Document:

EX-10.1

 Exhibit 10.1 
  

			
	 

	  	 366 Walker Drive

State College, PA 16801

Ph: 814.278.7267

Fax: 814.278.7286

www.rexenergy.com

  
  

NAME 
 [Address] 

[Address] 
  

	Re:	Change in Control Agreement 

 Dear
[                ]: 
 The Board of Directors (the
“Board”) of Rex Energy Corporation (the “Parent Company”, together with its subsidiaries, the “Company”) offers this agreement to address the terms and conditions of your
employment in the event of a future Change in Control of the Company. As used here, “Change in Control” has a certain meaning, defined below. The purpose of this proposed agreement is to obtain
your continued dedication and objectivity, notwithstanding the possibility or occurrence of a Change in Control, because the stockholders of the Company will benefit when you are motivated to maximize the value of the Company upon a Change in
Control. 
 Subject to the terms of this Agreement, the Board agrees to provide you with the severance benefits set forth below in the event
your employment is terminated in connection with a Change in Control. 
 If not defined in context, bold and italicized terms used in this
Agreement are defined in Section 8 below. 
 1.    Term of the Agreement. This Agreement is for a
term that begins on the date when an authorized officer of the Company countersigns after you have executed the Agreement (the “Effective Date”) and, unless terminated earlier under the terms of this Agreement, ends on
December 31, 2019 (the “Initial Term”). The term of this Agreement automatically renews for one (1) additional year (each an “Additional Term”) upon completion of the Initial Term and any
subsequent Additional Terms, unless either party provides the other party with written notice of non-renewal at least ninety days (90) days prior to the date of automatic renewal. The Initial Term,
together with the Additional Term, shall be referred to as the “Term.” Notwithstanding the foregoing provisions of this Section 1, if a Change in Control occurs when there are fewer than twelve (12) months remaining
during the Term, the term of this Agreement will extend automatically through the date that is twelve (12) months following the effective date of the Change in Control. If you become entitled to benefits under Section 4 during the Term,
this Agreement will not terminate until all of the obligations of the parties with respect to this Agreement have been satisfied. 

2.    At-Will Employment. The Company and you acknowledge that your
employment will continue to be at-will as defined under applicable law. As an at-will employee, either the Company or you may terminate the employment relationship at
any time and for any lawful reason. 

 3.    Written Notice of Termination of Employment. Any
purported termination of your employment by the Company or by you during the Term must be communicated in writing through a notice of termination to the other party in accordance with Section 9 below. Such notice must state whether the party
terminating employment believes it to be for Cause, or for Good Reason, and whether the party providing the notice believes the termination of employment to have been a “Direct Result” of a Change in Control. 

4.    Change in Control Severance. In the event that your employment with the Company ends for any reason
other than as a Direct Result of a Change in Control, this Agreement terminates immediately and you have no further interest or rights under this Agreement. Subject to the terms of this Agreement, if your employment with the Company is terminated as
a Direct Result of a Change in Control, and if you satisfy all of the eligibility criteria set forth in Section 5 below, and if you do not experience a Disqualification Event described in Section 6 below, then you will
receive the following severance: 
 (a) Severance Payment. The Company will provide a single lump sum payment (less applicable
withholdings and deductions) (the “Severance Payment”) equal to 18 months of your annual base salary at the rate in effect immediately prior to the date of termination of your employment (without giving effect to any salary
reductions which satisfy the definition of Good Reason). The Severance Payment will be paid on the tenth (10th) day following your satisfaction of all the eligibility criteria set forth in
Section 5 below. 
 (b) Benefit Continuation. If you timely elect COBRA healthcare continuation coverage for you and your
eligible dependents, you will be responsible for paying the full COBRA cost of such coverage, and, for a period of 18 months after the month in which the termination of your employment occurs, the Company will reimburse you monthly in an amount
equal to your actual COBRA coverage cost minus the employee portion of the premium you would have paid if your employment with the Company had continued. 

