Document:

INFA-2013.09.30-10Q-Ex10.1

EXHIBIT 10.1

August 4, 2013

Anil Chakravarthy
[Address]

Dear Anil,
I am pleased to offer you the position of EVP and Chief Product Officer with Informatica Corporation. In this capacity, you will report to Sohaib Abbasi, CEO and President. 
The compensation portion of your package consists of:
		
	•
	A base salary of $410,000 

		
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	An annual target bonus of 90% of your base salary, paid semi-annually and contingent on meeting company  objectives 

		
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	You will also be recommended to receive 75,000 Restricted Stock Units (RSUs) and 175,000 non-qualified stock options. For additional details, please read and sign the Informatica Equity Grant Addendum below.

For the first payment of your bonus, payable in February 2014 and tied to corporate performance in H2 2013, you will be guaranteed a minimum payment of 80% of your pro rated target bonus. The target bonus will be pro rated based on your start date and associated tenure of employment during the applicable performance period. Should the company payout level be higher than 80%, you will receive a pro rated bonus paid at the higher achieved amount. 
In addition to your salary, you will be eligible for standard company benefits. These benefits will be available to you on your date of hire. You will also be eligible to participate in the Company's 401(k) and Employee Stock Purchase Plans.
As a senior officer of the Company, you will also be entitled to participate in the Company’s executive severance plan. A copy of the Executive Severance Agreement is enclosed for your review and signature. 
After reading this letter, and the enclosed Proprietary Agreement, indicate your acceptance of these employment terms by signing both documents. In addition, please complete the enclosed required new hire forms and return this letter, the agreement, and the new hire forms to our office as indicated below. This offer and the agreement enclosed herewith are valid through August 5th, 2013 after which time this offer shall lapse.
California is an employment at will state. As such, your employment is at the mutual consent of both you and the Company and you are free to resign at any time, just as Informatica is free to terminate your employment at any time, with or without cause, and with or without notice.
This offer is contingent upon your ability to provide us with identification as proof of your right to work in the United States. We are required by law to view your identification and complete the appropriate documentation for our records. It is mandatory for you to present this identification within 3 working days of your hire date. Failure to do so can result in a delay of your ability to begin work. By agreeing to this offer you also confirm that there are no restrictions or limitations on your ability and right to work for Informatica Corporation or to work in the data integration and management technology space by virtue of any agreements with or obligations to your current employer or previous employers.  Furthermore, this offer and your employment with Informatica are contingent upon a background check.
Please contact either myself or our Benefits Department on your first day of employment to schedule a Benefits Orientation (866) 463-2474.

Please advise me of your start date once you have agreed it with Sohaib.
Please fax a copy of the signed offer letter to me at [FAX] (confidential fax)
and
Please also fax the following documents or bring them on your first day:
		
	◦
	Employee Proprietary Information & Inventions Agreement 

		
	◦
	Background Check Release Authorization 

		
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	New Employee Information 

		
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	Voluntary Self-Identification 

		
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	Form W-4 

		
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	Complete Section 1 of Form I-9 (Employment Eligibility Verification) 

		
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	Present identification for Form I-9 upon hire date 

I look forward to working with you and, on behalf of the company and its employees, extend a warm welcome to you.

Sincerely, 

/s/ Jo Stoner
Jo Stoner
SVP Worldwide Human Resources

	
				
