Document:

Exhibit 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.

 

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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

 

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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

 

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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

 

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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.

 

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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.

 

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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

 

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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;

 

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(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

 

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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,

 

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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

 

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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

 

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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

 

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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.

 

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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.

 

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

 

	
 
    	
PIVOTAL SOFTWARE, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Executive]Exhibit 10.9

 

TAX SHARING AGREEMENT

 

by and among

 

DELL TECHNOLOGIES INC.

 

AND ITS AFFILIATES,

 

EMC CORPORATION

 

AND ITS AFFILIATES

 

and

 

PIVOTAL SOFTWARE, INC.

 

AND ITS AFFILIATES,

 

Dated:

 

February 8, 2017

 

 

TAX SHARING AGREEMENT

 

THIS TAX SHARING AGREEMENT (this “Agreement”) dated as of February 8, 2017 is entered into by and among Dell Technologies Inc., a Delaware corporation (“Dell Technologies”, each Dell Technologies Affiliate (as defined below), EMC Corporation, a Massachusetts corporation (“EMC”), each EMC Affiliate (as defined below), Pivotal Software, Inc., a Delaware corporation and an direct subsidiary of EMC (“Pivotal”), and each Pivotal Affiliate (as defined below).

 

RECITALS

 

WHEREAS, Dell Technologies and EMC were parties to the Agreement and Plan of Merger dated as of October 12, 2015, as amended by the First Amendment to Agreement and Plan of Merger, dated as of May 16, 2016, by and among Dell Technologies, Dell Inc., a Delaware Corporation, Universal Acquisition Co., a Delaware corporation and wholly owned subsidiary of Dell Technologies, and EMC (collectively, (the “Merger Agreement”);

 

WHEREAS, on September 7, 2016, the Effective Time of the Merger (as defined in the Merger Agreement), EMC and its direct and indirect domestic subsidiaries, including Pivotal and each Pivotal Affiliate, became members of an Affiliated Group (as defined below) of which Dell Technologies is the common parent corporation;

 

WHEREAS, a certain Fourth Amended and Restated Shareholders’ Agreement by and among Pivotal, EMC, and other shareholders of Pivotal, as amended on December 13, 2016, provides that EMC and Dell Technologies shall not be obligated to reimburse Pivotal, or any Pivotal shareholder, for any Pivotal Tax Benefit (the “Tax Benefit”);

 

WHEREAS, as stipulated in that certain Fourth Amended and Restated Shareholders’ Agreement, at any time prior to a closing of a Qualified IPO, Dell Technologies shall have the right to cause Pivotal to enter into a tax sharing agreement with Dell Technologies;

 

WHEREAS, the parties have determined that it is appropriate to enter into this Agreement with respect to certain tax matters beginning with Pivotal’s Effective Tax Return Period (the “Effective Tax Return Period”) as set forth in this Agreement in Section 10.01.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto hereby agree as follows:

 

Section 1.                                          Definitions.

 

As used in this Agreement, capitalized terms shall have the following meanings (such meanings to be equally applicable to both the singular and the plural forms of the terms defined):

 

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“Affiliated Group” means an affiliated group of corporations within the meaning of section 1504(a) of the Code that files a consolidated return for United States federal Income Tax purposes.

 

“After Tax Amount” means any additional amount necessary to reflect the hypothetical Tax consequences of the receipt or accrual of any payment required to be made under this Agreement (including payment of an additional amount or amounts hereunder and the effect of the deductions available for interest paid or accrued and for Taxes such as state and local Income Taxes), determined by using the highest applicable statutory corporate Income Tax rate (or rates, in the case of an item that affects more than one Tax) for the relevant taxable period (or portion thereof).

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Audit” means any audit, assessment of Taxes, other examination by any Taxing Authority, proceeding, or appeal of such a proceeding relating to Taxes, whether administrative or judicial, including proceedings relating to competent authority determinations.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Combined Return” means any Tax Return, other than with respect to United States federal Income Taxes, filed on a consolidated, combined (including nexus combination, worldwide combination, domestic combination, line of business combination or any other form of combination) or unitary basis wherein Pivotal or one or more Pivotal Affiliates join in the filing of such Tax Return (for any taxable period or portion thereof) with Dell Technologies or one or more Dell Technologies Affiliates.

 

“Consolidated Return” means any Tax Return with respect to United States federal Income Taxes filed on a consolidated basis wherein Pivotal or one or more Pivotal Affiliates join in the filing of such Tax Return (for any taxable period or portion thereof) with Dell Technologies or one or more Dell Technologies Affiliates.

 

“Controlling Party” has the meaning set forth in Section 8.01 of this Agreement.

 

“Deconsolidation Event” means, with respect to Pivotal and each Pivotal Affiliate, any event or transaction that causes Pivotal and/or one or more Pivotal Affiliates to no longer be eligible to join with Dell Technologies or one or more Dell Technologies Affiliates in the filing of a Consolidated Return or a Combined Return.

 

“Dell Technologies Affiliate” means any corporation or other entity directly or indirectly “controlled” by Dell Technologies where “control” means the ownership of fifty percent (50%) or more of the ownership interests of such corporation or other entity (by vote or value) or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such corporation or other entity, but at all times excluding Pivotal or any Pivotal Affiliate.

 

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“Dell Technologies Business” means all of the businesses and operations conducted by Dell Technologies and Dell Technologies Affiliates, excluding the Pivotal Business, at any time.

 

“Dell Technologies Group” means the Affiliated Group, or similar group of entities as defined under corresponding provisions of the laws of other jurisdictions, of which Dell Technologies is the common parent corporation, and any corporation or other entity which many be, may have been or may become a member of such group from time to time, but excluding any member of the Pivotal Group.

 

“Distribution” means any distribution by Dell Technologies or any Dell Technologies Affiliate of its issued and outstanding shares of Pivotal stock (and securities, if any) that Dell Technologies or any Dell Technologies Affiliate holds at such time to Dell Technologies shareholders and/or securityholders or the shareholders and/or securityholders of a Dell Technologies Affiliate in a transaction intended to qualify as a distribution under Section 355 of the Code.

 

“Distribution Taxes” means any Taxes imposed on, or increase in Taxes incurred by, Dell Technologies or any Dell Technologies Affiliate, and any Taxes of a Dell Technologies shareholder (or former Dell Technologies shareholder) that are required to be paid or reimbursed by Dell Technologies or any Dell Technologies Affiliate pursuant to a legal determination, provided that Dell Technologies shall have vigorously defended itself in any legal proceeding involving Taxes of a Dell Technologies shareholder, (without regard to whether such Taxes are offset or reduced by any Tax Asset, Tax Item, or otherwise) resulting from, or arising in connection with, the failure of a Distribution to qualify as a tax-free transaction under Section 355 of the Code (including any Tax resulting from the application of Section 355(d) or Section 355(e) of the Code to a Distribution) or corresponding provisions of the laws of any other jurisdictions.  Any Income Tax referred to in the immediately preceding sentence shall be determined using the highest applicable statutory corporate Income Tax rate for the relevant taxable period (or portion thereof).

 

“EMC” has the meaning set forth in the preamble hereto.

 

“EMC Affiliate” means any corporation or other entity directly or indirectly “controlled” by EMC where “control” means the ownership of fifty percent (50%) or more of the ownership interests of such corporation or other entity (by vote or value) or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such corporation or other entity, but at all times excluding Pivotal or any Pivotal Affiliate.

 

“Effective Tax Return Period” has the meaning set forth in Section 10.01 of this Agreement.

 

“Estimated Tax Installment Date” means, with respect to United States federal Income Taxes, the estimated Tax installment due dates prescribed in Section 6655(c) of

 

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the Code and, in the case of any other Tax, means any other date on which an installment payment of an estimated amount of such Tax is required to be made.

 

“Final Determination” shall mean the final resolution of liability for any Tax for any taxable period, by or as a result of: (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction; (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the laws of other jurisdictions, which resolves the entire Tax liability for any taxable period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered by the jurisdiction imposing the Tax; or (iv) any other final disposition, including by reason of the expiration of the applicable statute of limitations.

 

“Income Tax” shall mean any federal, state, local or non-U.S. Tax determined (in whole or in part) by reference to net income, net worth, gross receipts or capital, or any Taxes imposed in lieu of such a tax.  For the avoidance of doubt, the term “Income Tax” includes any franchise tax or any Taxes imposed in lieu of such a tax.

 

“Income Tax Return” means any Tax Return relating to any Income Tax.

 

“Independent Accountant” has the meaning set forth in Section 2.04(b) of this Agreement.

 

“Independent Firm” has the meaning set forth in Section 10.04 of this Agreement.

 

“IRS” means the United States Internal Revenue Service or any successor thereto, including its agents, representatives, and attorneys.