(c)    No Mitigation. You are not required to mitigate the amount of any payment or benefit provided for in
this Section 4 by seeking other employment or otherwise. 
 (d)     No Additional Severance. The
Severance Payment and COBRA reimbursement available under this Section 4 (the “Change in Control Severance”) are in lieu of any other severance payments or benefits which you may be eligible for or entitled to receive
under any other severance plan or arrangement of the Company or any of its subsidiaries. 
 5.    Eligibility
Criteria. To receive the Change in Control Severance that this Agreement provides, you must satisfy the following eligibility criteria: 

(a)    Continued Service Pending Change in Control. If the Parent Company or a third party takes action in
furtherance of or that would result in a Change in Control (including, without limitation, the commencement of a tender offer, the distribution of a proxy statement, the acquisition of shares or other interests, the commencement of negotiations or
the execution of a definitive agreement), you must agree not to voluntarily resign from the Company without Good Reason; perform your responsibilities at a level meeting the Company’s expectations; and cooperate with the Company in connection
with the Change in Control, until the Change in Control is consummated. 

  
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 (b)    Execution of Confidential Separation Agreement and General
Release. Within sixty days of the date upon which your employment is terminated, you must execute a confidential separation agreement and general release in a form provided by the Company, which will include, among other provisions, a full and
complete release of the Company from any liability or obligation; an agreement to cooperate with the Company in litigation, disputes, and investigations; an agreement to keep the Company’s confidential information secret; and an agreement not
to disparage the Company or its businesses or services. 
 6.    Disqualification Events. You are
disqualified from receiving the Change in Control Severance that this Agreement provides if any of the following occurs: 
 (a)
    The Company terminates your employment for “Cause.” 

(b)    Your employment with the Company ends due to your retirement; or your resignation without “Good
Reason,” or due to your death or Permanent Disability prior to termination. “Permanent Disability” means any physical or mental impairment that is determined to make you eligible to receive a disability benefit
in accordance with the provisions of any insured long term disability plan applicable to you, or, if no such plan is applicable to you, any such impairment that the Company determines in good faith constitutes Permanent Disability. 

(c)    You not in Good Standing at or near the date of your termination. “Good Standing”
means you are properly performing all job duties, following all of the Company’s policies and procedures, and complying with all contractual obligations and fiduciary duties, in each case, as the Company determines in its sole discretion. 

(d)    You are a party to a pre-existing agreement with the Company
providing severance benefits for a Change in Control or similar transaction or event. 
 7.    Successors;
Binding Agreement. 
 (a) Assumption By Successor. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform the obligations under this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place. 
 (b) Enforceability By Beneficiaries. This
Agreement inures to the benefit of and is enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 

8.    Definitions. For purposes of this Agreement: 

“Direct Result” of a Change in Control means a termination of employment by the Company
without Cause, or resignation by you for Good Reason, if it occurs at any time: 
  

	 	(a)	 Between (i) the date the Parent Company enters into a definitive agreement or files a proxy
statement, or the date a third person begins a 

  
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tender or exchange offer, in each case, in connection with a transaction that, if consummated, would constitute a Change in Control, and (ii) the date the Change in Control transaction is
either consummated, abandoned or terminated (for this purpose, the Parent Company’s Board of Directors shall have the sole and absolute discretion to determine that a proposed transaction has been abandoned); or 

 

	 	(b)	Within one year after the consummation of a Change in Control. 

“Cause” means: 
  

	 	(a)	conviction of a felony involving moral turpitude, 

  

	 	(b)	conduct that is materially and demonstrably injurious to the Company, 

  

	 	(c)	willful engagement in one or more acts of dishonesty resulting in personal gain to you at the expense of the Company, or 

  

	 	(d)	a material breach by you of the Parent Company’s Code of Business Conduct or similar applicable conduct policy. 

“Good Reason” means the occurrence of any of the following events without your consent:

  

	 	(a)	A material reduction in your authority, duties or responsibilities from those possessed immediately prior to the Change in Control; 

 

	 	(b)	A transfer of you to a location that is more than 25 miles away from the location where you were employed immediately prior to the Change in Control; 

 

	 	(c)	Any reduction in your rate of annual salary below your annual salary immediately prior to the Change in Control; or 

  

	 	(d)	Any material reduction in the level of your benefits or bonus below a level consistent with the Company’s practice prior to the Change in Control, other than changes applicable to all similarly situated
executive employees of the Company. 

