Document:

Exhibit 10.3

 

Award Number:

 

PIVOTAL SOFTWARE, INC.

 

NON-QUALIFIED STOCK OPTION AGREEMENT
 PURSUANT TO THE
 PIVOTAL SOFTWARE, INC.
  2013 STOCK PLAN

 

This Non-Qualified Stock Option Agreement (the “Option Agreement”), including any country-specific appendix attached hereto (the “Appendix”) (the Option Agreement and Appendix, together, the “Agreement”), dated as of December [·], 201    (the “Grant Date”), is between Pivotal Software, Inc., a Delaware corporation (the “Company”), and [·] (the “Participant”).

 

Preliminary Statement

 

The Committee hereby grants this non-qualified stock option (the “Option”) as of the Grant Date pursuant to the Pivotal Software, Inc. 2013 Stock Plan, as it may be amended from time to time (the “Plan”), to purchase the number of shares of the Class A common stock of the Company, $0.01 par value per share (the “Common Stock”), set forth below, to the Participant, as an Eligible Employee of the Company or, if different, the Affiliate of the Company employing or retaining the Participant (the “Employer”).  Except as otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Plan.  By accepting this Agreement, the Participant acknowledges having received and read a copy of the Plan and agrees to comply with it, this Agreement and all applicable laws and regulations.

 

Accordingly, the parties hereto agree as follows:

 

1.                                      Tax Matters.  No part of the Option is intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended.

 

2.                                      Common Stock Subject to Option;  Exercise Price.  Subject in all respects to the Plan and the terms and conditions set forth herein and therein, the Option entitles the Participant to purchase from the Company, upon exercise, [•] shares of Common Stock. The exercise price under the Option is $[•] for each share of Common Stock (the “Exercise Price”).

 

3.                                           Vesting; Exercise.

 

(a)                                 The Option shall vest and become exercisable:

 

(i)                                     with respect to 25% of the shares of Common Stock underlying the Option, on the date of the first anniversary of the Grant Date; and

 

(ii)                                  with respect to the remaining shares of Common Stock underlying

 

 

the Option, in equal monthly installments thereafter, such that 100% of the Option will have become vested on the date of the fourth anniversary of the Grant Date;

 

provided, with respect to each vesting date, that the Participant has not experienced a Termination prior to such date.  There shall be no proportionate or partial vesting in the periods prior to each vesting date.

 

(b)                                 Subject to Section 3(e), to the extent that the Option has become vested and exercisable with respect to a number of shares of Common Stock, the Option may thereafter be exercised by the Participant, in whole or in part, at any time or from time to time prior to the expiration of the Option in accordance with the Plan; provided, however, unless otherwise permitted by the Committee, the Option may only be exercised within a Quarterly Exercise Period.

 

(c)                                  To exercise the Option, unless otherwise directed or permitted by the Committee, the Participant must:

 

(i)                                     execute and deliver such documentation as required by this Agreement or otherwise by the Committee, setting forth the terms of the exercise, certain restrictions on transferability of the shares of Common Stock acquired upon exercise, and such other terms or restrictions as the Board or Committee shall from time to time establish, including any rights of first refusal, drag along rights, tag along rights, transfer restrictions and registration rights; and

 

(ii)                                  remit the aggregate Exercise Price to the Company in full, payable in the manner determined by the Company from time to time in its sole discretion: (A) in cash or by check, bank draft or money order payable to the order of the Company; (B) by a “net exercise” under which the Company reduces the number of shares of Common Stock issued upon exercise by the number of shares of Common Stock with an aggregate Fair Market Value that equals the aggregate Exercise Price of all shares of Common Stock being exercised under the Option; or (C) on such other terms and conditions as may be acceptable to the Committee.

 

(d)                                 If at any time counsel to the Company shall be of the opinion that any sale or delivery of shares of Common Stock pursuant to the exercise of the Option is or may in the circumstances constitute a violation by the Participant or the Company of any provisions of any law or of any regulations of any governmental authority or result in the imposition of excise taxes on the Company under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act or otherwise with respect to shares of Common Stock, and the right to exercise the Option shall be suspended until, in the opinion of said counsel, such sale or delivery will not result in the violation of any provisions of any law or of any regulation of any governmental authority or imposition of excise taxes on the Company.

 

4.                                      Option Term.  The term of the Option shall be until the tenth anniversary of the Grant Date, after which time it shall expire (the “Expiration Date”).  Upon the Expiration Date, the Option shall be canceled for no consideration and no longer shall be exercisable.  The Option is subject to termination prior to the Expiration Date to the extent provided in Sections 5

 

2

 

and 10 below.

 

5.                                      Termination.  The provisions in the Plan regarding Termination shall apply to the Option; provided, however, prior to the second anniversary of the Grant Date, unless otherwise determined by the Committee, solely for the purposes of determining whether there is a Termination of Consultancy or Termination of Employment and of continuing the vesting of the Option (but, for the avoidance of doubt, not for purposes of continuing the exercisability of the vested portion of the Option), neither EMC Corporation nor VMware, Inc. nor any of their respective subsidiaries or affiliates (other than the Company and its Subsidiaries) shall be deemed Affiliates; and provided further, on or after the second anniversary of the Grant Date, unless otherwise determined by the Committee, the definitions of Termination of Consultancy and Termination of Employment set forth in the Plan shall apply to the Option for all purposes (i.e., both continued vesting and continued exercisability).  Notwithstanding the foregoing, the Company may permit the Option to continue to vest and/or remain exercisable in accordance with the provisions of this Agreement during such period, if any, that the Participant receives pay continuation from the Company or any of its Affiliates or Subsidiaries or over such other period as the Company may determine in writing, but in no event later than the Expiration Date.

 

6.                                      Responsibility for Taxes.

 

(a)                     The Participant acknowledges that, regardless of any action taken by the Company or the Employer, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participant (“Tax-Related Items”) is and remains the Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer.  The Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting, or exercise of the Option or the subsequent sale of shares of Common Stock acquired pursuant to such exercise; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result.  Further, if the Participant is subject to Tax-Related Items in more than one jurisdiction, the Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

(b)                     Prior to any relevant taxable or tax withholding event, as applicable, the Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items.  In this regard, the Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy their withholding obligations with regard to all Tax-Related Items in the manner determined by the Company and/or the Employer from time to time, which may include: (i) remitting the aggregate amount of such Tax-Related Items to the Company in full, in cash or by check, bank draft or money order payable to the order of the Company; (ii) effecting a “net settlement” under which the Company reduces the number of shares of Common Stock issued upon exercise by the number of shares of Common Stock with an aggregate fair market value that equals the aggregate applicable Tax-Related Items associated with the exercise; or (iii) making arrangements with the Company to have such Tax-Related Items withheld from other

 

3

 

compensation, to the extent permitted by the Committee.