 

“Joint Responsibility Item” means any Tax Item for which the non-Controlling Party’s responsibility under this Agreement could exceed three hundred thousand dollars ($300,000), but not a Sole Responsibility Item.

 

“Non-Income Tax Return” means any Tax Return relating to any Tax other than an Income Tax.

 

“Officer’s Certificate” means a letter executed by an officer of Dell Technologies or Pivotal and provided to Tax Counsel as a condition for the completion of a Tax Opinion or Supplemental Tax Opinion.

 

“Option” means an option to acquire common stock, or other equity-based incentives the economic value of which is designed to mirror that of an option, including non-qualified stock options, discounted non-qualified stock options, cliff options to the extent stock is issued or issuable (as opposed to cash compensation), and tandem stock options to the extent stock is issued or issuable (as opposed to cash compensation).

 

“Owed Party” has the meaning set forth in Section 7.05 of this Agreement.

 

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“Owing Party” has the meaning set forth in Section 7.05 of this Agreement.

 

“Payment Period” has the meaning set forth in Section 7.05(e) of this Agreement.

 

“Pivotal” has the meaning set forth in the preamble hereto.

 

“Pivotal Affiliate” means any corporation or other entity directly or indirectly “controlled” by Pivotal at the time in question, where “control” means the ownership of fifty percent (50%) or more of the ownership interests of such corporation or other entity (by vote or value) or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such corporation or other entity.

 

“Pivotal Business” means the business and operations conducted by Pivotal and Pivotal Affiliates.

 

“Pivotal Business Records” has the meaning set forth in Section 10.03(b) of this Agreement.

 

“Pivotal Group” means the Affiliated Group, or similar group of entities as defined under corresponding provisions of the laws of other jurisdictions, of which Pivotal will be the common parent corporation immediately after a Deconsolidation Event and including any corporation or other entity which may become a member of such group from time to time.

 

“Pivotal Separate Tax Liability” means an amount equal to the Tax liability that Pivotal and each Pivotal Affiliate would have incurred if they had filed a consolidated return, combined return (including nexus combination, worldwide combination, domestic combination, line of business combination or any other form of combination), unitary return or a separate return, as the case may be, separate from the members of the Dell Technologies Group, for the relevant Tax period, and such amount shall be computed by Dell Technologies (A) in a manner consistent with (i) general Tax accounting principles, (ii) the Code and the Treasury regulations promulgated thereunder, and (iii) past practice, if any, and (B) taking into account any Tax Asset of Pivotal and any Pivotal Affiliate attributable to any Tax period beginning on or after September 7, 2016; provided, however, that, although the Pivotal Separate Tax Liability is to be computed on a hypothetical basis as if Pivotal and each Pivotal Affiliate were separate from the members of the Dell Technologies Group, the fact that Pivotal or any Pivotal Affiliate is included in a Consolidated Return or a Combined Return and the effect that such inclusion has on the calculation of any Tax Item, shall nevertheless be taken into account for purposes of computing the Pivotal Separate Tax Liability (for example, for purposes of calculating its R&D credit, Pivotal shall be entitled to its allocable share of the consolidated R&D credit of the Dell Technologies Group).  For the avoidance of doubt, the Pivotal Separate Tax Liability shall be computed for the relevant Tax period without regard to whether or not Pivotal or any Pivotal Affiliate would be able, on a hypothetical basis separate from the members of the Dell Technologies Group, to utilize in an earlier or later Tax period a Tax Asset resulting from such computation.

 

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“Post-Deconsolidation Period” means any taxable period beginning after the date of a Deconsolidation Event.

 

“Pre-Deconsolidation Period” means any taxable period beginning on or before the date of a Deconsolidation Event.

 

“Ruling” means (i) any private letter ruling issued by the IRS in connection with a Distribution in response to a request for such a private letter ruling filed by Dell Technologies (or any Dell Technologies Affiliate) prior to the date of a Distribution, and (ii) any similar ruling issued by any other Taxing Authority addressing the application of a provision of the laws of another jurisdiction to a Distribution.

 

“Ruling Documents” means (i) the request for a Ruling filed with the IRS, together with any supplemental filings or other materials subsequently submitted on behalf of Dell Technologies, its subsidiaries and shareholders to the IRS, the appendices and exhibits thereto, and any Ruling issued by the IRS to Dell Technologies (or any Dell Technologies Affiliate) in connection with a Distribution and (ii) any similar filings submitted to, or rulings issued by, any other Taxing Authority in connection with a Distribution.

 

“Sole Responsibility Item” means any Tax Item for which the non-Controlling Party has the entire economic liability under this Agreement.

 

“Supplemental Ruling” means (i) any ruling (other than the Ruling) issued by the IRS in connection with a Distribution, and (ii) any similar ruling issued by any other Taxing Authority addressing the application of a provision of the laws of another jurisdiction to a Distribution.

 

“Supplemental Ruling Documents” means (i) the request for a Supplemental Ruling, together with any supplemental filings or other materials subsequently submitted, the appendices and exhibits thereto, and any Supplemental Rulings issued by the IRS in connection with a Distribution and (ii) any similar filings submitted to, or rulings issued by, any other Taxing Authority in connection with a Distribution.

 

“Supplemental Tax Opinion” has the meaning set forth in Section 5.02(c) of this Agreement.

 

“Tax Asset” means any Tax Item that has accrued for Tax purposes, but has not been realized during the taxable period in which it has accrued, and that could reduce a Tax in another taxable period, including a net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable deduction or credit related to alternative minimum tax or any other Tax credit.

 

“Tax Benefit” means a reduction in the Tax liability (or increase in refund or credit or any item of deduction or expense) of a Taxpayer for any taxable period.  Except as otherwise provided in this Agreement, a Tax Benefit shall be deemed to have been realized or received from a Tax Item in a taxable period only if and to the extent that the Tax liability of the Taxpayer for such period, after taking into account the effect of the

 

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Tax Item on the Tax liability of such Taxpayer in the current period and all prior periods, is less than it would have been had such Tax liability been determined without regard to such Tax Item.

 

“Tax Counsel” means a nationally recognized law firm selected by Dell Technologies to provide a Tax Opinion.

 

“Tax Detriment” means an increase in the Tax liability (or reduction in refund or credit or any item of deduction or expense) of a Taxpayer for any taxable period.  Except as otherwise provided in this Agreement, a Tax Detriment shall be deemed to have been realized or incurred from a Tax Item in a taxable period only if and to the extent that the Tax liability of the Taxpayer for such period, after taking into account the effect of the Tax Item on the Tax liability of such Taxpayer in the current period and all prior periods, is more than it would have been had such Tax liability been determined without regard to such Tax Item.

 

“Tax Item” means any item of income, gain, loss, deduction, expense or credit, or other attribute that may have the effect of increasing or decreasing any Tax.

 

“Tax Opinion” means an opinion issued by Tax Counsel as one of the conditions to completing a Distribution addressing certain United States federal Income Tax consequences of a Distribution under Section 355 of the Code.

 

“Tax Return” means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, amended tax return, claim for refund or declaration of estimated Tax) required to be supplied to, or filed with, a Taxing Authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.

 

“Taxes” means all federal, state, local or non-U.S. taxes, charges, fees, duties, levies, imposts, rates or other assessments, including income, gross receipts, net worth, excise, property, sales, use, license, capital stock, transfer, franchise, payroll, withholding, social security, value added or other taxes, (including any interest, penalties or additions attributable thereto) and a “Tax” shall mean any one of such Taxes.

 

“Taxing Authority” means any governmental authority or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS).

 

“Taxpayer” means any taxpayer and its Affiliated Group or similar group of entities as defined under corresponding provisions of the laws of any other jurisdiction of which a taxpayer is a member.

 

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Section 2.                                          Preparation and Filing of Tax Returns.

 

2.01.                     Dell Technologies’ Responsibility.  Subject to the other applicable provisions of this Agreement, Dell Technologies shall have sole and exclusive responsibility for the preparation and filing of:

 

(a)                                 all Consolidated Returns and all Combined Returns for any taxable period;

 

(b)                                 all Income Tax Returns (other than Consolidated Returns and Combined Returns) with respect to Dell Technologies and/or any Dell Technologies Affiliate for any taxable period; and

 

(c)                                  all Non-Income Tax Returns with respect to Dell Technologies, any Dell Technologies Affiliate, or the Dell Technologies Business or any part thereof for any taxable period.

 

2.02.                     Pivotal’s Responsibility.  Subject to the other applicable provisions of this Agreement, Pivotal shall have sole and exclusive responsibility for the preparation and filing of:

 

(a)                                 all Income Tax Returns (other than Consolidated Returns and Combined Returns) with respect to Pivotal and/or any Pivotal Affiliate that are required to be filed (taking into account any extension of time which has been requested or received); and

 

(b)                                 all Non-Income Tax Returns with respect to Pivotal, any Pivotal Affiliate, or the Pivotal Business or any part thereof for any taxable period.