 “Change in Control” means the occurrence of any of the following events: 

 

	 	(a)	The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a
“Covered Person”) of beneficial ownership (within the meaning of rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either: 

 

	 	i.	the then outstanding shares of the common stock of Parent Company (the “Outstanding Parent Company Common Stock”), or 

  
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	 	ii.	the combined voting power of the then outstanding voting securities of Parent Company entitled to vote generally in the election of directors (the “Outstanding Parent Company Voting
Securities”); 

 provided, however, that for purposes of this definition, the following acquisitions shall not
constitute a Change in Control of Parent Company: 
  

	 	1.	any acquisition directly from Parent Company; 

  

	 	2.	any acquisition by Parent Company; 

  

	 	3.	any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Parent Company or any entity controlled by Parent Company; or 

 

	 	4.	any acquisition pursuant to a transaction that complies with clauses (1), (2) and (3) of paragraph (c) below; or 

  

	 	(b)	Individuals who, as of the effective date of a Designated Executive’s status as a Participant under this Policy, constitute the Board of Parent Company (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board of Parent Company; provided that any individual becoming a director subsequent to such effective date whose election, or nomination for election by Parent
Company’s shareholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Covered Person other than the Board of Parent Company; 

  

	 	(c)	Consummation of 

  

	 	(i)	a reorganization, merger, or consolidation, or sale of Parent Company or any subsidiary of Parent Company, or 

  

	 	(ii)	a disposition of all or substantially all of the assets of Parent Company, 

 (each of
(i) or (ii) a “Business Combination”), in each case, unless, following such Business Combination, 
  

	 	1.	 all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the
Outstanding Parent Company Common Stock and Outstanding Parent Company Voting Securities immediately prior to such Business Combination beneficially own, direct or indirectly, more than fifty percent (50%) of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the 

  
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corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Parent Company or all or substantially all of
Parent Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Parent Company Common Stock and
Outstanding Parent Company Voting Securities, as the case may be, 

  

	 	2.	no Covered Person (excluding any employee benefit plan (or related trust) of Parent Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, thirty percent
(30%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation, except to the extent
that such ownership existed prior to the Business Combination, and 

  

	 	3.	at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board of Directors, providing for such Business Combination.  

9.    Notice. For purposes of this Agreement, notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand, or delivered or mailed by UPS, Federal Express, or other overnight courier, or United States registered mail, return receipt requested, postage
prepaid, addressed to, the Company, Attention General Counsel’s Office, at 366 Walker Drive, State College, PA 16801, or to you at the address set forth on the signature page of this Agreement or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 

10.    Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to by the parties in writing. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party that are not expressly set forth in this Agreement and this Agreement shall supersede all prior agreements, negotiations, correspondence, undertakings and communications of the parties, oral or written with
respect to the subject matter hereof. The validity, interpretation, construction and performance of this Agreement shall be subject to the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law principles. 

11.    Tax Compliance. All amounts payable under this Agreement are intended to comply with the “short
term deferral” exception under Section 409A of the Internal Revenue Code (“Section 409A”) specified in Treas. Reg. § 1.409A-1(b)(4) (or
any successor provision) or the “separation pay plan” exception under Section 409A specified in Treas. Reg. § 1.409A-1(b)(9) (or any successor provision), or both of them, and shall be
interpreted in a manner consistent with the applicable exceptions. Notwithstanding the foregoing, to the extent that any 

  
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amounts payable in accordance with this Agreement are subject to Section 409A, this Agreement shall be interpreted and administered in such a way as to comply with Section 409A to the
maximum extent possible. Each installment payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of applying Section 409A. If payment of any amount subject to
Section 409A is triggered by a separation from service that occurs while you are a “specified employee” (as defined by Section 409A) with, and if such amount is scheduled to be paid within six (6) months after such
separation from service, the amount shall accrue without interest and shall be paid the first business day after the end of such six-month period, or, if earlier, within 15 days after the appointment of the
personal representative or executor of your estate following your death. “Termination of employment,” “resignation” or words of similar import, as used in this Agreement shall mean, with respect to any payments subject to
Section 409A, your “separation from service” as defined by Section 409A. Nothing in this Agreement shall be construed as a guarantee of any particular tax treatment. You shall be solely responsible for the tax consequences
with respect to all amounts payable under this Agreement, and in no event shall the Company have any responsibility or liability if this Agreement does not meet any applicable requirements of Section 409A. 

