QUANTUM CORPORATION

EXECUTIVE CHAIRMAN CHANGE OF CONTROL AGREEMENT

 

THIS CHANGE OF CONTROL AGREEMENT ("Agreement") is effective as of April 1, 2011,
by and between Richard E. Belluzzo (the "Employee") and QUANTUM CORPORATION, a
Delaware corporation (the "Corporation").

Recitals

A. Whereas, the Employee is the executive chairman of the Corporation.

B. The board of directors of the Corporation has determined that it is in the
best interests of the Corporation and its stockholders to assure that the
Corporation will have the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Corporation.

C. The board of directors believes that it is important to provide the Employee
with compensation arrangements and stock benefits upon a Change of Control,
provided the Employee executes and does not revoke a release of claims in favor
of the Corporation in the event of his Involuntary Termination (as defined
below) following such Change of Control, which provide the Employee with
enhanced financial security, are competitive with those of other corporations,
and provide sufficient incentive to the Employee to remain with the Corporation
following a Change of Control.

D. Certain capitalized terms used in the Agreement are defined in Section 4
below.

In consideration of the mutual covenants herein contained, and in consideration
of the continuing employment of the Employee by the Corporation, the parties
agree as follows:

    Change of Control Severance Benefits. If the Employee's employment
    terminates at any time on or within twelve (12) months after a Change of
    Control, then the following shall apply:

    Voluntary Resignation; Termination For Cause. If the Employee's employment
    terminates in a voluntary resignation, including termination due to death or
    Disability (and not an Involuntary Termination), or if the Employee is
    terminated for Cause, or if the Employee voluntarily accepts a position
    within the Corporation below the level of vice president then the Employee
    shall not be entitled to receive severance or other benefits except for
    those (if any) as may be available under the Corporation's severance and
    benefits plans and policies existing at the time of such termination.
    
    Involuntary Termination. If the Employee's employment terminates due to an
    Involuntary Termination, then the Employee shall be entitled to receive a
    lump-sum severance payment equal to:
    
    the amount of Employee's Base Compensation that would be payable if Employee
    remained employed through August 15, 2012;
    
    if applicable, monthly reimbursements from the Corporation for the same
    level of health coverage and benefits as in effect for the Employee on the
    day immediately preceding the day of the Employee's termination of
    employment; provided, however, that: (i) the Employee constitutes a
    qualified beneficiary, as defined in Section 4980B(g)(1) of the Internal
    Revenue Code of 1986, as amended; and (ii) the Employee elects continuation
    coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of
    1985, as amended ("COBRA"), within the time period prescribed pursuant to
    COBRA. The Corporation shall continue to reimburse the Employee for premiums
    paid to continue such coverage until one (1) year after the date of the
    Involuntary Termination or, if earlier, until Employee is eligible for
    similar benefits from another employer. The Employee shall be responsible
    for the payment of COBRA premiums (including, without limitation, all
    administrative expenses) for the remaining COBRA period. If the provisions
    of COBRA do not apply to Employee (for instance, if the Employee is employed
    outside of the United States), the Corporation will provide Employee with a
    lump sum payment equal to twelve (12) multiplied by the portion, if any, of
    the premium the Corporation was paying for the Employee's health coverage
    and benefits as in effect for the Employee on the day immediately preceding
    the day of the Employee's termination of employment. In addition, and
    notwithstanding anything to the contrary in this Section 1(b)(iii), if the
    Corporation determines in its sole discretion that it cannot provide the
    COBRA benefits without potentially violating applicable law (including,
    without limitation, Section 2716 of the Public Health Service Act), the
    Corporation will in lieu thereof provide to the Employee a taxable monthly
    payment in an amount equal to the monthly COBRA premium that the Employee
    would be required to pay to continue his group health coverage in effect on
    the date of his termination of employment (which amount will be based on the
    premium for the first month of COBRA coverage), which payments will be made
    regardless of whether the Employee elects COBRA continuation coverage.
    