 

2.03.                     Agent.  Subject to the other applicable provisions of this Agreement, Pivotal hereby irrevocably designates, and agrees to cause each Pivotal Affiliate to so designate, Dell Technologies as its sole and exclusive agent and attorney-in-fact to take such action (including execution of documents) as Dell Technologies, in its sole discretion, may deem appropriate in any and all matters (including Audits) relating to any Tax Return described in Section 2.01 of this Agreement.

 

2.04.                     Manner of Tax Return Preparation.

 

(a)                                 Unless otherwise required by a Taxing Authority, the parties hereby agree to prepare and file all Tax Returns, and to take all other actions, in a manner consistent with (1) this Agreement, (2) any Tax Opinion, (3) any Supplemental Tax Opinion, (4) any Ruling, and (5) any Supplemental Ruling.  All Tax Returns shall be filed on a timely basis (taking into account applicable extensions) by the party responsible for filing such returns under this Agreement.

 

(b)                                 Dell Technologies shall have the exclusive right, in its sole discretion, with respect to any Tax Return described in Section 2.01 of this Agreement, to determine (1) the manner in which such Tax Return shall be prepared and filed, including

 

8

 

the elections, method of accounting, positions, conventions and principles of taxation to be used and the manner in which any Tax Item shall be reported, (2) whether any extensions shall be requested, (3) the elections that will be made by Dell Technologies, any Dell Technologies Affiliate, Pivotal, and/or any Pivotal Affiliate on such Tax Return, (4) whether any amended Tax Returns shall be filed, (5) whether any claims for refund shall be made, (6) whether any refunds shall be paid by way of refund or credited against any liability for the related Tax, and (7) whether to retain outside firms to prepare and/or review such Tax Returns; provided, however, that Dell Technologies shall consult with Pivotal prior to changing any method of accounting if such action would solely impact Pivotal or Pivotal Affiliates.  In the case of any Consolidated Return or Combined Return that reports a Pivotal Separate Tax Liability in excess of five million dollars ($5,000,000), Dell Technologies shall provide to Pivotal a pro forma draft of the portion of such Tax Return that reflects the Pivotal Separate Tax Liability and a statement showing in reasonable detail Dell Technologies’ calculation of the Pivotal Separate Tax Liability (including copies of all worksheets and other materials used in preparation thereof) at least twenty-one (21) days prior to the due date (with applicable extensions) for the filing of such Tax Return for Pivotal’ s review and comment.  Pivotal shall provide its comments to Dell Technologies at least ten (10) days prior to the due date (with applicable extensions) for the filing of such Tax Return.  In the case of a dispute regarding the reporting of any Tax Item on such Tax Return or the requesting of a change of method of accounting which would solely impact Pivotal or Pivotal Affiliates, which the parties cannot resolve, Dell Technologies and Pivotal shall jointly retain a nationally recognized accounting firm that is mutually agreed upon by Dell Technologies and Pivotal (the “Independent Accountant”) to determine whether the proposed reporting of Dell Technologies or Pivotal is more appropriate.  If Dell Technologies and Pivotal are unable to agree, the Independent Accountant shall be Deloitte Tax LLP.  The relevant Tax Item shall be reported in the manner that the Independent Accountant determines is more appropriate, and such determination shall be final and binding on Dell Technologies and Pivotal.  If Pivotal has not provided its comments on the pro forma draft of the portion of the Tax Return, or in the case of a dispute regarding the reporting of any Tax Item, such dispute has not been resolved by the due date (with applicable extension) for the filing of any Tax Return, Dell Technologies shall file such Tax Return reporting all Tax Items in the manner as originally set forth on the pro forma draft of the portion of the Tax Return provided to Pivotal; provided, however, that Dell Technologies agrees that it will thereafter file an amended Tax Return, if necessary, reporting any disputed Tax Item in the manner determined by the Independent Accountant, and any other Tax Item as agreed upon by Dell Technologies and Pivotal.  The fees and expenses incurred in retaining the Independent Accountant shall be borne equally by Dell Technologies and Pivotal, except that if the Independent Accountant determines that the proposed reporting of the disputed Tax Item(s) submitted to the Independent Accountant for its determination by a party is frivolous, has not been asserted in good faith or for which there is not substantial authority, one hundred percent (100%) of the fees and expenses of the Independent Accountant shall be borne by such party.

 

(c)                                  Information.  Pivotal shall timely provide, in accordance with Dell Technologies’ internal tax return calendar, which will be provided to Pivotal on a rolling one- year schedule, all information necessary for Dell Technologies to prepare all Tax

 

9

 

Returns and compute all estimated Tax payments (for purposes of Section 7.01 of this Agreement).  If Pivotal does not meet these deadlines, the Section 2.04(b) notice period to Pivotal shall be waived.

 

Section 3.                                          Liability for Taxes.

 

3.01.                     Pivotal’s Liability for Taxes.  Pivotal and each Pivotal Affiliate shall be jointly and severally liable for the following Taxes, and shall be entitled to receive and retain all refunds of Taxes previously incurred by Pivotal, any Pivotal Affiliate, or the Pivotal Business with respect to such Taxes:

 

(a)                                 all Taxes with respect to Tax Returns described in Section 2.01(a) of this Agreement to the extent that such Taxes are related to (i) the Pivotal Separate Tax Liability, or (ii) the Pivotal Business, for any taxable period;

 

(b)                                 all Taxes with respect to Tax Returns described in Section 2.02 of this Agreement; and

 

(c)                                  all Taxes imposed by any Taxing Authority with respect to the Pivotal Business, Pivotal or any Pivotal Affiliate (other than in connection with the required filing of a Tax Return described in Sections 2.01(a) or 2.02 of this Agreement) for any taxable period.

 

3.02.                     Dell Technologies’ Liability for Taxes.  Dell Technologies shall be liable for the following Taxes, and shall be entitled to receive and retain all refunds of Taxes previously incurred by Dell Technologies, any Dell Technologies Affiliate, or the Dell Technologies Business with respect to such Taxes:

 

(a)                                 except as provided in Section 3.01(a) of this Agreement, all Taxes with respect to Tax Returns described in Section 2.01(a) of this Agreement;

 

(b)                                 all Taxes with respect to Tax Returns described in Sections 2.01(b) or 2.01(c) of this Agreement; and

 

(c)                                  all Taxes imposed by any Taxing Authority with respect to Dell Technologies, any Dell Technologies Affiliate, or the Dell Technologies Business (other than in connection with the required filing of a Tax Return described in Section 2.01 of this Agreement) for any taxable period.

 

3.03.                     Taxes, Refunds and Credits.  Notwithstanding Sections 3.01 and 3.02 of this Agreement, (i) Dell Technologies shall be liable for all Taxes incurred by any person with respect to the Dell Technologies Business for all periods and shall be entitled to all refunds and credits of Taxes previously incurred by any person with respect to such Taxes, and (ii) Pivotal and each Pivotal Affiliate shall be jointly and severally liable for all Taxes incurred by any person with respect to the Pivotal Business for all periods and shall be entitled to all refunds and credits of Taxes previously incurred by any person with respect to such Taxes.  Nothing in this Agreement shall be construed to require compensation, by payment, credit, offset or otherwise, by Dell Technologies (or any Dell

 

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Technologies Affiliate) to Pivotal (or any Pivotal Affiliate) for any loss, deduction, credit or other Tax attribute arising in connection with, or related to, Pivotal, any Pivotal Affiliate, or the Pivotal Business, that is shown on, or otherwise reflected with respect to, any Tax Return described in Section 2.01 of this Agreement; provided, however, that in the event that the Pivotal Separate Tax Liability with respect to a particular taxable period is less than zero, Dell Technologies shall pay to Pivotal an amount equal to the Tax Benefit that the Dell Technologies Group recognizes as a result of the Pivotal Separate Tax Liability being less than zero for such taxable period.

 

3.04.                     Payment of Tax Liability.  If one party is liable or responsible for Taxes, under Sections  3.01 through 3.03 of this Agreement, with respect to Tax Returns for which another party is responsible for filing, or with respect to Taxes that are paid by another party, then the liable or responsible party shall pay the Taxes (or a reimbursement of such Taxes) to the other party pursuant to Section 7.05 of this Agreement.

