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EXHIBIT 10.24
COMPUTERVISION CORPORATION
Management Retention Agreement
Mr. Rock X. Xxxxxxxxx
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Computervision Corporation (the "Company") recognizes that, as is the case
with many publicly-held corporations, the possibility of a change in control may
exist and that such possibility, and the uncertainty and questions which it may
raise among key personnel, may result in the departure or distraction of key
personnel to the detriment of the Company, its stockholders and its customers.
The Board of Directors of the Company (the "Board") has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of the Company's key personnel, including yourself, to
their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control of the
Company.
In order to induce you to remain in its employ, the Company agrees that you
shall receive the severance benefits set forth in this letter agreement (the
"Agreement") in the event your employment with the Company is terminated under
the circumstances described below subsequent to a "Change in Control" (as
defined below).
1. Certain Definitions.
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As used herein, the following terms shall have the following respective
meanings:
(a) A "CHANGE IN CONTROL" shall occur or be deemed to have occurred
only if any of the following events occur:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, any corporation owned directly or indirectly by the
stockholders of the Company in substantially the
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same proportion as their ownership of stock of the Company) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 40% or more of the combined voting power of the
Company's then outstanding securities (other than as a result of the
acquisition of such securities directly from the Company);
(ii) during any period of two consecutive years (not including
any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board and any new
director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described
in paragraph (i), (iii) or (iv) of this Subsection) whose election by
the Board or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then
still in office, who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority
thereof; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
(A) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) 50% or more
of the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
person (as hereinabove defined), other than a person holding 50% or
more of the combined voting power of the Company's then outstanding
securities immediately prior to such recapitalization, acquires 50% or
more of the combined voting power of the Company's then outstanding
securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
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(b) "CAUSE" shall mean (i) an intentional act of fraud,
embezzlement or theft in connection with your duties to the Company or
in the course of your employment with the Company, (ii) your willful
engaging in gross misconduct which is demonstrably and materially
injurious to the Company, (iii) your willful and
continued failure to perform substantially your duties with the
Company or one of its affiliates (other than any such failure
resulting from incapacity due to physical or mental illness), which
such failure is not cured within 30 days after a written demand for
substantial performance is delivered to you by the Board or the Chief
Executive Officer of the Company which specifically identifies the
manner in which the Board or Chief Executive Officer believes that you
have not substantially performed your duties. For purposes of this
Subsection, no act or failure to act on your part shall be deemed
"willful" unless done or omitted to be done by you not in good faith
and without reasonable belief that your action or omission was in the
best interest of the Company.
(c) "DATE OF TERMINATION" shall have the meaning set forth
in Section 3(c).
(d) "DISABILITY" shall be deemed to have occurred if, as a
result of incapacity due to physical or mental illness, you shall have
been absent from the full-time performance of your duties with the
Company for six (6) consecutive months and, within thirty (30) days
after written Notice of Termination by reason of disability is given
to you, you shall not have returned to the full-time performance of
your duties.
(e) "GOOD REASON" shall mean, without your express written
consent, the occurrence after a Change in Control of the Company of
any of the following circumstances unless, in the case of paragraphs
(A), (C), (D), (F) or (G), such circumstances are fully corrected
prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(A) any significant diminution in your position,
duties, responsibilities, power, title or office as in effect
immediately prior to a Change in Control;
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(B) any reduction in your annual base salary as in
effect on the date hereof or as the same may be increased from
time to time;
(C) the failure by the Company to (i) continue in
effect any material compensation or benefit plan in which you
participate immediately prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, (ii)
continue your participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of your
participation relative to other participants, as existed at the
time of the Change in Control or (iii) award cash bonuses to you
in amounts and in a manner substantially consistent with past
practice in light of the Company's financial performance and your
individual performance;
(D) the failure by the Company to continue to
provide you with benefits substantially similar to those enjoyed
by you under any of the Company's life insurance, medical, health
and accident, or disability plans in which you were participating
at the time of the Change in Control, the taking of any action by
the Company which would directly or indirectly materially reduce
any of such benefits, or the failure by the Company to provide
you with the number of paid vacation days to which you are
entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect at
the time of the Change in Control;
(E) any requirement by the Company or of any
person in control of the Company that (i) the location at which
you perform your principal duties for the Company be changed to a
new location that is both outside a radius of 35 miles from your
principal residence at the time of the Change in Control and more
than 35 miles from the location at which you perform your
principal duties for the Company at the time of the Change in
Control or (ii) you travel on an overnight basis more than 90
days in any consecutive 12-month period;
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(F) the failure of the Company to obtain a
reasonably satisfactory agreement from any successor to assume
and agree to perform this Agreement, as contemplated in Section
5; or
(G) any purported termination of your employment
which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 3(b), which purported
termination shall not be effective for purposes of this
Agreement.