    Offset. In the event the Corporation becomes liable to the Employee for any
    severance payments or benefits required under any applicable statute, law or
    regulation, whether federal, state, local, foreign or otherwise, the
    severance pay (including any payments under Section 1(b)(iii)) the Employee
    would otherwise be entitled to receive under this Section 1 will be reduced
    by any liability the Corporation may have to the Employee with respect to
    such statutes, laws or regulations.

 1. Acceleration of Vesting of Equity-Based Compensation Awards.

    Termination in Connection with a Change of Control. If the Employee's
    employment terminates on or within the twelve (12) month period following a
    Change of Control, then, subject to Section 5 below, the vesting of any
    equity-based compensation awards held by the Employee shall be as follows:
    
    Voluntary Resignation; Termination for Cause. If the Employee's employment
    terminates in a voluntary resignation, including termination due to death or
    Disability (and not an Involuntary Termination), or if the Employee is
    terminated for Cause, the Employee is entitled to exercise or receive
    payment for any vested equity-based compensation awards. All further vesting
    of Employee's outstanding equity-based compensation awards will terminate
    immediately.
    
    Involuntary Termination. If the Employee suffers an Involuntary Termination,
    then the portion of any equity-based compensation awards then held by the
    Employee that is not vested shall automatically become vested.

    Code Section 409A.

    Notwithstanding anything to the contrary in this Agreement,
    no Deferred Compensation Separation Benefits (as defined below) will be
    considered due or payable until the Employee has a "separation from service
    " within the meaning of Section 409A of the Internal Revenue Code of 1986,
    as amended, and the final regulations and any guidance promulgated
    thereunder ("Section 409A")
    . In addition, if the Employee is a "specified employee" within the meaning
    of Section 409A
    at the time of the Employee's
    separation from service
    (other than due to death), then the severance benefits payable to the
    Employee under this Agreement, if any, and any other severance payments or
    separation benefits that may be considered deferred compensation under
    Section 409A (together, the "Deferred Compensation Separation Benefits")
    otherwise due to the Employee on or within the six (6) month period
    following the Employee's
    separation from service
    will accrue during such six (6) month period and will become payable in a
    lump sum payment (less applicable withholding taxes) on the date six (6)
    months and one (1) day following the date of the Employee's
    separation from service
    . All subsequent payments, if any, will be payable in accordance with the
    payment schedule applicable to each payment or benefit. Notwithstanding
    anything herein to the contrary, if the Employee dies following his
    separation from service
    but prior to the six (6) month anniversary of his date of
    separation
    , then any payments delayed in accordance with this paragraph will be
    payable in a lump sum (less applicable withholding taxes) to the Employee's
    estate as soon as administratively practicable after the date of the
    Employee's death and all other Deferred Compensation Separation Benefits
    will be payable in accordance with the payment schedule applicable to each
    payment or benefit.
    
    
    
    This provision is intended to comply with the requirements of Section 409A
    so that none of the severance payments and benefits to be provided hereunder
    will be subject to the additional tax imposed under Section 409A, and any
    ambiguities herein will be interpreted to so comply. The Corporation and the
    Employee agree to work together in good faith to consider amendments to this
    Agreement and to take such reasonable actions which are necessary,
    appropriate or desirable to avoid imposition of any additional tax or income
    recognition prior to actual payment to the Employee under Section 409A.

    Definition of Terms. The following terms referred to in this Agreement shall
    have the following meanings:

    Base Compensation. "Base Compensation" shall mean the annual base salary the
    Corporation pays the Employee for his services immediately prior to an
    Involuntary Termination.
    
    Change of Control. "Change of Control" shall mean the occurrence of any of
    the following events:
    
    Any "person" (as such term is used in Sections 13(d) and 14(d) of the
    Securities Exchange Act of 1934, as amended) is or becomes the "beneficial
    owner" (as defined in Rule l3d-3 under said Act), directly or indirectly, of
    securities of the Corporation representing forty percent (40%) or more of
    the total voting power represented by the Corporation's then outstanding
    voting securities; or
    