 

3.05.                     Computation.  Dell Technologies shall provide Pivotal with a written calculation in reasonable detail (including, upon reasonable request, copies of all work sheets and other materials used in preparation thereof) setting forth the amount of any Pivotal Separate Tax Liability or estimated Pivotal Separate Tax Liability (for purposes of Section 7.01 of this Agreement) and any Taxes related to the Pivotal Business.  Pivotal shall have the right to review and comment on such calculation.  Any dispute with respect to such calculation shall be resolved pursuant to Section 10.04 of this Agreement; provided, however, that, notwithstanding any dispute with respect to any such calculation, in no event shall any payment attributable to the amount of any Pivotal Separate Tax Liability or estimated Pivotal Separate Tax Liability be paid later than the date provided in Section 7 of this Agreement.

 

Section 4.                                          Deconsolidation Events.

 

4.01.                     Tax Allocations.  Although neither party has any plan to effectuate any transaction that would constitute a Deconsolidation Event, the parties have set forth how certain Tax matters with respect to a Deconsolidation Event would be handled in the event that, as a result of changed circumstances, a transaction that constitutes a Deconsolidation Event is pursued at some future time.

 

(a)                                 Allocation of Tax Items.  In the case of a Deconsolidation Event, all Tax computations for (1) any Pre-Deconsolidation Periods ending on the date of the Deconsolidation Event and (2) the immediately following taxable period of Pivotal or any Pivotal Affiliate, shall be made pursuant to the principles of Section 1.1502-76(b) of the Treasury Regulations or of a corresponding provision under the laws of other jurisdictions, as reasonably determined by Dell Technologies, taking into account all reasonable suggestions made by Pivotal with respect thereto.

 

(b)                                 Allocation of Tax Assets.  In the case of a Deconsolidation Event, Dell Technologies and Pivotal shall cooperate in determining the allocation of any Tax Assets among Dell Technologies, each Dell Technologies Affiliate, Pivotal, and each Pivotal Affiliate.  The parties hereby agree that in the absence of controlling legal

 

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authority or unless otherwise provided under this Agreement, Tax Assets shall be allocated to the legal entity that is required under Section 3 of this Agreement to bear the liability for the Tax associated with such Tax Asset, or in the case where no party is required hereunder to bear such liability, the party that incurred the cost or burden associated with the creation of such Tax Asset.

 

4.02.                     Carrybacks.

 

(a)                                 In General.  In the case of a Deconsolidation Event, Dell Technologies agrees to pay to Pivotal the Tax Benefit from the use in any Pre-Deconsolidation Period of a carryback of any Tax Asset of the Pivotal Group from a Post-Deconsolidation Period (other than a carryback of any Tax Asset attributable to Distribution Taxes for which the liability is borne by Dell Technologies or any Dell Technologies Affiliate).  If subsequent to the payment by Dell Technologies to Pivotal of the Tax Benefit of a carryback of a Tax Asset of the Pivotal Group, there shall be a Final Determination which results in a decrease (1) to the amount of the Tax Asset so carried back or (2) to the amount of such Tax Benefit, Pivotal shall repay to Dell Technologies any amount which would not have been payable to Pivotal pursuant to this Section 4.02(a) had the amount of the benefit been determined in light of these events.  Nothing in this Section 4.02(a) shall require Dell Technologies to file an amended Tax Return or claim for refund of Income Taxes; provided, however, that Dell Technologies shall use its reasonable efforts to use any carryback of a Tax Asset of the Pivitol Group that is carried back under this Section 4.02(a).

 

(b)                                 Net Operating Losses.  In the case of a Deconsolidation Event, notwithstanding any other provision of this Agreement, Pivotal hereby expressly agrees to elect (under Section 172(b)(3) of the Code and, to the extent feasible, any similar provision of any state, local or non-U.S. Tax law, including Section 1.1502-21T(b)(3) of the Treasury Regulations) to relinquish any right to carryback net operating losses to any Pre-Deconsolidation Periods of Dell Technologies (in which event no payment shall be due from Dell Technologies to Pivotal in respect of such net operating losses).

 

4.03.                     Continuing Covenants.  Each of Dell Technologies (for itself and each Dell Technologies Affiliate) and Pivotal (for itself and each Pivotal Affiliate) agrees (1) not to take any action reasonably expected to result in an increased Tax liability to the other, a reduction in a Tax Asset of the other or an increased liability to the other under this Agreement, and (2) to take any action reasonably requested by the other that would reasonably be expected to result in a Tax Benefit or avoid a Tax Detriment to the other, provided, in either such case, that the taking or refraining to take such action does not result in any additional cost not fully compensated for by the other party or any other adverse effect to such party.  The parties hereby acknowledge that the preceding sentence is not intended to limit, and therefore shall not apply to, the rights of the parties with respect to matters otherwise covered by this Agreement.

 

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Section 5.                                          Distribution Taxes.

 

5.01.                     Liability for Distribution Taxes.  Although neither party has any plan or intent to effectuate a Distribution, the parties have set forth how certain Tax matters with respect to a Distribution would be handled in the event that, as a result of changed circumstances, a Distribution is pursued at some future time.

 

(a)                                 Dell Technologies’ Liability for Distribution Taxes.  In the event of a Distribution, notwithstanding Sections 3.01 through 3.03 of this Agreement, Dell Technologies and each Dell Technologies Affiliate shall be jointly and severally liable for any Distribution Taxes, to the extent that such Distribution Taxes are attributable to, caused by, or result from, one or more of the following:

 

(i)                                     any action or omission by Dell Technologies (or any Dell Technologies Affiliate) inconsistent with any information, covenant, representation, or material related to Dell Technologies, any Dell Technologies Affiliate, or the Dell Technologies Business in an Officer’s Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling (for the avoidance of doubt, disclosure of any action or fact that is inconsistent with any information, covenant, representation, or material submitted to Tax Counsel, the IRS, or other Taxing Authority, as applicable, in connection with an Officer’s Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling shall not relieve Dell Technologies (or any Dell Technologies Affiliate) of liability under this Agreement);

 

(ii)                                  any action or omission by Dell Technologies (or any Dell Technologies Affiliate), including a cessation, transfer to affiliates, or disposition of its active trades or businesses, or an issuance of stock, stock buyback or payment of an extraordinary dividend by Dell Technologies (or any Dell Technologies Affiliate) following a Distribution;

 

(iii)                               any acquisition of any stock or assets of Dell Technologies (or any Dell Technologies Affiliate) by one or more other persons (other than Pivotal or a Pivotal Affiliate) prior to or following a Distribution; or

 

(iv)                              any issuance of stock by Dell Technologies (or any Dell Technologies Affiliate), or change in ownership of stock in Dell Technologies (or any Dell Technologies Affiliate).

 

(b)                                 Pivotal’s Liability for Distribution Taxes.  In the event of a Distribution, notwithstanding Sections 3.01 through 3.03 of this Agreement, Pivotal and each Pivotal Affiliate shall be jointly and severally liable for any Distribution Taxes, to the extent that such Distribution Taxes are attributable to, caused by, or result from, one or more of the following:

 

(i)                                     any action or omission by Pivotal (or any Pivotal Affiliate) after a Distribution at any time, that is inconsistent with any information, covenant,

 

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representation, or material related to Pivotal, any Pivotal Affiliate, or the Pivotal Business in an Officer’s Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling (for the avoidance of doubt, disclosure by Pivotal (or any Pivotal Affiliate) to Dell Technologies (or any Dell Technologies Affiliate) of any action or fact that is inconsistent with any information, covenant, representation, or material submitted to Tax Counsel, the IRS, or other Taxing Authority, as applicable, in connection with an Officer’s Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling shall not relieve Pivotal (or any Pivotal Affiliate) of liability under this Agreement);

 

(ii)                                  any action or omission by Pivotal (or any Pivotal Affiliate) after the date of a Distribution (including any act or omission that is in furtherance of, connected to, or part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) occurring on or prior to the date of a Distribution) including a cessation, transfer to affiliates or disposition of the active trades or businesses of Pivotal (or any Pivotal Affiliate), stock buyback or payment of an extraordinary dividend;

 

(iii)                               any acquisition of any stock or assets of Pivotal (or any Pivotal Affiliate) by one or more other persons (other than Dell Technologies or any Dell Technologies Affiliate) prior to or following a Distribution; or

 

(iv)                              any issuance of stock by Pivotal (or any Pivotal Affiliate) after a Distribution, including any issuance pursuant to the exercise of employee stock options or other employment related arrangements or the exercise of warrants, or change in ownership of stock in Pivotal (or any Pivotal Affiliate) after a Distribution.

 

(c)                                  Joint Liability for Remaining Distribution Taxes.  Dell Technologies shall be liable for fifty percent (50%) and Pivotal and each Pivotal Affiliate shall be jointly and severally liable for fifty percent (50%), of any Distribution Taxes not otherwise allocated by Sections 5.01(a) or (b) of this Agreement.

