Exhibit 10.4

 

LOGO [g556778g02l56.jpg]    Serena Software, Inc.

June 20, 2013

Robert I. Pender, Jr.

c/o Serena Software, Inc.

1850 Gateway Drive, 4th Floor

San Mateo, CA 94404

Dear Bob:

At the request of the Board of Directors of Serena Software, Inc. (“Serena”), we
are pleased to extend an offer to you for the position of Senior Vice President,
Finance and Chief Financial Officer of Serena.

This letter confirms our offer of employment to you. The terms of your
employment include the following:

Your base salary will be $350,000 over a period of twelve (12) months before
applicable payroll taxes, tax withholdings and voluntary deductions, commencing
as of June 17, 2013 and payable in equal installments of $14,583.33 (less
applicable payroll taxes, tax withholdings and voluntary deductions) on a
semi-monthly basis on or about the 15th and last day of each month.

You will be eligible to receive an annual cash incentive bonus based on an
annual target bonus equal to 100% of your base salary for a period of twelve
(12) months. For fiscal year 2014, the annual cash incentive plan is governed by
the terms of the FY 2014 Executive Annual Incentive Plan. Your actual bonus
payout will be subject to the achievement of our annual EBITA (earnings before
interest, taxes and amortization) target under our fiscal year 2014 operating
plan as revised on June 5, 2013. Achievement of less than 95% of the EBITA
target will result in no payout, achievement of 95% of the EBITA target will
result in a 50% payout, achievement of 100% of the EBITA target will result in a
100% payout and achievement of 105% of the EBITA target will result in a 150%
payout of the applicable target bonus amount. Bonus payouts are capped at 150%
of your applicable target bonus. For fiscal year 2014, your applicable target
bonus will be $262,500, which reflects a proration of your annual target bonus
based on your expected period of service during the fiscal year. The actual
payout of your pro-rated bonus (less applicable taxes, withholdings and
voluntary deductions) for fiscal year 2014 will be guaranteed at 100% of your
pro-rated applicable target bonus if you remain employed through fiscal year
2014; provided, that if a Change in Control should occur prior to the end of
fiscal year 2014, Serena will pay you 100% of your applicable target bonus (i.e.
$262,500) immediately prior to the Change in Control.

 

 

1850 Gateway Drive, 4th Floor San Mateo California 94404    T 650.481.3400 F
650.481.3700 www.serena.com   

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Robert I. Pender, Jr.

June 20, 2013

 

You will be granted 750,000 restricted stock units under Serena’s Amended and
Restated 2006 Stock Incentive Plan (“Stock Plan”) pursuant to the terms of
Serena’s standard Restricted Stock Unit Agreement (Retention Award). Subject to
your continued employment on the applicable vesting event, 100% of the
restricted stock units will vest upon the first to occur of (a) the 3rd
anniversary of the date of grant, (b) a Change in Control, or (c) an Initial
Public Offering. If the vesting event is a Change in Control, each restricted
stock unit will be cancelled immediately prior to such Change in Control in
consideration for a payment equal to the per share consideration received by
Silver Lake Partners II, L.P. and affiliates for their holdings of Serena’s
common stock (the “SLP Per Share Consideration”) in such Change in Control as
set forth in more detail below; provided, that the aggregate payment that you
will be entitled to receive with respect to the cancellation of all of your
restricted stock units in such Change in Control will not be (i) less than
$500,000 or (ii) more than $2,000,000. Such payments shall be made net of all
required taxes and withholdings. The aggregate payment to be made in
consideration of the cancellation of your restricted stock units in connection
with a Change in Control will be:

 

  1) if such aggregate payment is to be $500,000:

 

  •  

paid wholly in cash and not subject to any indemnity escrow or any other
holdback .

 

  2) if such aggregate payment is in excess of $500,000 but not in excess of
$1,000,000:

 

  •  

subject to the same terms and conditions as apply to the payment of the SLP Per
Share Consideration, except that:

 

  •  

while it is not expected that there will be any indemnity escrow, should there
be one, your participation in any such escrow shall be limited to a cap of 15%
of your interest, with a duration for such escrow period of no longer than one
year following the closing, after which such participation amount will be paid
in cash, and

 

  •  

while the expectation is any sale would be for all cash, should the
consideration comprise any non-cash element, you shall not be required to
participate in any such non-cash aspect of the consideration, such as a
stock-for-stock exchange, seller paper, or earn-out, but instead shall receive
your interest entirely in cash based on the fair market value of the SLP Per
Share Consideration.

