Letter Agreement between VMware, Inc. and Dawn Smith



 Exhibit 10.28 
 Dawn Smith 
 Dear Dawn, 
 We are pleased to offer you a position with VMware, Inc. (the “Company”) as Senior Vice President and General Counsel, commencing on a mutually agreed upon date to be determined. You will report
to the Office of the President. Your annual salary of $400,000 will be paid semi-monthly in accordance with the Company’s normal payroll procedures. You will be eligible to participate in the Company’s benefit plans and programs, as they
may be amended from time to time in the sole discretion of the Company, which are available to the Company’s full-time regular employees in similarly situated positions. 
 You will be eligible to earn a performance bonus in accordance with VMware’s executive bonus program as it may be amended from time to time. Currently, you will be eligible for a target bonus of 75%
on an annualized basis, which will be paid semi-annually on a prorated basis from your date of hire through the end of the bonus period. 
 As a
key employee of VMware, a recommendation will be made to the Compensation and Corporate Governance Committee of the VMware Board (the “Committee”) that you be granted an option to purchase shares of VMware Class A common stock and
restricted stock units as detailed below at a meeting of the Committee after your date of hire. The vesting, exercise price and other terms of the stock option and restricted stock units, as applicable, will be set by the Committee at that meeting.
Any stock option and restricted stock units granted to you will be governed by the terms and conditions of the applicable grant agreement and the VMware 2007 Equity and Incentive Plan. The details of the grant recommendation are as follows:

 Stock Option 
 You will be recommended for an option to purchase 90,000 shares of VMware Class A common stock. Subject to the terms of the applicable stock plan, this stock option will vest over four years, with
25% of the shares subject to the option vesting on the first anniversary of the date of grant and monthly thereafter at a rate of 2.0833% of the shares subject to the option. The option exercise price will be equal to the fair market value of VMware
Class A common stock on the date of the grant. 
 Restricted Stock Units 
 You will be recommended for a grant of 35,000 restricted stock units. Subject to the terms of the VMware 2007 Equity and Incentive Plan,
these restricted stock units will vest over four years, with 25% of the restricted stock units vesting on each anniversary of the date of grant. 
 Change in Control 
 If there is a Change in Control (as defined
below), in lieu of any other severance or termination compensation (unless otherwise required by law), 100% of any unvested RSUs (from the recommended grant of 35,000 RSUs, described above) and 100% of any unvested stock options (from the
recommended grant of 90,000 shares, described above) will become immediately vested (“Change-in-Control Acceleration”) in the event that: 
 1. The Company terminates your employment without Cause (as defined below) during the first twelve months after a Change in Control, or 







 2. You terminate your employment for Good Reason (as defined below) during the first twelve
months after a Change in Control. 
 Certain Terminations 
 If the Company terminates your employment without Cause or you terminate your employment with Good Reason and the paragraphs in the
“Change in Control” section above do not apply to such termination of termination of employment, then 50% of any unvested RSUs (from the grant of 35,000 RSUs, described above) and 50% of any unvested stock options (from the grant of
90,000, described above) will become immediately vested upon such termination. 
 Definitions 
 1. For purposes of this offer letter agreement, a Change in Control will be deemed to have occurred if: 
 (a) any Person (as defined below), is or becomes the Beneficial Owner (within the meaning set forth in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (“the Exchange Act”)), directly or indirectly, of securities of the Company representing 35% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the
Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with (b) below; 
 (b) there is consummated a merger or consolidation of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting
power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or
its affiliates) representing 35% or more of the combined voting power of the Company’s then outstanding securities; or 
 (c) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s
assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company immediately prior to such sale. 
 Notwithstanding anything
in the foregoing to the contrary, no Change in Control shall be deemed to have occurred for purposes of this offer letter agreement by virtue of (i) any transaction which results in you, or a group of Persons in which you have a substantial
interest, acquiring, directly or indirectly, 35% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s 
  

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 then outstanding securities or (ii) EMC Corporation’s (“EMC”) distribution of the
Company’s shares in a transaction intended to qualify as a distribution under section 355 of the Internal Revenue Code of 1986, as amended. 
 2. For purposes of this offer letter agreement, the occurrence of any of the following shall constitute “Cause,” provided that you have been given notice by the Company of the existence of Cause
and, if the existence of Cause is curable, a reasonable opportunity to cure the existence of such Cause: 
 (a) willful neglect,
failure or refusal by you to perform your employment duties (except resulting from your incapacity due to illness) as reasonably directed by the Company; 
 (b) willful misconduct by you in the performance of your employment duties; 
 (c)
your indictment for a felony (other than traffic related offense) or a misdemeanor involving moral turpitude; 
 (d) your
commission of an act involving personal dishonesty that results in financial, reputational, or other harm to the Company and/or its affiliates and/or its subsidiaries, including, but not limited to, an act constituting misappropriation or
embezzlement of property; or 
 (e) your material violation of VMware’s Key Employee Agreement and/or a material violation
of any other VMware policies including but not limited to the Business Conduct guidelines. 
 The determination of Cause will be
made by the Company in its sole discretion. 
 3. For purposes of this offer letter agreement, “Person” shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) EMC, the Company or any of their respective subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company or any of its affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities and (iv) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. 
 4. For purposes of this offer letter agreement, “Good Reason” for termination by you of your employment shall mean the occurrence (without your express written consent) of any of the following:

 (a) any materially adverse alteration in your roles, titles, reporting relationship or in the nature or status of your
responsibilities including, without limitation, if you no longer serve as the General Counsel of a public entity; 
 (b) a
material diminution by the Company in your Base Salary (excluding a reduction that also is applied to all other executive officers of the Company and that reduces your Base Salary by a percentage reduction that is no greater than the lowest
percentage reduction applied to any other executive officer); or a material diminution by the Company in your aggregate annual bonus target; 
 (c) the relocation of your principal place of employment to a location more than seventy-five (75) miles from your principal place of employment immediately prior to such relocation; or 