 

5.02.                     Continuing Covenants.

 

(a)                                 Pivotal Restrictions.  Pivotal agrees that, so long as a Distribution could, in the reasonable discretion of Dell Technologies, be effectuated, Pivotal will not knowingly take or fail to take, or permit any Pivotal Affiliate to knowingly take or fail to take, any action that could reasonably be expected to preclude Dell Technologies’ ability to effectuate a Distribution.  In the event of a Distribution, Pivotal agrees that (1) it will take, or cause any Pivotal Affiliate to take, any action reasonably requested by Dell Technologies in order to enable Dell Technologies to effectuate a Distribution and (2) it will not take or fail to take, or permit any Pivotal Affiliate to take or fail to take, any action where such action or failure to act would be inconsistent with any information, covenant, representation, or material that relates to facts or matters related to Pivotal (or any Pivotal Affiliate) or within the control of Pivotal and is contained in an Officer’s Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling (except where such information,

 

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covenant, representation, or material was not previously disclosed to Pivotal) other than as permitted by Section 5.02(c) of this Agreement.  For this purpose an action is considered inconsistent with a representation if the representation states that there is no plan or intention to take such action.  In the event of a Distribution, Pivotal agrees that it will not take (and it will cause the Pivotal Affiliates to refrain from taking) any position on a Tax Return that is inconsistent with such Distribution qualifying under Section 355 of the Code.

 

(b)                                 Dell Technologies Restrictions.  In the event of a Distribution, Dell Technologies agrees that it will not take or fail to take, or permit any Dell Technologies Affiliate to take or fail to take, any action where such action or failure to act would be inconsistent with any material, information, covenant or representation that relates to facts or matters related to Dell Technologies (or any Dell Technologies Affiliate) or within the control of Dell Technologies and is contained in an Officer’s Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling.  For this purpose an action is considered inconsistent with a representation if the representation states that there is no plan or intention to take such action.  In the event of a Distribution, Dell Technologies agrees that it will not take (and it will cause the Dell Technologies Affiliates to refrain from taking) any position on a Tax Return that is inconsistent with such Distribution qualifying under Section 355 of the Code.

 

(c)                                  Certain Pivotal Actions Following a Distribution.  In the event of a Distribution, Pivotal agrees that, during the two (2) year period following a Distribution, without first obtaining, at Pivotal’ s own expense, either a supplemental opinion from Tax Counsel that such action will not result in Distribution Taxes (a “Supplemental Tax Opinion”) or a Supplemental Ruling that such action will not result in Distribution Taxes, unless in any such case Dell Technologies and Pivotal agree otherwise, Pivotal shall not (1) sell all or substantially all of the assets of Pivotal or any Pivotal Affiliate, (2) merge Pivotal or any Pivotal Affiliate with another entity, without regard to which party is the surviving entity, (3) transfer any assets of Pivotal in a transaction described in Section 351 (other than a transfer to a corporation which files a Consolidated Return with Pivotal and which is wholly-owned, directly or indirectly, by Pivotal) or subparagraph (C) or (D) of Section 368(a)(l) of the Code, (4) issue stock of Pivotal or any Pivotal Affiliate (or any instrument that is convertible or exchangeable into any such stock) in an acquisition or public or private offering, or (5) facilitate or otherwise participate in any acquisition of stock in Pivotal that would result in any shareholder owning five percent (5%) or more of the outstanding stock of Pivotal.  Pivotal (or any Pivotal Affiliate) shall only undertake any of such actions after Dell Technologies’ receipt of such Supplemental Tax Opinion or Supplemental Ruling and pursuant to the terms and conditions of any such Supplemental Tax Opinion or Supplemental Ruling or as otherwise consented to in writing in advance by Dell Technologies.  The parties hereby agree that they will act in good faith to take all reasonable steps necessary to amend this Section 5.02(c), from time to time, by mutual agreement, to (i) add certain actions to the list contained herein, or (ii) remove certain actions from the list contained herein, in either case, in order to reflect any relevant change in law, regulation or administrative interpretation occurring after the date of this Agreement.

 

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(d)                                 Notice of Specified Transactions.  Not later than twenty (20) days prior to entering into any oral or written contract or agreement, and not later than five (5) days after it first becomes aware of any negotiations, plan or intention (regardless of whether it is a party to such negotiations, plan or intention), regarding any of the transactions described in paragraph (c), Pivotal shall provide written notice of its intent to consummate such transaction or the negotiations, plan or intention of which it becomes aware, as the case may be, to Dell Technologies.

 

(e)                                  Pivotal Cooperation.  Pivotal agrees that, at the request of Dell Technologies, Pivotal shall cooperate fully with Dell Technologies to take any action necessary or reasonably helpful to effectuate a Distribution, including seeking to obtain, as expeditiously as possible, a Tax Opinion, Supplemental Tax Opinion, Ruling, and/or Supplemental Ruling.  Such cooperation shall include the execution of any documents that may be necessary or reasonably helpful in connection with obtaining any Tax Opinion, Supplemental Tax Opinion, Ruling, and/or Supplemental Ruling (including any (i) power of attorney, (ii) Officer’s Certificate, (iii) Ruling Documents, (iv) Supplemental Ruling Documents, and/or (v) reasonably requested written representations confirming that (a) Pivotal has read the Officer’s Certificate, Ruling Documents, and/or Supplemental Ruling Documents and (b) all information and representations, if any, relating to Pivotal, any Pivotal Affiliate or the Pivotal Business contained therein are true, correct and complete in all material respects).

 

(f)                                   Earnings and Profits.  Dell Technologies will advise Pivotal in writing of the decrease in Dell Technologies earnings and profits or the earnings and profits of a Dell Technologies Affiliate attributable to a Distribution under Section 312(h) of the Code on or before the first anniversary of a Distribution; provided, however, that Dell Technologies shall provide Pivotal with estimates of such amounts (determined in accordance with past practice) prior to such anniversary as reasonably requested by Pivotal.

 

Section 6.                                          Indemnification.

 

6.01.                     In General.  Dell Technologies and each member of the Dell Technologies Group shall jointly and severally indemnify Pivotal, each Pivotal Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any and all Taxes for which Dell Technologies or any Dell Technologies Affiliate is liable under this Agreement and any loss, cost, damage or expense, including reasonable attorneys’ fees and costs, that is attributable to, or results from, the failure of Dell Technologies, any Dell Technologies Affiliate or any director, officer or employee to make any payment required to be made under this Agreement.  Pivotal and each member of the Pivotal Group shall jointly and severally indemnify Dell Technologies, each Dell Technologies Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any and all Taxes for which Pivotal or any Pivotal Affiliate is liable under this Agreement and any loss, cost, damage or expense, including reasonable attorneys’ fees and costs, that is attributable to, or results from, the failure of Pivotal, any Pivotal Affiliate or any director, officer or employee to make any payment required to be made under this Agreement.

 

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6.02.                     Inaccurate or Incomplete Information.  Dell Technologies and each member of the Dell Technologies Group shall jointly and severally indemnify Pivotal, each Pivotal Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any cost, fine, penalty, or other expense of any kind attributable to the failure of Dell Technologies or any Dell Technologies Affiliate in supplying Pivotal or any Pivotal Affiliate with inaccurate or incomplete information, in connection with the preparation of any Tax Return.  Pivotal and each member of the Pivotal Group shall jointly and severally indemnify Dell Technologies, each Dell Technologies Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any cost, fine, penalty, or other expenses of any kind attributable to the failure of Pivotal or any Pivotal Affiliate in supplying Dell Technologies or any Dell Technologies Affiliate with inaccurate or incomplete information, in connection with the preparation of any Tax Return.

 

6.03.                     No Indemnification for Tax Items.  Nothing in this Agreement shall be construed as a guarantee of the existence or amount of any loss, credit, carryforward, basis or other Tax Item, whether past, present or future, of Dell Technologies, any Dell Technologies Affiliate, Pivotal or any Pivotal Affiliate.  In addition, for the avoidance of doubt, for purposes of determining any amount owed between the parties hereto, all such determinations shall be made without regard to any financial accounting tax asset or liability or other financial accounting items.

 

Section 7.                                          Payments.

 

7.01.                     Estimated Tax Payments.  Not later than three (3) days prior to each Estimated Tax Installment Date with respect to a taxable period for which a Consolidated Return or a Combined Return will be filed, Pivotal shall pay to Dell Technologies on behalf of the Pivotal Group an amount equal to the amount of any estimated Pivotal Separate Tax Liability that Pivotal otherwise would have been required to pay to a Taxing Authority on such Estimated Tax Installment Date.  If the Pivotal Separate Tax Liability for such taxable period is less than zero, then Dell Technologies shall pay to Pivotal an amount equal to the Tax Benefit that the Dell Technologies Group anticipates it will recognize for the entire year as a result of the Pivotal Separate Tax Liability being less than zero for such taxable period.  Not later than seven (7) days prior to each such Estimated Tax Installment Date, Dell Technologies shall provide Pivotal with a written notice setting forth the amount payable by Pivotal in respect of such estimated Pivotal Separate Tax Liability and a calculation of such amount.