	 
	Anil Chakravarthy
	/s/ Anil Chakravarthy
	 

	 
	Date:
	August 5, 2013
	 

Informatica Equity Grant Addendum
Upon the commencement of your employment with Informatica, it will be recommended to the Compensation Committee of Informatica’s Board of Directors (the “Committee”) that you be granted 75,000 restricted stock units under Informatica’s 2009 Equity Incentive Plan, as amended (the “Plan”). The Committee typically meets during the first month of each quarter. The grant date for the approved restricted stock units will typically be set as the first business day in the month following the approval meeting (provided such date is during an open trading window). Your restricted stock units will vest over a four year period in 25% increments on each annual anniversary of the grant date, subject to your continued service with Informatica on each vesting date. Your grant of restricted stock units will be subject to the terms and conditions of the Plan and a standard award agreement under the Plan. You will receive further information about your restricted stock unit award at a later date. 
In addition, upon the commencement of your employment with Informatica, it will be recommended to the Committee that you be granted a non-qualified stock option under the Plan to purchase 175,000 shares. The grant date for the approved stock options will be typically set as the first business day in the month following the approval meeting (provided such date is during an open trading window) and the strike price will be equal to the closing market price on that date. Your stock options will commence vesting on your employment start date and will vest in equal monthly installments over the next four years, all subject to your continued service with Informatica on each vesting date. Your grant of stock options will be subject to the terms and conditions of the Plan and a standard award agreement under the Plan. You will receive further information about your stock option grant at a later date. 
Both the grant of restricted stock units and the non-qualified stock options are subject to the appropriate documentation that will confirm the action taken by the Committee in connection with these grants. The Plan’s administrator will provide you with this documentation following the approval of the equity. 
Please keep in mind that this proposed grant of equity award(s) is only a recommendation to the Committee. The information about the grant(s) provided in the paragraph above should not be construed as a guaranteed grant because no grant can be made to you unless the Board specifically authorizes it and unless you properly execute the appropriate documentation that will confirm the action taken by the Board in connection with the grant. Your participation in, and your rights under, the applicable Informatica employee equity program (and its terms) do not form part of your terms and conditions of employment with your employer nor do they provide a right of continued employment with your employer. Similarly, notwithstanding that the equity plan participation is through Informatica, it does not give rise and should not be construed as giving rise to any employment relationship between you and Informatica. 
	
				
	 
	/s/ Anil Chakravarthy
	 
	August 5, 2013

	 
	Anil Chakravarthy
	 
	Date

INFORMATICA CORPORATION
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement (“Severance Agreement”) is entered into as of the last date signed below (the “Effective Date”) by and between Informatica Corporation (the “Company”) and Anil Chakravarthy (the “Executive”) (collectively, the “Parties”).

NOW, THEREFORE, for good and valuable consideration, the Parties agree as follows:
1.At-Will Employment.  Executive and the Company agree that Executive’s employment with the Company constitutes “at-will” employment.  Executive and the Company acknowledge that this employment relationship may be terminated at any time, upon written notice to the other party, with or without good cause or for any or no cause, at the option either of the Company or Executive.  However, as described in this Severance Agreement, Executive may be entitled to severance benefits depending upon the circumstances of Executive’s termination of employment.  Upon the termination of Executive’s employment with the Company for any reason, Executive will be entitled to payment of all accrued but unpaid vacation, expense reimbursements, and other benefits due to Executive through his termination date under any Company-provided or paid plans, policies, and arrangements.  Executive agrees to resign from all positions that he holds with the Company immediately following the termination of his employment if the Board so requests.
2.Term of Agreement.  This Severance Agreement will have an initial term of two years commencing on the Effective Date.  On the second anniversary of the Effective Date, and on each annual anniversary of the Effective Date thereafter, this Severance Agreement automatically will renew for an additional one-year term unless the Company provides Executive with notice of non-renewal at least 90 days prior to the date of automatic renewal.
3.Severance.
(a)Termination Without Cause or Resignation for Good Reason in Connection with a Change of Control.  If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, and the termination is in Connection with a Change of Control, then, subject to Section 4, Executive will receive: (i) continued payment of his base salary for a period of twelve (12) months (the “Continuance Period” if Executive is entitled to receive payments under this Section 3(a)), (ii) a lump sum payment equal to 100% of Executive’s annual on-target bonus, commissions or variable earnings, assuming Company performance at 100% of target for Company bonus determination, (iii) reimbursement for any applicable premiums to continue coverage for Executive and Executive’s eligible dependents under the Company’s Benefit Plans for the Continuance Period, or, if earlier, until Executive is eligible for similar benefits from another employer (provided Executive validly elects to continue coverage under applicable law), and (iv) immediate vesting with respect to all unvested equity awards that were or are granted prior to or after the date hereof. 
(b)Termination Without Cause or Resignation for Good Reason Not in Connection with a Change of Control.  If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason during the period beginning on September 4th 2013 and ending on September 3rd 2014, and the termination is not in Connection with a Change of Control, then, subject to Section 4, Executive will receive (i) a lump-sum payment equal to his base salary for a period of six (6) months, (ii) a lump sum payment equal to 50% of Executive’s annual on-target bonus, commissions or variable earnings, assuming Company performance at 100% of target for Company bonus determination, and (iii) reimbursement for any applicable premiums to continue coverage for Executive and Executive’s eligible dependents under the Company’s Benefit Plans for the Severance Period, or, if earlier, until Executive is eligible for similar benefits from another employer (provided Executive validly elects to continue coverage under applicable law).  For purposes of this Severance Agreement, “Severance Period” means the six (6) month period following such termination if Executive is entitled to receive payments under this Section 3(b).
(c)All Other Terminations.  If Executive’s employment with the Company terminates voluntarily by Executive without Good Reason or is terminated for Cause by the Company, then (i) all further vesting of Executive’s outstanding equity awards will terminate immediately, (ii) all payments of compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned), (iii) Executive will be paid all accrued but unpaid vacation, expense reimbursements and other benefits due to Executive through his termination date under any Company-provided or paid plans, policies, and arrangements, and (iv) Executive will be eligible for severance benefits only in accordance with the Company’s then established policies and practices.
(d)Termination due to Death or Disability.  If Executive’s employment terminates by reason of death or Disability, then (i) Executive will be entitled to receive benefits only in accordance with the Company’s then applicable plans, 