12.    Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 

13.    Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same instrument. 

14.    Headings. The headings contained in this Agreement are intended solely for convenience and shall not
affect the rights of the parties to this Agreement. 
 If this Agreement sets forth our agreement on the subject matter hereof, kindly sign
the signature page that follows and return your complete, executed Agreement to the Company. An authorized officer of the Company will then countersign and date this Agreement, at which point this Agreement will become binding and will constitute
our agreement on the subject. The Company will provide you with a fully executed copy of this Agreement for your records. 
 [Signatures
Appear on the Following Page] 

  
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	 [NAME:]

	 [TITLE:]

	 Address:

 Accepted and agreed to this      day of
            , 2017 on behalf of 
 REX ENERGY CORPORATION and 

REX ENERGY OPERATING CORP. 
  

			
	By	 	 /s/ Thomas C. Stabley

		 	Thomas C. Stabley
		 	President and Chief Executive Officer

 [Signature Page to Change in Control Agreement]Exhibit 10.1

 

TWILIO INC.

 

AMENDED AND RESTATED EXECUTIVE SEVERANCE PLAN

 

1.                                      Purpose.  Twilio Inc. (the “Company”) considers it essential to the best interests of its stockholders to foster the continuous employment of key management personnel.  The Board of Directors of the Company (the “Board”) recognizes, however, that, as is the case with many publicly held corporations, the possibility of an involuntary termination of employment, either before or after a Change in Control (as defined in Section 2 hereof), exists and that such possibility, and the uncertainty and questions that it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders.  Therefore, the Board has determined that the Twilio Inc. Amended and Restated Executive Severance Plan (the “Plan”) should be adopted to reinforce and encourage the continued attention and dedication of the Company’s Covered Executives to their assigned duties without distraction.  Nothing in this Plan shall be construed as creating an express or implied contract of employment and nothing shall alter the “at will” nature of the Covered Executives’ employment with the Company.

 

2.                                      Definitions.  The following terms shall be defined as set forth below:

 

(a)                                 “Accounting Firm” shall mean a nationally recognized accounting firm selected by the Company.

 

(b)                                 “Administrator” means the Board or the Compensation Committee of the Board.

 

(c)                                  “Applicable Percentage” means 100% in the case of the Tier 1 Executive or a Tier 2 Executive and either 50% or 100% (as designated by the Administrator in its sole discretion and specified on Exhibit B hereto) in the case of a Tier 3 Executive.

 

(d)                                 “Base Salary” shall mean the higher of (i) the annual base salary in effect immediately prior to the Date of Termination or (ii) the annual base salary in effect for the year immediately prior to the year in which the Date of Termination occurs.

 

(e)                                  “Cause” shall mean, and shall be limited to, the occurrence of any one or more of the following events:

 

(i)                                     willful conduct by the Covered Executive constituting a material act of misconduct in connection with the performance of his or her duties, including, without limitation, misappropriation of funds or property of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of Company property for personal purposes;

 

(ii)                                  the commission of, or plea of guilty or no contest to, any felony or any crime involving moral turpitude, deceit, dishonesty or fraud, or any conduct by the Covered Executive that would reasonably be expected to result in material injury or reputational harm to the Company or any of its subsidiaries and affiliates if he or she

 

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were retained in his or her position;

 

(iii)                               continued non-performance by the Covered Executive of his or her duties to the Company (other than by reason of the Covered Executive’s physical or mental illness, incapacity or disability) which has continued for 30 days following written notice of such non-performance from the Company;

 

(iv)                              a breach by the Covered Executive of any of the provisions contained in the Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement entered into between the Covered Executive and the Company or any other confidentiality, invention assignment or similar agreement with the Company;

 

(v)                                 a material violation by the Covered Executive of the Company’s written employment policies; or

 

(vi)                              the Covered Executive’s failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or the Covered Executive’s willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation.