 

7.02.                     True-Up Payments.  Not later than ten (10) business days after receipt of any Pivotal Separate Tax Liability computation pursuant to Section 3.05 of this Agreement, Pivotal shall pay to Dell Technologies, or Dell Technologies shall pay to Pivotal, as appropriate, an amount equal to the difference, if any, between the (i) Pivotal Separate Tax Liability and (ii) the amount equal to (A) the aggregate amount paid by Pivotal to Dell Technologies with respect to such period under Section 7.01 of this Agreement minus (B) the aggregate amounts paid by Dell Technologies to Pivotal with respect to such period under Section 7.01 of this Agreement.

 

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7.03.                     Redetermination Amounts.  In the event of a redetermination of any Tax Item reflected on any Consolidated Return or Combined Return (other than Tax Items relating to Distribution Taxes), as a result of a refund of Taxes paid, a Final Determination or any settlement or compromise with any Taxing Authority which in any such case would affect the Pivotal Separate Tax Liability, Dell Technologies shall prepare a revised pro forma Tax Return in accordance with Section 2.04(b) of this Agreement for the relevant taxable period reflecting the redetermination of such Tax Item as a result of such refund, Final Determination, settlement or compromise.  Pivotal shall pay to Dell Technologies, or Dell Technologies shall pay to Pivotal, as appropriate, an amount equal to the difference, if any, between the Pivotal Separate Tax Liability reflected on such revised pro forma Tax Return and the Pivotal Separate Tax liability for such period as originally computed pursuant to this Agreement.

 

7.04.                     Payments of Refunds, Credits and Reimbursements.  If one party receives a refund or credit of any Tax to which the other party is entitled pursuant to Section 3.03 of this Agreement, the party receiving such refund or credit shall pay to the other party the amount of such refund or credit pursuant to Section 7.05 of this Agreement.  If one party pays a Tax with respect to which the other party is liable of responsible pursuant to Sections 3.01 through 3.03 of this Agreement, then the liable or responsible party shall pay to the other party the amount of such Tax pursuant to Section 7.05 of this Agreement.

 

7.05.                     Payments Under This Agreement.  In the event that one party (the “Owing Party”) is required to make a payment to another party (the “Owed Party”) pursuant to this Agreement, then such payments shall be made according to this Section 7.05.

 

(a)                                 In General.  All payments shall be made to the Owed Party or to the appropriate Taxing Authority as specified by the Owed Party within the time prescribed for payment in this Agreement, or if no period is prescribed, within ten (10) days after delivery of written notice of payment owing together with a computation of the amounts due.

 

(b)                                 Treatment of Payments.  Unless otherwise required by any Final Determination, the parties agree that any payments made by one party to another party pursuant to this Agreement (other than (i) payments for the Pivotal Separate Tax Liability for any Post-Deconsolidation Period, (ii) payments of interest pursuant to Section 7.05(e) of this Agreement, and (iii) payments of After Tax Amounts pursuant to Section 7.05(d) of this Agreement) shall be treated for all Tax and financial accounting purposes as nontaxable payments (dividend distributions or capital contributions, as the case may be) made immediately prior to the Deconsolidation Event and, accordingly, as not includible in the taxable income of the recipient or as deductible by the payor.

 

(c)                                  Prompt Performance.  All actions required to be taken (including payments) by any party under this Agreement shall be performed within the time prescribed for performance in this Agreement, or if no period is prescribed, such actions shall be performed promptly.

 

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(d)                                 After Tax Amounts.  If pursuant to a Final Determination it is determined that the receipt or accrual of any payment made under this Agreement (other than payments of interest pursuant to Section 7.05(e) of this Agreement) is subject to any Tax, the party making such payment shall be liable for (a) the After Tax Amount with respect to such payment and (b) interest at the rate described in Section 7.05(e) of this Agreement on the amount of such Tax from the date such Tax accrues through the date of payment of such After Tax Amount.  A party making a demand for a payment pursuant to this Agreement and for a payment of an After Tax Amount with respect to such payment shall separately specify and compute such After Tax Amount.  However, a party may choose not to specify an After Tax Amount in a demand for payment pursuant to this Agreement without thereby being deemed to have waived its right subsequently to demand an After Tax Amount with respect to such payment.  Pivotal’s liability for any and all payments of the Pivotal Separate Tax Liability for any Post-Deconsolidation Period shall be increased by the After Tax Amount with respect to such payment and decreased by the corresponding Tax Benefit, if any, attributable to such Pivotal Separate Tax Liability.

 

(e)                                  Interest.  Payments pursuant to this Agreement that are not made within the period prescribed in this Agreement (the “Payment Period”) shall bear interest for the period from and including the date immediately following the last date of the Payment Period through and including the date of payment at a per annum rate equal to the prime rate as published in The Wall Street Journal on the last day of such Payment Period.  Such interest will be payable at the same time as the payment to which it relates and shall be calculated on the basis of a year of three hundred sixty-five (365) days and the actual number of days for which due.

 

Section 8.                                          Tax Proceedings.

 

8.01.                     In General.  Except as otherwise provided in this Agreement, (i) with respect to Tax Returns described in Section 2.01 of this Agreement, Dell Technologies and (ii) with respect to Tax Returns described in Section 2.02 of this Agreement, Pivotal (in either case, the “Controlling Party”), shall have the exclusive right, in its sole discretion, to control, contest, and represent the interests of Dell Technologies, any Dell Technologies Affiliate, Pivotal, and/or any Pivotal Affiliate in any Audit relating to such Tax Return and to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Audit.  The Controlling Party’s rights shall extend to any matter pertaining to the management and control of an Audit, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item.  Any costs incurred in handling, settling, or contesting an Audit shall be borne by the Controlling Party.

 

8.02.                     Participation of non-Controlling Party.  Except as otherwise provided in Section 8.04 of this Agreement, the non-Controlling Party shall have control over decisions to resolve, settle or otherwise agree to any deficiency, claim or adjustment with respect to any Sole Responsibility Item.  Except as otherwise provided in Section 8.04 of this Agreement, the Controlling Party and the non-Controlling Party shall have joint control over decisions to resolve, settle or otherwise agree to any deficiency, claim or

 

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adjustment with respect to any Joint Responsibility Item.  Except as otherwise provided in Section 8.04 of this Agreement, the Controlling Party shall not settle any Audit it controls concerning a Tax Item on a basis that would reasonably be expected to adversely affect the non-Controlling Party by at least three hundred thousand dollars ($300,000) without obtaining such non-Controlling Party’s consent, which consent shall not be unreasonably withheld, conditioned or delayed if failure to consent would adversely affect the Controlling Party.

 

8.03.                     Notice.  Within ten (10) business days after a party becomes aware of the existence of a Tax issue that may give rise to an indemnification obligation under this Agreement, such party shall give prompt notice to the other party of such issue (such notice shall contain factual information, to the extent known, describing any asserted tax liability in reasonable detail), and shall promptly forward to the other party copies of all notices and material communications with any Taxing Authority relating to such issue.  Notwithstanding any provision in Section 10.15 of this Agreement to the contrary, if a party to this Agreement fails to provide the other party notice as required by this Section 8.03, and the failure results in a detriment to the other party then any amount which the other party is otherwise required to pay pursuant to this Agreement shall be reduced by the amount of such detriment.

 

8.04.                     Control of Distribution Tax Proceedings.  In the event of a Distribution, Dell Technologies shall have the exclusive right, in its sole discretion, to control, contest, and represent the interests of Dell Technologies, any Dell Technologies Affiliate, Pivotal, and/or any Pivotal Affiliate in any Audits relating to Distribution Taxes and to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Audit; provided, however, that Dell Technologies shall not settle any such audit with respect to Distribution Taxes with a Taxing Authority that would reasonably be expected to result in a material Tax cost to Pivotal or any Pivotal Affiliate, without the prior consent of Pivotal, which consent shall not be unreasonably withheld, conditioned or delayed.  Dell Technologies’ rights shall extend to any matter pertaining to the management and control of such Audit, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item; provided, however, that to the extent that Pivotal is obligated to bear at least fifty percent (50%) of the liability for any Distribution Taxes under Section 5.01 of this Agreement, Dell Technologies and Pivotal shall have joint control over decisions to resolve, settle or otherwise agree to any deficiency, claim or adjustment.  Pivotal may assume sole control of any Audits relating to Distribution Taxes if it acknowledges in writing that it has sole liability for any Distribution Taxes under Section 5.01 of this Agreement that might arise in such Audit and can demonstrate to the reasonable satisfaction of Dell Technologies that it can satisfy its liability for any such Distribution Taxes.  If Pivotal is unable to demonstrate to the reasonable satisfaction of Dell Technologies that it will be able to satisfy its liability for such Distribution Taxes, but acknowledges in writing that it has sole liability for any Distribution Taxes under Section 5.01 of this Agreement, Pivotal and Dell Technologies shall have joint control over the Audit.