    A change in the composition of the board of directors of the Corporation
    occurring within a twenty-four (24) month period, as a result of which fewer
    than a majority of the directors are Incumbent Directors. "Incumbent
    Directors" shall mean directors who either (A) are directors of the
    Corporation as of the date hereof, or (B) are elected, or nominated for
    election, to the board of directors of the Corporation with the affirmative
    votes of at least a majority of the Incumbent Directors at the time of such
    election or nomination (but shall not include an individual whose election
    or nomination is in connection with an actual or threatened proxy contest
    relating to the election of directors to the Corporation); or
    
    The consummation of a merger or consolidation of the Corporation with any
    other corporation, other than a merger or consolidation which would result
    in the voting securities of the Corporation outstanding immediately prior
    thereto continuing to represent (either by remaining outstanding or by being
    converted into voting securities of the surviving entity) at least fifty
    percent (50%) of the total voting power represented by the voting securities
    of the Corporation or such surviving entity outstanding immediately after
    such merger or consolidation, or the stockholders of the Corporation approve
    a plan of complete liquidation of the Corporation or the consummation of a
    sale or disposition by the Corporation of all or substantially all the
    Corporation's assets.
    
    Involuntary Termination. "Involuntary Termination" shall mean any purported
    termination of the Employee's employment by the Corporation which is not
    effected for Disability or for Cause or any termination of the Employee's
    employment by the Employee following: (i) the assignment to the Employee of
    any duties or the reduction of the Employee's duties, either of which
    results in a significant diminution in the Employee's position or
    responsibilities with the Corporation in effect immediately prior to such
    assignment, or the removal of the Employee from such position and
    responsibilities; (ii) a substantial reduction of the facilities and
    perquisites (including office space and location) available to the Employee
    immediately prior to such reduction; (iii) a reduction by the Corporation in
    the Base Compensation of the Employee as in effect immediately prior to such
    reduction, other than a uniform reduction applicable to all executives
    generally; (iv) a material reduction by the Corporation in the kind or level
    of employee benefits to which the Employee is entitled immediately prior to
    such reduction with the result that the Employee's overall benefits package
    is significantly reduced, other than a uniform reduction applicable to all
    executives generally; (v) the relocation of the Employee to a facility or a
    location more than fifty (50) miles from the Employee's then present
    location; or (vi) the failure of the Corporation to obtain the assumption of
    this agreement by any successors contemplated in Section 8 below.
    
    Cause. "Cause" shall mean: (i) any act of personal dishonesty taken by the
    Employee in connection with his responsibilities as an employee that is
    intended to result in substantial personal enrichment of the Employee; (ii)
    the conviction of a felony; (iii) a willful act by the Employee which
    constitutes gross misconduct injurious to the Corporation; and (iv)
    continued violations by the Employee of the Employee's obligations to the
    Corporation under the Corporation's established personnel policies and
    procedures which are demonstrably willful and deliberate on the Employee's
    part after the Corporation has delivered a written demand for performance to
    the Employee that describes the basis for the Corporation's belief that the
    Employee has not substantially performed his duties and afforded the
    Employee at least fifteen (15) days to cure.
    
    Disability. "Disability" shall mean that the Employee has been unable to
    perform his duties under this Agreement as the result of his incapacity due
    to physical or mental illness with or without reasonable accommodation, and
    such inability, at least twenty-six (26) weeks after its commencement, is
    determined to be total and permanent by a physician selected by the
    Corporation or its insurers and acceptable to the Employee or the Employee's
    legal representative (such statement as to acceptability not to be
    unreasonably withheld). Termination resulting from Disability may only be
    effected after at least thirty (30) days' written notice by the Corporation
    of its intention to terminate the Employee's employment. In the event that
    the Employee resumes the performance of substantially all of his duties
    hereunder before the termination of his employment becomes effective, the
    notice of intent to terminate shall automatically be deemed to have been
    revoked.
    
    Disinterested Board. "Disinterested Board" shall mean the board of directors
    of the Corporation excluding those members of the board of directors, if
    any, who are parties to agreements or arrangements identical to or
    substantially similar to this Agreement.