policies, and arrangements, and (ii) Executive’s outstanding equity awards will terminate in accordance with the terms and conditions of the applicable award agreement(s).
(e)Sole Right to Severance.  This Severance Agreement is intended to represent Executive’s sole entitlement to severance payments and benefits in connection with the termination of his employment.  To the extent Executive is entitled to receive severance or similar payments and/or benefits under any other Company plan, program, agreement, policy, practice, or the like, severance payments and benefits due to Executive under this Severance Agreement will be so reduced.
4.Conditions to Receipt of Severance; No Duty to Mitigate.  
(a)Separation Agreement and Release of Claims.  The receipt of any severance pursuant to Section 3 will be subject to Executive signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to the Company, and provided further that separation agreement and release of claims becomes effective no later than sixty (60) days following the termination date.  No severance will be paid or provided until the separation agreement and release agreement becomes effective.
(b)Timing of Payments.  Any severance payments or benefits under this Severance Agreement that would be considered Deferred Compensation Separation Benefits (as defined in Section 5) shall be paid on, or, in the case of installments, shall not commence until, the sixtieth (60th) day following Executive’s separation from service, or, if later, such time as required by Section 5.  Any installment payments that would have been made to Executive during the sixty (60) day period immediately following the Executive’s separation from service but for the preceding sentence shall be paid to Executive on the sixtieth (60th) day following the Executive’s separation from service and the remaining payments shall be made as provided in this Severance Agreement.
(c)Non-Competition.  In the event of a termination of Executive’s employment that otherwise would entitle Executive to the receipt of severance pursuant to Section 3, Executive agrees not to engage in Competition during the Continuance Period or Severance Period.  If Executive engages in Competition within such period, all continuing payments and benefits to which Executive otherwise may be entitled pursuant to Section 3 will cease immediately.
(d)Nonsolicitation.  In the event of a termination of Executive’s employment that otherwise would entitle Executive to the receipt of severance pursuant to Section 3, Executive agrees that, during the Continuance Period or Severance Period, Executive, directly or indirectly, whether as employee, owner, sole proprietor, partner, director, member, consultant, agent, founder, co-venturer or otherwise, will (i) not solicit, induce, or influence any person to modify his or her employment or consulting relationship with the Company (the “No-Inducement”), and (ii) not solicit business from any of the Company’s substantial customers and users (the “No-Solicit”).  If Executive breaches the No-Inducement or the No-Solicit, all continuing payments and benefits to which Executive otherwise may be entitled pursuant to Section 3 will cease immediately.
(e)Nondisparagement.  In the event of a termination of Executive’s employment that otherwise would entitle Executive to the receipt of severance pursuant to Section 3, Executive agrees to refrain from any disparagement, criticism, defamation, slander of the Company, its directors, or its employees, or tortious interference with the contracts and relationships of the Company.  The foregoing restrictions will not apply to any statements that are made truthfully in response to a subpoena or other compulsory legal process.
(f)No Duty to Mitigate.  Executive will not be required to mitigate the amount of any payment contemplated by this Severance Agreement, nor will any earnings that Executive may receive from any other source reduce any such payment.
5.Section 409A.  
(a)Notwithstanding anything to the contrary in this Severance Agreement, no severance payable to Executive, if any, pursuant to this Severance Agreement, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Compensation Separation Benefits”) shall be payable until Executive has a “separation from service” within the meaning of Section 409A. 
(b)Notwithstanding anything to the contrary in this Severance Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination (other than due to death), then the Deferred Compensation Separation Benefits that are payable within the first six (6) months following Executive’s separation from service shall become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s separation from service.  All subsequent Deferred Compensation Separation Benefits, if any, shall be payable in accordance with the payment schedule applicable to each payment or benefit.  Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service but prior to the six (6) month anniversary of the separation, then any payments delayed in accordance with this paragraph shall be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Compensation Separation Benefits shall be payable in accordance with 

