Exhibit (10)(bb)

 

THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

        THIS AGREEMENT, made this 15th day of June, 2003, by and between
C-COR.net CORP., a Pennsylvania Business Corporation with its principal place of
business at 60 Decibel Road, State College, Pennsylvania (“Corporation”),

 

-AND-

 

        DAVID A. WOODLE, an individual, of 110 Berwick Drive, Boalsburg,
Pennsylvania 16827 (“Employee”).

 

BACKGROUND

 

        A.    Employee has been employed by Corporation since July 20, 1998.
Employee now serves as Corporation’s Chairman, President and Chief Executive
Officer.

 

        B.    Corporation and Employee entered into an Amended and Restated
Employment Agreement on September 14, 1999 and an Amendment to Employment
Agreement on January 18, 2000 (the “Employment Contracts”).

 

        C.    On June 18, 2002, Corporation and Employee entered into a Second
Amended and Restated Employment Agreement making amendments to the Employment
Contracts and an Amended and Restated Change of Control Agreement.

 

        D.    On November 13, 2002, Corporation and Employee entered into a
First Amendment to the Amended and Restated Change of Control Agreement.

 

        E.    Corporation and Employee desire to consolidate the documents
referred to in Background Sections C and D above into this Third Amended and
Restated Employment Agreement.

 

        NOW, THEREFORE, in consideration of the mutual promises contained
herein, and intending to be legally bound thereby, the parties hereto agree as
follows:

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SECTION I

 

Description of Employment

 

        1.01.    Employment and Term. The term of Employee’s employment with
Corporation commenced on July 20, 1998 and shall extend to June 30, 2008 (the
“Term”).

 

        1.02.    Capacity. During the balance of the Term, Employee shall serve
as Corporation’s Chairman, Chief Executive Officer and President, or in such
other offices or capacities as shall be determined by Corporation’s Board of
Directors. Further, if elected by Corporation’s shareholders, Employee shall,
without additional compensation therefor, serve as a member of Corporation’s
Board of Directors.

 

        1.03.    Time and Efforts. During the Term, Employee shall diligently
and conscientiously devote his best efforts and his full time and attention to
the discharge of his duties as Chairman, Chief Executive Officer and President
and of such other duties as may be determined by the Board of Directors of
Corporation. Employee acknowledges that during the period of his employment
pursuant to this Agreement as the Chairman, Chief Executive Officer and
President of Corporation, he will not have any other employment or business
affiliations without the prior approval of the Board of Directors of
Corporation.

 

SECTION II

 

Compensation

 

        2.01.    Salary. During the period of Employee’s employment hereunder as
Chairman, Chief Executive Officer and President (irrespective of such other
offices or titles as may be held by Employee) the Corporation shall pay to
Employee a salary at an annual rate of Four Hundred Thousand and 00/100
($400,000) Dollars, payable bi-weekly, for services rendered. The amount of
Employee’s salary shall be reviewed annually by the Compensation Committee of
the Board of Directors and may be adjusted as determined by the committee.

 

        2.02.    Business Expenses. Employee shall be reimbursed by Corporation
for all reasonable expenses incurred in carrying out his employment duties or in
otherwise promoting the business of Corporation by presenting to the designated
officer of Corporation an itemized expense account report with receipts
attached.

 

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        2.03.    Incentive Compensation. During the Term, Corporation shall
include Employee as a participant under Corporation’s “Profit Incentive Plan.”
Employee will be entitled to such awards as are declared from time to time by
the Board of Directors under the terms of the “Profit Incentive Plan.”

 

        2.04.    Additional Retirement Benefit. Employee shall receive an annual
additional retirement benefit of Fifty Thousand and 00/100 ($50,000.00) Dollars
commencing at Employee’s “retirement,” as defined below and continuing until
Employee’s death. For this purpose “retirement” shall have the same definition
as under the C-COR.net Corp. Incentive Plan.

 

        2.05.    Life Insurance Coverage. Corporation will provide to Employee
group term life insurance in a face amount equal to three times the Employee’s
salary. Changes in life insurance coverage will occur at the same time
Employee’s salary is changed pursuant to Section 2.01 hereof.

 

        2.06.    Automobile Allowance. During the Term, Corporation shall pay
Employee, on or about the first of each month, a monthly allowance of Eight
Hundred and 00/100 ($800.00) Dollars to be used to defray Employee’s automobile
expenses.

 

        2.07.    Financial and Tax Planning Reimbursement. Corporation agrees to
reimburse Employee for expenses incurred in his personal financial and tax
planning up to an amount not exceeding One Thousand Five Hundred and 00/100
($1,500.00) Dollars per year during the Term of this Agreement.

