Broadvision, Inc. Executive Severance Benefit Plan

EXHIBIT 10.38


BROADVISION, INC. EXECUTIVE SEVERANCE BENEFIT PLAN


Section 1. INTRODUCTION.


The BroadVision, Inc. Executive Severance Benefit Plan (the "Plan") was established effective May 22, 2003. The purpose of the Plan is to provide for the payment of severance benefits to certain eligible employees of the BroadVision, Inc. (the "Company") whose employment with the Company is involuntarily terminated. This Plan shall supersede any severance benefit plan (except the Change of Control Severance Benefit Plan), policy or practice previously maintained by the Company. This Plan document also is the Summary Plan Description for the Plan.


Section 2. ELIGIBILITY FOR BENEFITS.


(a) General Rules. Subject to the requirements set forth in this Section, the Company will grant severance benefits under the Plan to Eligible Employees.


(i) Definition of "Eligible Employee." For purposes of this Plan, an "Eligible Employee" is a regular hire employee of the Company (i) who (a) reports directly to the CEO of the Company ("Group 1") or (b) is a Senior Vice President or the Vice President and Corporate Financial Controller of the Company and does not report directly to the CEO ("Group 2"), (ii) whose employment is terminated by the Company pursuant to an Involuntary Termination Without Cause or a reduction in force and (ii) who is notified by the Company in writing that he or she is eligible for participation in the Plan. The determination of whether an employee is an Eligible Employee shall be made by the Company, in its sole discretion, and such determination shall be binding and conclusive on all persons.


(ii) Definition of "Involuntary Termination Without Cause." For purposes of this Plan, an "Involuntary Termination Without Cause" means an Eligible Employee's involuntary termination of employment by the Company for a reason other than Cause. "Cause" means the occurrence of any one or more of the following:


(1) the Eligible Employee's conviction of, or plea of no contest with respect to, any crime involving fraud, dishonesty or moral turpitude;


(2) the Eligible Employee's attempted commission of or participation in a fraud or act of dishonesty against the Company that results in (or might have reasonably resulted in) material harm to the business of the Company;


(3) the Eligible Employee's intentional, material violation of any contract or agreement between the Eligible Employee and the Company or any statutory duty the Eligible Employee owes to the Company;


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(4) the Eligible Employee's conduct that constitutes gross misconduct, insubordination, incompetence or habitual neglect of duties and that results in (or might have reasonably resulted in) material harm to the business of the Company; or


(5) the Eligible Employee's persistent unsatisfactory performance of his or her job duties.


The conduct described under clause (3), (4) or (5) above will only constitute Cause if such conduct is not cured within fifteen (15) days after the Eligible Employee's receipt of written notice from the Company or the Board specifying the particulars of the conduct that may constitute Cause.


(iii) In order to be eligible to receive benefits under the Plan, an Eligible Employee must remain on the job until his or her date of termination as scheduled by the Company.


(iv) In order to be eligible to receive benefits under the Plan, an Eligible Employee also must execute a general waiver and release in substantially the form attached hereto as Exhibit A, Exhibit B or Exhibit C, as appropriate, and such release must become effective in accordance with its terms. The Company, in its discretion, may modify the form of the required release to comply with applicable law and shall determine the form of the required release, which may be incorporated into a termination agreement or other agreement with the Eligible Employee.


(b) Exceptions to Benefit Entitlement. An employee, including an employee who otherwise is an Eligible Employee, will not receive benefits under the Plan (or will receive reduced benefits under the Plan) in the following circumstances, as determined by the Company in its sole discretion:


(i) The employee has executed an individually negotiated employment contract or agreement with the Company relating to severance benefits that is in effect on his or her termination date, in which case such employee's severance benefit, if any, shall be governed by the terms of such individually negotiated employment contract or agreement and shall be governed by this Plan only to the extent that the reduction pursuant to Section 3(c) below does not entirely eliminate benefits under this Plan.


(ii) The employee voluntarily terminates employment with the Company. Voluntary terminations include, but are not limited to, resignation, retirement or failure to return from a leave of absence on the scheduled date.


(iii) The employee voluntarily terminates employment with the Company in order to accept employment with another entity that is wholly or partly owned (directly or indirectly) by the Company.


(iv) The employee is offered an identical or substantially equivalent or comparable position with the Company. For purposes of the foregoing, a "substantially equivalent or comparable position" is one that offers the employee substantially the same level of responsibility and compensation.


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(v) The employee is offered immediate reemployment by a successor to the Company or by a purchaser of its assets, as the case may be, following a change in ownership of the Company or a sale of substantially all of the assets of a division or business unit of the Company. For purposes of the foregoing, "immediate reemployment" means that the employee's employment with the successor to the Company or the purchaser of its assets, as the case may be, results in uninterrupted employment such that the employee does not incur a lapse in pay as a result of the change in ownership of the Company or the sale of its assets.


(vi) The employee is rehired by the Company prior to the date benefits under the Plan are scheduled to commence.


Section 3. AMOUNT OF BENEFIT.


(a) Severance Benefits. Severance benefits under the Plan, if any, shall be provided to Eligible Employees described in Section 2 in the amount provided in Appendix A, as such Appendix A may be revised by the Company, in its sole discretion, from time to time.