 

(c)                      Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case the Participant will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent.  If the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, the Participant is deemed to have been issued the full number of shares of Common Stock subject to the exercised Option, notwithstanding that a number of the shares of Common Stock are held back solely for the purpose of paying the Tax-Related Items.

 

(d)                     Finally, the Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Participant’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to issue or deliver the shares of Common Stock or the proceeds of the sale of shares of Common Stock, if the Participant fails to comply with the Participant’s obligations in connection with the Tax-Related Items.

 

7.                                      Nature of Grant.  In accepting the Option, the Participant acknowledges, understands and agrees that:

 

(a)                     the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

 

(b)                     the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past;

 

(c)                      all decisions with respect to future Option or other grants, if any, will be at the sole discretion of the Company;

 

(d)                     the Option grant and the Participant’s participation in the Plan shall not be interpreted as forming an employment or service contract with the Company or any of its Affiliates;

 

(e)                      unless otherwise agreed with the Company, the Option and the shares of Common Stock subject to the Option, and the income and value of same, are not granted as consideration for, or in connection with the service the Participant may provide as a director of an Affiliate of the Company;

 

(f)                       the Participant is voluntarily participating in the Plan;

 

(g)                      the Option and the shares of Common Stock subject to the Option, and the income and value of same, are not intended to replace any pension rights or compensation;

 

(h)                     the Option and the shares of Common Stock subject to the Option, and the income and value of same, are not part of normal or expected compensation for purposes of,

 

4

 

including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar payments;

 

(i)                         the future value of the underlying shares of Common Stock is unknown, indeterminable and cannot be predicted with certainty;

 

(j)                        if the underlying shares of Common Stock do not increase in value, the Option will have no value;

 

(k)                     if the Participant exercises the Option and acquires shares of Common Stock, the value of such shares of Common Stock may increase or decrease in value, even below the Exercise Price;

 

(l)                         for purposes of the Option, the Participant will be deemed to have experienced a Termination as of the date the Participant is no longer actively providing services to the Company or any of its Affiliates (regardless of the reason for such Termination and whether or not later found to be invalid or in breach of labor laws in the jurisdiction where the Participant is providing services or the terms of the Participant’s employment or service agreement, if any).  The Committee shall have the exclusive discretion to determine when the Participant is no longer actively providing services for purposes of his or her Option grant including whether: (i) the Participant may still be considered to be providing services while on a leave of absence; (ii) the Participant’s right to vest in the Option under the Plan, if any, will terminate as of such date or be extended by any notice period (e.g., the Participant’s period of service would include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where the Participant is a service provider or the terms of the Participant’s employment or service agreement, if any);  and (iii) the period (if any) during which the Participant may exercise the Option after such Termination will commence on such date or be extended by any notice period mandated under labor laws in the jurisdiction where the Participant is providing services;

 

(m)                 no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from a Termination (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment agreement, if any);

 

(n)                     the following provisions apply if the Participant is employed outside the U.S.:

 

(i)                                     the Option and the shares of Common Stock subject to the Option, and the income and value of same, are not part of normal or expected compensation for any purpose; and

 

(ii)                                  neither the Company nor any of its Affiliates shall be liable for any foreign exchange rate fluctuation between the Participant’s local currency and the United States (“U.S.”) Dollar that may affect the value of the Option or of any amounts due to the Participant pursuant to the exercise of the Option or the subsequent sale of any shares of Common Stock acquired upon exercise.

 

5

 

8.                                      No Advice Regarding Grant.  The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of the underlying shares of Common Stock.  The Participant should consult with the Participant’s own personal tax, legal and financial advisors regarding the Participant’s participation in the Plan before taking any action related to the Plan.

 

9.                                      Data Privacy.  The Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Participant’s personal data as described in this Agreement and any other Option grant materials by and among, as applicable, the Company, the Employer and any other Affiliate of the Company for the exclusive purpose of implementing, administering and managing the Participant’s participation in the Plan.

 

The Participant understands that the Company, the Employer and any other Affiliate of the Company may hold certain personal information about the Participant, including, but not limited to, the Participant’s name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all stock options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan.

 

The Participant understands that Data will be transferred to the stock plan service provider selected by the Company (the “Designated Broker”), which is assisting the Company with the implementation, administration and management of the Plan.  The Participant understands that the recipients of the Data may be located in the U.S. or elsewhere, and that the recipient’s country (e.g., the U.S.) may have different data privacy laws and protections than the Participant’s country.  The Participant understands that, if he or she resides outside the U.S., he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative.  The Participant authorizes the Company, the Designated Broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing the Participant’s participation in the Plan.  The Participant understands that Data will be held only as long as is necessary to implement, administer and manage the Participant’s participation in the Plan.  The Participant understands that, if he or she resides outside the U.S., he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative.  Further, the Participant understands that he or she is providing the consents herein on a purely voluntary basis.  If the Participant does not consent, or if the Participant later seeks to revoke his or her consent, his or her employment or other service relationship with the Company, the Employer or any other Affiliate of the Company will not be adversely affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant Options or other equity awards to the Participant or administer or maintain such awards.  Therefore, the Participant understands that refusing or withdrawing his or her consent may affect the Participant’s

 

6

 

ability to participate in the Plan.  For more information on the consequences of the Participant’s refusal to consent or withdrawal of consent, the Participant understands that he or she may contact his or her local human resources representative.

 

10.                               Restriction on Transfer of Options and Common Stock Underlying the Options.  Unless otherwise determined by the Committee in accordance with the Plan, (a) no part of the Option or any shares of Common Stock acquired upon exercise of the Option shall be Transferable other than by will or by the laws of descent and distribution and (b) during the lifetime of the Participant, the Option may be exercised only by the Participant or the Participant’s guardian or legal representative.  Any attempt to Transfer the Option, or any shares of Common Stock acquired upon exercise of the Option, other than in accordance with the Plan shall be void.

