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EXHIBIT 10.33
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), dated as of the 28 day of
December, 1997, is between SystemSoft Corporation, a Delaware corporation having
its principal place of business at Xxx Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 (the "Company"), and Xxxxxxx X. X'Xxxxxxx ("Employee or you").
In consideration of the mutual covenants and undertakings set forth
herein, the Company and you agree as follows:
1. The Company shall continue to employ you and you accept continued employment
with the Company, upon the terms and subject to the conditions set forth in this
Agreement. The Corporation recognizes that the employee may be invited to serve
on boards of Companies and/or industry associations and supports this activity
insofar as it does not represent a conflict of interest to the Corporation.
a. During the term of such employment, you shall: (a) devote substantially
all of your business time and energy to performing your duties pursuant
to this Agreement, (b) perform all duties as the board of directors or
any officer of the Company shall from time to time direct, (c) perform
such duties in a faithful manner and to the best of your ability and (d)
use your best efforts to promote the interests of the Company. The
Company shall continue to pay you your present base salary ("Base
Salary", which may be adjusted from time to time in writing), payable in
at least equal monthly payments during the term of your employment by
the Company, the specific payment terms of which shall be determined by
the Company.
b. You may be entitled to receive bonuses based on fifty percent (50%) of
your Base Salary. You may be entitled to increases in your Base Salary.
The determination of the amount of such increases in Base Salary, if
any, and the time and method of payment of such increases shall be at
the sole discretion of the board of directors of the Company.
c. You may exercise any stock options granted to you at any time regardless
of whether the options have vested. Until such options have vested in
accordance with the terms of the stock option grant, the Company shall
have the right to purchase the shares of stock issued pursuant to the
exercise of the grant at the price paid by you.
d. You may request the Company to finance the acquisition cost of the stock
option shares. If the Company elects, in its sole discretion, to provide
such financing, you shall execute a promissory note acceptable to the
Company. Interest shall accrue at the prime rate.
2. During the term of your employment by the Company, and for a period of one
(1) year following the termination of such employment, you shall not, directly
or indirectly, for your own account or on behalf of any other Person, anywhere
in the world, engage in any business activity
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which is the same as, substantially similar to or otherwise competitive with any
business activity now or thereafter undertaken by the Company or by any
affiliate of the Company (except that you may own non-voting shares, and not
more than 10% of the voting shares, of any publicly-traded Company engaged in
such business activity). You expressly acknowledges that because of the nature
of the Company's business and the locations of the Company's customers, placing
a more limited geographic scope on your obligations under this Section would
render those obligations effectively meaningless, and that the worldwide scope
of those obligations is therefore reasonable.
A violation by you of the non-competition covenant set forth in this
Section shall entitle the Company to terminate any remaining severance payments
pursuant to Section 7 of this Agreement and seek any other remedy pursuant to
this Agreement or applicable law.
3. a. During the term of your employment by the Company, and for a period of
one (1) year following the termination of such employment, you shall
not, directly or indirectly, for your own account or on behalf of any
other Person, (a) employ or solicit the employment of any Person who is,
or during the 120 days immediately preceding the termination of such
employment was, an employee of the Company or any affiliate of the
Company, (b) influence or seek to influence any employee of the Company
to leave the Company's employment or (c) contact (except pursuant to
your duties on behalf of the Company during your employment) any
employee of the Company with respect to any business matter of the
Company. The Corporation will not hold the Employee accountable for
inadvertant hires: those that may be done by someone in another part of
the Company with no involvement or knowledge on the Employee's part.
b. During the term of your employment by the Company, and for a period of
one (1) year following the termination of such employment, you shall
not, directly or indirectly, for your own account or on behalf of any
other Person, (a) sell or attempt to sell any products or services
competitive with the Company's products or services to any customer to
whom the Company sold products or services at any time during the last
one (1) year of your employment with the Company or (b) suggest, advise
or attempt to persuade any such customer to limit or discontinue its
business with the Company. The foregoing restrictions shall apply to (a)
all such customers of the Company located in any defined territory or
territories to which you was assigned at any time during the last one
(1) year of your employment with the Company and (b) any of the
Company's customers with which or with whom you dealt or whose account
or business he managed, supervised, or conducted, alone or with any
other Person, on behalf of the Company at any time during the last one
(1) year of your employment.
