Document:

Unassociated Document

    
      

    

    Exhibit 10.34

      TALEO
CORPORATION

      

      AMENDMENT
TO EMPLOYMENT AGREEMENT

      

      

      This
Amendment to the Employment Agreement (the “Amendment”) is made as of December
30, 2008, by and between Taleo Corporation (the “Company”), and Neil
Hudspith (“Executive”).

      

      RECITALS

      

      WHEREAS, the
Company and Executive are parties to a Neil Hudspith Employment Agreement dated
May 1, 2008 (the “Agreement”); and

      

      WHEREAS, the
Company and Executive desire to amend certain provisions of the Agreement in
order to come into compliance with Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), and any final regulations and official
guidance promulgated thereunder (together, “Section 409A”), as set forth
below.

      

      NOW, THEREFORE, BE IT
RESOLVED, the Company and Executive agree that in consideration of the
foregoing and the promises and covenants contained herein, the parties agree as
follows:

      

      AGREEMENT

      

      1.
            Car
Allowance.  Section 3(d) of the Agreement entitled “Car
Allowance” shall be amended and restated in its entirety to provide as
follows:

      

      “Subject
to Executive remaining an employee of the Company through each payment date, for
a period of two (2) years, Executive will receive an annual car allowance of
$12,000.00 USD, less Withholdings. Such car allowance will be paid periodically
in accordance with the Company’s normal payroll practices as in effect from time
to time (but no less frequently than once per month).”

      

      2. 
           Relocation Expense
Reimbursement.  The following sentence shall be added to
Section 3(e) of the Agreement entitled “Relocated Related Reimbursements,”
immediately following the last sentence of Section 3(e):

      

      “Such tax
gross up payments, if any, will be paid be no later than the end of the calendar
year immediately following the calendar year in which Executive remits the
related taxes.”

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      3.   
         Severance.  Sections
6(a) through 6(c) of the Agreement shall be amended and restated in their
entirety to provide as follows:

      

      
        	
                 
      

              	
                “(a)

              	
                If
      Company or a successor corporation terminates Executive’s employment for
      any reason other than Cause (as defined below) or if Executive resigns for
      Good Reason (as defined below) then Company or the successor corporation
      will (1) pay prorated bonuses for any partially completed bonus periods
      through Executives termination date (at an assumed 100% on-target
      achievement of goal), less Withholding, (2) pay a lump sum equal to six
      (6) months of Executive’s Base Salary at the rate in effect at the time of
      Executive’s resignation or termination of employment, less Withholding,
      and (3) if Executive elects to continue Executive’s health insurance
      coverage under the Consolidated Omnibus Budget Reconciliation Act
      (“COBRA”) following such termination or resignation of Executive’s
      employment, pay the same portion of Executive’s monthly premium under
      COBRA as it pays for active employees until the earliest of (i) the
      close of the 6 month period following the termination of Executive’s
      employment, (ii) the expiration of Executive’s continuation coverage
      under COBRA, or (iii) the date when Executive becomes eligible for
      substantially equivalent health insurance coverage in connection with new
      employment or self-employment.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                If
      Company or a successor corporation terminates Executive’s employment for
      any reason other than Cause (as defined below) or if Executive resigns for
      Good Reason (as defined below) and either such event takes place within
      one year following a Change in Control (as defined below), then Company or
      the successor corporation will (1) pay prorated bonuses for any partially
      completed bonus periods through Executives termination date (at an assumed
      100% on-target achievement of goal), less Withholding, (2) pay a lump sum
      equal to twelve (12) months of Executive’s Base Salary at the rate in
      effect at the time of Executive’s resignation or termination of
      employment, less Withholding, (3) pay bonuses (at an assumed 100%
      on-target achievement of goal) at the rate in effect at the time of
      Executive’s resignation or termination of employment for a period of 12
      months from the date of Executive’s resignation or termination of
      employment (bonuses will be prorated for any partially completed bonus
      periods through the 12 month period from the date of Executive’s
      resignation or termination of employment), less Withholding, and (4) if
      Executive elects to continue Executive’s health insurance coverage under
      the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following
      such termination or resignation of Executive’s employment, pay the same
      portion of Executive’s monthly premium under COBRA as it pays for active
      employees until the earliest of (i) the close of the 12 month period
      following the termination of Executive’s employment, (ii) the
      expiration of Executive’s continuation coverage under COBRA, or
      (iii) the date when Executive becomes eligible for substantially
      equivalent health insurance coverage in connection with new employment or
      self-employment.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                All
      benefits set forth in Sections 6(a) and 6(b) are collectively referred to
      as “Severance.”  Subject to Section 7(a) and to any required six
      (6) month delay pursuant to Section 13, Severance payments, other than
      reimbursements of COBRA premiums, shall be made by Company in one lump sum
      and shall be paid within thirty (30) days of any such termination of
      employment.”