 

11.                               Company’s Repurchase Rights.  The Company shall have the right (the “Repurchase Right”) to repurchase from the then-current holder of the Option (or the shares of Common Stock acquired upon exercise of the Option) (the “Holder”) some or all (as determined by the Company or its assignee or assignees, as applicable) of the shares of Common Stock held or subsequently acquired upon exercise of the Option in accordance with the terms hereof by the Holder at the price per share equal to Fair Market Value (the “Repurchase Price”).  The Repurchase Right may be exercised by the Company or its assignee or assignees at any time.  The Repurchase Right shall be exercised by the Company or its assignee or assignees by giving the Holder written notice of its intention to exercise the Repurchase Right.  Upon such notification, the Holder shall promptly surrender to the Company or its assignee or assignees any certificates representing the shares of Common Stock being purchased, duly endorsed for transfer, free and clear of any liens or encumbrances, together with a duly executed stock power for the transfer of such shares to the Company or its assignee or assignees.  Upon the Company’s or its assignee’s receipt of the certificates from the Holder, the Company or its assignee shall deliver to such Holder a check for the Repurchase Price of the shares of Common Stock being purchased; provided, however, that the Company may pay the Repurchase Price for such shares by offsetting and canceling any indebtedness then owed by the Participant to the Company.  The Repurchase Right shall terminate in accordance with Section 24.  The Company may assign the Repurchase Right to one or more Persons.

 

12.                               Drag Along Obligations.  In the event of a Change in Control (other than a Change in Control event described in Section 2.8(b) of the Plan), the Holder shall be obligated to and shall upon the written request of the holders of securities representing 50% or more of the total voting power of the Voting Securities, or their designated representative or representatives (the “Majority Shareholders”):  (a) sell, transfer and deliver, or cause to be sold, transferred and delivered, to any Person, his or her shares of Common Stock (including for this purpose all of such Holder’s shares that presently or as a result of any such Change in Control may be acquired upon the exercise of the Option (following the payment of the exercise price therefor)) on substantially the same terms applicable to the Majority Shareholders (with appropriate adjustments to reflect the conversion of convertible securities, the redemption of redeemable securities and the exercise of exercisable securities as well as the relative preferences and priorities of preferred stock); and (b) execute and deliver such instruments of conveyance and transfer and take such other action, including voting such shares of Common Stock in favor of any transaction proposed by the Majority Shareholders and executing any purchase agreements, merger agreements, indemnity agreements, escrow agreements or related documents, as the Majority Shareholders may reasonably require in order to carry out the terms and provisions of

 

7

 

this Section 12.  The obligations under this Section 12 shall terminate in accordance with Section 24.

 

13.                               Securities Representations.  Upon the exercise of the Option prior to registration of the offering of the Common Stock subject to the Option pursuant to the Securities Act or other applicable securities laws, the Participant shall be deemed to acknowledge and make the representations and warranties as described below and as otherwise may be requested by the Company for compliance with applicable laws, and any issuances of Common Stock by the Company shall be made in reliance upon the express representations and warranties of the Participant.

 

a.                                      The Participant is acquiring and will hold the shares of Common Stock for investment for his account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or other applicable securities laws.

 

b.                                      The Participant has been advised that offerings of the shares of Common Stock have not been registered under the Securities Act or other applicable securities laws, on the ground that no public offering of the shares of Common Stock is to be effected (it being understood, however, that the shares of Common Stock are being offered in reliance on the exemption provided under Rule 701 under the Securities Act), and that the shares of Common Stock must be held indefinitely, unless they are subsequently registered under the applicable securities laws or the Participant obtains an opinion of counsel (in the form and substance satisfactory to the Company and its counsel) that registration is not required.  In connection with the foregoing, the Company is relying in part on the Participant’s representations set forth in this Section 13.  The Participant further acknowledges and understands that the Company is under no obligation hereunder to register offerings of the shares of Common Stock.

 

c.                                       The Participant is aware of the adoption of Rule 144 by the U.S. Securities and Exchange Commission under the Securities Act, which permits limited public resales of securities acquired in a non-public offering, subject to the satisfaction of certain conditions.  The Participant acknowledges that he is familiar with the conditions for resale set forth in Rule 144, and acknowledges and understands that the conditions for resale set forth in Rule 144 have not been satisfied and that the Company has no plans to satisfy these conditions in the foreseeable future.

 

d.                                      The Participant will not sell, transfer or otherwise dispose of the shares of Common Stock in violation of the Plan, this Agreement, the Securities Act (or the rules and regulations promulgated thereunder) or under any other applicable securities laws.  The Participant agrees that he will not dispose of the Common Stock unless and until he has complied with all requirements of this Agreement applicable to the disposition of the shares of Common Stock.

 

e.                                       The Participant has been furnished with, and has had access to, such information as he considers necessary or appropriate for deciding whether to invest in the shares of Common Stock, and the Participant has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Common Stock.

 

8

 

f.                                        The Participant is aware that his investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss.  The Participant is able, without impairing his financial condition, to hold the Common Stock for an indefinite period and to suffer a complete loss of his investment in the Common Stock.

 

14.                               Confidentiality.  The Participant recognizes, acknowledges and agrees that he or she has had and will continue to have access to secret and confidential information regarding the Company, including but not limited to, its products, financial information, formulae, patents, sources of supply, customer dealings, data, know-how and business plans. The Participant acknowledges that such information is of great value to the Company, is the sole property of the Company, and has been and will be acquired by the Participant in confidence. In consideration of the obligations undertaken by the Company herein, the Participant will not, at any time, during or after the Participant’s employment, directorship or consultancy with the Company (as applicable), reveal, divulge or make known to any person, any such information acquired by the Participant, provided such information is not in or does not hereafter become part of the public domain, or become known to others through no fault of the Participant.

 

15.                               No Rights as Stockholder.  The Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by the Option unless and until the Participant has become the holder of record of such shares, and no adjustments shall be made for dividends (whether in cash, in kind or other property), distributions or other rights in respect of any such shares, except as otherwise specifically provided for in the Plan.

 

16.                               Provisions of Plan Control.  This Agreement is subject to all the terms, conditions and provisions of the Plan, including the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time.  The Plan is incorporated herein by reference.  If and to the extent that this Agreement conflicts or is inconsistent with the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly.

 

17.                               Notices.  All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party to which the notice, demand or request is being made as follows:

 

a.                                      unless otherwise specified by the Company in a notice delivered by the Company in accordance with this Section 17, any notice required to be delivered to the Company shall be properly delivered if delivered  (i) by United States mail or by a globally recognized overnight delivery service  to:

 

Pivotal Software, Inc.