 

        2.08.    Other Benefit Plans. Employee shall also be eligible to
participate in Corporation’s other fringe benefit plans, including both those
plans presently existing and those which may in the future be adopted, in
accordance with the terms and provisions of such plans.

 

        2.09.    Vacation. Employee shall be entitled to a reasonable amount of
vacation but not less than three (3) weeks per year.

 

        2.10.    Club Memberships. Corporation agrees to reimburse Employee for
annual dues he is required to pay as a condition of membership at the Centre
Hills Country Club during the Term of this Agreement.

 

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        2.11.    Physical Examination. Corporation agrees to reimburse Employee
for the expense of an annual physical examination by a physician selected by
Employee.

 

SECTION III

 

Intellectual Property

 

        3.01.    Disclosure. Employee agrees to promptly and fully disclose to
Corporation all inventions, improvements, original works of authorship,
formulas, processes, computer programs, techniques, know-how and data
(hereinafter collectively referred to as “Inventions”), whether or not
patentable or copyrightable, made or conceived or first reduced to practice or
learned by Employee either alone or jointly with others, whether during
Employee’s regular hours of employment and directly or indirectly relating to or
capable of being used for the benefit of Corporation’s business. Employee
agrees, without compensation additional to that provided for in Section II of
this Agreement, to assign all rights in and to such Inventions to Corporation
and to execute, at Corporation’s request, appropriate documents effectuating
such assignments.

 

        3.02.    Maintenance of Records. Employee agrees to maintain accurate
and current written records of all such Inventions, in the form of notes,
sketches, drawings, or reports which shall be and will remain the property of
and be available to Corporation at all times.

 

        3.03.    Provision of Assistance. Employee agrees, upon Corporation’s
request, during and after the Term of employment set forth herein, to assist
Corporation, its attorneys, and nominees at its or their expense in preparing
and prosecuting applications for letters patent on Inventions created by him and
applications to register copyrights on inventions created by him providing,
however, that time actually spent by Employee at such work after termination of
employment, at Corporation’s request, shall be paid for by Corporation at a
reasonable rate, and that necessary expenses incurred by Employee in connection
with Employee’s duties under this paragraph shall be paid by Corporation.

 

        3.04.    Previous Inventions. Employee expressly retains an interest in
and title to Inventions patented or unpatented which Employee conceived prior to
his Term of employment with Corporation.

 

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3.05.    Term of Obligations. Employee’s termination of employment by
Corporation under this Agreement shall not affect the obligations imposed on
Employee by Paragraphs 3.01, 3.02 and 3.03 and such obligations shall be binding
on Employee’s heirs, executors and administrators.

 

SECTION IV

 

Confidentiality and Noncompetition

 

4.01.    Confidentiality. Employee agrees, during and after his Term of
employment hereunder, without the prior written consent of Corporation, not to
disclose to any person other than Corporation, by publication or otherwise, or
use for his own benefit, any confidential information of Corporation or any
Inventions, whether conceived in whole or in part by Employee or by others.
Employee’s duty under this paragraph includes but is not limited to the
nondisclosure of trade secrets or confidential information, knowledge or data of
Corporation which he may obtain during the course of his employment relating to
Corporation’s business, technical or otherwise, including but not limited to
manufacturing methods, processes, techniques, products, engineering development
products, computer programs, customer lists, machines, research, compositions,
inventions or discoveries. Employee agrees that upon leaving the employ of
Corporation, he will not take with him any original or copy of documents, or
records relating to the foregoing matters, without the written consent of
Corporation. This Section does not apply to any Inventions described in Section
3.04 above.

 

4.02.    Noncompetition. In consideration of Employee’s employment, for the
duration of his employment by Corporation, and for a period of two (2) years
after the termination thereof, Employee agrees:

 

(a)    Not to, on behalf of himself or any other entity or corporation, directly
or indirectly, as an employee, agent, independent contractor, owner,
stockholder, partner, officer, director or otherwise, engage in the business of
the manufacture or sale of electronic equipment for use in cable television or
broadband data transmission systems in North America, Central America and

 

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South America, Europe, the Middle East and the Far East, including the Pacific
Rim.