              

      

      

      4.    
        Release of
Claims.  Section 7(a) of the Agreement entitled “Separation
Agreement and Release of Claims” shall be amended and restated in its entirety
to provide as follows:

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                “(a)

              	
                Separation Agreement
      and Release of Claims.  The receipt of any severance
      pursuant to this Agreement will be subject to Executive signing and not
      revoking a separation agreement and release of claims (the “Release”) in a
      form reasonably acceptable to the Company which becomes effective within
      sixty (60) days following Executive’s employment termination date or such
      earlier date as required by the Release (such deadline, the “Release
      Deadline”).  The Release will provide (among other things) that
      Executive will not disparage the Company, its directors, or its executive
      officers, and will contain No-Inducement, No-Solicit and Non-Compete terms
      consistent with this Agreement.  No severance pursuant to this
      Agreement will be paid or provided until the Release becomes
      effective.  Notwithstanding any timing of payment provision in
      Section 6, in the event severance payments provided under Section
      6(a) or Section 6(b) would be considered Deferred Payments (as
      defined in Section 13 below), then the following timing of payments will
      apply to such Deferred Payments, in each case subject to any delay in
      payment required by the provisions of Section 13 (and provided the Release
      becomes effective):

              

      

      

      
        	
                 
      

              	
                (i)

              	
                If
      the Release Deadline is on or before December 10 of the calendar year in
      which Executive’s “separation from service” (within the meaning of
      Section 409A of the Internal Revenue Code of 1986, as amended,
      and any final regulations and official guidance promulgated thereunder
      (together, “Section 409A”)) occurs, any portion of the severance
      payments or benefits provided under Section 6(a) or Section 6(b) that
      would be considered Deferred Payments will be paid to Executive on or
      before December 31 of that calendar year or such later time as required by
      (A) the payment schedule applicable to each payment or benefit as set
      forth in Section 6, or (B) if applicable, Section 13 of this
      Agreement; and

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                If
      the Release Deadline is after December 10 of the calendar year in which
      Executive’s “separation from service” (within the meaning of
      Section 409A) occurs, any portion of the severance payments or
      benefits provided under Section 6(a) or Section 6(b) that would
      be considered Deferred Payments will be paid on the first payroll date to
      occur during the calendar year following the calendar year in which such
      separation of service occurs or such later time as required by
      (A) the payment schedule applicable to each payment or benefit as set
      forth in Section 6, (B) the Release Deadline, or (C) if
      applicable, Section 13 of this
Agreement.”

              

      

      

      5.  
          Section
409A.  Section 13 of the Agreement entitled “Section 409A”
shall be amended and restated in its entirety to provide as
follows:

      

      
        “13. 
   Section
409A.

      

      

      
        	
                 
      

              	
                (a)

              	
                Notwithstanding
      anything to the contrary in this Agreement, no severance payments or
      benefits payable to Executive, if any, pursuant to this Agreement that,
      when considered together with any other severance payments or separation
      benefits, is considered deferred compensation under Section 409A
      (together, the “Deferred Payments”) will be payable until Executive has a
      “separation from service” within the meaning of Section
      409A.  Similarly, no severance payable to Executive, if any,
      pursuant to this Agreement that otherwise would be exempt from Section
      409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be
      payable until Executive has a “separation from service” within the meaning
      of Section 409A.

              

      

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (b)