875 Howard Street, 5th Floor,

San Francisco, California 94103

Attention: Pivotal Stock Team

 

or (ii) by email to:

 

stock@pivotal.io

 

b.                                      any notice required to be delivered to the Participant shall be properly

 

9

 

delivered if delivered (i) by United States mail or by a globally recognized overnight delivery service to the address of the Participant on file with the Company or (ii) by email to the email address of the Participant on file with the Company.

 

Any notice, demand or request, if made in accordance with this Section 17 shall be deemed to have been duly given:  (i) when delivered in person; (ii) three days after being sent by United States mail; or (iii) on the first business day following the date of deposit if delivered by a globally recognized overnight delivery service; or (iv) upon receipt by the sender of a return receipt email or similar delivery confirmation or acknowledgement email.

 

18.                               No Right to Employment.  This Agreement is not an agreement of employment.  None of this Agreement, the Plan or the grant of the Option hereunder shall (a) guarantee that the Company or the Employer will employ the Participant for any specific time period or (b) modify or limit in any respect the Company’s or the Employer’s right to terminate or modify the Participant’s employment or compensation.

 

19.                               Dispute Resolution.  All controversies and claims arising out of or relating to this Agreement, or the breach hereof, shall be settled by the Company’s or the Employer’s mandatory dispute resolution procedures, if any, as may be in effect from time to time with respect to matters arising out of or relating to Participant’s employment with the Company or the Employer.

 

20.                               Severability of Provisions.  If at any time any of the provisions of this Agreement shall be held invalid or unenforceable, or are prohibited by the laws of the jurisdiction where they are to be performed or enforced, by reason of being vague or unreasonable as to duration or geographic scope or scope of the activities restricted, or for any other reason, such provisions shall be considered divisible and shall become and be immediately amended to include only such restrictions and to such extent as shall be deemed to be reasonable and enforceable by the court or other body having jurisdiction over this Agreement and the Company and the Participant agree that the provisions of this Agreement, as so amended, shall be valid and binding as though any invalid or unenforceable provisions had not been included; provided that if the Company’s repurchase rights and/or rights of first refusal set forth in this Agreement or any other agreement shall be held invalid or unenforceable, the Option shall be cancelled and terminated.

 

21.                               Governing Law; Venue.  All matters arising out of or relating to this Agreement and the transactions contemplated hereby, including its validity, interpretation, construction, performance and enforcement, shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to its principles of conflict of laws. For purposes of any action, lawsuit or other proceedings brought to enforce this Agreement, relating to it, or arising from it, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts.

 

22.                               Construction.  Wherever any words are used in this Agreement in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply.  As used herein, (i) “or” shall mean “and/or” and (ii) “including” or “include” shall mean “including, without limitation.”  Any reference herein to an agreement in writing shall be deemed to include an electronic writing to the extent permitted by

 

10

 

applicable law.

 

23.                               Other shares of Common Stock.  Notwithstanding anything in this Agreement or the Plan to the contrary, none of the shares of Common Stock owned from time to time by a Participant that were not acquired in connection with the grant of an Award to such Participant shall be subject to any of the terms, conditions or provisions of this Agreement or the Plan.

 

24.                               Termination of Certain Rights.  The restrictions on Transfer in Section 10 with respect to any Common Stock acquired upon exercise of the Option (but not the restrictions on Options that have not been exercised nor the restrictions contained in Section 14.18 of the Plan), the Company’s Repurchase Rights under Section 11 and the drag along obligations under Section 12 shall terminate upon the closing of the Company’s Initial Public Offering.

 

25.                               Waiver.  The Participant acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of this Agreement.

 

26.                               Language.  If the Participant has received this Agreement, or any other document related to the Option and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

 

27.                               Country-Specific Provisions.  The Option grant shall be subject to any additional terms and conditions set forth in any Appendix to this Agreement for the Participant’s country.  Moreover, if the Participant relocates to one of the countries included in the Appendix, the special terms and conditions for such country will apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.

 

28.                               Imposition of Other Requirements.  The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the Option and on any shares of Common Stock purchased upon exercise of the Option, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

 

29.                               Insider Trading Restrictions/Market Abuse Laws.  The Participant acknowledges that the Participant may be subject to insider trading restrictions and/or market abuse laws, which may affect the Participant’s ability to acquire or sell shares of Common Stock or rights to shares of Common Stock (e.g., the Option) under the Plan during such times as the Participant is considered to have “inside information” regarding the Company (as defined by the laws in the Participant’s country).  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy.  The Participant acknowledges that it is his or her responsibility to comply with any applicable restrictions and that he or she should speak to his or her personal advisor on this matter.

 

11

 

30.                               Exchange Control, Foreign Asset/Account and/or Tax Reporting Requirements.  The Participant acknowledges that there may be certain exchange control, foreign asset/account and/or tax reporting requirements which may affect the Participant’s ability to acquire or hold shares of Common Stock or cash received from participating in the Plan (including the proceeds of any dividends paid on shares of Common Stock) in a brokerage or bank account outside the Participant’s country.  The Participant may be required to report such accounts, assets or related transactions to the tax or other authorities in his or her country.  The Participant also may be required to repatriate sale proceeds or other funds received as a result of participating in the Plan to the Participant’s country within a certain time after receipt.  The Participant acknowledges that it is his or her responsibility to comply with such regulations and that he or she should speak to his or her personal advisor on this matter.

 

31.                               Cancellation and Rescission Rights.  The Participant hereby acknowledges and agrees that the Participant and this Option are subject to the terms and conditions of Section 9.3 (Cancellation and Rescission of Awards) of the Plan.

 

Acceptance, Acknowledgment and Receipt

 

By accepting this Agreement, I, the Participant, hereby:

 

·                  acknowledge and confirm my consent to receive electronically this Agreement, the Plan and any other Plan documents or other related communications that the Company wishes or is required to deliver;

·                  acknowledge that a copy of the Plan and the related Plan documents were made available to me;

·                  agree that the electronic acceptance of this Agreement constitutes a legally binding acceptance of this Agreement, and that the electronic acceptance of this Agreement shall have the same force and effect as if this Agreement was physically signed; and

·                  acknowledge that I may submit a hard copy of this Agreement if I prefer, by signing this Agreement and sending it to the General Counsel’s office at the Company.