 

(b)    Not to call on or solicit, on behalf of himself or on behalf of any other
entity or corporation, any of the customers of Corporation for the purpose of
selling or distributing to any of said customers any product or service
comparable to or competitive with products or services developed, sold and/or
distributed by Corporation or products or services which Corporation may have
under development during the period of time Employee was employed by Corporation
(“Corporation’s Products”); nor will Employee in any way, directly or
indirectly, for himself or on behalf of any other entity or corporation,
solicit, divert or take away any customer of Corporation. For purposes of this
Agreement, “customer” shall mean any person, entity or corporation which has
purchased Corporation’s Products, or has received a price quotation from
Corporation for Corporation’s Products, at any time within the three (3) year
period prior to the date of termination of Employee’s employment.

 

(c)    Not to enter or attempt to enter into an employment or agency
relationship with any person who, at the time of such entry (or attempted
entry), or at the time of termination of Employee’s service with Corporation,
was an officer, director, employee, principal or agent of Corporation if, but
only if, such employment or agency relationship is with respect to a business in
competition with Corporation.

 

(d)    Not to induce or attempt to induce any person described in subparagraph
(c) to leave his or her employment, agency, directorship or office with
Corporation to enter into a business in competition with Corporation.

 

It is understood by and between the parties to this Agreement that the aforesaid
covenants set forth in this Section 4.02 are essential elements of this
Agreement, and that, but for the agreement of Employee to comply with such
covenants, Corporation would not have agreed to the terms of employment set
forth in this Agreement. Such covenants by Employee shall be construed as
agreements independent of any other provisions in this Agreement. The existence

 

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of any claim or cause of action by Employee against Corporation, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by Corporation of such covenants. In addition to all other legal
remedies available to Corporation for enforcement of the covenants of this
Section 4.02, the parties agree that Corporation shall be entitled to an
injunction by any court of competent jurisdiction to prevent or restrain any
breach or threatened breach hereof. The parties to this Agreement agree that, if
any court of competent jurisdiction determines the specified time period or the
specified geographical area of application, or the definition of Corporation’s
Products in such covenants to be unreasonable, arbitrary or against public
policy, then a lesser time period and/or a smaller geographical area and/or a
less encompassing definition of Corporation’s Products which are determined to
be reasonable, nonarbitrary and not against public policy may be enforced
against Employee. The parties to this Agreement agree and acknowledge that they
are familiar with the present and proposed operations of Corporation and believe
that the restrictions set forth in this Section 4.02 are reasonable with respect
to its subject matter, duration and geographical application. The provisions of
this Section 4.02 may be waived, in part or fully, in writing by Corporation at
its option. These restrictive covenants shall survive the termination of this
Agreement.

 

SECTION V

 

Indemnification for Service as Director and Officer

 

5.01.    Indemnity of Employee. Should Employee serve Corporation as a director
or officer during the Term, Corporation shall hold harmless and indemnify
Employee as a director or officer to the full extent authorized or permitted by
the provisions of the Pennsylvania Business Corporation Law (the “State
Statute”), or by any amendment thereof or other statutory provisions authorizing
or permitting such indemnification which is adopted after the date hereof.

 

5.02.    Maintenance of Insurance and Self-Insurance.

 

(a)    Corporation represents that it presently has in force and effect policies
of Directors and Officers Liability Insurance (“D&O Insurance”) in insurance
companies and amounts as determined from time to time by Corporation (the
“Insurance Policies”). Subject only to the provisions of Section

 

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5.02(b) hereof, Corporation hereby agrees that, so long as Employee shall serve
as a director or officer of Corporation (or shall continue at the request of
Corporation to serve as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) and
thereafter so long as Employee shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative by reason of the fact that Employee was a director or
officer of Corporation (or served in any of said other capacities), Corporation
will purchase and maintain in effect for the benefit of Employee one or more
valid, binding and enforceable policy or policies of D&O Insurance providing, in
all respects, coverage at least comparable to that presently provided pursuant
to the Insurance Policies.

 

(b)    Corporation shall not be required to maintain said policy or policies of
D&O Insurance in effect if said insurance is not reasonably available or if, in
the reasonable business judgment of the then directors of Corporation, either
(i) the premium cost for such insurance is substantially disproportionate to the
amount of coverage or (ii) the coverage provided by such insurance is so limited
by exclusions that there is insufficient benefit from such insurance.

 

(c)    In the event Corporation does not purchase and maintain in effect said
policy or policies of D&O Insurance pursuant to the provisions of Section
5.02(b) hereof, Corporation agrees to hold harmless and indemnify Employee to
the full extent of the coverage which would otherwise have been provided for the
benefit of Employee pursuant to the Insurance Policies.