              	
                Further,
      if Executive is a “specified employee” within the meaning of
      Section 409A at the time of Executive’s separation from service
      (other than due to death), any Deferred Payments that otherwise are
      payable within the first six (6) months following Executive’s separation
      from service will become payable on the first payroll date that occurs on
      or after the date six (6) months and one (1) day following the date of
      Executive’s separation from service.  All subsequent Deferred
      Payments, if any, will be payable in accordance with the payment schedule
      applicable to each payment or benefit.  Notwithstanding anything
      herein to the contrary, in the event of Executive’s death following
      Executive’s separation from service but prior to the six (6) month
      anniversary of Executive’s separation from service (or any later delay
      date), then any payments delayed in accordance with this paragraph will be
      payable in a lump sum as soon as administratively practicable after the
      date of Executive’s death and all other Deferred Payments will be payable
      in accordance with the payment schedule applicable to each payment or
      benefit.  Each payment and benefit payable under the Agreement
      is intended to constitute a separate payment for purposes of Section
      1.409A-2(b)(2) of the Treasury
Regulations.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Any
      severance payment that satisfies the requirements of the “short-term
      deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury
      Regulations shall not constitute Deferred Payments for purposes of the
      Agreement.  Any severance payment that qualifies as a payment
      made as a result of an involuntary separation from service pursuant to
      Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not
      exceed the Section 409A Limit shall not constitute Deferred Payments for
      purposes of the Agreement.  For purposes of this subsection (c),
      “Section 409A Limit” will mean the lesser of two (2) times: (i)
      Executive’s annualized compensation based upon the annual rate of pay paid
      to Executive during the Company’s taxable year preceding the Company’s
      taxable year of Executive’s separation from service as determined
      under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any
      Internal Revenue Service guidance issued with respect thereto; or (ii) the
      maximum amount that may be taken into account under a qualified plan
      pursuant to Section 401(a)(17) of the Code for the year in which
      Executive’s employment is
terminated.

              

      

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (d)

              	
                The
      foregoing provisions are intended to comply with the requirements of
      Section 409A so that none of the severance payments and benefits to be
      provided under the Agreement will be subject to the additional tax imposed
      under Section 409A, and any ambiguities herein will be interpreted to so
      comply.  Executive and the Company agree to work together in
      good faith to consider amendments to the Agreement and to take such
      reasonable actions which are necessary, appropriate or desirable to avoid
      imposition of any additional tax or income recognition prior to actual
      payment to Executive under Section
409A.”

              

      

      

      6.    
        Integration.  The
following sentence shall be added to Section 14 of the Agreement entitled
“Integration,” immediately following the last sentence of Section
14:

      

      “With
respect to stock options and awards of restricted stock granted on or after the
date hereof, the acceleration of vesting provisions provided herein will apply
to such awards except to the extent otherwise explicitly provided in the
applicable equity award agreement.”

      

      7.     
       Schedule
B.  Schedule B of the Agreement entitled “Relocation Related
Reimbursements,” as amended and restated as Schedule B-1, is further amended and
restated in its entirety to provide as follows:

      

      “The attached Schedule B-2 supersedes
and replaces Schedule B to the Agreement entered into between Neil Hudspith
and Taleo Corporation as of May 1, 2008 and the Schedule B-1
entered into between Neil Hudspith and Taleo Corporation on or about July 31,
2008.

      

      Schedule
B-2

      

      Relocation Related
Reimbursements

      

      

      
        
          
            	
                    Relocation
      Reimbursement Item

                  
	
                     

                    Visa
      Costs: 3 Year L-1 Visa

                  
	
                     

                    Rent
      Payment: up to $7,000 per month  for up to 2
    years

                  
	
                     

                    Air
      fare for travel between Europe and the San Francisco Bay area for family
      members for two years: up to $26,000 USD per year.

                  
	
                     

                    Moving
      house hold goods to USA: up to $10,000

                    Moving
      house hold goods back to UK (“Return Reimbursements”): all reasonable
      expenses*

                  
	
                     

                    Storage
      up to 3 months: up to $5,000

                  
	
                     

                    Home
      search trip for family of 2. Air fare from Europe to San Francisco Bay
      area: up to $12,000 USD.

                  
	
                     

                    Relocation
      to US for family of 2. Air fare from Europe to the San Francisco Bay area:
      up to $6,000 USD.

                  
	
                     

                    Miscellaneous
      relocation expenses: $7,000

                  
	
                     

                    Corporate
      housing for up to 3 months: up to $3,500 per
  month

                  

          

        

      

      

        
          
             

          

          
            -5-

            
              

            

          

          
             

          

        

      

       

      Except
with respect to the Return Reimbursements, the intent of the above
relocation-reimbursements has always been and continues to be that you are
required to remain an employee through the date of reimbursement of any of the
above expenses.  Such reimbursements are intended to be exempt from
the requirements of Section 409A under the “short-term deferral”
rule.