(b) Additional Benefits. Notwithstanding the foregoing, the Company may, in its sole discretion, provide benefits in addition to those pursuant to Section 3(a) to Eligible Employees or employees who are not Eligible Employees ("Non-Eligible Employees") chosen by the Company, in its sole discretion, and the provision of any such benefits to an Eligible Employee or a Non-Eligible Employee shall in no way obligate the Company to provide such benefits to any other Eligible Employee or to any other Non-Eligible Employee, even if similarly situated. If benefits under the Plan are provided to a Non-Eligible Employee, references in the Plan to "Eligible Employee" (with the exception of Section 3(a)) shall be deemed to refer to such Non-Eligible Employee.


(c) Certain Reductions. The Company, in its sole discretion, shall have the authority to reduce an Eligible Employee's severance benefits, in whole or in part, by any other severance benefits, pay in lieu of notice, or other similar benefits payable to the Eligible Employee by the Company that become payable in connection with the Eligible Employee's termination of employment pursuant to (i) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act (the "WARN Act"), (ii) a written employment or severance agreement with the Company, or (iii) any Company policy or practice providing for the Eligible Employee to remain on the payroll for a limited period of time after being given notice of the termination of the Eligible Employee's employment. The benefits provided under this Plan are intended to satisfy, in whole or in part, any and all statutory obligations that may arise out of an Eligible Employee's termination of employment, and the Plan Administrator shall so construe and implement the terms of the Plan. The Company's decision to apply such reductions to the severance benefits of one Eligible Employee and the amount of such reductions shall in no way obligate the Company to apply the same reductions in the same amounts to the severance benefits of any other Eligible Employee, even if similarly situated. In the Company's sole discretion, such reductions may be applied on a retroactive basis, with severance benefits previously paid being recharacterized as payments pursuant to the Company's statutory obligation. In addition to the foregoing reductions, if an Eligible Employee becomes employed by an entity other than the Company during the period of time in respect of which severance benefits pursuant to Sections 3(a) and 3(b) are paid, the Eligible Employee must


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notify the Company in writing immediately. Following receipt of such notification, the Company will reduce such Eligible Employee's unpaid severance benefits by fifty percent (50%).


Section 4. TIME OF PAYMENT AND FORM OF BENEFIT.


The Company reserves the right to determine whether severance benefits under the Plan, if any, shall be paid in a single sum, in installments, or in any other form and to choose the timing of such payments. All such payments under the Plan will be subject to applicable withholding for federal, state and local taxes. If an Eligible Employee is indebted to the Company at his or her termination date, the Company reserves the right to offset any severance payments under the Plan by the amount of such indebtedness. In no event shall payment of any Plan benefit be made prior to the Eligible Employee's termination date or prior to the effective date of the release described in Section 2(a)(3).


Section 5. REEMPLOYMENT.


In the event of an Eligible Employee's reemployment by the Company as an employee or return to service with the Company as an independent contractor during the period of time in respect of which severance benefits pursuant to Sections 3(a) and 3(b) have been paid, the Company, in its sole and absolute discretion, may require such Eligible Employee to repay to the Company all or a portion of such severance benefits as a condition of reemployment or resumption of service.


Section 6. RIGHT TO INTERPRET PLAN; AMENDMENT AND TERMINATION.


(a) Exclusive Discretion. The Plan Administrator shall have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to participate in the Plan and amount of benefits paid under the Plan. The rules, interpretations, computations and other actions of the Plan Administrator shall be binding and conclusive on all persons.


(b) Amendment or Termination. The Company reserves the right to amend or terminate this Plan (including Appendix A) or the benefits provided hereunder at any time; provided, however, that no such amendment or termination shall affect the right to any unpaid benefit of any Eligible Employee whose termination date has occurred prior to amendment or termination of the Plan. Any action amending or terminating the Plan shall be in writing and executed by the Chief Executive Officer or Senior Vice President of Human Resources of the Company.


Section 7. NO IMPLIED EMPLOYMENT CONTRACT.


The Plan shall not be deemed (i) to give any employee or other person any right to be retained in the employ of the Company or (ii) to interfere with the right of the Company to discharge any employee or other person at any time, with or without cause, which right is hereby reserved.


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Section 8. LEGAL CONSTRUCTION.


This Plan is intended to be governed by and shall be construed in accordance with the Employee Retirement Income Security Act of 1974 ("ERISA") and, to the extent not preempted by ERISA, the laws of the State of California.


Section 9. CLAIMS, INQUIRIES AND APPEALS.


(a) Applications for Benefits and Inquiries. Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the Plan Administrator in writing by an applicant (or his or her authorized representative). The Plan Administrator is:


BroadVision, Inc. 585 Broadway Redwood City, CA 94063


(b) Denial of Claims. In the event that any application for benefits is denied in whole or in part, the Plan Administrator must provide the applicant with written or electronic notice of the denial of the application, and of the applicant's right to review the denial. Any electronic notice will comply with the regulations of the U.S. Department of Labor. The notice of denial will be set forth in a manner designed to be understood by the applicant and will include the following:


(i) the specific reason or reasons for the denial;


(ii) references to the specific Plan provisions upon which the denial is based;


(iii) a description of any additional information or material that the Plan Administrator needs to complete the review and an explanation of why such information or material is necessary; and


(iv) an explanation of the Plan's review procedures and the time limits applicable to such p ...