 2. Limitation on Payments. In the event that the severance and other benefits
    provided for in this Agreement or otherwise payable or provided to the
    Employee (i) constitute "parachute payments" within the meaning of Section
    280G of the Internal Revenue Code of 1986, as amended (the "Code") and (ii)
    but for this Section 5, would be subject to the excise tax imposed by
    Section 4999 of the Code (the "Excise Tax"), then the Employee's severance
    benefits hereunder shall be either:

    (i) delivered in full, or

    (ii) delivered as to such lesser extent which would result in no portion of
    such severance benefits being subject to the Excise Tax,

    whichever of the foregoing amounts, taking into account the applicable
    federal, state and local income taxes and the Excise Tax, results in the
    receipt by the Employee on an after-tax basis, of the greatest amount of
    severance benefits, notwithstanding that all or some portion of such
    severance benefits may be taxable under Section 4999 of the Code. Unless the
    Corporation and the Employee otherwise agree in writing, any determination
    required under this Section 5 shall be made in writing in good faith by the
    accounting firm serving as the Corporation's independent public accountants
    immediately prior to the Change of Control (the "Accountants"). In the event
    of a reduction in benefits hereunder, the reduction will occur in the
    following order: the vesting acceleration of stock options, then cash
    severance benefits, then vesting acceleration of restricted stock awards,
    and then Corporation-paid COBRA coverage. In the event that acceleration of
    vesting of stock options or restricted stock awards is to be reduced, such
    acceleration of vesting shall be cancelled in the reverse order of the date
    of grant (that is, the latest first) for the Employee's stock options or
    restricted stock awards, as applicable. If two or more stock options or
    restricted stock awards are granted on the same day, the stock options or
    restricted stock awards, as applicable, will be reduced on a pro-rata basis.
    For purposes of making the calculations required by this Section 5, the
    Accountants may make reasonable assumptions and approximations concerning
    applicable taxes and may rely on reasonable, good faith interpretations
    concerning the application of Sections 280G and 4999 of the Code. The
    Corporation and the Employee shall furnish to the Accountants such
    information and documents as the Accountants may reasonably request in order
    to make a determination under this Section. The Corporation shall bear all
    costs the Accountants may reasonably incur in connection with any
    calculations contemplated by this Section 5.

    At-Will Employment. The Corporation and the Employee acknowledge that the
    Employee's employment is at will and may be terminated at any time and for
    any reason, with or without notice. On termination of the Employee's
    employment, the Employee shall not be entitled to any payments, benefits,
    damages, awards or compensation other than as provided by this Agreement, or
    as may otherwise be available in accordance with the Corporation's
    established employee plans and policies at the time of termination.

 3. Term, Amendment and Termination.

    Term. Subject to subsection (b) below, the terms of this Agreement shall
    terminate upon the earlier of: (i) the date that all obligations of the
    parties hereunder have been satisfied; (ii) August 15, 2012; or (iii) twelve
    (12) months after a Change of Control. A termination of the terms of this
    Agreement pursuant to the preceding sentence shall be effective for all
    purposes, except that such termination shall not affect the payment or
    provision of compensation or benefits on account of a termination of
    employment occurring prior to the termination of the terms of this
    Agreement.
    
    Amendment and Termination. Unless a Change of Control has previously
    occurred, except as provided in paragraph 7(a) above, the termination or
    amendment of this Agreement shall not become effective until six (6) months
    from the time the Corporation has provided to Employee written notice of the
    amendment or termination, with such amendment or termination to be approved
    by unanimous resolution of the Disinterested Board. Notwithstanding the
    foregoing, if a Change of Control occurs during the six (6) month notice
    period described above, such amendment or termination of the Agreement shall
    not become effective unless the Employee consents in writing to the
    amendment or termination. If a Change of Control occurs, this Agreement
    shall no longer be subject to amendment, change, substitution, deletion,
    revocation or termination in any respect whatsoever except as provided in
    paragraph 7(a)(iii) above or to the extent the Employee consents to such
    amendment or termination in accordance with this paragraph.
    
    Form of Amendment. The Form of any proper amendment or termination of this
    Agreement shall be a written instrument signed by a duly authorized officer
    or officers of the Corporation, certifying that the amendment or termination
    has been approved by the Disinterested Board in accordance with Section
    7(b).