 

5.03.    Additional Indemnity. Subject only to the exclusions set forth in
Section 5.04 hereof, Corporation hereby further agrees to hold harmless and
indemnify Employee:

 

(a)    Against any and all expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Employee in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
an action by or in the right of the Corporation) to which Employee is, was or at

 

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any time becomes a party, or is threatened to be made a party, by reason of the
fact that Employee is, was or at any time becomes a director, officer, employee
or agent of Corporation, or is or was serving or at any time serves at the
request of Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise; and

 

(b)    Otherwise to the fullest extent as may be provided to Employee by
Corporation under the non-exclusivity provisions of Section 7-1 of the Bylaws of
Corporation and the State Statute.

 

5.04.    Limitations on Additional Indemnity. No indemnity pursuant to Section
5.03 hereof shall be paid by Corporation:

 

(a)    except to the extent the aggregate of losses to be indemnified thereunder
exceeds the sum of One Thousand and 00/100 ($1,000.00) Dollars plus the amount
of such losses for which Employee is indemnified either pursuant to Sections
5.01 or 5.02 hereof or pursuant to any D&O Insurance purchased and maintained by
the Corporation;

 

(b)    in respect to remuneration paid to Employee if it shall be determined by
a final judgment or other final adjudication that such remuneration was in
violation of law;

 

(c)    on account of any suit in which judgment is rendered against Employee for
an accounting of profits made from the purchase or sale by Employee of
securities of Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law;

 

(d)    on account of Employee’s conduct which is finally adjudged by a court of
competent jurisdiction to have been knowingly fraudulent or deliberately
dishonest or to have constituted willful misconduct or recklessness; and

 

(e)    if a final decision by a court of competent jurisdiction shall determine
that such indemnification is not lawful.

 

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5.05.    Continuation of Indemnity. All agreements and obligations of
Corporation contained herein shall continue during the period Employee is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer, employee or agent of another
corporations, partnership, joint venture, trust or other enterprise) and shall
continue thereafter so long as Employee shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Employee was a director of
Corporation or serving in any other capacity referred to herein.

 

5.06.    Notification and Defense of Claim. Promptly after receipt by Employee
of notice of the commencement of any action, suit or proceeding, Employee will,
if a claim in respect thereof is to be made against Corporation under this
Section V, notify Corporation of the commencement thereof; but the omission so
to notify Corporation will not relieve it from any liability which it may have
to Employee otherwise than under this Section V. With respect to any such
action, suit or proceeding as to which Employee notifies Corporation of the
commencement thereof:

 

(a)    Corporation will be entitled to participate therein at its own expense;
and

 

(b)    Except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel satisfactory to Employee.
After notice from Corporation to Employee of its election so to assume the
defense thereof, Corporation will not be liable to Employee under this Section V
for any legal or other expenses subsequently incurred by Employee in connection
with the defense thereof other than reasonable costs of investigation or as
otherwise provided below. Employee shall have the right to employ Corporation’s
counsel in such action, suit or proceeding but the fees and expenses of such
counsel incurred after notice from Corporation of its assumption of the defense
thereof shall be at the expense of Employee unless (i) the employment of counsel
by Employee has been authorized by Corporation, (ii) Employee shall

 

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have reasonably concluded that there may be a conflict of interest between
Corporation and Employee in the conduct of the defense of such action or (iii)
Corporation shall not in fact have employed counsel to assume the defense of
such action, in each of which cases the fees and expenses of counsel shall be at
the expense of Corporation. Corporation shall not be entitled to assume the
defense of any action, suit or proceeding brought by or on behalf of Corporation
or as to which Employee shall have made the conclusion provided for in (ii)
above.

 

        (c)    Corporation shall not be liable to indemnify Employee under this
Section V for any amounts paid in settlement of any action or claim effected
without its written consent. Corporation shall not settle any action or claim in
any manner which would impose any penalty or limitation on Employee with
Employee’s written consent. Neither Corporation nor Employee will unreasonably
withhold its or his consent to any proposed settlement.

 

          5.07.    Repayment of Expenses. Employee will reimburse Corporation
for all reasonable expenses paid by Corporation in defending any civil or
criminal action, suit or proceeding against Employee in the event and only to
the extent that it shall be ultimately determined that Employee is not entitled
to be indemnified by Corporation for such expenses under the provisions of the
State Statute, the Bylaws of Corporation, this Section V or otherwise.

 

          5.08.    Enforcement.

 

 

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(a)    Corporation expressly confirms and agrees that it has entered into this
Section V and assumed the obligations imposed on Corporation hereby in order to
induce Employee to, if elected, serve as a director of Corporation, and
acknowledges that Employee is relying upon this Section V in agreeing to serve
Corporation in such capacity.

