemized deductions and
personal exemptions attributable to such unreduced Total Payments).

 

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(b)    The Total Payments shall be reduced in the following order: (i) reduction
on a pro-rata basis of any cash severance payments that are exempt from Section
409A, (ii) reduction on a pro-rata basis of any non-cash severance payments or
benefits that are exempt from Section 409A, and (iii) reduction of any payments
or benefits otherwise payable to the Eligible Employee on a pro-rata basis or
such other manner that complies with Section 409A; provided, in case of clauses
(ii) and (iii), that reduction of any payments attributable to the acceleration
of vesting of Company equity awards shall be first applied to Company equity
awards that would otherwise vest last in time.

 

(c)    All determinations regarding the application of this Section 5.13 shall
be made by an accounting firm or consulting group with experience in performing
calculations regarding the applicability of Section 280G of the Code and the
Excise Tax selected by the Company (the “Independent Advisors”). For purposes of
determinations, no portion of the Total Payments shall be taken into account
which, in the opinion of the Independent Advisors, (i) does not constitute a
“parachute payment” within the meaning of Section 280G(b)(2) of the Code
(including by reason of Section 280G(b)(4)(A) of the Code) or (ii) constitutes
reasonable compensation for services actually rendered, within the meaning of
Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in
Section 280G(b)(3) of the Code) allocable to such reasonable compensation. The
costs of obtaining such determination and all related fees and expenses
(including related fees and expenses incurred in any later audit) shall be borne
by the Company.

 

(d)    In the event it is later determined that a greater reduction in the Total
Payments should have been made to implement the objective and intent of this
Section 5.13, the excess amount shall be returned promptly by the Eligible
Employee to the Company.

 

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