 

(f)                                   “Change in Control” shall mean a Sale Event, as defined in the Twilio Inc. 2016 Stock Option and Incentive Plan, as amended from time to time.

 

(g)                                  “Change in Control Period” shall mean the period beginning 3 months prior to, and ending 12 months after, the date of a Change in Control.  For the avoidance of doubt, upon the termination of a Covered Executive’s employment by the Company without Cause or by the Executive for Good Reason, any unvested equity awards then held by such Covered Executive shall not lapse until the earliest of a Change in Control, three months after the Date of Termination, or the expiration date of such equity award.

 

(h)                                 “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(i)                                     “Covered Executives” shall mean the Tier 1 Executive and those other executives or employees designated by the Administrator in its sole discretion as the Tier 2 Executives and the Tier 3 Executives, and, in each case, who meet the eligibility requirements set forth in Section 4 of this Plan.

 

(j)                                    “Date of Termination” shall mean the date that a Covered Executive’s employment with the Company (or any successor) ends, which date shall be specified in the Notice of Termination.  Notwithstanding the foregoing, a Covered Executive’s employment shall not be deemed to have been terminated solely as a result of the Covered Executive becoming an employee of any direct or indirect successor to the business or assets of the Company.

 

(k)                                 “Good Reason” shall mean that the Covered Executive has complied with the “Good Reason Process” following the occurrence of any of the following events:

 

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(i)                                     a material diminution in the Covered Executive’s responsibilities, authority or duties;

 

(ii)                                  a material reduction in the Covered Executive’s base salary except for across-the-board salary reductions similarly affecting all or substantially all management employees;

 

(iii)                               the relocation of the Company office at which the Covered Executive is principally employed to a location more than 35 miles from such office; or

 

(iv)                              the failure of any successor to the Company to assume and agree to be bound by the terms and conditions of this Plan with respect to the applicable Covered Executive.

 

For purposes of Section 2(j)(i), a change in the reporting relationship, or a change in a title will not, by itself, be sufficient to constitute a material diminution of responsibilities, authority or duty.

 

(l)                                     “Good Reason Process” shall mean:

 

(i)                                     the Covered Executive reasonably determines in good faith that a “Good Reason” condition has occurred;

 

(ii)                                  the Covered Executive notifies the Company in writing of the occurrence of the Good Reason condition within 30 days of the occurrence of such condition;

 

(iii)                               the Covered Executive cooperates in good faith with the Company’s efforts, for a period of 30 days following such notice (the “Cure Period”), to remedy the condition;

 

(iv)                              notwithstanding such efforts, the Good Reason condition continues to exist following the Cure Period; and

 

(v)                                 the Covered Executive terminates his or her employment and provides the Company with a Notice of Termination with respect to such termination, each within 30 days after the end of the Cure Period.

 

If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

 

(m)                             “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Plan relied upon for the termination of a Covered Executive’s employment and the Date of Termination.

 

(n)                                 “Participation Agreement” shall mean an agreement between a Covered Executive and the Company that acknowledges the Covered Executive’s participation in the Plan.

 

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(o)                                 “Tier 1 Executive” shall mean the Company’s Chief Executive Officer.

 

(p)                                 “Tier 2 Executives” shall mean the individuals designated as such by the Administrator and who are listed in Exhibit A, attached hereto, as such exhibit is amended by the Administrator from time to time.

 

(q)                                 “Tier 3 Executives” shall mean  the individuals designated as such by the Administrator and who are listed in Exhibit B, attached hereto, as such exhibit is amended by the Administrator from time to time.

 

3.                                      Administration of the Plan.

 

(a)                                 Administrator.  The Plan shall be administered by the Administrator.