 

(b)    In the event Employee is required to bring any action to enforce rights
or to collect monies due under this Agreement and is successful in such action,
Corporation shall reimburse Employee for all of Employee’s reasonable fees and
expenses in bringing and pursuing such action.

 

SECTION VI

 

Change in Control

 

        6.01.    Background. Corporation is concerned that upon a possible or
threatened change in control (as defined below), Employee may have concerns
about the continuation of his employment status and responsibilities and may be
approached by others with employment opportunities, and desires to provide
Employee some assurance as to the continuation of his employment status and
responsibilities on a basis consistent with that which he has earned in the
event of such possible or threatened change in control. Further:

 

  Ÿ   Corporation desires to assure that if a possible change in control
situation arises and Employee is involved in deliberations or negotiations in
connection therewith, that Employee will be in a secure position to consider and
negotiate such transaction as objectively as possible and without implied threat
to his financial well-being.

 

  Ÿ   Corporation is concerned about the possible effect on Employee of the
uncertainties created by any proposed change in control of Corporation.

 

  Ÿ   Employee is willing to continue to serve but desires that in the event of
such a change in control he will continue to have the responsibility, status,
income, benefits and perquisites that he received immediately prior to that
event.

 

        6.02.    Change in Control. The provisions of Sections 6.03, 6.04, and
6.05 of this Agreement shall become operative upon a change in control of
Corporation, as hereinafter

 

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defined. For purposes of this Agreement, a “change in control” shall be deemed
to have occurred if and when:

 

(a)    Subsequent to the date of this Agreement, any person or group of persons
acting in concert shall have acquired ownership of or the right to vote or to
direct the voting of shares of capital stock of Corporation representing 30% or
more of the total voting power of Corporation, or

 

(b)    Corporation shall have merged into or consolidated with another
corporation, or merged another corporation into corporation, on a basis whereby
less than 50% of the total voting power of the surviving corporation is
represented by shares held by former shareholders of Corporation prior to such
merger or consolidation, or

 

(c)    Corporation shall have sold more than 50% of its assets to another
corporation or other entity or person, or

 

(d)    As the result of, or in connection with, any cash tender or exchange
offer, merger or other business combination, sale of assets or contested
election, the persons who were Directors of Corporation before such transaction
cease to constitute a majority of Directors of Corporation.

 

6.03.    Acceleration of Options Upon Change in Control. In the event of a
change in control (without regard to whether the Employee’s employment is
terminated by reason of the change in control), all outstanding options held by
Employee, both exercisable and nonexercisable, shall be immediately exercisable
regardless of the time the option has been held by Employee and shall remain
exercisable until their original expiration date, subject to applicable
requirements of the Internal Revenue Code (the “Code”).

 

6.04.    Termination Within Eighteen (18) Months. In the event that the
employment of Employee with Corporation is terminated involuntarily, other than
for gross misconduct, within eighteen (18) months after a change in control
occurs:

 

(a)    Employee shall be entitled to receive an amount of cash equal to the sum
of the following amounts:

 

(i)    five (5) times his annual salary at his rate on the date of termination
of employment (but not less than five (5) times Employee’s annual salary prior
to the change in control); and

 

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(ii)    an amount equal to five (5) times the annual amount of Corporation’s
matching contributions with respect to Employee’s Employee-Directed
Contributions to the C-COR.net Corp. Retirement Savings and Profit Sharing Plan
(the “401(k) Plan”) and deferral contributions to the C-COR.net Corp.
Supplemental Executive Retirement Plan (the “SERP”), determined based on the
rate(s) of Corporation’s matching contribution(s) and the rate(s) of Employee’s
deferral contribution(s) to the 401(k) Plan and SERP, as applicable, on the date
of Employee’s termination of employment (but not less than such rates as in
effect on the date immediately preceding the change in control). Such amount
shall be paid to Employee in a single sum in cash and shall not be contributed
to either the 401(k) Plan or the SERP; and

 

(iii)    if Employee terminates employment with Corporation during but before
the last day of a plan year for which Corporation makes an Employer
Discretionary Contribution to the 401(k) Plan, an amount equal to the amount
that would have been contributed as an Employer Discretionary Contribution to
the 401(k) Plan with respect to the Employee, based on his actual compensation
for the plan year taken into account for purposes of the 401(k) Plan, and
assuming that he had satisfied all other requirements (e.g., 1000 hours,
employment on the last day of the plan year) needed to share in the allocation
of such contribution. Such amount will be paid to Employee as soon as
practicable after the Corporation’s Employer Discretionary Contribution for the
plan year is paid to the 401(k) Plan; and