the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under this Severance Agreement is intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.
(c)Any amount paid under this Severance Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations shall not constitute Deferred Compensation Separation Benefits for purposes of clause (b) above.
(d)Any amount paid under this Severance Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit (as defined below) shall not constitute Deferred Compensation Separation Benefits for purposes of clause (b) above.
(e)The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder shall be subject to the additional tax imposed under Section 409A, and any ambiguities herein shall be interpreted to so comply.  The Company and Executive agree to work together in good faith to consider amendments to this Severance 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 Executive under Section 409A.
6.Definitions.
(a)Benefit Plans.  For purposes of this Severance Agreement, “Benefit Plans” means plans, policies, or arrangements that the Company sponsors (or participates in) and that immediately prior to Executive’s termination of employment provide Executive and Executive’s eligible dependents with medical, dental, or vision benefits.  Benefit Plans do not include any other type of benefit (including, but not by way of limitation, financial counseling, disability, life insurance, or retirement benefits). A requirement that the Company provide Executive and Executive’s eligible dependents with coverage under the Benefit Plans will not be satisfied unless the coverage is no less favorable than that provided to Executive and Executive’s eligible dependents immediately prior to Executive’s termination of employment.  Subject to the immediately preceding sentence, the Company may, at its option, satisfy any requirement that the Company provide coverage under any Benefit Plan by instead providing coverage under a separate plan or plans providing coverage that is no less favorable or by paying Executive a lump-sum payment which is, on an after-tax basis, sufficient to provide Executive and Executive’s eligible dependents with equivalent coverage under a third party plan that is reasonably available to Executive and Executive’s eligible dependents.
(b)Cause.  For purposes of this Severance Agreement, “Cause” means (i) Executive’s act of dishonesty or fraud in connection with the performance of his responsibilities to the Company with the intention that such act result in Executive’s substantial personal enrichment, (ii) Executive’s conviction of, or plea of nolo contendere to, a felony, (iii) Executive’s willful failure to perform his duties or responsibilities, or (iv) Executive’s violation or breach of Executive’s Employee Proprietary Information and Inventions Agreement; provided that if any of the foregoing events is capable of being cured, the Company will provide notice to Executive describing the nature of such event and Executive will thereafter have 30 days to cure such event.
(c)Change of Control.  For purposes of this Severance Agreement, “Change of Control” means (i) a sale of all or substantially all of the Company’s assets, (ii) any merger, consolidation, or other business combination transaction of the Company with or into another corporation, entity, or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock of the Company (or the surviving entity) outstanding immediately after such transaction, (iii) the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company, (iv) the individuals who, at the beginning of any period of two consecutive years, constitute the Board (the “Incumbent Directors”) cease for any reason during such period to constitute at least a majority of the Board, unless the election or the nomination for election by the Company’s stockholders of a director first elected during such period was approved by the vote of at least a majority of the Incumbent Directors, whereupon such director also shall be classified as an Incumbent Director, or (v) a dissolution or liquidation of the Company.
(d)Competition.  For purposes of this Severance Agreement, Executive will be deemed to have engaged in “Competition” if Executive, without the consent of the Board, directly or indirectly provides services to (whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate officer, director, or otherwise), or has or obtains any ownership interest in or participates in the financing, operation, management, or control of, any person, firm, corporation, or business that competes with the Company.  Executive having solely an ownership interest of less than 1% of any corporation shall not be Competition.
(e)Disability.  For purposes of this Severance Agreement, Disability shall have the same defined meaning as in the Company’s long-term disability plan.