4. At your sole option, you may terminate your employment with the Company as of
February 28, 1998 (the "Termination Date"). If you make this election, as
further provided in Section 7, you shall receive your Base Salary and all
bonuses received by the Management Team which may include stock grants through
the Termination Date. At your option, this Section of the Agreement may be
amended or rescinded by mutual agreement of the Company and yourself on or
before March 1, 1998. Consistent with the provisions of Section 2 of this
Agreement, you are free to seek alternate employment beginning January 31, 1998;
however you may not commence new employment prior to February 28, 1998. If you
have not secured another position by February 28, 1998 and
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agree to a six month Sales Consulting arrangement with the Company, then the
Company shall pay you at your full current Base Salary for a period of Six
months (through August 31, 1998) and then for an additional twelve month period
following this (through August 31, 1999). Additionally, you will continue to
vest your stock options through August 31, 1999. If however, you do secure other
employment following the Termination Date and/or a consulting arrangement does
not commence, then you will receive 12 months salary through February 28, 1999
and twelve months stock vesting through February 28, 1999.
5. If you elect to terminate your employment with the Company, you will not
disclose or use any of the Company's confidential information or confidential
information entrusted to the Company by others to any non-Company person,
company, or other entity. The Company's confidential information includes
matters not generally known outside of the Company, such as experimentation,
research and developments relating to existing and future products and services
marketed or used by the Company, and also any information relating to the
general business operations of the Company (i.e., sales, products, market
opportunities, costs, profits, organizations, customer lists, pricing methods,
etc.). In the event you hear of the Company confidential information from a
third party, you agree not to disclose such confidential information.
6. If you elect to terminate your employment with the Company, you will settle
all expense accounts and advances made by the Company to you and complete all
other procedures required of terminating employees by February 28, 1998. The
Company shall pay all reasonable and documented expenses incurred by you prior
to February 28, 1998. You will return to the Company all property provided by
the Company to you including all credit, identification, and entry cards and all
documents, records, papers, notebooks, and other materials and copies thereof
(regardless of the medium on which the copy is made) related to or including any
information which is confidential to the Company.
7. If you elect to terminate your employment with the Company, the Company,
while expressly denying the commission of any wrongful act, including but not
limited to any violations of any federal, state or local fair employment
practice law, or other employment practice law, or other employer duty or other
employment-related obligation (all of which are hereinafter referred to as
"employment relations laws") or other equity, will provide the following:
a. Commencing on March 1, 1998, with the first payment on March 15,
1998, you will receive semi-monthly payments of $7,292 for the first
twelve months after the Termination Date. Your entitlement to these
separation payments will terminate if you breach your obligations to
the Company pursuant to Sections 2, 3, 5 and 14 of this Agreement.
Such a breach by you will, among other things, relieve the Company
of its obligations to you under this Agreement regardless of when
said breach occurs. If you secure and begin other employment, then
during the twelve month period following the Termination Date, all
medical and dental benefits payable to you hereunder will cease once
you are eligible for such coverage from your new employer. Each
payment made shall be less any amount required of the Company by law
to be withheld or elected to be withheld by you on a voluntary
basis. For purposes of this Agreement, being "employed" or
"employment" means having a common law employment relationship with
another entity or engaging in any other comparable
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position such as independent contractor for, owner of, consultant
to, or partner with or of another entity. Notwithstanding anything
to the contrary in this Agreement, your failure to attempt to find
other employment will not entitle the Company to discontinue payment
under Section 7 (a) or to cease to provide continuation of benefits
as described in Sections 7(b) and 7(c).
b. The Termination Date will be the date of the "qualifying event"
under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"), and you will receive COBRA information under separate
cover. However, commencing on the Effective Date, and for the period
during which you receive the above-referenced semi-monthly payments
from the Company, the Company will continue to make its contribution
to your medical and dental insurance coverage on the same terms and
conditions available to active Company employees. Group universal
life insurance and disability insurance coverage in effect at the
Termination Date will be continued for a maximum of twelve (12)
months thereafter in accordance with the terms of those policies.
The Company agrees to pay your Officers Life Insurance and
Disability Policies for a twelve month period from the Termination
Date.
c. Continuation of your participation in the Company 401(k) Plan for as
long as payments continue to you under this Agreement. Thereafter,
your rights in the Plans shall be determined under the terms of the
Plan.
d. For a period of 12 months, (or 18 months if the Consulting
Agreement described in paragraph 4(d) is in effect) after the
Termination Date, you may exercise any stock options granted to you
at any time regardless of whether the options have vested. Until
such options have vested in accordance with the terms of the stock
option grant, the Company shall have the right to purchase the
shares of stock issued pursuant to the exercise of the grant at the
price paid by you.
e. You shall be appointed to the Company Advisory Committee for not
less that 12 months, (or 18 months if the Consulting Agreement
described in paragraph 4(d) is in effect) months after the
Termination Date, during which time any options granted to you shall
not be canceled and the vesting thereof shall continue. In your
capacity as a member of the Company Advisory Committee, you will
provide assistance to the Company on an as needed basis. Such
assistance shall be limited to reasonable amounts of your time and
shall take place at mutually convenient schedules.
f. The Company will permit you to maintain access to your existing US
mail. The Company will hold your personal mail for you at the
Company's reception desk or mail it to you once per week at your
option. the Company will also maintain your email account for a
period of six months after the Termination Date. You acknowledge and
agree both that you will not directly access this account and that
the Company will monitor all of your email traffic and pass on to
you only your personal email messages.
