(iii)The Company will pay Executive an amount equal to Executive’s annual target bonus (assuming achievement of 100% of Executive’s target bonus) under the Amended and Restated Executive Bonus Plan, less all applicable taxes and withholdings, for the year in which Executive’s termination date occurs, such amount payable in a lump sum on the date the first installment of severance pay is paid.
(iv)All outstanding and unvested Equity Awards in each case that vest solely based on continued service that are then held by Executive shall become fully vested, exercisable and otherwise free from forfeiture and (A) with respect to any stock options then held by Executive, those options shall remain exercisable for the period of time set forth in the applicable grant agreement and (B) with respect to any Equity Awards granted in the form of restricted stock units, Executive shall be entitled to the Assumed RSU Payment Amount, with the amount calculated in prong (ii) of the definition of Assumed RSU Payment Amount determined as of Executive’s termination date.
3.Definitions. For purposes of this Agreement:
(a)“Cause” means any of: (a) Executive’s conviction of, or plea of guilty or nolo contendere to, any crime involving dishonesty or moral turpitude or any felony; (b) a good faith finding by the Company that Executive has (i) engaged in dishonesty, willful misconduct or gross negligence, (ii) committed an act that materially injures or would reasonably be expected to materially injure the reputation, business or business relationships of the Company, (iii) materially breached the terms of any agreement between Executive and the Company, including without limitation the Employment Agreement or any restrictive covenant or confidentiality agreement with the Company; or (iv) failed or refused to comply in any material respect with the Company’s material policies or procedures.
(b)“Good Reason” means the occurrence, without Executive’s prior written consent, of any of the following events: (a) a material reduction in Executive’s authority, duties, or responsibilities, provided that neither a change in title, nor a reduction in Executive’s authority, duties or responsibilities solely as a result of the Company becoming a subsidiary of the acquiring or succeeding entity shall constitute Good Reason; (b) the relocation of the principal place at which Executive provides services to the Company by at least 65 miles and to a location such that Executive’s daily commuting distance is increased; (c) a material reduction of Executive’s base salary (except for across the board pay cuts of all management level employees of the Company); or (d) a material breach by the Company of its obligations under the Employment Agreement. No resignation will be treated as a resignation for Good Reason unless (A) Executive has given written notice to the Company of Executive’s intention to terminate his employment for Good Reason, describing the grounds for such action, no later than 90 days after the first occurrence of such circumstances, (B) Executive has provided the Company with at least 30 days in which to cure the circumstances, and (C) if the Company is not successful in curing the circumstances, Executive ends his employment within 30 days following the cure period in (ii). Notwithstanding the foregoing, with respect to prong (ii) of this definition, a requirement that Executive be present and perform services for no more than three (3) days per week at a location 65 or more miles from his current location for a transition period following the Change in Control not to exceed twelve (12) months (the “Transition Period”), with any and all expenses of Executive related to such temporary work location (including weekly round trip airfare, lodging in at least a 4-star hotel (or other mutually agreeable lodging), meals and other expenses) paid for (on a grossed-up basis) by an acquiring or succeeding entity, shall not constitute Good Reason unless the proposed work location does not comply with Centers for Disease Control Covid-19 workplace safety guidelines. For the avoidance of doubt, Executive shall be entitled to work from his current work location, or remotely, for the other two (2) days per week during the Transition Period.
(c)“Change in Control” means any of the following events provided that such event also constitutes a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5):
(i)the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act) 50% or more of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control Event: (1) any acquisition of additional shares of common stock or other securities by Patricia Gallup (or any entity controlled by her or any trust or similar estate planning entity for the benefit of her spouse and/or issue, her and her spouse’s siblings and/or issue) or the 1998 PC Connection Voting Trust (collectively, the “Exempt Entities”), (2) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company, unless the Person exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company), (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (4) any acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (iii) of this definition; or
(ii)a change in the composition of the Board that results in the Continuing Directors (as defined below) no longer