 

(b)                                 Powers of Administrator.  The Administrator shall have all powers necessary to enable it properly to carry out its duties with respect to the complete control of the administration of the Plan.  Not in limitation, but in amplification of the foregoing, the Administrator shall have the power and authority in its discretion to:

 

(i)                                     construe the Plan to determine all questions that shall arise as to interpretations of the Plan’s provisions;

 

(ii)                                  determine which individuals are and are not Covered Executives, designate an individual as a Tier 1 Executive, Tier 2 Executive or Tier 3 Executive, determine the benefits to which any Covered Executives may be entitled, the eligibility requirements for participation in the Plan and all other matters pertaining to the Plan;

 

(iii)                               adopt amendments to the Plan which are deemed necessary or desirable to comply with all applicable laws and regulations, including but not limited to Code Section 409A and the guidance thereunder;

 

(iv)                              make all determinations it deems advisable for the administration of the Plan, including the authority and ability to delegate administrative functions to a third party;

 

(v)                                 decide all disputes arising in connection with the Plan; and

 

(vi)                              otherwise supervise the administration of the Plan.

 

(c)                                  All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Covered Executives.

 

4.                                      Eligibility.  All Covered Executives who have executed and submitted to the Company a Participation Agreement, and satisfied such other requirements as may be determined by the Administrator, are eligible to participate in the Plan.  Notwithstanding the foregoing, the Administrator may determine at any time that a Covered Executive should be designated to participate in the Plan at a different tier (e.g., a change from a Tier 2 Executive to a Tier 3 Executive, or a Tier 3 Executive to a Tier 2 Executive, etc.) as a result of a material

 

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change in such Covered Executive’s role, and such designation of the applicable tier shall be effective upon the Administrator taking action by resolution to update the applicable Exhibit hereto.   Similarly, the Administrator may determine at any time that a Covered Executive should no longer be designated as such as a result of a material change in such Covered Executive’s role, and such individual shall cease to be eligible to participate in the Plan upon the Administrator taking action by resolution to update the applicable Exhibit hereto.

 

5.                                      Termination Benefits Generally.  In the event a Covered Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Covered Executive any earned but unpaid salary, unpaid expense reimbursements and accrued but unused leave entitlement, if applicable (collectively, the “Accrued Benefits”), within the time required by law but in no event more than 30 days after the Date of Termination.

 

6.                                      Termination Not in Connection with a Change in Control.  In the event the employment of the Tier 1 Executive or a Tier 2 Executive is terminated by the Company for any reason other than for Cause, death or disability, and such termination occurs outside of the Change in Control Period, then with respect to such Covered Executive, in addition to the Accrued Benefits, subject to his or her execution of a separation agreement containing, among other provisions, an effective general release of claims in favor of the Company and related persons and entities, confidentiality, return of property and non-disparagement, in a form and manner satisfactory to the Company by the Covered Executive and the expiration of any revocation period with respect thereto within 30 days of the Date of Termination (the “Release Requirement”), the Company shall:

 

(a)                                 pay the Covered Executive a single lump sum cash amount equal to nine months’ Base Salary for the Tier 1 Executive and six months’ Base Salary for each Tier 2 Executive.  Such amount shall be paid within 30 days after the Date of Termination; provided, however, that if the 30-day period begins in one calendar year and ends in a second calendar year, such payment shall be paid in the second calendar year by the last day of such 30-day period; and

 

(b)                                 if the Covered Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Covered Executive a monthly cash payment for (i) nine months for the Tier 1 Executive and six months for each Tier 2 Executive, or (ii) the Covered Executive’s applicable COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Covered Executive if the Covered Executive had remained employed by the Company.

 

For the avoidance of doubt, (x) a non-renewal of the Plan does not entitle any Covered Executive to the severance pay and benefits under Section 6 of the Plan and (y) Tier 3 Executives are not eligible for any benefits under Section 6 of the Plan.