 

  3) if such aggregate payment is in excess of $1,000,000:

 

  •  

the first $1,000,000 of your interest shall be paid as described in bullet 2
immediately above, and

 

  •  

the portion of your interest that exceeds $1,000,000 shall be subject to the
same terms and conditions as apply to the payment of the SLP Per Share
Consideration.

 

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Robert I. Pender, Jr.

June 20, 2013

 

In addition, Serena shall set aside a discretionary bonus pool through which
additional awards may be granted by the compensation committee of the Board of
Directors at the time of a Change in Control. You may participate in this
discretionary pool, with the amount of any such award to be determined by the
compensation committee in its sole discretion, and, if applicable, paid to you
by Serena at or immediately prior to the Change in Control. To the extent a
grant from this discretionary pool brings the aggregate payment to be made to
you in consideration of the cancellation of restricted stock units in connection
with a Change in Control over $500,000, the provisions of 2 above will apply. It
is not expected that a grant from this discretionary pool would bring your
aggregate payment over $1,000,000 but it is nonetheless agreed that in any such
event, the provisions of 3 above will apply.

In the event that your employment is terminated by Serena without Cause or by
you for Good Reason, you will be entitled to the following severance benefits:
(i) continuation of your base salary for a period of twelve (12) months
following the termination of your employment, payable over the twelve (12) month
period in accordance with Serena’s customary payroll practices; provided,
however, that the first payment will be made on the first regularly scheduled
payroll date following the date on which the Release (defined below) becomes
irrevocable (the “Release Effective Date”); (ii) payment of 100% of your annual
target bonus for the fiscal year in which your employment terminates, payable on
the first regularly scheduled payroll date following the Release Effective
Date; and (iii) continuation of your health coverage through reimbursement of
premiums under COBRA for a period of twelve (12) months following the
termination of your employment. All severance benefits will be subject to
applicable payroll taxes and tax withholdings. The severance benefits will be
contingent upon your execution, delivery and non-revocation, within sixty
(60) days following the termination of employment , of a customary release of
claims in favor of Serena and its affiliates (the “Release”) (which Release will
be delivered to you within five (5) business days following the termination of
your employment), and continued compliance with certain restrictive covenants,
including customary non-competition and non-solicitation arrangements covering
the duration of the salary continuation period and a customary non-disparagement
arrangement. Notwithstanding the preceding to the contrary, (x) fifty percent
(50%) of the aggregate payment described in item (i) above will be paid solely
in consideration of your continued compliance with the non-competition covenant,
and if you fail to comply with the non-competition covenant, Serena will cease
making any further installments of such payments and (y) if the sixty (60) day
period during which you may consider the Release spans two calendar years, the
first payment shall commence on the first regularly scheduled payroll date that
occurs in the second calendar year (and such first installment shall include all
installment payments that would otherwise have been paid prior to such date if
this provision did not apply).

In addition, if your employment is terminated as a result of a termination
without Cause or resignation for Good Reason within twelve (12) months following
a Change in Control, you will be entitled to receive (i) continuation of your
base salary for a period of twelve (12) months following the termination of your
employment; (ii) payment of 100% of your annual target bonus; (iii) payment of a
prorated portion of your annual target bonus for the

 

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Robert I. Pender, Jr.

June 20, 2013

 

period of service during the fiscal year in which the termination of employment
occurs; and (iv) continuation of your health coverage through the reimbursement
of premiums under COBRA for a period of twelve (12) months following the
termination of your employment, subject to the terms and conditions of a
separate Change in Control agreement that will be provided to you under separate
cover.

For purpose of this letter, the terms “Cause,” “Good Reason” and “Change in
Control” are defined in the Stock Plan, and “Initial Public Offering” is defined
in the Restricted Stock Unit Agreement (Retention Award).