 

Grant Agreement Effective                 [·], 201

 

12Exhibit 10.5

 

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

THIS AGREEMENT, dated       , 201 , is made by and between Pivotal Software, Inc. (the “Company”), and           (the “Executive”) residing at                 .

 

WHEREAS, the Company considers the establishment and maintenance of a sound and vital management team to be essential to protecting and enhancing the best interests of the Company and its stockholders; and

 

WHEREAS, the Executive is expected to make a significant contribution to the profitability, growth and financial strength of the Company; and

 

WHEREAS, the Company recognizes that the possibility of a Change in Control may exist, and that such possibility and the uncertainty and questions which it may raise among management may result in the departure or distraction of the Executive in the performance of the Executive’s duties, to the detriment of the Company and its stockholders; and

 

WHEREAS, it is in the best interests of the Company and its stockholders to reinforce and encourage the continued attention and dedication of management personnel, including the Executive, to their assigned duties without distraction and to ensure the continued availability to the Employer of the Executive in the event of a Change in Control.

 

THEREFORE, in consideration of the foregoing and other respective covenants and agreements of the parties herein contained, the parties hereto agree as follows:

 

1.                                      Defined Terms.  The definitions of capitalized terms used in this Agreement are provided in Section 16.

 

2.                                      Term of Agreement.  The term of this Agreement (the “Term”) shall commence on       , 201  and shall continue in effect through January 1, 201 , provided, however, that commencing on January 1, 201   and each January 1st thereafter, the Term shall automatically be extended for one additional year unless, not later than April 1st of the preceding year, the Company or the Executive shall have given notice not to extend the Term; and further provided, however, that if a Change in Control shall have occurred during the Term, the Term shall expire on the last day of the twenty-fourth (24th) month following the month in which such Change in Control occurred.

 

3.                                      Company’s Covenants Summarized.  In order to induce the Executive to remain in the employ of the Employer and in consideration of the Executive’s covenants in Section 4, the Company, under the conditions described herein, shall pay or cause to be paid to the Executive the Severance Payments and the other payments and benefits described herein. No Severance Payments shall be payable under this Agreement unless there shall have been (or, pursuant to the second sentence of Section 6.1, there shall be

 

 

deemed to have been) a termination of the Executive’s employment with the Employer following a Change in Control and during the Term. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company or the Employer, the Executive shall not have any right to be retained in the employ of the Company or the Employer.

 

4.                                      The Executive’s Covenants.  Subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control, the Executive shall remain in the employ of the Employer until the earliest of (i) the date which is six (6) months from the date of the first occurrence of a Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive’s employment for Good Reason or by reason of death, Disability or Retirement, or (iv) the termination by the Employer of the Executive’s employment for any reason.

 

5.                                      Compensation Other Than Severance Payments; Equity Awards.

 

5.1                               If the Executive fails to perform the Executive’s full-time duties with the Employer following a Change in Control as a result of incapacity due to physical or mental illness, during any period when the Executive so fails to perform the Company shall pay or cause to be paid the Base Salary to the Executive, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement (other than the Company’s or the Employer’s short- or long-term disability plan, as applicable, but including any bonus or incentive plan) maintained by the Company or the Employer, as applicable, during such period, until the Executive resumes the full-time performance of such duties or the Executive’s employment is terminated by the Employer for Disability.

 

5.2                               If the Executive’s employment with the Employer shall be terminated for any reason following a Change in Control, the Company shall pay or cause to be paid the Base Salary to the Executive through the Date of Termination, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of the applicable compensation and benefit plans, programs or arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason.

 

5.3                               Except as expressly provided herein, if the Executive’s employment with the Employer shall be terminated for any reason following a Change in Control, the Company shall pay or cause to be paid to the Executive the Executive’s normal post-termination compensation and benefits as such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, the applicable retirement, insurance and other compensation or benefit plans, programs and arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason.

 

2

 

5.4                               Notwithstanding anything to the contrary contained in any equity plan or arrangement of the Company or any agreement between the Company or the Employer and the Executive (but subject to the provisions of Section 14.3(D)), upon or following the occurrence of a Change in Control, any outstanding stock option, restricted stock or other equity or equity-based award granted to the Executive (including any award that resulted from a substitution or replacement of equity awards upon such Change in Control) shall become immediately vested and exercisable if the Executive becomes entitled to the Severance Payments described in Section 6.1; provided that with respect to any stock option, the time period in which the Executive will have to exercise such stock option shall be 24 months following the Date of Termination. From and after the occurrence of a Change in Control, the “detrimental activity” provisions in the Company’s equity plans shall no longer apply to any award issued to the Executive under such plans.

 

6.                                      Severance Payments.

 

6.1                               If the Executive’s employment with the Employer is terminated within twenty-four (24) months following a Change in Control, other than (a) by the Employer for Cause, (b) by reason of death or Disability, or (c) by the Executive without Good Reason, then the Company shall, subject to Section 15 hereof, pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (“Severance Payments”), in addition to any payments and benefits to which the Executive is entitled under Section 5.  For purposes of this Agreement, the Executive’s employment shall be deemed to have been terminated within twenty-four (24) months following a Change in Control and during the Term by the Employer without Cause or by the Executive with Good Reason, if (i) the Executive’s employment is terminated by the Employer without Cause during a Potential Change in Control Period, or (ii) the Executive terminates Executive’s employment for Good Reason during a Potential Change in Control Period, so long as at the time of such termination the Term has not expired pursuant to the final sentence of Section 2. In the event that the Executive’s employment is terminated in the manner described in the preceding sentence during a Potential Change in Control Period, a Change in Control shall be deemed to have occurred immediately preceding such termination for purposes of Section 5.4 hereof. Except as described above, the Executive shall not be entitled to benefits pursuant to this Section 6.1 unless a Change in Control shall have occurred during the Term.

 

(A)                               The Company shall pay to the Executive a lump sum severance payment, in cash, equal to 1.0 times the sum of (a) the Base Salary, and (b) the sum of the target annual bonus available to the Executive pursuant to each of the Employer ‘s annual bonus plans or any successor plans (but excluding any special performance or incentive plan) in which the Executive participates in respect of the fiscal year in which the Date of Termination occurs (without giving effect to any event or circumstance constituting Good Reason), assuming for this purpose attainment of 100% of any applicable target; provided, however, that if the applicable target bonus would have been pro-rated for a partial fiscal year, such target bonus shall be recalculated for purposes of this Section 6.1(A) to equal

 

3

 

the amount that for which the Executive would have been eligible for the entire fiscal year.