 

7.                                      Termination in Connection with a Change in Control.  In the event the employment of the Tier 1 Executive, a Tier 2 Executive or Tier 3 Executive is terminated (i) by the Company for any reason other than for Cause, death or disability or (ii) by the Covered Executive for Good Reason, and such termination occurs during the Change in Control Period,

 

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then with respect to such Covered Executive, in addition to the Accrued Benefits, subject to his or her satisfaction of the Release Requirement, the Company shall:

 

(a)                                 cause the Applicable Percentage of the outstanding and unvested equity awards held by the Covered Executive to immediately become fully exercisable and vested as of the Date of Termination (or the date of the Change in Control, if later); provided, that the performance conditions applicable to any stock-based awards subject to performance conditions will be deemed satisfied at the target level specified in the terms of the applicable award agreement.

 

(b)                                 pay the Covered Executive a single lump sum cash amount equal to 18 months’ Base Salary for the Tier 1 Executive and 12 months’ Base Salary for each Tier 2 Executive.  Such amount shall be paid within 30 days after the Date of Termination; provided, however, that if the 30-day period begins in one calendar year and ends in a second calendar year, such payment shall be paid in the second calendar year by the last day of such 30-day period; and

 

(c)                                  if the Covered Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Covered Executive a monthly cash payment for (i) 18 months for the Tier 1 Executive and 12 months for each Tier 2 Executive, or (ii) the Covered Executive’s applicable COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Covered Executive if the Covered Executive had remained employed by the Company.

 

For the avoidance of doubt, the severance pay and benefits provided in this Section 7 shall apply in lieu of, and expressly supersede, the provisions of Section 6 and no Covered Executive shall be entitled to the severance pay and benefits under both Section 6 and 7 hereof.  In addition, for the avoidance of doubt, (x) a non-renewal of the Plan does not entitle any Covered Executive to the severance pay and benefits under Section 7 of the Plan and (y) Tier 3 Executives are not eligible for any benefits under Sections 7(b) and 7(c) of the Plan.

 

8.                                      Additional Limitation.

 

(a)                                 Anything in this Plan to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Covered Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Plan or otherwise, calculated in a manner consistent with Section 280G of the Code and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Covered Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Covered Executive receiving a higher After Tax Amount (as defined below) than the Covered Executive would receive if the Aggregate Payments were not subject to such reduction.  In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in

 

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time from consummation of the transaction that is subject to Section 280G of the Code:  (i) cash payments not subject to Section 409A of the Code; (ii) cash payments subject to Section 409A of the Code; (iii) equity-based payments and acceleration; and (iv) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

 

(b)                                 For purposes of this Section 8, the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise, employment and social security taxes imposed on the Covered Executive as a result of the Covered Executive’s receipt of the Aggregate Payments.  For purposes of determining the After Tax Amount, the Covered Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes and social security at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

 

(c)                                  The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 8(a) shall be made by the Accounting Firm, which shall provide detailed supporting calculations both to the Company and the Covered Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Covered Executive.  Any determination by the Accounting Firm shall be binding upon the Company and the Covered Executive.

 

9.                                      Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement; Arbitration.

 

(d)                                 Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement.  As a condition to participating in the Plan, each Covered Executive shall continue to comply with the terms and conditions contained in the Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement or similar agreement entered into between the Covered Executive and the Company and such other agreement(s) as designated in the applicable Participation Agreement.  If a Covered Executive has not entered into a Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement or similar agreement with the Company, he or she shall enter into such agreement prior to participating in the Plan.

 

(e)                                  Arbitration Agreement.  As a condition to participating in the Plan, the applicable Participation Agreement may provide that the terms, conditions and procedures set forth in an Arbitration Agreement or similar agreement entered into between the Covered Executive and the Company shall apply in all respects to any controversies, claims or disputes arising under or related to the Plan.   If a Covered Executive has not entered into an Arbitration Agreement or similar agreement with the Company, he or she shall enter into such agreement prior to participating in the Plan

 

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10.                               Withholding.  All payments made by the Company under this Plan shall be subject to any tax or other amounts required to be withheld by the Company under applicable law.