      

      * All
Return Reimbursement expenses must be incurred while you are a Taleo employee or
within six (6) months following your separation from service. With respect to
the taxable portion of any such Return Reimbursements, (a) any such
reimbursements shall be made no later than the last day of the calendar year
that immediately follows the calendar year in which you incurred the expense;
(b) such reimbursement shall not be subject to liquidation or exchange for
another benefit or payment; and (c) the reimbursement provided to you in
any calendar year shall not affect the expenses eligible for reimbursement or
in-kind benefits to be provided in any other calendar year.  Such
reimbursements are intended to constitute compliant deferred compensation
payable on a specified date or fixed schedule in accordance with the
requirements set forth under Treasury Regulation Section
1.409A-3(i)(1)(iv).  You and the Company agree to work together in
good faith to consider amendments to the Schedule B-2 and to take such
reasonable actions which are necessary, appropriate or desirable to avoid
imposition of any additional tax or income recognition prior to actual payment
to you under Section 409A.”

      

      8.   
         Full Force and
Effect.  To the extent not expressly amended hereby, the
Agreement shall remain in full force and effect.

      

      9.     
       Entire
Agreement.  This Amendment and the Agreement constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof.

      

      10.           Counterparts.  This
Amendment may be executed in counterparts, all of which together shall
constitute one instrument, and each of which may be executed by less than all of
the parties to this Amendment.

      

      11.           Amendment.  Any
provision of this Amendment may be amended, waived or terminated by a written
instrument signed by the Company and Executive.

      

      12.           Governing
Law.  This Amendment shall be governed by the laws of the State
of California (with the exception of its conflict of laws
provisions).

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      IN WITNESS WHEREOF, the
undersigned parties have caused this Amendment to be executed as of the date
first set forth above.

      

      

      
        	
                NEIL
      HUDSPITH

              	 
      	
                TALEO
      CORPORATION

              	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                /s/ Neil Hudspith

              	 
      	
                /s/ Josh Faddis

              	 
      
	
                Signature

              	 
      	
                Signature

              	 
      
	 
      	 
      	 
      	 
      
	
                Neil Hudspith

              	 
      	
                Josh Faddis

              	 
      
	
                Print
      Name

              	 
      	
                Print
      Name

              	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                VP, Legal

              	 
      
	 
      	 
      	
                Print
      Title

              	 
      

      

      

       

      (Signature
page to Amendment to Neil Hudspith Employment Agreement)
 

        

    

     
-7-ex10_1.htm

Exhibit 10.1

 

Procera Networks, Inc.

EXECUTIVE EMPLOYMENT AGREEMENT

For

Charles Constanti

This Executive Employment Agreement (“Agreement”) by and between Charles Constanti (“Executive”) and Procera Networks, Inc. (the “Company”)
(collectively, the “Parties”) is effective as of the last date signed by the Parties.

Whereas, the Company desires to employ Executive to provide personal services to the Company, and wishes to provide Executive with certain compensation and benefits in return for his services;

Whereas, Executive wishes to be employed by the Company and to provide personal services to the Company in return for certain compensation and benefits;

Now, Therefore, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:

1.             Employment by the Company.

1.1           Position.  Subject to terms and conditions set forth herein, the Company agrees to employ Executive in the position of Chief Financial Officer and
Executive hereby accepts such employment.  During the term of Executive’s employment with the Company, Executive will devote Executive’s best efforts and substantially all of Executive’s business time and attention to the business of the Company, except for vacation periods as set forth herein and reasonable periods of illness or other incapacities permitted by the Company’s general employment policies.  Executive’s first date of employment shall be a date to
be mutually agreed upon by the Parties (the “Commencement Date”).

1.2           Duties and Location.  Executive shall serve in an executive capacity and shall perform such duties as are customarily associated with Executive’s
then current title, consistent with the bylaws of the Company and as required by the Company’s Board of Directors (the “Board”).  Executive shall report to the Company’s Board.  Executive’s primary office location shall be a location mutually acceptable to both the Executive and the Company.  The Company reserves the right to reasonably require Executive to perform Executive’s duties at places other than Executive’s primary office location
from time to time as agreed to by Executive, and to require reasonable business travel.

1.3           Policies and Procedures.  The employment relationship between the parties shall be governed by the general employment policies and practices of the
Company, except that when the terms of this Agreement differ from or are in conflict with the Company’s general employment policies or practices, this Agreement shall control.

  

  

  

2.             Compensation.

2.1           Salary.  For services to be rendered hereunder, Executive shall receive an annual salary at the rate of $225,000.00 (the “Base
Salary”), subject to payroll withholding and deductions and payable in accordance with the Company’s regular payroll schedule.  Executive’s Base Salary shall be reviewed annually and may be increased as approved by the Board in its sole discretion.