(f)Good Reason.  For purposes of this Severance Agreement, with respect to a termination that occurs on or following the date three months preceding a Change of Control, “Good Reason” means the occurrence of any of the following without Executive’s express written consent: (i) a material reduction in Executive’s position or duties other than a reduction where Executive assumes similarly functional duties on a divisional basis following a Change of Control due to the Company becoming part of a larger entity, (ii) a material reduction in Executive’s Base Salary other than a one-time reduction of not more than 10% that also is applied to substantially all of the Company’s other executive officers, (iii) a material reduction in the aggregate level of benefits made available to Executive other than a reduction that also is applied to substantially all of the Company’s other executive officers, or (iv) relocation of Executive’s primary place of business for the performance of his duties to the Company to a location that is more than 35 miles from its prior location.  In order for a resignation to qualify as for “Good Reason,” the Executive must provide the Company with written notice within sixty (60) days of the event that Executive believes constitutes “Good Reason” specifically identifying the acts or omissions constituting the grounds for Good Reason and the Company must have failed to cure such Good Reason condition within thirty (30) days following the date of such notice.
(g)In Connection with a Change of Control.  For purposes of this Severance Agreement, a termination of Executive’s employment with the Company is “in Connection with a Change of Control” if Executive’s employment is terminated during the period beginning three months prior to a Change of Control and ending twelve months following a Change of Control (the “Change of Control Period”).  Notwithstanding the foregoing, a resignation by Executive for Good Reason shall be in Connection with a Change of Control only if the event that constitutes Good Reason occurs during the Change of Control Period.
(h)Section 409A Limit.  For purposes of this Severance Agreement, “Section 409A Limit” means the lesser of two (2) times: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during Executive’s taxable year preceding the taxable year of Executive’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which Executive’s employment is terminated.
7.Assignment.  This Severance Agreement will be binding upon and inure to the benefit of (a) the heirs, executors, and legal representatives of Executive upon Executive’s death, and (b) any successor of the Company.  Any such successor of the Company will be deemed substituted for the Company under the terms of this Severance Agreement for all purposes.  For this purpose, “successor” means any person, firm, corporation, or other business entity which at any time, whether by purchase, merger, or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.  None of the rights of Executive to receive any form of compensation payable pursuant to this Severance Agreement may be assigned or transferred except by will or the laws of descent and distribution.  Any other attempted assignment, transfer, conveyance, or other disposition of Executive’s right to compensation or other benefits will be null and void.
8.Notices.  All notices, requests, demands, and other communications called for hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered personally, (b) one day after being sent by a well established commercial overnight service, or (c) four days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:
If to the Company:

Informatica Corporation
Attn: Chief Executive Officer
100 Cardinal Way
Redwood City, CA  94063
    
If to Executive:
at the last residential address known by the Company.
9.Severability.  If any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Severance Agreement will continue in full force and effect without said provision.