 4. Successors.

    Corporation's Successors. Any successor to the Corporation (whether direct
    or indirect and whether by purchase, lease, merger, consolidation,
    liquidation or otherwise) to all or substantially all of the Corporation's
    business and/or assets shall assume the obligations under this Agreement and
    agree expressly to perform the obligations under this Agreement in the same
    manner and to the same extent as the Corporation would be required to
    perform such obligations in the absence of a succession. For all purposes
    under this Agreement, the term "Corporation" shall include any successor to
    the Corporation's business and/or assets which executes and delivers the
    assumption agreement described in this subsection (a) or which becomes bound
    by the terms of this Agreement by operation of law.
    
    Employee's Successors. The terms of this Agreement and all rights of the
    Employee hereunder shall inure to the benefit of, and be enforceable by, the
    Employee's personal or legal representatives, executors, administrators,
    successors, heirs, distributees, devisees and legatees.
    
    Employment By Subsidiaries. If the Employee is employed by a wholly owned
    subsidiary of Quantum Corporation, then: (i) "Corporation" as defined herein
    shall be deemed to include such subsidiary; and (ii) the effects intended to
    result from a Change of Control under this Agreement shall apply to such
    subsidiary, and the Employee shall be entitled to all the benefits and
    subject to all the obligations provided herein.

 5. Notice.

    General. Notices and all other communications contemplated by this Agreement
    shall be in writing and shall be deemed to have been duly given when emailed
    to the Employee's Corporation email address (assuming the Employee still is
    employed by the Corporation) or to his personal email address if available,
    personally delivered or when mailed by U.S. registered or certified mail,
    return receipt requested and postage prepaid. In the case of the Employee,
    mailed notices shall be addressed to him at the home address which he most
    recently communicated to the Corporation in writing. In the case of the
    Corporation, mailed notices shall be addressed to its corporate
    headquarters, and all notices shall be directed to the attention of its
    Secretary.
    
    Notice of Termination. Any termination by the Corporation for Cause or by
    the Employee as a result of an Involuntary Termination shall be communicated
    by a notice of termination of the other party hereto given in accordance
    with this Section 9 of this Agreement. Such notice shall indicate the
    specific termination provision in this Agreement relied upon, shall set
    forth in reasonable detail the facts and circumstances claimed to provide a
    basis for termination under the provision so indicated, and shall specify
    the termination date (which shall be not more than fifteen (15) days after
    the giving of such notice). The failure by the Employee to include in the
    notice any fact or circumstance which contributes to a showing of
    Involuntary Termination shall not waive any right of the Employee hereunder
    or preclude the Employee from asserting such fact or circumstance in
    enforcing his rights hereunder.

    Release of Claims. In order to receive any of the benefits provided for
    pursuant to this Agreement upon the Employee's Involuntary Termination, the
    Employee (or his legal representative in the event of death or disability as
    the case may be) shall be required to execute and not revoke a release of
    claims (in a form provided by the Corporation) in favor of the Corporation
    within the period required by the release and in no event later than sixty
    (60) days following the Employee's Involuntary Termination, inclusive of any
    revocation period set forth in the release, which release will include a
    provision prohibiting the solicitation of employees of the Corporation for a
    period of one year.

    Timing of Benefits. Subject to Section 3 of this Agreement, benefits
    provided for pursuant to this Agreement shall be paid on the 61st day
    following Employee's separation from service, but only if the Employee has
    signed and not revoked the release of claims required pursuant to Section 10
    of this Agreement.

 6. Miscellaneous Provisions.

        No Duty to Mitigate. The Employee shall not be required to mitigate the
        amount of any payment contemplated by this Agreement (whether by seeking
        new employment or in any other manner), nor shall any such payment be
        reduced by any earnings that the Employee may receive from any other
        source.
    