 

(B)                               For the twenty four (24) month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and the Executive’s dependents health insurance benefits substantially similar to those provided to the Executive and the Executive’s dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and the Executive’s dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater after-tax cost to the Executive than the cost to the Executive immediately prior to such date or occurrence. If, at the end of the twenty four (24) month period following the Date of Termination, the Executive has not previously become eligible to receive comparable benefits from a new employer or pursuant to a government-sponsored health insurance or health care program, then the Company shall arrange, at its sole cost and expense, to enable the Executive to convert coverage for the Executive and the Executive’s dependents being provided hereunder to individual policies or programs, if applicable, upon the same terms as other former employees of the Company may apply for such conversion. The cost of providing the benefits set forth in this Section 6.1(B) shall be in addition to (and shall not reduce) the Severance Payments. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the extent the Executive becomes eligible to receive comparable benefits from a new employer or pursuant to a government-sponsored health insurance or health care program. Unless the Executive agrees to another method, the coverage described in this Section 6.1(B) will be provided through a third party insurer.

 

(C)                               The Company shall pay to the Executive a prorated portion of the Executive’s bonus compensation for the fiscal year in which the Date of Termination occurs (assuming that any applicable performance objectives were achieved at the target level of performance and without giving effect to any event or circumstance constituting Good Reason) calculated by multiplying (i) the target amount of such bonus compensation by (ii) a fraction, the numerator of which is the number of days in the applicable fiscal year through the Date of Termination and the denominator of which is 365. The foregoing payment shall be reduced by the sum of any quarterly, semi-annual and other partial year bonus payments previously paid to the Executive in respect of the fiscal year in which the Date of Termination occurs.

 

6.2                               (A) Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by the Executive (including any payment or benefit received in connection with a Change in Control or the termination of the Executive’s employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Payments, being hereinafter referred to as the “Total Payments”) would be subject (in whole or part) to the Excise Tax, then the Total Payments shall be

 

4

 

reduced to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax, but only if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments). If a reduction in the Total Payments is required under this Section 6.2(A), the Total Payments shall be reduced by the Company in its reasonable discretion in the following order: (A) reduction of any cash payment (excluding any cash payment with respect to the acceleration of equity awards) that is otherwise payable to the Executive that is exempt from Section 409A of the Code; (B) reduction of any other payments or benefits otherwise payable to the Executive (other than those described in clause (C) below) on a pro-rata basis or such other manner that complies with Section 409A of the Code; and (C) reduction of any payment or benefit with respect to the acceleration of equity awards that is otherwise payable to the Executive (on a pro-rata basis as between equity awards that are covered by Section 409A of the Code and those that are not (or such other manner that complies with Section 409A of the Code)).

 

(B)                               For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

 

(C)                               All determinations required to be made under this Section 6.2 shall be made by a professional services firm designated by the Company that is experienced in performing calculations under Section 280G (the “Firm”) which shall provide detailed supporting calculations both to the Company and Executive. All fees and expenses of the Firm shall be borne solely by the Company.

 

6.3                               Subject to Section 14.3(A), the payments provided in subsection (A) and (C) of Section 6.1 shall be made on the eighth (8th) day following the Release

 

5

 

Deadline; provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in Section 1274(b)(2)(B) of the Code) on the thirtieth (30th) day after the Release Deadline (also subject to Section 14.3(A)). In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive, payable on the fifth (5th) business day after demand by the Company (together with interest at 120% of the rate provided in Section 1274(b)(2)(B) of the Code).  At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations.

 

6.4                               The Company shall pay to the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating to the termination of the Executive’s employment, in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder. Such payments shall be made within five (5) business days after delivery of the Executive’s written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require. The Executive’s reimbursement rights described in this Section 6.4 shall remain in effect for the life of the Executive, provided, that, in order for the Executive to be entitled to reimbursement hereunder, the Executive must submit the written reimbursement request described above within 180 days following the date upon which the applicable fee or expense is incurred.

 

7.                                      Termination Procedures and Compensation During Dispute.

 

7.1                               Notice of Termination.  After a Change in Control, any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 10. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail any facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than two-thirds (2/3) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i), (ii) or (iii) of the definition of Cause herein, and specifying the particulars thereof in detail.

 

6

 

7.2                               Date of Termination.  “Date of Termination,” with respect to any purported termination of the Executive’s employment with the Employer after a Change in Control, shall mean (i) if the Executive’s employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided, that the Executive shall not have returned to the full-time performance of the Executive’s duties during such thirty (30) day period), and (ii) if the Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Employer, shall not be less than ninety (90) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor more than sixty (60) days, respectively, from the date such Notice of Termination is given).

 

7.3                               Dispute Concerning Termination.  If within ten (10) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section 7.3), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the earlier of (i) the date on which the Term ends or (ii) the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of an arbitrator or a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence.

 

7.4                               Compensation During Dispute.  If the Date of Termination is extended in accordance with Section 7.3, the Company shall continue to pay or cause to be paid to the Executive the full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, the Base Salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given, until the Date of Termination, as determined in accordance with Section 7.3. Amounts paid under this Section 7.4 are in addition to all other amounts due under this Agreement (other than those due under Section 5.2) and shall not be offset against or reduce any other amounts due under this Agreement.

 

8.                                      No Mitigation.  If the Executive’s employment with the Employer terminates following a Change in Control, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 or Section 7.4.  Except as set forth in Section 6.1(B), the amount of any payment or benefit provided for in this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company or the Employer, or otherwise.

 

7

 

9.                                      Successors; Binding Agreement.

 

9.1                               In addition to any obligations imposed by law upon any successor to the Company, the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform 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. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement.

 

9.2                               This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive’s estate.

 

10.                               Notices.  For the purpose 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 or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the last known residence address of the Executive or in the case of the Company, to its principal office to the attention of the Chief Executive Officer of the Company with a copy to its clerk or Secretary, 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.

 

11.                               Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board.  No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of 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. This Agreement supersedes, effective as of the date hereof, any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party or the Employer (including, without limitation, any prior agreement between the company the the Executive containing change in control provisions); provided, however, that this Agreement shall not supersede any agreement setting forth the terms and conditions of the Executive’s employment with the Employer. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Executive has agreed.  The obligations of the Company under this Agreement

 

8

 

which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Sections 6 and 7) shall survive such expiration.