10.Arbitration.  The Parties agree that any and all disputes arising out of the terms of this Severance Agreement, their interpretation, and any of the matters herein released, shall be subject to binding arbitration in San Mateo County before the American Arbitration Association under its National Rules for the Resolution of Employment Disputes, supplemented by the California Code of Civil Procedure.  The Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award.  The Parties hereby agree to waive their right to have any dispute between them resolved in a court of law by a judge or jury.  This paragraph will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the Parties and the subject matter of their dispute relating to Executive’s obligations under this Severance Agreement and the Confidentiality Agreement.
11.Integration.  This Severance Agreement, together with the Employee Proprietary Information and Inventions Agreement between Executive and the Company (the “Confidential Information Agreement”) and Executive’s Company stock option and other equity agreements, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral.  No waiver, alteration, or modification of any of the provisions of this Severance Agreement will be binding unless in a writing that specifically references this Section and is signed by duly authorized representatives of the parties hereto.
12.Waiver of Breach.  The waiver of a breach of any term or provision of this Severance Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Severance Agreement.
13.Survival.  The Confidential Information Agreement and Sections 4 and 9 will survive the termination of this Severance Agreement.
14.Headings.  All captions and Section headings used in this Severance Agreement are for convenient reference only and do not form a part of this Severance Agreement.
15.Tax Withholding.  All payments made pursuant to this Severance Agreement will be subject to withholding of applicable taxes.
16.Governing Law.  This Severance Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions).
17.Acknowledgment.  Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Severance Agreement, and is knowingly and voluntarily entering into this Severance Agreement.
18.Counterparts.  This Severance Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.

IN WITNESS WHEREOF, each of the parties has executed this Severance Agreement, in the case of the Company by a duly authorized officer, as of the day and year written below.

COMPANY:
INFORMATICA CORPORATION

	
					
	By:
	/s/ Earl E. Fry
	 
	Date:
	September 6, 2013

	 
	Earl E. Fry
	 
	 
	 

	 
	Executive Vice President and CFO
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	EXECUTIVE:
	 
	 
	 

	 
	 
	 
	 
	 

	/s/ Anil Chakravarthy
	 
	Date:
	September 9, 2013

	Anil Chakravarthy
	 
	 
	 

	 
	 
	 
	 
	 

SIGNATURE PAGE TO EXECUTIVE SEVERANCE AGREEMENTExhibit 10.1

 

COMMONWEALTH REIT

 

RESTRICTED SHARE AGREEMENT

 

This Restricted Share Agreement (this “Agreement”) is made as of «DATE», «YEAR», between «NAME» (the “Recipient”) and CommonWealth REIT (the “Company”).

 

In consideration of the mutual promises and covenants contained in this Agreement, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             Grant of Shares.  Subject to the terms and conditions hereinafter set forth and the terms and conditions of the CommonWealth REIT 2012 Equity Compensation Plan, as it may be amended from time to time (the “Plan”), the Company hereby grants to the Recipient, effective as of the date of this Agreement, «NUMBER OF SHARES» of its common shares of beneficial interest, par value $.01 per share.  The shares so granted are hereinafter referred to as the “Shares,” which term shall also include any shares of the Company issued to the Recipient by virtue of his or her ownership of the Shares, by share dividend, share split, recapitalization or otherwise.

 

2.                                      Vesting; Repurchase of Shares.

 

(a)                                 Subject to Sections 2(b) and 2(c) hereof, the Shares shall vest one-fifth of the total number of Shares as of the date hereof and as to a further one-fifth of such total number of Shares on each anniversary of the date hereof for the next four calendar years.  Any Shares not vested as of any date are herein referred to as “Unvested Shares.”

 

(b)                                 Subject to Section 2(c) hereof, at the option of the Company, in the event the Recipient ceases to render significant services, whether as an employee or otherwise, to (i) the Company, (ii) the entity which is the manager or shared services provider to the Company or an entity controlled by, under common control with or controlling such entity (collectively, the “Manager”), or (iii) an affiliate of the Company (which shall be deemed for such purpose to include any other entity to which the Manager is the manager or shared services provider), all or any portion of the Unvested Shares shall be forfeited by the Recipient as of the date the Recipient ceases to render such services.  The Company may exercise such option by delivering or mailing to the Recipient (or his or her estate), at any time after the Recipient has ceased to render such services, a written notice of exercise of such option.  Such notice shall specify the number of Unvested Shares to be forfeited.