        Waiver. No provision of this Agreement shall be modified, waived or
        discharged unless the modification, waiver or discharge is agreed to in
        writing and signed by the Employee and by an authorized officer of the
        Corporation (other than the Employee). No waiver by either party of any
        breach of, or of compliance with, any condition or provision of this
        Agreement by the other party shall be considered a waiver of any other
        condition or provision or of the same condition or provision at another
        time.
    
        Whole Agreement. No agreements, representations or understandings
        (whether oral 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.
    
        Choice of Law. The validity, interpretation, construction and
        performance of this Agreement shall be governed by the laws of the State
        of California.
    
        Severability. The invalidity or unenforceability of any provision or
        provisions of this Agreement shall not affect the validity or
        enforceability of any other provision hereof, which shall remain in full
        force and effect.
    
     a. Arbitration.
    
        Employee and the Corporation agree that any dispute or controversy
        arising out of, relating to, or in connection with this Agreement, or
        the interpretation, validity, construction, performance, breach, or
        termination thereof, shall be finally settled by binding arbitration to
        be held in Milpitas, California under the National Rules for the
        Resolution of Employment Disputes supplemented by the Supplemental
        Procedures for Large Complex Disputes, of the American Arbitration
        Association as then in effect (the "Rules"). The parties shall be
        entitled to conduct discovery pursuant to the California Code of Civil
        Procedure. The arbitrator may regulate the timing and sequence of such
        discovery and shall decide any discovery disputes or controversies
        between the Corporation and Employee. The arbitrator may grant
        injunctions or other relief in such dispute or controversy. The decision
        of the arbitrator shall be final, conclusive and binding on the parties
        to the arbitration. Judgment may be entered on the arbitrator's decision
        in any court having jurisdiction.
        
        The arbitrator(s) shall apply California law to the merits of any
        dispute or claim, without reference to rules or conflicts of law.
        
        Unless otherwise provided for by law, the Corporation and the Employee
        shall each pay half of the costs and expenses of such arbitration.
        
        THE EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
        ARBITRATION. THE EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
        THE EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, OR RELATING TO,
        OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
        CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING
        ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF
        THE EMPLOYEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF
        ALL DISPUTES RELATING TO ALL ASPECTS OF THIS AGREEMENT.
    
        No Assignment of Benefits. The rights of any person to payments or
        benefits under this Agreement shall not be made subject to option or
        assignment, either by voluntary or involuntary assignment or by
        operation of law, including (without limitation) bankruptcy,
        garnishment, attachment or other creditor's process, and any action in
        violation of this subsection (g) shall be void.
    
        Withholding Taxes. All payments made pursuant to this Agreement will be
        subject to withholding of applicable taxes.
    
        Assignment by Corporation. The Corporation may assign its rights under
        this Agreement to an affiliate, and an affiliate may assign its rights
        under this Agreement to another affiliate of the Corporation or to the
        Corporation provided, however, that no assignment shall be made if the
        net worth of the assignee is less than the net worth of the Corporation
        at the time of assignment. In the case of any such assignment, the term
        "Corporation" when used in a section of this Agreement shall mean the
        Corporation that actually employs the Employee.
    
        Amendment of Award Agreements. The Corporation and the Employee agree
        that the provisions of this Agreement shall supersede any conflicting
        provisions of any equity-based compensation award agreement of the
        Employee, and the Corporation and the Employee agree to execute such
        further documents as may be necessary to amend any such agreement. With
        respect to equity-based compensation awards granted on or after the date
        hereof, the provisions of this Agreement will apply to such awards
        except to the extent otherwise explicitly provided in the applicable
        equity-based compensation award agreement.
    
        Headings. The headings of sections herein are included solely for
        convenience of reference and shall not control the meaning or
        interpretation of any provisions of this Agreement.
    
        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, each of the parties has executed this Agreement, in the case
of the Corporation by its duly authorized officer, as of the day and year first
above written.

QUANTUM CORPORATION

EMPLOYEE

By /s/ Shawn D. Hall

/s/ Richard E. Belluzzo

Shawn D. Hall

Richard E. Belluzzo

Senior Vice President, General Counsel

Executive Chairman of the Board

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE PAGE OF CHIEF EXECUTIVE CHANGE OF CONTROL AGREEMENT