 

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.                               Settlement of Disputes; Arbitration; 409A Compliance.

 

14.1                        All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing.  Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) days after notification by the Board that the Executive’s claim has been denied.

 

14.2                        Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in San Francisco, California, in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the evidentiary standards set forth in this Agreement shall apply. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. Notwithstanding any provision of this Agreement to the contrary, the Executive shall be entitled to seek specific performance of the Executive’s right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement.

 

14.3                        It is the intention of the Company and the Executive that this Agreement not result in taxation of the Executive under Section 409A of the Code and the regulations and guidance promulgated thereunder and that the Agreement shall be construed in accordance with such intention. Without limiting the generality of the foregoing, the Company and the Executive agree as follows:

 

(A)                               Notwithstanding anything to the contrary herein, if the Executive is a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code) with respect to the Company, any amounts (or benefits) otherwise payable to or in respect of the Executive under this Agreement pursuant to the Executive’s termination of employment with the Employer shall be delayed, to the extent required so that taxes are not imposed on the Executive pursuant to Section 409A of the Code, and shall be paid upon the earliest date permitted by Section 409A(a)(2) of the Code;

 

9

 

(B)                               For purposes of this Agreement, the Executive’s employment with the Employer will not be treated as terminated unless and until such termination of employment constitutes a “separation from service” for purposes of Section 409A of the Code;

 

(C)                               To the extent necessary to comply with the provisions of Section 409A of the Code and the guidance issued thereunder (1) reimbursements to the Executive as a result of the operation of Section 6.1(B) or Section 6.4 hereof shall be made not later than the end of the calendar year following the year in which the reimbursable expense is incurred and shall otherwise be made in a manner that complies with the requirements of Treasury Regulation Section 1.409A-3(i)(l)(iv), (2) if Executive is a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code), any reimbursements to the Executive as a result of the operation of such sections with respect to a reimbursable event within the first six months following the Date of Termination which are required to be delayed pursuant to Section 14.3(A) shall be made as soon as practicable following the date which is six months and one day following the Date of Termination (subject to clause (1) of this sentence); and

 

(D)                               If the provisions of Section 5.4 are applicable to an equity or equity-based award subject to the provisions of Section 409A of the Code and the immediate payment of the award contemplated by Section 5.4 would result in taxation under Section 409A, payment of such awards shall be made upon the earliest date upon which such payment may be made without resulting in taxation under Section 409A of the Code. For the avoidance of doubt, with respect to any equity or equity-based awards which are subject to Section 409A of the Code and which comply with the permissible payment requirements of such section by providing for payments pursuant to a fixed schedule, the application of Section 5.4, as modified (to the extent required) by this Section 14.3(D), shall require that the payment of such awards continue upon such fixed schedule following the Date of Termination until the award is fully vested.

 

15.                               Release.  Notwithstanding anything to the contrary herein, the payment to the Executive of the benefits provided in Section 6 upon the Executive’s termination of employment shall be subject to the execution and non-revocation by the Executive of the Company’s standard form of release in favor of the Company and its Affiliates, as in effect immediately prior to the Change in Control. Such release must be executed by the Executive within 45 days following the Date of Termination (the “Release Deadline”).

 

16.                               Definitions.  For purposes of this Agreement, the following terms shall have the meanings indicated below:

 

16.1                        “Base Amount” shall have the meaning set forth in Section 280G(b)(3) of the Code.

 

16.2                        “Base Salary” shall mean the annual base salary in effect for the Executive immediately prior to a Change in Control, as such salary may be increased

 

10

 

from time to time during the Term (in which case such increased amount shall be the Base Salary for purposes hereof), but without giving effect to any reduction thereto.

 

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

 

16.4                        “Board” shall mean the Board of Directors of the Company.

 

16.5                        “Cause” for termination by the Employer of the Executive’s employment shall mean (i) the willful and continued failure by the Executive (other than any such failure resulting from (A) the Executive’s incapacity due to physical or mental illness, (B) any such actual or anticipated failure after the issuance of a Notice of Termination by the Executive for Good Reason or (C) the Company’s or the Employer’s active or passive obstruction of the performance of the Executive’s duties and responsibilities) to perform substantially the duties and responsibilities of the Executive’s position with the Employer after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed such duties or responsibilities; (ii) the conviction of the Executive by a court of competent jurisdiction for felony criminal conduct; or (iii) the willful engaging by the Executive in fraud or dishonesty which is demonstrably and materially injurious to the Company or its reputation, monetarily or otherwise.  No act, or failure to act, on the Executive’s part shall be deemed “willful” unless committed or omitted by the Executive in bad faith and without reasonable belief that the Executive’s act or failure to act was in, or not opposed to, the best interest of the Company. It is also expressly understood that the Executive’s attention to matters not directly related to the business of the Employer shall not provide a basis for termination for Cause so long as the Board has approved the Executive’s engagement in such activities. No termination of the Executive’s employment shall be a termination for Cause hereunder unless it is effected in accordance with Section 7.1.

 

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

 

(A)                               any Person becomes the Beneficial Owner (whether through stock purchase, merger or otherwise), directly or indirectly, of securities of the Company representing 50% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding securities, provided that the foregoing shall not apply to a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) that results in the ownership, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company before such transaction;

 

(B)                               following an Initial Public Offering the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date of the Initial Public Offering,

 

11

 

constitute the Board and any new director (other than a director 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 directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then in office who either were directors on the date of the Initial Public Offering or whose appointment, election or nomination for election was previously so approved or recommended;

 

(C)                               the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

 

Notwithstanding anything in the foregoing to the contrary, no Change in Control shall be deemed to have occurred for purposes of this Agreement by virtue of any transaction which results in the Executive, or a group of Persons which includes the Executive, acquiring, directly or indirectly, 50% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding securities.

 

16.7                        “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

16.8                        “Company” shall mean Pivotal Software, Inc. and, except in determining under Section 16.6 whether or not any Change in Control of the Company has occurred, shall include any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

16.9                        “Date of Termination” shall have the meaning set forth in Section 7.2.

 

16.10                 “Disability” shall be deemed the reason for the termination of the Executive’s employment, if, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive’s duties with the Employer for a period of one hundred twenty (120) days, the Company shall have given the Executive a Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termination is given, the Executive shall not have returned to the full-time performance of the Executive’s duties. Any question as to the existence of the Executive’s Disability upon which the Executive and the Company cannot agree shall be determined by a qualified independent physician selected by the Executive (or, if the Executive is unable to make such selection, it shall be made by any

 

12

 

adult member of the Executive’s immediate family), and approved by the Company. The determination of such physician made in writing to the Company and to the Executive shall be final and conclusive for all purposes of this Agreement, absent fraud.