2.2           Annual Bonus.  Executive will be eligible for an annual bonus target of sixty percent (60%) of his Base Salary (the “Annual
Bonus”); provided that for calendar year 2009, this potential bonus shall be prorated for the partial period of employment in calendar year 2009.  The Annual Bonus shall be based on the 2009 executive bonus plan approved by the Company’s Board of Directors (or an executive committee thereof) within the first thirty days of each half year; provided however that with respect to calendar 2009 such objectives may be set within
the first 90 days of employment. The amount of the annual bonus paid shall be determined by the Board of Directors based upon a good faith, objective determination of Executive’s achievement of the previously agreed to objectives.  Since the Annual Bonus is intended both to reward past Company and Executive performance and to provide an incentive for Executive to remain with the Company, Executive must remain an active employee through the date that any such bonus is awarded to him in order to
earn any such bonus.  Executive will not earn any Annual Bonus (including a prorated bonus) if Executive’s employment terminates for any reason before the Annual Bonus is awarded to him.  Any Annual Bonus awarded by the Board shall be paid no later than 30 days after the end of the calendar year.

2.3           Equity Compensation.  Executive shall be granted an option to purchase one million shares of the Company’s Common Stock (the “Option”),
having an exercise price equal to the closing price as quoted on the American Stock Exchange on the third day following the next quarterly earnings release.  Except as otherwise provided herein, the Option will vest and become exercisable over four (4) years, with twenty-five percent (25%) of the shares covered by the Option vesting and becoming exercisable on the one year anniversary of the date of grant, and the remaining shares covered by the Option vesting and becoming exercisable in thirty-six
(36) equal monthly installments thereafter, as long as the Executive remains in continuous service with the Company (as defined in the Plan).  The Option shall be governed by the terms and conditions set forth in the Plan, and in the applicable stock option agreement and grant document.

2.4           Standard Company Benefits.  Executive shall be entitled to participate in all employee benefit programs for which Executive is eligible under the
terms and conditions of the benefit plans which may be in effect from time to time and provided by the Company to its employees generally.

	
  
	
3.
	
Confidential Information Obligations.

3.1           Confidential Information Agreement.  As a condition of employment, Executive agrees to execute and abide by the Employee Confidential Information
and Inventions Assignment Agreement attached hereto as Exhibit A.

  

  

  

3.2           Third Party Agreements and Information.  Executive represents and warrants that Executive’s employment by the Company will not conflict with
any prior employment or consulting agreement or other agreement with any third party, and that Executive will perform Executive’s duties to the Company without violating any such agreement.  Executive represents and warrants that Executive does not possess confidential information arising out of prior employment, consulting, or other third party relationships, which would be used in connection with Executive’s employment by the Company, except as expressly authorized by that third party.  During
Executive’s employment by the Company, Executive will use in the performance of Executive’s duties only information which is generally known and used by persons with training and experience comparable to Executive’s own, common knowledge in the industry, otherwise legally in the public domain, or obtained or developed by the Company or by Executive in the course of Executive’s work for the Company.

	
  
	
4.
	
Outside Activities During Employment.

4.1           Non-Company Business. Except with the prior written consent of the Board, Executive will not during
the term of Executive’s employment with the Company undertake or engage in any other employment, occupation or business enterprise, other than ones in which Executive is a passive investor.  Executive may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of Executive’s duties hereunder.

4.2           No Adverse Interests. Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by
him to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise, except as a passive investor in mutual or exchange traded funds.

  

  

  

	
  
	
5.
	
Termination Of Employment.

5.1           At-Will Relationship.  Executive’s employment relationship is at-will.  Either Executive or the Company may terminate the employment
relationship at any time, with or without Cause or advance notice.

5.2           Termination without Cause; Resignation for Good Reason.  If, at any time, the Company terminates Executive’s employment without Cause (as defined
herein), or Executive resigns with Good Reason (as defined herein), and Executive executes and delivers the Separation Date Release of all claims set forth as Exhibit B hereto and allows such release to become effective, then the Company will provide Executive with the following severance benefits:

(a)           Cash Severance.  The Company shall pay Executive severance in the form of continuation of Executive’s Base Salary in effect on Executive’s
last day of employment for a period of six (6) months after Executive’s termination, subject to standard payroll deductions and withholdings and payable on the Company’s regular payroll schedule.  Each payment made pursuant to this Section 5.2(a) is intended to be a separate payment (as defined in Treasury Regulations Section 1.409A-2(b)(2)) from any other payments made pursuant to this Section 5.2(a) for purposes of the “short term deferral rule” under Treasury Regulations Section
1.409A-1(b)(4).