 

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Section 9.                                          Stock Options and Restricted Stock.

 

9.01.                     In General.

 

(a)                                 The parties hereto agree that, so long as Pivotal continues to be a member of the Consolidated Group of which Dell Technologies is the common parent, Dell Technologies shall be entitled to any Tax Benefit arising by reason of (i) exercises of Options to purchase shares of Dell Technologies stock and (ii) the lapse of any restrictions with respect to shares of Dell Technologies stock subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code).  The parties hereto agree (i) to report all Tax deductions with respect to exercises of Options to purchase shares of Dell Technologies stock and the lapse of any restrictions with respect to shares of Dell Technologies stock subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code) consistently with this Section 9.01(a), to the extent permitted by the Tax law, and (ii) that such Tax deductions shall not be considered Tax deductions of Pivotal or any Pivotal Affiliate for purposes of computing the Pivotal Separate Tax Liability.

 

(b)                                 The parties hereto agree that, once Pivotal ceases to be a member of the Consolidated Group of which Dell Technologies is the common parent, so long as Dell Technologies and/or any Dell Technologies Affiliate own shares of Pivotal stock possessing at least twenty percent (20%) of the total voting power of all of the issued and outstanding shares of Pivotal stock, Pivotal shall pay the amount of the Tax Benefit arising by reason of (i) exercises of Options to purchase shares of Dell Technologies stock and (ii) the lapse of any restrictions with respect to shares of Dell Technologies stock subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code) to Dell Technologies.

 

(c)                                  The parties hereto agree that, once the shares of Pivotal stock owned by Dell Technologies and any Dell Technologies Affiliates possess less than twenty percent (20%) of the total voting power of all of the issued and outstanding shares of Pivotal stock, then upon the exercise of any Option to purchase shares of Dell Technologies stock by any Pivotal Group employee of former employee, Pivotal shall pay to Dell Technologies an amount equal to the excess of (i) the fair market value of such shares of Dell Technologies stock issued, over (ii) the strike price paid by the Pivotal Group employee of former employee with respect thereto.

 

9.02.                     Notices, Withholding, Reporting.  Dell Technologies shall promptly notify Pivotal of any event giving rise to income to any Pivotal Group employees or former employees in connection with exercises of Options to purchase shares of Dell Technologies stock or the lapse of any restrictions with respect to shares of Dell Technologies stock subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code).  If required by the Tax law, Pivotal shall withhold applicable Taxes and satisfy applicable Tax reporting obligations in connection therewith.

 

9.03.                     Adjustments.  If Pivotal or any Pivotal Affiliate as a result of a Final Determination or any settlement or compromise with any Taxing Authority receives any

 

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Tax Benefit to which Dell Technologies is entitled under Section 9.01 of this Agreement, Pivotal shall pay the amount of such Tax Benefit to Dell Technologies.  If Dell Technologies or any Dell Technologies Affiliate as a result of a Final Determination or any settlement or compromise with any Taxing Authority receives any Tax Benefit to which Pivotal is entitled under Section 9.01 of this Agreement, Dell Technologies shall pay the amount of such Tax Benefit to Pivotal.

 

Section 10.                                   Miscellaneous Provisions.

 

10.01.              Effectiveness.  This Agreement will become effective upon execution by the parties hereto.  The Effective Tax Return Period (the “Effective Tax Return Period”) of this Agreement is for Pivotal tax return periods beginning on or after September 7, 2016, the date EMC and its direct and indirect domestic subsidiaries, including Pivotal and each Pivotal Affiliate, became members of an Affiliated Group of which Dell Technologies is the common parent corporation.

 

10.02.              No Prior TSA.  Notwithstanding anything to the contrary contained herein, Dell and EMC shall not be obligated to reimburse Pivotal, or any Pivotal shareholder, for any Pivotal Tax Benefit utilized in any tax return with respect to any taxable period ending prior to or on the Effective Tax Return Period.

 

10.03.              Cooperation and Exchange of Information.

 

(a)                                 Cooperation.  Pivotal and Dell Technologies shall each cooperate fully (and each shall cause its respective affiliates to cooperate fully) with all reasonable requests from another party for information and materials not otherwise available to the requesting party in connection with the preparation and filing of Tax Returns, claims for refund, and Audits concerning issues or other matters covered by this Agreement or in connection with the determination of a liability for Taxes or a right to a refund of Taxes.  Such cooperation shall include:

 

(i)                                     the retention until the expiration of the applicable statute of limitations, and the provision upon request, of copies of all Tax Returns, books, records (including information regarding ownership and Tax basis of property), documentation and other information relating to the Tax Returns, including accompanying schedules, related work papers, and documents relating to rulings or other determinations by Taxing Authorities;

 

(ii)                                  the execution of any document that may be necessary or reasonably helpful in connection with any tax proceeding, or the filing of a Tax Return or refund claim by a member of the Dell Technologies Group or the Pivotal Group, including certification, to the best of a party’s knowledge, of the accuracy and completeness of the information it has supplied; and

 

(iii)                               the use of the party’s reasonable best efforts to obtain any documentation that may be necessary or reasonably helpful in connection with any of the

 

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foregoing.  Each party shall make its employees and facilities available on a reasonable and mutually convenient basis in connection with the foregoing matters.

 

(b)                                 Retention of Records.  Any party that is in possession of documentation of Dell Technologies (or any Dell Technologies Affiliate) or Pivotal (or any Pivotal Affiliate) relating to the Pivotal Business, including books, records, Tax Returns and all supporting schedules and information relating thereto (the “Pivotal Business Records”) shall retain such Pivotal Business Records for a period of seven (7) years following the Effective Time.  Thereafter, any party wishing to dispose of Pivotal Business Records in its possession (after the expiration of the applicable statute of limitations), shall provide written notice to the other party describing the documentation proposed to be destroyed or disposed of sixty (60) business days prior to taking such action.  The other party may arrange to take delivery of any or all of the documentation described in the notice at its expense during the succeeding sixty (60) day period.

 

10.04.              Dispute Resolution.  In the event that Dell Technologies and Pivotal disagree as to the amount or calculation of any payment to he made under this Agreement, or the interpretation or application of any provision under this Agreement, the parties shall attempt in good faith to resolve such dispute.  If such dispute is not resolved within sixty (60) business days following the commencement of the dispute, Dell Technologies and Pivotal shall jointly retain a nationally recognized law or accounting firm, which firm is independent of both parties (the “Independent Firm”), to resolve the dispute.  The Independent Firm shall act as an arbitrator to resolve all points of disagreement and its decision shall be final and binding upon all parties involved.  Following the decision of the Independent Firm, Dell Technologies and Pivotal shall each take or cause to be taken any action necessary to implement the decision of the Independent Firm.  The fees and expenses relating to the Independent Firm shall be borne equally by Dell Technologies and Pivotal, except that if the Independent Firm determines that the position advanced by either party is frivolous, has not been asserted in good faith or for which there is not substantial authority, one hundred percent (100%) of the fees and expenses of the Independent Firm shall be borne by such party.  Notwithstanding anything in this Agreement to the contrary, the dispute resolution provisions set forth in this Section 10.03 shall not be applicable to any disagreement between the parties relating to Distribution Taxes and any such dispute shall be settled in a court of law or as otherwise agreed to by the parties.

 

10.05.              Notices.  All notices and other communications required or permitted to be given hereunder shall be in writing and shall be deemed given upon (a) a transmitter’s confirmation of a receipt of a facsimile transmission (but only if followed by confirmed delivery of a standard overnight courier the following business day or if delivered by hand the following business day), (b) confirmed delivery of a standard overnight courier or when delivered by hand or (c) the expiration of ten (10) business days after the date mailed by certified or registered mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):

 

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If to Dell Technologies or any Dell Technologies Affiliate, to the Senior Vice President of Corporate Tax of Dell Technologies, with a copy to the General Counsel of Dell Technologies, at:

 

Dell Technologies Inc.

One Dell Way, RR1-33

Round Rock, Texas 78682

Attn: Office of General Counsel

 

If to Pivotal or any Pivotal Affiliate, to Senior Director of Taxes, with a copy to the General Counsel of Pivotal, at:

 

Pivotal Software, Inc.

3495 Deer Creek Road

Palo Alto, California 94304

Attention: Office of General Counsel

 

Either party may, by written notice to the other parties, change the address or the party to which any notice, request, instruction or other documents is to be delivered.

 

10.06.              Changes in Law.

 

(a)                                 Any reference to a provision of the Code or a law of another jurisdiction shall include a reference to any applicable successor provision or law.