 

16.11                 “Employer” shall mean the Company in instances where the Executive is an employee of the Company and shall mean the applicable subsidiary of the Company in instances where the Executive is employed by a subsidiary of the Company and the Board (or its delegate) has authorized the entry into a Change in Control Severance Agreement with the Executive in his capacity as an employee of such subsidiary.

 

16.12                 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

16.13                 “Excise Tax” shall mean any excise tax imposed under Section 4999 of the Code.

 

16.14                 “Executive” shall mean the individual named in the first paragraph of this Agreement.

 

16.15                 “Good Reason” for termination by the Executive of the Executive’s employment shall mean the occurrence (without the Executive’s express written consent) after any Change in Control, or prior to a Change in Control under the circumstances described in the second sentence of Section 6.1 (treating all references to a “Change in Control” as references to a “Potential Change in Control”), of any one of the following acts by the Company or the Employer, or failures by the Company or the Employer to act, unless such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof:

 

(A)                               A significant adverse change in the Executive’s role as in effect immediately prior to the Change in Control, including, without limitation, any significant adverse change in the Executive’s role as a result of a diminution of the Executive’s duties or responsibilities or the assignment to the Executive of any duties or responsibilities which are inconsistent with such role;

 

(B)                               a reduction in the Executive’s total annual target compensation (as compared to the Executive’s total annual target compensation immediately prior to the Change in Control), other than pursuant to a broad-based reduction in total annual target compensation which applies to all similarly situated executives of the Company or any acquirer, as applicable (and defining total annual target compensation for purposes of this Section 16.15(B) as Base Salary and annual target cash incentive compensation (and not including equity or equity-based compensation));

 

(C)                               the failure by the Company or the Employer to continue in effect any material Plan in which the Executive is participating at the time of the Change in Control (or Plans providing the Executive with at least substantially similar benefits) other than as a result of the normal expiration of any such Plan in

 

13

 

accordance with its terms as in effect at the time of the Change in Control, or the taking of any action, or the failure to act, by the Company or the Employer which would have a material adverse effect on the Executive’s continued participation in any of such Plans following the date of the Change in Control or which would materially reduce the Executive’s benefits in the future under any of such Plans or deprive the Executive of any material benefit enjoyed by the Executive under a Plan at the time of the Change in Control;

 

(D)                               the Company or the Employer requiring the Executive to be based at an office that is greater than 35 miles from where the Executive’s office is located immediately prior to the Change in Control except for required travel on the Employer’s business to an extent substantially consistent with the business travel obligations which the Executive undertook on behalf of the Employer prior to the Change in Control; or

 

(E)                                a breach by the Company of its obligations under Section 9.1 hereof.

 

The Executive’s right to terminate the Executive’s employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. In order for Good Reason to exist hereunder, the Executive must provide notice to the Company of the existence of the condition or circumstance described above within 90 days of the initial existence of the condition or circumstance (or, if later, within 90 days of the Executive’s becoming aware of such condition or circumstance), and the Company must have failed to cure such condition within 30 days of the receipt of such notice. Subject to the preceding sentence, the Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.

 

For purposes of any determination regarding the existence of Good Reason, any good faith claim by the Executive that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board by clear and convincing evidence that Good Reason does not exist.

 

16.16                 “Initial Public Offering” shall mean the consummation of (1) a firmly underwritten initial public offering pursuant to a registration statement declared effective under the Securities Act of 1933, as amended, covering the offer and sale of the common stock of the Company to the public generally or (2) another transaction of series of transactions which results in the common stock of the Company being listed on a national securities exchange.

 

16.17                 “Notice of Termination” shall have the meaning set forth in Section 7.1.

 

16.18                 “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 (A) such term shall not include Dell Technologies, Inc. together with its direct and indirect

 

14

 

subsidiaries, but shall include each of VMware, Inc. or EMC Corporation, together with their respective subsidiaries, and (B) such term shall not include (i) the Company (or one of its subsidiaries), (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company (or one of its subsidiaries) or (iii) an underwriter temporarily holding securities pursuant to an offering of such securities.

 

16.19                 “Plan” shall mean any compensation plan such as an incentive plan, or any employee benefit plan such as a thrift, pension, profit sharing, medical, disability, accident, life insurance plan or a relocation or vacation plan or policy or any other plan, program or policy of the Company or the Employer intended to benefit employees, but excluding following a Change in Control (but not during a Potential Change in Control Period) any stock option, restricted stock or other stock-based plan or benefit except with respect to any awards outstanding under any such plan as of the date of the Change in Control.

 

16.20                 “Potential Change in Control” shall be deemed to have occurred if the event set forth in any one of the following subsections shall have occurred:

 

(A)                               the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

 

(B)                               the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; or

 

(C)                               the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

 

16.21                 “Potential Change in Control Period” shall commence upon the occurrence of a Potential Change in Control and shall lapse upon the occurrence of a Change in Control or, if earlier (i) with respect to a Potential Change in Control occurring pursuant to Section 16.20(A), immediately upon the abandonment or termination of the applicable agreement, (ii) with respect to a Potential Change in Control occurring pursuant to Section 16.20(B), immediately upon a public announcement by the applicable party that such party has abandoned its intention to take or consider taking actions which if consummated would result in a Change in Control, or (iii) with respect to a Potential Change in Control occurring pursuant to Section 16.20(C), upon the one year anniversary of the occurrence of a Potential Change in Control (or such earlier date as may be determined by the Board).

 

16.22                 “Release Deadline” shall have the meaning set forth in Section 15.

 

16.23                 “Retirement” shall be deemed the reason for the termination by the Executive of the Executive’s employment if such employment is terminated in accordance with the Employer’s retirement policy, including early retirement, generally applicable to its salaried employees.

 

15

 

16.24                 “Severance Payments” shall have the meaning set forth in Section 6.1.

 

16.25                 “Term” shall mean the period of time described in Section 2 (including any extension, continuation or termination described therein).

 

16.26                 “Total Payments” shall mean those payments so described in Section 6.2.

 

16

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

	
 
    	
PIVOTAL SOFTWARE, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Executive]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00281-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00281-of-00352.parquet"}]]