(b)           Continued Health Insurance Coverage.  To the extent provided by the federal COBRA law or, if applicable, state insurance laws, and by the Company’s
then-current group health insurance policies, Executive may be eligible to continue Executive’s then-current group health insurance benefits after termination of Employment at his own expense.

(c)           Accelerated Vesting.  In the event the Company terminates Executive’s employment without Cause, or Executive resigns with Good Reason, within
twelve (12) months after a Change in Control (as defined below), then the Company will accelerate the vesting of any equity awards granted to Executive prior to Executive’s employment termination such that one hundred percent (100%) of all shares or options subject to such awards which are unvested as of the employment termination date shall be accelerated and deemed fully vested as of Executive’s last day of employment.

5.3           Termination for Cause; Resignation without Good Reason.  If the Company terminates Executive’s employment with the Company for Cause, or Executive
resigns without Good Reason, then Executive will not be entitled to any further compensation from the Company (other than accrued salary, and accrued and unused vacation, through Executive’s last day of employment), including severance pay, pay in lieu of notice or any other such compensation.

5.4           Termination Due to Death or Disability.

(a)           Death.  This Agreement shall terminate immediately upon Executive’s death and Executive’s estate shall not be entitled to any further
compensation from the Company (other than accrued salary, and accrued and unused vacation, through Executive’s last day of employment), including severance pay, pay in lieu of notice or any other such compensation.

  

  

  

(b)           Disability.   If Executive is incapacitated by accident, sickness or otherwise such that Executive is incapable of performing the services set
forth in Section 1.1 herein, and such incapacity is certified by a qualified medical doctor, then this Agreement shall terminate.  In such an event, Executive and/or Executive’s legal representatives shall not be entitled to any further compensation from the Company (other than accrued salary, and accrued and unused vacation, through Executive’s last day of employment), including severance pay, pay in lieu of notice or any other such compensation.

5.5           Deferred Compensation.  If the Company determines that any of the severance benefit payments fail to satisfy the distribution requirement of Section
409A(a)(2)(A) of the Internal Revenue Code as a result of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, the payment of such benefit shall be accelerated to the minimum extent necessary so that the benefit is not subject to the provisions of Section 409A(a)(1) of the Internal Revenue Code.  (It is the intention of the preceding sentence to apply the short-term deferral provisions of Section 409A of the Internal Revenue Code, and the regulations and other guidance thereunder, to the severance
benefit payments, and the payment schedule as revised after the application of the preceding sentence shall be referred to as the “Revised Payment Schedule.”)  However, if there is no Revised Payment Schedule that would avoid the application of Section 409A(a)(1) of the Internal Revenue Code, the payment of such benefits shall not be paid pursuant to a Revised Payment Schedule and instead shall be delayed to the minimum extent necessary so that such benefits are not subject to the provisions
of Section 409A(a)(1) of the Internal Revenue Code.  The Board may attach conditions to or adjust the amounts paid pursuant to this Section 5.5 to preserve, as closely as possible, the economic consequences that would have applied in the absence of this Section 5.5; provided, however, that no such condition or adjustment shall result in the payments being subject to Section 409A(a)(1) of the Internal Revenue Code.

5.6           Limitation on Payments.  In the event that the payments or other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute
“parachute payments” within the meaning of Section 280G of the Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then Executive’s benefits under this Agreement shall be either (a) delivered in full, or (b) delivered to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes
and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.  If a reduction in payments or benefits constituting “parachute payments” is necessary pursuant to the foregoing provision, reduction shall occur in the following order unless the Executive elects in writing a different order (provided,
however, that such election shall be subject to Company approval if made on or after the date on which the event that triggers the parachute payment occurs): reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits.  If acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of the Executive’s stock awards unless the Executive elects
in writing a different order for cancellation.

 

  

  

  

 

Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5.6 shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon Executive and the Company for all purposes and may be relied
upon by the Company.  For purposes of making the calculations required by this Section 5.6, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Section 280G and 4999 of the Code.  The Company and Executive shall further to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 5.6.  The
Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 5.6.
 