 

(iv)    if Employee terminates employment with Corporation prior to acquiring a
100% nonforfeitable interest in, as applicable, his Employer Matching
Contribution Account and Employer Discretionary Contribution Account under the
401(k) Plan and/or his Employer Matching Contribution Account under the SERP, an
amount equal to the fair market value of the nonvested portion of such
account(s) under the 401(k) Plan and the SERP, determined as of the date
Employee terminates employment with Corporation and including the value of any
investment carnings accrued with respect to the nonvested portion of such
account(s) which have accrued but are unallocated as of such date; provided,
however, that if Employee should be re-employed by Corporation and receive the
restoration of the nonvested portion of his Employer Matching Contribution
Account and/or Employer

 

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Discretionary Contribution Account under the 401(k) Plan, then Employee shall be
obligated, within 30 days of Corporation’s demand following such restoration, to
repay the full amount that had been paid to him under this Section 6.04(a)(iv)
representing the fair market value of his nonvested account(s) under the 401(k)
Plan.

 

(b)    Employee shall be entitled to receive an amount of cash equal to five (5)
times the average of the Profit Incentive Plan or the successor to such plan
(“PIP”) payments of the last five (5) years awarded to him under the PIP of
Corporation pursuant to the terms of such PIP as in effect immediately prior to
such change in control. Such amount will be paid to Employee within ten (10)
days after termination of Employee’s employment. If Employee has not received
PIP payments for twenty (20) full quarters at the officer level, the average
annual PIP will be calculated by averaging the number of full quarters for which
Employee’s officer level PIP has been accrued (whether already paid or not paid)
and annualizing that amount.

 

(c)    Employee shall continue for a period of five (5) years from the date of
his termination to be covered at the expense of Corporation by the same or
equivalent health, dental, accident, life and disability insurance coverages as
he was enrolled in immediately prior to termination of his employment; provided,
however, that Employee may elect to be paid in cash within thirty (30) days
after termination of his employment an amount equal to Corporation’s cost of
providing such coverages during such period.

 

(d)    On the date of termination, Employee shall become eligible for the
benefits payable under Section 2.04 (Additional Retirement Benefit) of this
Agreement and such benefits shall be paid to Employee, or if applicable,
Employee’s beneficiary, in the same manner, amounts and intervals as if Employee
had, on the date of his termination of employment following a change in control,
met the age and service requirements for normal retirement as defined in Section
2.04 of this Agreement. In the event the Employee’s benefit from Section 2.04
Additional Retirement Benefit of this Agreement begins to be paid before normal
retirement, it shall not be actuarially adjusted to reflect its early
commencement.

 

(e)    All outstanding options held by Employee, both exercisable and
nonexercisable, shall be immediately exercisable regardless of the time the
option has been

 

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held by Employee and shall remain exercisable until their original expiration
date, subject to applicable requirements of the Code.

 

6.05.    Other Events.    If Employee resigns from Corporation within eighteen
(18) months after a change in control due to a “Good Reason”, Employee shall be
entitled to receive all payments and enjoy all of the benefits specified in
Section 6.04 hereof. For purposes of this Agreement, a “Good Reason” shall be if
any one or more of the following events has occurred between the change in
control and Employee’s resignation:

 

(a)    A reduction or alteration in the nature or status of Employee’s
authorities, duties or responsibilities from those in effect immediately prior
to the change in control; or

 

(b)    If the base salary paid by Corporation to Employee is reduced by more
than ten (10%) percent from his salary immediately prior to the change in
control; or

 

(c)    If Corporation requires Employee to relocate his principal place of work
to a location more than forty (40) miles from Employee’s former place of work.

 

6.06.    Excise Tax Gross-Up.    

 

(a)    Notwithstanding any contrary provision in this Agreement, in the event it
shall be determined that (i) any payment by Corporation to or for the benefit of
Employee pursuant to Sections 6.04, 6.05 of this Agreement, or a portion thereof
(a “Payment”), or (ii) any actual or deemed compensation income to Employee, for
purposes of Section 280G of the Code, resulting from the acceleration of the
exercisability of the Employee’s outstanding options pursuant to Section 6.03 of
the Agreement (“Option Income”), would be subject to the excise tax imposed by
Section 4999 of the Code (relating to excess parachute payments as described in
Section 280G of the Code) (the “Excise Tax”), Employee shall be entitled to
receive from Corporation an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by Employee of all taxes (but not including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax, imposed upon the Gross-Up Payment, Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment and Option
Income.