 

(b)                                 If, due to any change in applicable law or regulations or their interpretation by any court of law or other governing body having jurisdiction subsequent to the date of this Agreement, performance of any provision of this Agreement or any transaction contemplated thereby shall become impracticable or impossible, the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision.

 

10.07.              Confidentiality.  Each party shall hold and cause its directors, officers, employees, advisors and consultants to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all information (other than any such information relating solely to the business or affairs of such party) concerning the other parties hereto furnished it by such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) in the public domain through no fault of such party or (2) later lawfully acquired from other sources not under a duty of confidentiality by the party to which it was furnished), and each party shall not release or disclose such information to any other person, except its directors, officers, employees, auditors, attorneys, financial advisors, bankers and other consultants who shall be advised of and agree to be bound by the provisions of this Section 10.07.  Each party shall be deemed to have satisfied its obligation to hold confidential information concerning or supplied by the other party if it exercises the same care as it takes to preserve confidentiality for its own similar information.

 

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10.08.              Successors.  This Agreement shall be binding on and inure to the benefit and detriment of any successor, by merger, acquisition of assets or otherwise, to any of the parties hereto, to the same extent as if such successor had been an original party.

 

10.09.              Affiliates.  Dell Technologies shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Dell Technologies Affiliate, and Pivotal shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Pivotal Affiliate; provided, however, that, if it is contemplated that a Dell Technologies Affiliate may cease to be a Dell Technologies Affiliate as a result of a transfer of its stock or other ownership interests to a third party in exchange for consideration in an amount approximately equal to the fair market value of the stock or other ownership interests transferred and such consideration is not distributed outside of the Dell Technologies Group to the shareholders of Dell Technologies, then (a) Pivotal shall execute a release of such Dell Technologies Affiliate from its obligations under this Agreement effective as of such transfer provided that Dell Technologies shall have confirmed in writing its obligations and the obligations of its remaining Dell Technologies Affiliates with respect to their own obligations and the obligations of the departing Dell Technologies Affiliate and that such departing Dell Technologies Affiliate shall have executed a release of any rights it may have against Pivotal or any Pivotal Affiliate by reason of this Agreement, or (b) Dell Technologies shall acknowledge in writing no later than thirty (30) days prior to such cessation that it shall bear one hundred percent (100%) of the liability for the obligations of Dell Technologies and each Dell Technologies Affiliate (including the departing Dell Technologies Affiliate) under this Agreement.  If at any time Pivotal shall, directly or indirectly, obtain beneficial ownership of more than fifty percent (50%) of the total combined voting power of any other entity, Pivotal shall cause such entity to become a party to this Agreement by executing together with Dell Technologies an agreement in substantially the same form as set forth in Schedule 10.09 and such entity shall have all rights and obligations of an Pivotal Affiliate under this Agreement.

 

10.10.              Authorization, Etc.  Each of the parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such party, that this Agreement constitutes a legal, valid and binding obligation of each such party and that the execution, delivery and performance of this Agreement by such party does not contravene or conflict with any provision of law or of its charter or bylaws or any agreement, instrument or order binding on such party.

 

10.11.              Entire Agreement.  This Agreement contains the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes any prior tax sharing agreements between Dell Technologies (or any Dell Technologies Affiliate) and Pivotal (or any Pivotal Affiliate) and such prior tax sharing agreements shall have no further force and effect.  If, and to the extent, the provisions of this Agreement conflict with any agreement entered into in connection with a Distribution or another Deconsolidation Event, the provisions of this Agreement shall control.

 

25

 

10.12.              Applicable Law; Jurisdiction.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY (i) AGREES THAT THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND ALL DISPUTES, CONTROVERSIES OR CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH, TERMINATION OR VALIDITY HEREOF SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICTS OF LAW RULES, (ii) TO BE SUBJECT TO, AND HEREBY CONSENTS AND SUBMITS TO, THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND OF THE FEDERAL COURTS SITTING IN THE STATE OF DELAWARE, (iii) TO THE EXTENT SUCH PARTY IS NOT OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF DELAWARE, HEREBY APPOINTS THE CORPORATION TRUST COMPANY AS SUCH PARTY’S AGENT IN THE STATE OF DELAWARE FOR ACCEPTANCE OF LEGAL PROCESS AND (iv) AGREES THAT SERVICE MADE ON ANY SUCH AGENT SET FORTH IN (iii) ABOVE SHALL HAVE THE SAME LEGAL FORCE AND EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE STATE OF DELAWARE.

 

10.13.              Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.

 

10.14.              Severability.  If any term, provision, covenant, or restriction of this Agreement is held by a court of competent jurisdiction (or an arbitrator or arbitration panel) to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions set forth herein shall remain in full force and effect, and shall in no way be affected, impaired, or invalidated.  In the event that any such term, provision, covenant or restriction is held to be invalid, void or unenforceable, the parties hereto shall use their best efforts to find and employ an alternate means to achieve the same or substantially the same result as that contemplated by such terms, provisions, covenant, or restriction.

 

10.15.              No Third Party Beneficiaries.  This Agreement is solely for the benefit of Dell Technologies, the Dell Technologies Affiliates, Pivotal and the Pivotal Affiliates.  This Agreement should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other rights in excess of those existing without this Agreement.

 

10.16.              Waivers, Etc.  No failure or delay on the part of a party in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  No modification or waiver of any provision of this Agreement nor consent to any departure by the parties therefrom shall in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

 

26

 

10.17.              Setoff.  All payments to be made by any party under this Agreement may be netted against payments due to such party under this Agreement, but otherwise shall be made without setoff, counterclaim or withholding, all of which are hereby expressly waived.

 

10.18.              Other Remedies.  Pivotal recognizes that any failure by it or any Pivotal Affiliate to comply with its obligations under Section 5 of this Agreement would, in the event of a Distribution, result in Distribution Taxes that would cause irreparable harm to Dell Technologies, Dell Technologies Affiliates, and their stockholders.  Accordingly, Dell Technologies shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which Dell Technologies is entitled at law or in equity.

 

10.19.              Amendment and Modification.  This Agreement may be amended, modified or supplemented only by a written agreement signed by all of the parties hereto.

 

10.20.              Waiver of Jury Trial.  Each of the parties hereto irrevocably and unconditionally waives all right to trial by jury in any litigation, claim, action, suit, arbitration, inquiry, proceeding, investigation or counterclaim (whether based in contract, tort or otherwise) arising out of or relating to this Agreement or the actions of the parties hereto in the negotiation, administration, performance and enforcement thereof.

 

10.21.              Interpretations.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless otherwise specified.  The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term, and words denoting any gender shall include all genders.  Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.  The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

 

27

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by a duly authorized officer as of the date first above written.

 

	
 
    	
DELL TECHNOLOGIES INC.
   on behalf of itself and each of the Dell
   Technologies Affiliates
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Tom Vallone
    
	
 
    	
Name: 
    	
Tom Vallone
    
	
 
    	
Title: 
    	
SVP, Taxes
    

 

	
 
    	
EMC CORPORATION
   on behalf of itself and each of the EMC
   Affiliates
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Tom Vallone
    
	
 
    	
Name: 
    	
Tom Vallone
    
	
 
    	
Title:
    

 

	
 
    	
PIVOTAL SOFTWARE, INC.
   on behalf of itself and each of the Pivotal
   Affiliates
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Cynthia Gaylor
    
	
 
    	
Name: 
    	
Cynthia Gaylor
    
	
 
    	
Title: 
    	
SVP, Chief Financial Officer
    

 

[Tax Sharing Agreement]

 

 

Schedule 10.09

 

WHEREAS, Pivotal Software, Inc., a Delaware corporation (“Pivotal”), owns, directly or indirectly, [all/more than fifty percent (50%)] of the outstanding stock or interests in the undersigned;

 

WHEREAS, the undersigned is not a party to that certain Amended and Restated Tax Sharing Agreement, dated as of February 8, 2017, by and among Dell Technologies, each Dell Technologies Affiliate, Pivotal and each Pivotal Affiliate (as defined therein) (the “Agreement”); and

 

WHEREAS, the undersigned, Dell Technologies and Pivotal desire to have the undersigned become a party to the Agreement and to have all rights and obligations of a party to the Agreement.

 

NOW, THEREFORE, in consideration of mutual obligations and undertakings contained in the Agreement, the parties agree that the undersigned shall become a party to the Agreement and shall have all rights and obligations of a party to the Agreement.

 

IN WITNESS WHEREOF, the parties have executed this agreement on the dates accompanying their respective signatures, but effective as of __________________.

 

	
DELL TECHNOLOGIES INC.
    
	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

	
PIVOTAL SOFTWARE, INC.
    
	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

	
[NAME]
    
	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:

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