5.7           Definitions.

(a)           For purposes of this Agreement, “Cause” shall mean any one or more of the following:

(i)            Executive’s indictment or conviction of any felony or of any crime involving dishonesty;

(ii)           Executive’s participation in any fraud or other act of willful misconduct against the Company (including any material breach of Company policy that causes or reasonably could cause harm to the Company);

(iii)          Executive’s refusal to comply with any lawful directive of the Company;

(iv)           Executive’s material breach of Executive’s fiduciary, statutory, contractual, or common law duties to the Company (including any material breach of this Agreement or the Confidential Information and
Inventions Agreement); or

(v)            Conduct by Executive, which in the good faith and reasonable determination of the Board demonstrates gross unfitness to serve.

Provided, however, that in the event that any of the foregoing events is reasonably capable of being cured, the Company shall, within twenty (20) days after the discovery of such event, provide written notice to the Executive describing the nature of such event and Executive shall
thereafter have ten (10) business days to cure such event.

(b)           For purposes of this Agreement, Executive shall have “Good Reason” for Executive’s resignation if: (w) any of the following occurs without
Executive’s consent; (x) Executive notifies the Company in writing, within twenty (20) days after the occurrence of one of the following events that Executive intends to terminate his employment no earlier than thirty (30) days after providing such notice; (y) the Company does not cure such condition within thirty (30) days following its receipt of such notice or states unequivocally in writing that it does not intend to attempt to cure such condition, and (z) the Executive resigns from employment
within thirty (30) days following the end of the period within which the Company was entitled to remedy the condition constituting Good Reason but failed to do so:

  

  

  

(i)            the assignment to Executive of any duties or responsibilities which result in the material diminution of Executive’s authority, duties or responsibility; provided,
however, that the acquisition of the Company and subsequent conversion of the Company to a division or unit of the acquiring corporation will not by itself result in a material diminution of Executive’s authority, duties or responsibility;

(ii)           a material reduction by the Company in Executive’s annual base salary, except to the extent the base salaries of all other executive officers of the Company are accordingly reduced;

(iii)          a relocation of Executive’s place of work, or the Company’s principal executive offices if Executive’s principal office is at such offices, to a location that increases Executive’s daily one-way
commute by more than thirty-five (35) miles; or

(iv)           any material breach by the Company of any material provision of this Agreement, including but not limited to Section 7.7.

(c)           For purposes of this Agreement, “Change in Control” shall be deemed to have occurred if, in a single transaction or series of related transactions:
(i) any person (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934 (“Exchange Act”)), or persons acting as a group, other than a trustee or fiduciary holding securities under an employment benefit program, is or becomes a “beneficial owner” (as defined in Rule 13-3 under the Exchange Act), directly or indirectly of securities of the Company representing 51% or more of the combined voting power of the Company, (ii) there is a merger, consolidation or
other business combination transaction of the Company with or into another corporation, entity or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock
of the Company (or the surviving entity) outstanding immediately after such transaction, or (iii) all or substantially all of the Company’s assets are sold.

6.             Arbitration.

To ensure the timely and economical resolution of disputes that may arise in connection with Executive’s employment with the Company, Executive and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance, negotiation, execution, or interpretation of
this Agreement, Executive’s employment, or the termination of Executive’s employment, shall be resolved to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator, in San Jose, California, conducted by JAMS under the then applicable JAMS rules. By agreeing to this arbitration procedure, both Executive and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative
proceeding.  The arbitrator shall:  (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award.  The arbitrator shall be authorized to award any or all remedies that Executive or the Company would be entitled to seek in a court of law.  The
Company shall pay all JAMS’ arbitration fees in excess of the amount of court fees that would be required if the dispute were decided in a court of law.  Nothing in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.

  

  

  

7.             General Provisions.

7.1           Notices.  Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal
delivery by fax) or the next day after sending by overnight carrier, to the Company at its primary office location and to Executive at his address as listed on the Company payroll.

7.2           Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction to the extent possible in keeping with the intent of the parties.

7.3           Waiver.  Any waiver of any breach of any provisions of this Agreement must be in writing to be effective, and it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of this Agreement.

7.4           Complete Agreement.  This Agreement, including Exhibit A, constitutes the entire agreement between Executive and the Company and it is the complete,
final, and exclusive embodiment of their agreement with regard to this subject matter.  It is entered into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or amended except in a writing signed by the Executive and a duly authorized officer of the Company.

7.5           Counterparts.  This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all
of which taken together will constitute one and the same Agreement.