8. If you elect to terminate your employment with the Company, then in exchange
for the consideration set forth above and for other good and valuable
consideration receipt and sufficiency of which is hereby acknowledged:
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a. You and your agents, insurers, representatives, assigns, heirs,
estates, executors, administrators, successors and attorneys hereby
accept the foregoing, in full and complete waiver, release, and
satisfaction of any and all claims of any kind or description that
you have or may have had or may have through the date you execute
the Agreement against the Company and/or its officers, benefit plans
(including benefit plan fiduciaries, trustees, administrators and
sponsors), attorneys, trustees, insurers, directors or employees
including but not limited to claims arising from any employment
relations laws, contract or tort law, public policy, law or equity
or claims for expenses or other monetary or equitable relief
including any right to or claim arising out of a right, to
re-employment. You also hereby release the Company from liability
for such claims and waive any other rights relating to your
employment, or your termination from employment, with the Company.
b. You represent that you have not filed any complaints, administrative
charges and/or lawsuits or proceedings against the Company based
upon claims released in Section 8(a), with any local, state or
federal court or agency and further that you have not assigned or
transferred to any person any portion of any claim which is released
or waived by this Agreement; and
c. The Company agrees to issue on a press release regarding your
separation from the Company.
d. A personal reference statement to be provided future employers and
others upon authorization by you will be consistent with the press
release. The Company will instruct its officers and directors that
this is the only statement to be made about your employment by the
Company.
9. The Company hereby acknowledges that the foregoing is in full and complete
waiver, release and satisfaction of any and all claims of any kind or
description that the Company has or may have had or may have against you through
the date you execute the Agreement, including but not limited to claims arising
from any employment relations laws, contract or tort law, public policy, law or
equity or claims for other monetary or equitable relief, and the Company hereby
expressly releases you from liability from such claims. However, this release
shall have no force or effect as to claims, if any, by the Company that you
violated any of the provisions of this Agreement. The Company will provide you
with indemnification rights in accordance with the Company's Certificate of
Incorporation and by-laws in effect on the date hereof, to the same extent
available to the Company's officers and directors.. In the event that the
applicable indemnity in the Certificate of Incorporation and by-laws are amended
by the Company's board of directors, such amendments shall apply to you as well.
In all policies of liability insurance for directors and officers, you will be
covered for acts occurring during your period of employment with the Company.
10. If you elect to terminate your employment with the Company, you accept the
payments and benefits set forth in Section 7 as full and complete payment,
settlement, consideration, accord and/or satisfaction of any and all obligations
of the Company arising out of your employment, including, but not limited to,
any and all claims for vacation time and all other compensation and benefits
such as stock, stock options, severance pay, commissions, bonuses,
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car allowance payments, deferred compensation payments, expenses (including,
without limitation, travel, moving and/or housing-related expenses), contractual
obligations and all other payments, compensation or reimbursements of any kind.
11. a. If you elect to terminate your employment with the Company, you
acknowledge that you were advised by the Company of your right to
consult with an attorney prior to executing this Agreement and you
consulted with an attorney prior to December 21, 1997.
b. You were advised when presented by the Company with the initial
draft of this Agreement prior to December 1, 1997, that you had at
least twenty-one (21) days within which to consider its terms and to
consult with or seek advice from an attorney or any other person of
your choosing, until the close of business on December 21, 1997.
c. The parties hereby agree that the twenty-one (21) day period
referenced in subsection (b) of this Section will not be affected or
extended by any revisions which might be made to the initial draft
of this Agreement.
12. It is further agreed by you and the Company that the consideration paid by
the Company hereunder is in return for specific performance by you of each and
every one of your obligations under this Agreement, and that the Company will
seek and is entitled to specific performance by you in the event of a violation
of any such obligation by you, in addition to all other remedies available to
the Company.