Notwithstanding anything to the contrary in this offer letter, (i) if at the
time of the termination of your employment, you are a “specified employee” as
defined in Section 409A of the Internal Revenue Code of 1986, as amended
(“Section 409A”) and the deferral of the commencement of any payments or
benefits payable to you as a result of your termination is necessary to prevent
any accelerated or additional tax under Section 409A, then Serena will defer the
commencement of such payments or benefits until the date that is six months
following your termination (or the earliest date permitted under Section 409A)
and (ii) if any other payments of money or other benefits due to you could cause
the application of an accelerated or additional tax under Section 409A, the
payments or other benefits will be deferred if deferral will make such payments
or other benefits compliant under Section 409A, or otherwise restructured, in a
manner, as equitably determined by Serena’s Board of Directors, that does not
cause an accelerated or additional tax. For purposes of Section 409A, the right
to a series of installment payments under this offer letter will be treated as a
right to a series of separate payments. With respect to the payment of amounts
or benefits that are nonqualified deferred compensation subject to Section 409A,
a termination of employment will not be deemed to have occurred for purpose of
this offer letter unless the termination is also a “separation from service”
within the meaning of Section 409A, and any references in this offer letter to a
“resignation,” “termination,” “termination of employment” or like term will mean
a separation from service. Except to the extent any expense, reimbursement or
in-kind benefit does not constitute a “deferral of compensation” within the
meaning of Section 409A: (a) the amount of expenses eligible for reimbursement
or in-kind benefits provided to you during any calendar year will not affect the
amount of expenses eligible for reimbursement or in-kind benefits provided to
you in any other calendar year, (b) the reimbursements for expenses will be made
on or before the last day of the calendar year following the calendar year in
which the applicable expense is incurred, and (c) the right to payment or
reimbursement or in-kind benefits may not be liquidated or exchanged for any
other benefit.

Silver Lake Partners and Serena shall use commercially reasonable best efforts
to obtain stockholder approval in accordance with the terms of Section 280G of
the Internal Revenue Code in connection with any “change in ownership or
effective control” of Serena or any “change in the ownership of a substantial
portion of the assets of Serena” prior to or at a Change in Control.

 

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Robert I. Pender, Jr.

June 20, 2013

 

You will be required to execute Serena’s Code of Conduct, Confidentiality and
Assignment of Inventions Agreement and Arbitration Agreement, which will be
provided to you separately.

In connection with your role as an executive officer of Serena, you will be
required to relocate to the area of Serena’s corporate headquarters located in
San Mateo, California. For a period of up to twelve (12) months, Serena will
reimburse you up to $5,000 per month for reasonable and eligible expenses
incurred by you to reside in temporary housing located within thirty-five
(35) miles of Serena’s corporate headquarters. Eligible expenses will include
costs incurred for temporary housing, such as an extended stay hotel room rates
or apartment rental. In addition, associated moving costs will be reimbursed up
to $1,000. You will be responsible for any income taxes associated with the
reimbursement of such expenses.

Employment with Serena is on an at-will basis. You are free to terminate your
employment for any reason at any time with or without prior notice. Similarly,
Serena can terminate your employment relationship with or without cause or
notice.

This written offer constitutes all of the material terms of your compensation
and supersedes any previous verbal commitments. The terms of this offer may only
be changed by written amendment to this offer letter. This offer letter
supersedes in its entirety your prior employment agreement with Serena dated
March 9, 2006, which is no longer effective. For purposes of the Management
Stockholders Agreement dated March 7, 2006, you will be deemed a “Management
Investor” and not a “Senior Manager.” Upon your acceptance of this offer letter,
please return the signed original to me and retain a copy for your records.

Your experience and talents will be a strong addition to our company. We are
excited about you joining our team and look forward to your contribution. Please
call me with any questions you may have.

Sincerely,

 

/s/ Karen King

Karen M. King

Director of Serena Software, Inc. and

Managing Director of Silver Lake Technology Associates II, L.L.C.,

as General Partner of Silver Lake Partners II, L.P.

 

Accepted:

 

/s/ Robert I. Pender, Jr.

  Robert I. Pender, Jr.

Date:

 

June 20, 2013

 

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