7.6           Headings.  The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect
the meaning thereof.

  

  

  

7.7           Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their
respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.  The Company shall obtain the assumption of this Agreement by any successor or assign of the Company.

7.8           Choice of Law.  All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the State
of California.

 In Witness Whereof, the parties have executed this Agreement.

	  	
Procera Networks, Inc.

	  	  	  
	  	  	  
	  	  	  
	  	
By:
	
/s/ James Brear

	  	  	
James Brear, CEO

	  	  	  
	  	
Date:
	
April 27, 2009

Understood and Agreed:

Executive

	
By:
	
/s/ Charles Constanti

	  	
Charles Constanti

	  	  
	
Date:
	
April 27, 2009

	
Agreed-to Commencement Date: May 11, 2009
	
JB: /s/ JB
	
CC: /s/ CC

  

  

  

Exhibit A

CONFIDENTIAL INFORMATION AND INVENTIONS AGREEMENT

  

  

  

Exhibit B

Separation Date Release

(To be signed on or within 21 days after the employment termination date.)

In exchange for the severance benefits to be provided to me by Procera Networks, Inc. (the “Company”) pursuant to the terms of my Executive Employment Agreement (the “Agreement”), I hereby provide the following General Release of Claims (the “Release”).  I understand that, on the last date
of my employment with the Company, the Company will pay me any accrued salary to which I am entitled by law, regardless of whether I sign this Release, but I am not entitled to any severance benefits unless I sign and return this Release to the Company and I allow it to become effective.

I hereby generally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively the “Released Parties”) of and from any and all claims, liabilities and obligations,
both known and unknown, arising out of or in any way related to events, acts, conduct, or omissions occurring at any time prior to or at the time that I sign this Release.

This general release includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership or equity interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing (including claims based on or arising under the Agreement); (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act (as amended) (“ADEA”), the federal Family and Medical Leave Act, the California Labor Code (as amended), the California Family Rights Act, and the California Fair Employment and Housing Act (as amended).

I understand that notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (i) any rights or claims for indemnification I may have pursuant to any written indemnification agreement to which I am a party, the charter, bylaws, or operating agreements of any of the
Released Parties, or under applicable law; or (ii) any rights which are not waivable as a matter of law.  In addition, I understand that nothing in this release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and Housing, except that I acknowledge and agree that I shall not recover any monetary benefits in connection with any such claim, charge
or proceeding with regard to any claim released herein.  I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

  

  

  

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA, and that the consideration given for the waiver and release in the preceding paragraph is in addition to anything of value to which I am already entitled.  I further acknowledge that I have been advised by this writing
that:  (1) my waiver and release do not apply to any rights or claims that may arise after the date I sign this Release; (2) I should consult with an attorney prior to signing this Release (although I may choose voluntarily not to do so); (3) I have twenty-one (21) days to consider this Release (although I may choose voluntarily to sign it earlier); (4) I have seven (7) days following the date I sign this Release to revoke it by providing written notice of revocation to the Company’s Board of
Directors; and (5) this Release will not be effective until the date upon which the revocation period has expired, which will be the eighth calendar day after the date I sign it provided that I do not revoke it (the “Effective Date”).

I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.  I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows:  “A general release does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law or legal principle of similar effect in any jurisdiction with respect to my release of claims herein, including but not limited to the release of unknown and unsuspected claims.

I hereby represent that I have been paid all compensation owed and for all hours worked, I have received all the leave and leave benefits and protections for which I am eligible, pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise, and I have not suffered any on-the-job injury for which I have
not already filed a workers’ compensation claim.

I further agree: (1) not to disparage the Company, its parent, or its or their officers, directors, employees, shareholders, affiliates and agents, in any manner likely to be harmful to its or their business,  business reputation, or personal reputation (although I may respond accurately and fully to any question, inquiry
or request for information as required by legal process); (2) not to voluntarily (except in response to legal compulsion) assist any third party in bringing or pursuing any proposed or pending litigation, arbitration, administrative claim or other formal proceeding against the Company, its parent or subsidiary entities, affiliates, officers, directors, employees or agents; and (3) to reasonably cooperate with the Company, by voluntarily (without legal compulsion) providing accurate and complete information, in
connection with the Company’s actual or contemplated defense, prosecution, or investigation of any claims or demands by or against third parties, or other matters, arising from events, acts, or failures to act that occurred during the period of my employment by the Company.

	
By:
	  	  	  
	  	
Charles Constanti
	  	
Date

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