13. a. The Company shall have the authority to terminate your employment
under this Agreement immediately (i) for Cause (as defined below) or (ii)
without Cause.
b. "Cause" shall mean your (i) material failure or refusal to perform
and discharge your duties and responsibilities of your employment,
or willful action that is materially inconsistent with the terms of
your employment; (ii) material breach of your fiduciary duties as an
officer of the Company or any subsidiary or affiliate; (iii)
commission of an act that would constitute a felony; (iv) commission
of any other act involving personal dishonesty or moral turpitude on
your part; or (v) material breach of any provision of this
Agreement.
c. In the event of an involuntary termination of your employment
without Cause pursuant to subsection (b) (ii) above, you shall
receive, for a period of twelve (12) months immediately following
your involuntary termination, (a) payments at the rate of 100% of
your Base Salary, including incentive bonus payments as of the date
of your termination and all such payments to be made in the same
manner as Base Salary payments during your employment. The severance
payments pursuant to Section 13 (c) shall continue during such one
year period even if you accept employment with another employer.
However, notwithstanding anything to the contrary contained in
Section 13 (c), all such severance payments shall immediately cease
if you violate any of the restrictive covenants set forth in your
Agreement, including, but not limited to, the provisions of Sections
2,3 and 14.
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d. During the period of severance payments, the Company will continue
to pay your health insurance under the standard policies maintained
by the company.
e. During the period of severance payments, the stock options granted
to you shall continue to vest over that period and any repricing of
options by the Company will be applicable to you.
f. In the event of a change in control of the Company, all options
granted to you pursuant to the Company's Employee Stock Option Plan
shall immediately vest including during any severance period,
(including the consulting condition whereby you would vest options
for an eighteen month period). "Change of Control" of the
Corporation is deemed to have occurred if more than 20% of the
voting shares outstanding are held by any one individual or
corporation. In the event of a change of control between now and the
end of the severance period, and you have not selected your options
in paragraph 4(Consulting Period), you will be entitled to the
additional benefit in paragraph 4(d) automatically extending your
total severance to eighteen months.
g. In the event that your job function is significantly reduced or
your salary plus bonus is reduced, it will be deemed that you have
been involuntarily terminated without cause. In this situation, all
options granted to you under the Company's Employee Stock Option
Plan shall immediately vest, as outlined in (f) above. Additionally,
you will be entitled to severance payments and health insurance as
outlined in paragraphs 7(a) and 7(b).
14. If you elect to terminate your employment with the Company, neither you nor
the Company shall release, reveal, publish, cause to be published, publicize,
discuss, or otherwise disclose the terms of the Agreement except as provided for
herein and in Section 8 of the Agreement and to your family, accountants, and
attorneys and except as you or the Company may be obligated to disclose on
account of statutory, regulatory, or other legal requirements. Both the Company
and you agree not to publicly criticize or discuss, except as mutually agreed,
nor make any derogatory comments regarding, the facts and circumstances leading
to your departure from the Company, but you may state that your departure was
voluntary. You further agree not to disparage in any way the Company and/or its
officers, directors, employees, shareholders, operations, finances, business
and/or products in any way. Notwithstanding anything to the contrary in this
Agreement, nothing herein will prevent you from answering questions from a duly
authorized government agent acting in his or her official capacity.
15. The terms of the Agreement including all facts, circumstances, statements or
documents relating thereto, shall not be admissible for any purpose in any
litigation in any forum other than to secure enforcement of the terms and
conditions of the Agreement.
16. The Agreement has been reached by mutual accord of the parties hereto, and
the parties by their signatures indicate their full agreement and understanding
of its terms.
17. The Agreement includes all of the agreements of the parties relative to your
possible election to seek termination, and supersedes any prior agreements or
representations between the parties as to the subjects covered.. This Agreement
has no precedential effect, value, or impact
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whatsoever as to any person not a party to it.
18. Should any provision or part of any provision of this Agreement be found by
a duly authorized court or forum to be legally unenforceable and/or against
public policy, such unenforceability shall not prevent enforcement of the
remaining provisions or parts of this Agreement.
19. The Agreement shall be interpreted under the laws of the Commonwealth of
Massachusetts. Any action to bring and try any dispute concerning the
enforcement or interpretation of this Agreement shall be done in an appropriate
court located in the Commonwealth of Massachusetts, and the parties hereby
consent to the jurisdiction of any such court for that purpose.
20. You may revoke this Agreement for a period of seven (7) days following its
execution and this Agreement will not become effective or enforceable until this
revocation period has expired (the "Effective Date").
IN WITNESS WHEREOF, all parties have set their hand and seal to this
Agreement as of the date written below.
SYSTEMSOFT CORPORATION XXXXXXX X. X'XXXXXXX
/s/ X. X. Xxxxxx /s/ Xxxxxxx X. X'Xxxxxxx
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By: Xxxxxxx X. X'Xxxxxxx
X. X. Xxxxxx
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Print Name:
Chairman & CEO
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Title:
12-18-97 12-18-97
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Date Date
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