 

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 (d) a material breach of this letter agreement. 
 In order for you to invoke a termination due to Good Reason following a Change in Control, as described above, (A) you must provide written notice to
the senior officer of VMware’s Human Resources group of your intention to terminate due to such condition within 90 days of the initial existence of such condition and provide VMware with 30 days from receipt of the notice to remedy such
condition, and (B) VMware must fail to remedy such condition within the 30 day cure period. 
 The intent of the parties is that payments
and benefits under this letter agreement comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder (collectively “Section
409A”) and, accordingly, to the maximum extent permitted, this letter agreement shall be interpreted to be in compliance therewith. If any provision of this letter agreement (or of any award of compensation, including equity compensation or
benefits) would cause you to incur any additional tax or interest under Section 409A, the Company shall, after consulting with and receiving your approval (which shall not be unreasonably withheld), reform such provision; provided that the
Company agrees to maintain, to the maximum extent practicable, the original intent and economic benefit to you of the applicable provision without violating the provisions of Section 409A. 
 A termination of employment shall not be deemed to have occurred for purposes of any provision of this letter agreement providing for the payment of any
amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of
Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” If you are deemed on the date
of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under
Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (i) the expiration of the six (6)-month period measured from the date of such
“separation from service” and (ii) the date of your death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this paragraph (whether they would have otherwise been
payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you in a lump sum with interest at the prime rate as published in the Wall Street Journal on the first business day of the Delay Period, and any
remaining payments and benefits due under this letter agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. 
 All expenses or other reimbursements provided herein that are taxable income to you shall in no event be paid later than the end of the calendar year next following the calendar year in which you incur
such expense. With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, of in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because such expenses are subject to a
limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of your taxable year following the taxable year in which the expense occurred. Any tax gross-up payment as provided herein
shall be made in any event no later than the end of the calendar year immediately following the calendar year in which you remit the related taxes, and any reimbursement of expenses incurred due to a tax audit or litigation shall be made no later
than the end of the calendar year 
  

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 immediately following the calendar year in which the taxes that are the subject of the audit or litigation
are remitted to the taxing authority, or, if no taxes are to be remitted, the end of the calendar year following the calendar year in which the audit or litigation is completed. 
 For purposes of Section 409A, your right to receive any installment payments shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this letter
agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within sixty (60) days following the date of termination”), the actual date of payment within the specified period shall be within
the sole discretion of the Company. 
 A one-time sign-on bonus of $100,000, net of taxes, payable within forty-five (45) days following
your date of hire. Should your employment with VMware terminate voluntarily without Good Reason or with Cause within one year, the bonus must be repaid. No repayment would be required for termination after one year of employment. 
 The Company agrees to provide assistance to you in securing and maintaining authorization for employment in the U.S. in accordance with the terms of our
Immigration Policy, a copy of which is included with this letter. You will be asked to sign this document on your first day of employment with the Company. Furthermore, given the nature of your particular immigration situation, the company retains
sole discretion to determine what efforts, if any, it will take to secure or maintain your future authorization for employment in the U.S., if and when your permission to work in the U.S. has otherwise lapsed. 
 You should be aware that your employment with the Company is for no specified period and constitutes at will employment. As a result, you are free to resign
at any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause, and with or without notice. 
 You agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business
activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. 
 On your first day of employment you will be asked to submit verification of your legal right to work in the U.S., and to sign and comply with our Key
Employee Agreement which requires, among other provisions, the assignment of patent rights to any invention made during your employment at VMware and non-disclosure of proprietary and confidential information. As a VMware employee, you will be
expected to abide by company rules and regulations. 
 In the event that the payments and benefits provided to you herein or otherwise by the
Company constitute “parachute payments” within the meaning of Section 280G of the Code and would, but for this provision, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then your
payments and benefits shall be either (i) delivered in full or (ii) delivered as to such lesser extent, as you may elect, as would result in no portion of such amounts being subject to the Excise Tax, whichever of the foregoing results in
the receipt by you on an after-tax basis of the greatest amount, notwithstanding that all or some of the amounts may be taxable under Section 4999 of the Code. If a reduction is to occur pursuant to the prior sentence, unless an alternative
election is permitted by, and does not result in taxation under, Section 409A and timely elected by you, the payments and benefits shall be cutback in the following order: any cash severance you are entitled to (starting with the last payment
due), then other cash amounts that are parachute payments (starting with the last payment due), then any stock options that have exercise prices higher than the then fair market value price of the stock (based on the latest vesting tranches), then
restricted stock and restricted stock units based on the last ones scheduled to be distributed and then other stock options based on the latest vesting tranches. 
  

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 To indicate your acceptance of the Company’s offer, please sign and date this letter in the space
provided below and return it to me. A duplicate original is enclosed for your records. This offer letter, along with the Employee Agreement and the Employment, Confidential Information, Invention Assignment Agreement and Business Conduct Guidelines,
contains all of the terms, promises, representations, and understandings between the parties, and supersedes any other oral or written agreement or understandings between the parties regarding these matters prior to the date hereof. This offer
letter may not be modified or amended except by a written agreement, signed by an officer of the Company and by you. This offer expires seven (7) days from the date of this letter. 
 We are looking forward to having you join VMware. 
  

	
	Sincerely,
	
	 /s/    Betsy Sutter

	Betsy Sutter
	Senior Vice President, Human Resources

 ACCEPTED AND AGREED TO this 16th day of
September, 2009. 
  

					
	 /s/    Dawn Smith
	 	Start Date:                     	  	
	(Employee Signature)	 		  	

  

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