 

(c)                                  Notwithstanding anything in this Agreement to the contrary, immediately upon the occurrence of an Acceleration Event (as defined below), all of the Unvested Shares shall vest and any forfeiture or other rights of the Company described in Section 2(b) shall lapse in their entirety, and such vesting and lapse of forfeiture or other Company rights shall also immediately apply to each other common share of beneficial interest, par value $.01 per share, of the Company previously granted to the Recipient which then remains subject to comparable restrictions and rights.  For purposes of this Section 2(c), an Acceleration Event shall be deemed to occur immediately upon the 

 

 

occurrence of any of the following events: a Change in Control, a Termination Event (as each such term is defined in Exhibit A hereto) or the death of the Recipient.

 

3.                                      Legends.  Share certificates, if any, evidencing the Shares shall prominently bear legends in substantially the following terms:

 

“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT OR AN OPINION OF THE TRUST’S COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

 

THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED PURSUANT TO AN EQUITY COMPENSATION PLAN MAINTAINED BY THE TRUST.  THESE SHARES MAY BE SUBJECT TO TRANSFER AND/OR VESTING RESTRICTIONS, AND UNVESTED SHARES ARE SUBJECT TO REPURCHASE RIGHTS AND FORFEITURE CONDITIONS CONTAINED IN THE PLAN, THE RELATED GRANT OF SHARES OR AN AGREEMENT BETWEEN THE TRUST AND THE INITIAL HOLDER OF THESE SHARES.  A COPY OF APPLICABLE RESTRICTIONS, REPURCHASE RIGHTS AND FORFEITURE CONDITIONS WILL BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF THE TRUST.”

 

In the event that the Shares are not evidenced by share certificates, the share books and records of the Company shall contain a notation in substantially the following terms:

 

“THE SHARES COVERED BY THIS STATEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT OR AN OPINION OF THE TRUST’S COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

 

THE SHARES COVERED BY THIS STATEMENT WERE ISSUED PURSUANT TO AN EQUITY COMPENSATION PLAN MAINTAINED BY THE TRUST.  THESE SHARES MAY BE SUBJECT TO TRANSFER AND/OR VESTING RESTRICTIONS, AND UNVESTED SHARES ARE SUBJECT TO REPURCHASE RIGHTS AND FORFEITURE CONDITIONS CONTAINED IN THE PLAN, THE RELATED GRANT OF SHARES OR AN AGREEMENT BETWEEN THE TRUST AND THE INITIAL HOLDER OF THESE SHARES. A COPY OF APPLICABLE RESTRICTIONS, REPURCHASE RIGHTS AND FORFEITURE CONDITIONS WILL BE FURNISHED TO THE HOLDER OF 

 

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THE SHARES COVERED BY THIS STATEMENT WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF THE TRUST.”

 

Certificates evidencing Shares and Shares not evidenced by certificates shall also bear or contain, as applicable, legends and notations as may be required by the Plan or the Company’s declaration of trust, any applicable supplement thereto or bylaws, each as in effect from time to time, or as the Company may otherwise determine appropriate.

 

Promptly following the request of the Recipient with respect to any Shares (or any other common share of beneficial interest, par value $.01 per share, of the Company previously granted to the Recipient) which have become vested, the Company shall take, at its sole cost and expense, all such actions as may be required to permit the Recipient to resell such shares including, without limitation, providing to the Company’s transfer agent certificates of officers of the Company, and opinions of counsel and/or filing an appropriate registration statement, and taking all such other actions as may be required to remove the legends set forth above with respect to transfer and vesting restrictions from the certificates evidencing such shares and, if applicable, from the share books and records of the Company.  The Company shall reimburse the Recipient, promptly upon the receipt of a request for payment, for all expenses (including legal expenses) reasonably incurred by the Recipient in connection with the enforcement of the Recipient’s rights under this paragraph.

 

4.                                      Tax Withholding.  To the extent required by law, the Company shall withhold or cause to be withheld income and other taxes incurred by the Recipient by reason of a grant of Shares, and the Recipient agrees that he or she shall upon request of the Company pay to the Company an amount sufficient to satisfy its tax withholding obligations from time to time (including as Shares become vested) as the Company may request.

