Chegg 2015 Annual Report Download - page 31

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Termination and Change of Control Arrangements
Pursuant to the offer letters we entered into with Messrs. Rosensweig, Brown and Geiger, we have agreed to make
certain payments upon their termination or resignation, or a change in control of our company.
Dan Rosensweig
We entered into an offer letter agreement with Mr. Rosensweig, our president and chief executive officer, on
December 3, 2009. The offer letter provides for at-will employment and has no specific term. Pursuant to Mr. Rosensweig’s
offer letter, in the event we terminate Mr. Rosensweig’s employment without “cause” or he resigns from his employment with
us for “good reason,” then we will pay Mr. Rosensweig a lump sum payment equal to 12 months of his then-current annual
salary and his monthly insurance premiums, until the earlier of 12 months following his termination or resignation or the date
upon which he commences full-time employment or consulting services with another company and is eligible for participation
in any health insurance program provided by such company. Additionally, Mr. Rosensweig will be entitled to immediate vesting
of 25% of his then-unvested stock options and 25% of his then-unvested RSUs. Mr. Rosensweig will also have a period of up
to 24 months from the effective date of his termination or resignation to exercise all vested options. These benefits are subject
to Mr. Rosensweig releasing us from all claims, resigning from our board of directors and returning all of our property to us.
Additionally, if Mr. Rosensweig is terminated without “cause” or he resigns from his employment with us for “good
reason” within 12 months following a “change of control” of our company, we will pay Mr. Rosensweig a lump sum payment
equal to his then current annual salary and his monthly insurance premiums, until the earlier of 12 months following his
termination or resignation or the date upon which he commences full time employment or consulting services with another
company and is eligible for participation in any health insurance program provided by such company. Additionally,
Mr. Rosensweig will be entitled to immediate vesting of 100% of his then-unvested stock options and 100% of his then-
unvested RSUs. Mr. Rosensweig will have a period of up to 24 months from the effective date of his termination or resignation
to exercise all vested options. These benefits are subject to Mr. Rosensweig releasing us from all claims.
For purposes of this section, “cause” means a determination by our board of directors that employment is terminated
because of (i) a failure or refusal to comply in any material respect with lawful policies, standards or regulations of our
company within 30 days after written notice to of such violations and/or failure to comply; (ii) a material violation of a federal
or state law or regulation applicable to our business; (iii) a conviction or plea of no contest to a felony or other crime of moral
turpitude under the laws of the United States or any state; (iv) fraud or material misappropriation of property belonging to us or
our affiliates; (v) a material breach of the terms of any confidentiality, invention assignment or proprietary information
agreement with us or with a former employer and failure to correct or cure such material breach within thirty days after written
notice of such breach; or (vi) material misconduct or gross negligence in connection with the performance of duties.
For purposes of this section, “good reason” occurs upon (i) removal from the position of Chief Executive Officer or no
longer reporting directly to our board of directors, (ii) any material change or reduction in duties as Chief Executive Officer or
assignment to duties inconsistent with such position, responsibilities, authority or status, (iii) reduction of then-current annual
base compensation (other than a similar reduction that applies to our other senior executives), or (iv) relocation to a primary
work location more than 50 miles from our principal office in Santa Clara, California.
For purposes of this section, “change of control” means (i) a merger, reorganization, consolidation or other acquisition
(or series of related transactions of such nature) pursuant to which more than 50% of the voting power of all of our equity
would be transferred by the holders our outstanding shares (excluding a reincorporation to effect a change in domicile); (ii) a
sale of all or substantially all of our assets; or (iii) any other transaction or series of transactions (other than capital raising
transactions) in which our stockholders immediately prior to such transaction or transactions own immediately after such
transaction less than 50% of the voting equity securities of the surviving corporation or its parent.
Andy Brown
We entered into an offer letter agreement with Mr. Brown, our Chief Financial Officer, on October 2, 2011. The offer
letter provides for at-will employment and has no specific term. Pursuant to Mr. Brown’s offer letter, in the event we terminate
Mr. Brown’s employment without “cause” or he resigns from his employment with us for “good reason,” then we will pay
Mr. Brown a lump sum payment equal to 12 months of his then-current annual salary and his monthly insurance premiums,
until the earlier of 12 months following his termination or resignation or the date upon which he commences full-time
employment or consulting services with another company and is eligible for participation in any health insurance program