 

11.                               Section 409A.

 

(a)                                 Anything in this Plan to the contrary notwithstanding, if at the time of the Covered Executive’s “separation from service” within the meaning of Section 409A of the Code, the Company determines that the Covered Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Covered Executive becomes entitled to under this Plan would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (i) six months and one day after the Covered Executive’s separation from service, or (ii) the Covered Executive’s death.  If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

 

(b)                                 The parties intend that this Plan will be administered in accordance with Section 409A of the Code and that all amounts payable hereunder shall be exempt from the requirements of such section as a result of being “short term deferrals” for purposes of Section 409A of the Code to the greatest extent possible.  To the extent that any provision of this Plan is not exempt from Section 409A of the Code and ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner to comply with Section 409A of the Code.  Each payment pursuant to this Plan is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).  The parties agree that this Plan may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

 

(c)                                  To the extent that any payment or benefit described in this Plan constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Covered Executive’s termination of employment, then such payments or benefits shall be payable only upon the Covered Executive’s “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

(d)                                 All in-kind benefits provided and expenses eligible for reimbursement under this Plan shall be provided by the Company or incurred by the Covered Executive during the time periods set forth in this Plan.  All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred.  The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect

 

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the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses).  Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

(e)                                  The Company makes no representation or warranty and shall have no liability to the Covered Executive or any other person if any provisions of this Plan are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

 

12.                               Notice and Date of Termination.

 

(a)                                 Notice of Termination.  A termination of the Covered Executive’s employment shall be communicated by Notice of Termination from the Company to the Covered Executive or vice versa in accordance with this Section 12.

 

(b)                                 Notice to the Company.  Any notices, requests, demands, and other communications provided for by this Plan shall be sufficient if in writing and delivered in person or sent by registered or certified mail, postage prepaid, to a Covered Executive at the last address the Covered Executive has filed in writing with the Company, or to the Company at the following physical or email address:

 

Twilio Inc.

Attention:  General Counsel

375 Beale Street, Ste. 300

San Francisco, CA 94105

 

legalnotices@twilio.com

 

13.                               No Mitigation.  The Covered Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Covered Executive by the Company under this Plan.

 

14.                               Benefits and Burdens.  This Plan shall inure to the benefit of and be binding upon the Company and the Covered Executives, their respective successors, executors, administrators, heirs and permitted assigns.  In the event of a Covered Executive’s death after a termination of employment but prior to the completion by the Company of all payments due to him or her under this Plan, the Company shall continue such payments to the Covered Executive’s beneficiary designated in writing to the Company prior to his or her death (or to his or her estate, if the Covered Executive fails to make such designation).

 

15.                               Enforceability.  If any portion or provision of this Plan shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Plan, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Plan shall be valid and enforceable to the fullest extent permitted by law.

 

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16.                               Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Plan, or the waiver by any party of any breach of this Plan, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

17.                               Non-Duplication of Benefits and Effect on Other Plans.  Notwithstanding any other provision in the Plan to the contrary, the benefits provided hereunder shall be in lieu of any other severance payments and/or benefits provided by the Company, including any such payments and/or benefits pursuant to an employment agreement or offer letter between the Company and the Covered Executive.

 

18.                               No Contract of Employment.  Nothing in this Plan shall be construed as giving any Covered Executive any right to be retained in the employ of the Company or shall affect the terms and conditions of a Covered Executive’s employment with the Company.

 

19.                               Amendment or Termination of Plan.  The Company may amend or terminate this Plan at any time or from time to time, but no such action shall adversely affect the rights of any Covered Executive without the Covered Executive’s written consent.

 

20.                               Governing Law.  This Plan shall be construed under and be governed in all respects by the laws of the State of California.

 

21.                               Obligations of Successors.  In addition to any obligations imposed by law upon any successor to the Company, any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company shall expressly assume and agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

22.                               Effectiveness and Term.  This Plan is effective as of June 12, 2017 (the “Effective Date”) and shall continue for a three-year period (the “Initial Term”), unless sooner terminated in accordance with Section 19, with such term to continue following the Initial Term for additional three-year periods, unless sooner terminated in accordance with Section 19 (each such three-year extension, a “Renewal”), subject to approval by the Administrator of each applicable Renewal.

 

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