October 6, 1999
Xxxx X. Xxxxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxx Xxxx, XX 00000
Dear Xxxx:
This letter agreement supercedes and replaces the offer letter to
you dated October 5, 1998 and (1) confirms your basic
compensation package associated with your employment as President
of Inso's PDM Division; and (2) describes certain additional
considerations related to Inso's planned disposition of the PDM
Division.
1. Basic Compensation Package
To confirm, your current total, targeted, annualized compensation
is equivalent to $294,000. This is comprised of a base salary of
$196,000 and a bonus of up to 50% of base salary, subject to the
terms of the Fiscal 2000 Executive Incentive Plan, a copy of
which was previously provided to you and which is incorporated by
reference into this letter agreement.
2. Additional Considerations
In addition to your basic compensation package, as a result of
Inso's decision to divest the PDM division, preferably by fiscal
year end 1/31/00, Inso is providing you with certain security and
incentive arrangements, which are described in greater detail on
Attachment A to this letter agreement (collectively, the
"Transaction Compensation"). The Transaction Compensation is
being offered to focus and reward your efforts relative to the
ongoing management of the PDM Division and its ultimate
disposition.
Xxxx, as indicated in Attachment A, the amount and nature of the
Transaction Compensation is variable, and is a function of the
timing of the disposition of the PDM Division. Also, your
entitlement to the Transaction Compensation assumes that you are
employed with Inso at the time of disposition of the PDM
Division, and that you use best efforts to assist with the
successful disposition of the PDM Division (including during any
reasonable transition period) while at the same time performing
your usual duties as President of the PDM Division. Finally,
your entitlement to receive base salary continuation as described
in Attachment A applies so long as you do not (i) own, operate,
or be employed by any business or other entity in the product
data management space; or (ii) solicit, seek to employ, employ,
retain, or seek to retain the services of any person who is at
that an employee of Inso.
This Agreement is intended to be the entire agreement between you
and Inso with respect to its subject matter, and supercedes and
replaces any prior discussions, memos and e-mails that may have
been exchanged on these subjects; provided that your
Nondisclosure Agreement, dated October 9,1998, shall remain in
effect. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts,
without regard to conflict of laws principles, and shall be
deemed to be performed in Massachusetts. This Agreement may not
be altered, modified or amended except by a written instrument
signed by you and an authorized representative of Inso.
Finally, this Agreement does not give you the right to be
retained in the employment of Inso. This Agreement does not, and
shall not be construed to, create a contract of employment
between you and Inso, and Inso's relationship with you shall
remain terminable at will.
I hope that this letter agreement answers any questions you have
regarding your personal situation relative to the disposition of
the PDM business. As you know, we are pleased to have your
valuable skill dedicated to this activity. Please countersign
both copies of this letter agreement where indicated below, and
return one fully executed copy to me.
Sincerely,
Inso Corporation
/s/ Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
President
Accepted and Agreed:
/s/ Xxxx X. Xxxxxxxx
___________________
Xxxx X. Xxxxxxxx
Dated: 10/8/99
ATTACHMENT A
Compensation Disposition On or
Component Prior to 1/31/00 Disposition After 1/31/00
Base Salary As described in letter Eligible for executive
agreement pay review in Spring '00
for 4/1/00 adjustment
Bonus under Payment after end of As per Fiscal 2000 Executive
Fiscal 2000 FY '00 Incentive Plan
Executive Incentive Payment of 100% of
Plan target annual bonus
($98K) if PDM
division performance
is at least 85% of
annual plan at time
of closing, as
reasonably determined
by Inso's President
Any payment for over-
plan component as per
Fiscal 2000 Executive
Incentive Plan, as
reasonably determined
by Inso's President
Severance 18 months base salary 18 months base salary
(payable only continuation at then- continutation at then-
if, upon current rate current rate
closing, Buyer Transaction Bonus of Transaction Bonus of
does not retain $98,000, payable within $49,000, payable within
Xxxxxxxx in same 30 days of closing2 30 days of closing
or substantially 18 months employee 18 months employee benefit
equivalent benefit continuation as continuation as per Inso
position1) per Inso policy and policy and applicable law
applicable law
Reasonable Executive Reasonable Executive
outplacement services outplacement services
as per Inso policy as per Inso policy
Transaction Transaction Bonus of Transaction Bonus of
Incentive $200,000, payable $100,000, payable
(payable only within 30 days of within 30 days of
if, upon closing closing
closing, Buyer
retains Xxxxxxxx
in same or
substantially
equivalent
position3)
Employment Employment with Inso Employment with Inso
Status; will terminate on will terminate on closing;
Management closing; Management Management Retention
Retention Retention Agreement Agreement dated December
Agreement dated December 13, 13, 1998 will terminate
1998 will terminate immediately prior to
immediately prior to closing
closing
Stock Options Any Inso stock Fifty percent (50%) of any
options which remain Inso stock options which
unvested as of the remain unvested as of the
closing which would closings which would have
have vested within vested within one year of
one year of the closing will vest on the
closing will vest on closing unless, at the
the closing unless, time of closing, the
at the time of Buyer offers you (in Inso's
closing, the Buyer reasonable opinion) more
offers you (in Inso's favorable treatment of your
reasonable opinion) unvested Inso stock options,
more favorable in which case no
treatment of your acceleration of vesting will
unvested Inso stock be provided by Inso
options, in which hereunder. You will have 90
case no acceleration days from the date of
of vesting will be closing to exercise any
provided by Inso vesting Inso stock options.
hereunder. You will
have 90 days from the
date of closing to
exercise any vested
Inso stock options.
1 A "substantially equivalent position," as reasonably determined by
Inso's President, shall be any position other than: (a) a demotion from
the position held by you at the time of the execution of the Agreement;
or (b) a position which involves a material change in your reporting
structure, geographic work location, compensation or benefits, or duties
and responsibilities.
2 All monetary amounts referenced in this letter shall be reduced by
applicable legally-required and volunatarily authorized deductions such
as taxes.
3 See above regarding defination of a "substantially equivalent position."