 

5.                                      Miscellaneous.

 

(a)                                 Amendments.  Neither this Agreement nor any provision hereof may be changed or modified except by an agreement in writing executed by the Recipient and the Company; provided, however, that any change or modification that does not adversely affect the rights hereunder of the Recipient, as they may exist immediately prior to the effective date of such change or modification, may be adopted by the Company without an agreement in writing executed by the Recipient, and the Company shall give the Recipient written notice of such change or modification reasonably promptly following the adoption of such change or modification.

 

(b)                                 Binding Effect of the Agreement.  This Agreement shall inure to the benefit of, and be binding upon , the Company, the Recipient and their respective estates, heirs, executors, transferees, successors, assigns and legal representatives.

 

(c)                                  Provisions Separable.  In the event that any of the terms of this Agreement shall be or become or is declared to be illegal or unenforceable by any court or other authority of competent jurisdiction, such terms shall be null and void and shall be deemed deleted from this Agreement, and all the remaining terms of this Agreement shall remain in full force and effect.

 

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(d)                                 Notices.  Any notice in connection with this Agreement shall be deemed to have been properly delivered if it is in writing and is delivered by hand or by facsimile or sent by registered certified mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given:

 

	
To the Recipient:
    	
To the   Recipient’s address as set forth on the signature page hereof.
    
	
 
    	
 
    
	
To the Company:
    	
CommonWealth REIT
    
	
 
    	
Two Newton Place
    
	
 
    	
255 Washington   Street, Suite 300
    
	
 
    	
Newton, MA 02458
    
	
 
    	
Attn: Secretary
    

 

(e)                                  Construction.  The headings and subheadings of this Agreement have been inserted for convenience only, and shall not affect the construction of the provisions hereof.  All references to sections of this Agreement shall be deemed to refer as well to all subsections which form a part of such section.

 

(f)                                   Employment Agreement.  This Agreement shall not be construed as an agreement by the Company, the Manager or any affiliate of the Company or the Manager to employ the Recipient, nor is the Company, the Manager or any affiliate of the Company or the Manager obligated to continue employing the Recipient by reason of this Agreement or the grant of Shares to the Recipient hereunder.

 

(g)                                  Applicable Law.  This Agreement shall be construed and enforced in accordance with the laws of The Commonwealth of Massachusetts.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused this Agreement to be executed under seal, as of the date first above written.

 

 

	
 
    	
COMMONWEALTH REIT
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
RECIPIENT:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
«NAME»
    
	
 
    	
«ADDRESS»
    
	
 
    	
«CITY», «ST»   «ZIP»
    

 

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Exhibit A

 

A “Change in Control” shall be deemed to have occurred if any of the events set forth in any one of the following paragraphs shall have occurred:

 

(a)                                 any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of either the then outstanding common shares 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 a transaction described in paragraph (c)(i) below;

 

(b)                                 the following individuals cease for any reason to constitute a majority of the number of Trustees then serving: individuals who, on the date of the Agreement, constitute the Board and any new Trustee (other than a Trustee whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of Trustees) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the Trustees then in office who either were Trustees on the date of the Agreement or whose appointment, election or nomination for election was previously so approved or recommended;

 

(c)                                  there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other entity, 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 50% or more of the combined voting power of the Company’s then outstanding securities; or

 

(d)                                 the shareholders 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 shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

 

A “Termination Event” shall occur if Reit Management & Research LLC (or any entity controlled by, under common control with or controlling Reit Management & Research LLC) ceases to be the manager or shared services provider to the Company. 

 

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For purposes of the definitions set forth on this Exhibit A, the following definitions shall apply, with capitalized terms used but not defined in this Exhibit A having the meaning set forth in the Plan:

 

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

 

“Agreement” shall mean the Restricted Share Agreement to which this Exhibit A is attached.

 

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“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) the Company or any of its 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 shareholders of the Company in substantially the same proportions as their ownership of shares of the Company.

 

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