 

(b)    All determinations required to be made under this Section 6.06, including
whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and
amounts relevant to the last sentence of this Section 6.06(b), shall be made by
the firm of

 

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independent accountants engaged to audit Corporation’s financial statements (the
“Accounting Firm”) which shall provide its determination (the “Determination”),
together with detailed supporting calculations regarding the amount of any
Gross-Up Payment and any other relevant matter, both to Corporation and Employee
within thirty (30) business days after (i) in the case of Option Income, the
date of the change in control or such later date as such Option Income is
treated as a payment in the nature of compensation for purposes of Section 280G
of the Code, or (ii) the date Employee terminates employment with the
Corporation and is eligible for Payments under Section 6.04 or 6.05 of this
Agreement (or such earlier time as is requested by Corporation). If the
Accounting Firm determines that no Excise Tax is payable by Employee, it shall
furnish Employee with a written statement that such Accounting Firm has
concluded that no Excise Tax is payable (including the reasons therefore) and
that he has substantial authority not to report any Excise Tax on his federal
income tax return. If a Gross-Up Payment is determined to be payable, it shall
be paid to Employee within ten (10) business days after the Determination is
delivered to Corporation. Any determination by the Accounting Firm shall be
binding upon Corporation and Employee with respect to Corporation’s obligation
to pay the Gross-Up Payment, absent manifest error. As a result of uncertainty
in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that a Gross-Up
Payment not made by Corporation should have been made (an “Underpayment”), or
that a Gross-Up Payment will have been made by Corporation which should not have
been made (an “Overpayment”). In either such event, the Accounting Firm shall
determine the amount of the Underpayment or Overpayment that has occurred. In
the case of an Underpayment, following a final determination by a court or the
Internal Revenue Service that any portion of the Payment or Option Income is
subject to Excise Tax, the amount of such Underpayment shall be promptly paid by
Corporation to or for the benefit of Employee. In the case of an Overpayment,
Employee shall, at the direction and expense of Corporation, take such steps as
are reasonably necessary (including the filing of returns and claims for
refund), follow reasonable instructions from, and procedures established by,
Corporation, and otherwise reasonably cooperate with Corporation to correct such
Overpayment; provided,however, that (i) Employee shall not in any event be
obligated to return to Corporation an amount greater

 

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than the net after-tax portion of the Overpayment that he has retained or has
recovered as a refund from the applicable taxing authorities and (ii) this
provision shall be interpreted in a manner consistent with the intent of Section
6.06(a), which is to make Employee whole, on an after-tax basis, from the
application of the Excise Tax, it being understood that the correction of an
Overpayment may result in Employee repaying to Corporation an amount which is
less than the Overpayment.

 

        6.07.    Agreements Not Exclusive. The specific agreements referred to
in this Section VI are not intended to exclude Employee’s participation in other
benefits available to executive personnel generally or to preclude other
compensation benefits as may be authorized by the Board of Directors of
Corporation at any time and shall be in addition to such compensation and
benefits.

 

        6.08.    Enforcement Costs. Corporation is aware that upon the
occurrence of a change in control, the Board of Directors or a shareholder of
Corporation may then cause or attempt to cause Corporation to institute, or may
institute, litigation seeking to have this Section VI declared unenforceable, or
may take, or attempt to take, other action to deny Employee the benefits
intended under this Section VI. In these circumstances, the purpose of this
Section VI could be frustrated. It is the intent of Corporation that Employee
not be required to incur the expenses associated with the enforcement of his
rights under this Section VI by litigation or other legal action because the
cost and expense thereof would substantially detract from the benefits extended
to Employee hereunder, nor be bound to negotiate any settlement of his rights
hereunder under threat of incurring such expenses. Accordingly, if following a
change in control, it should appear to Employee that Corporation has failed to
comply with any of its obligations under this Section VI or in the event that
Corporation or any other person takes any action to declare this Agreement void
or unenforceable, or institutes any litigation or other legal action designed to
deny, diminish or to recover from Employee the benefits intended to be provided
to Employee hereunder and that Employee has complied with all reasonable
obligations related to Employee’s employment with Corporation, Corporation
irrevocably authorizes Employee from time-to-time to retain counsel of his
choice at the direct expense and liability of Corporation as provided in this
Section 6.08 to represent Employee in connection with the initiation or defense
of any litigation or other legal action,

 

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whether by or against Corporation or any director, officer, shareholder or other
person affiliated with Corporation, in any jurisdiction. Notwithstanding any
existing or prior attorney-client relationship between Corporation and such
counsel, the Corporation irrevocably consents to Employee entering into an
attorney-client relationship with such counsel, and in that connection
Corporation and Employee agree that a confidential relationship shall exist
between Employee and such counsel. The reasonable fees and expenses of counsel
selected from time-to-time by Employee as hereinabove provided shall be paid or
reimbursed to Employee by Corporation on a regular, periodic basis upon
presentation by Employee of a statement or statements prepared by such counsel
in accordance with its customary practices up to a maximum aggregate amount of
$500,000, said amount to be “grossed up” to cover federal and state income
taxes. The amount of the gross up shall be calculated in accordance with the
following formula: A/ (1-R), where A is the amount of legal fees and R is the
combined highest marginal tax rate applicable to Employee in the tax year that
the payment is made.

 

        6.09.    No Set-Off. Corporation shall not be entitled to set-off
against the amount payable to Employee any amounts earned by Employee in other
employment after termination of his employment with Corporation, or any amounts
which might have been earned by Employee in other employment had he sought other
employment. The amounts payable to Employee under this Section VI shall not be
treated as damages but as severance compensation to which Employee is entitled
by reason of termination of his employment in the circumstances contemplated by
this Agreement. However, a set-off may be taken by Corporation against the
amounts payable to Employee for expenses covering the same or equivalent
hospital, medical, accident, and disability insurance coverages as set forth in
Section 6.04(c) of this Section VI if such benefits are paid for Employee by a
new employer after Employee’s termination of employment by Corporation under
Section 6.04 hereof or after Employee’s resignation under Section 6.05 hereof.

 

        6.10.    Successors and Assigns. The provisions of this Section VI shall
be binding upon and inure to the benefit of Corporation and its successors and
assigns, and shall be binding upon and inure the benefit of Employee and his
legal representatives, heirs, and assigns. Corporation shall require any
successor or surviving entity in any change in control

 

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(“Successor”), by agreement in form and substance satisfactory to Employee,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that Corporation would be required to perform if no such
succession had taken place. Regardless of whether such agreement is executed,
this Agreement shall be binding upon any Successor in accordance with the
operation of law and such Successor shall be deemed “Corporation” for purposes
of this Agreement. This Agreement shall inure to the benefit of and be
enforceable by Employee and his personal or legal representative, executors,
administrators, successors, heirs, distributes, devisees and legatees.

 

SECTION VII

 

Miscellaneous

 

        7.01.    Use of Name. Employee agrees to allow Corporation to have his
name or picture used by Corporation for advertising or trade purposes during the
Term of this Agreement.

 

        7.02.    Binding Effect. This Agreement shall inure to the benefit of
and be binding upon Employee and upon Corporation, their successors and assigns,
including, without limitation, any person, partnership, company or corporation
which may acquire substantially all of Corporation’s assets or business or into
which Corporation may be consolidated, merged or otherwise combined.

 

        7.03.    Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the Commonwealth of Pennsylvania.

 

        7.04.    Legal Construction. In the event any one or more of the
provisions contained in this Agreement shall for any reason beheld invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision thereof and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.

 

        7.05.    Amendment. No amendment, modification or alteration of the
terms hereof shall be binding unless the same be in writing, dated subsequent to
the date hereof and duly executed by the parties hereto.

 

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        7.06.    Integration. This Agreement constitutes the entire
understanding and agreement between Corporation and Employee with regard to the
subject matter hereof and supersedes all other agreements and understandings
between Corporation and Employee.

 

        7.07.    Severability. In the event that any section, clause or other
provision of this Agreement shall be determined to be invalid or unenforceable
in any jurisdiction for any reason, such section, clause or other provision
shall be enforceable in any other jurisdiction in which valid and enforceable
and, in any event, the remaining sections, clauses and other provisions of this
Agreement shall be unaffected and shall remain in full force and effect to the
fullest extent permitted by law.

 

        7.08.    Headings. The headings used in this Agreement are for ease of
reference only and are not intended to affect the meaning or interpretation of
any of the terms hereof.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement with
the intent to be legally bound thereby on the day and year first above written.

 

CORPORATION:

C-COR.net CORP.

By:    /s/ Donald M. Cook                                           

Print Name:    Donald M. Cook                                

Title:    Chair, Compensation                                     

EMPLOYEE:

                        /s/  David A. Woodle                        

DAVID A. WOODLE

 

 

 

 

 

 

 

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