(g) "NOTICE OF TERMINATION" shall have the meaning set forth
in Section 3(b).
(h) "SEVERANCE PAYMENTS" shall have the meaning set
forth in Section 4(c)(ii).
(i) "TERM" shall have the meaning set forth in
Section 2.
2. Term of the Agreement.
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The term of this Agreement (the "Term") shall commence as of the date
hereof and shall continue in effect through December 31, 1999; provided,
however, that commencing on January l, 2000 and each January l thereafter, the
Term shall be automatically extended for one additional year unless, not later
than November 30 of the preceding calendar year, the Company shall have given
you written notice that the Term will not be extended; and provided further
that, if a Change in Control of the Company shall have occurred during the
original or extended Term, this Agreement shall continue in effect for a period
of not less than 24 months beyond the month in which such Change in Control
occurred.
3. Employment Status; Termination Following Change in Control.
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(a) No benefits shall be payable under this Agreement unless there has
been a Change in Control of the Company during the Term. You acknowledge that
this Agreement does not constitute a contract of employment or impose on the
Company any obligation to retain you as an employee. You may terminate your
employment at any time, with or without Good Reason. If your employment with the
Company terminates for any reason and subsequently a Change in Control shall
have occurred, you shall not be entitled to any benefits hereunder.
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(b) Any termination of your employment by the Company or by you
following a Change in Control of the Company during the Term shall be
communicated by written notice of termination that indicates the specific
provision in this Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated ("Notice of Termination"). A Notice
of Termination shall be delivered to the other party hereto in accordance with
Section 6.
(c) The "Date of Termination" shall mean (i) if your employment is
terminated for Disability, thirty (30) days after Notice of Termination is given
(provided that you shall not have returned to the full-time performance of your
duties during such thirty (30) day period), and (ii) if your employment is
terminated by the Company for Cause, by you for Good Reason or for any other
reason (other than Disability), the date specified in the Notice of Termination
(which, in the case of a termination for Cause, shall not be less than thirty
(30) days from the date such Notice of Termination is given and in the case of a
termination for Good Reason shall not be less than fifteen (15) nor more than
sixty (60) days from the date such Notice of Termination is given); provided,
however, that if within fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as determined without
regard to this proviso), the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, then the Date
of Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); and provided,
further, that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue you
as a participant in all compensation, benefit and insurance plans in which you
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection.
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(d) You shall be entitled to the benefits provided in Section 4 if a
Change in Control shall have occurred during the Term and your employment with
the Company is subsequently terminated or terminates within 24 months after such
Change in Control, unless such termination is (A) because of your death, (B) by
the Company for Disability or Cause , or (C) by you other than for Good Reason.
(e) Your right to terminate your employment for Good Reason shall not
be affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason under this Agreement.
4. COMPENSATION UPON TERMINATION. Following a Change in Control of the
Company, you shall be entitled to the following benefits during a period of
disability, or upon termination of your employment, as the case may be, provided
that such period or termination occurs during the Term:
(a) DISABILITY. During any period that you fail to perform your
full-time duties with the Company as a result of incapacity due to physical or
mental illness, you shall continue to receive base salary and all other earned
compensation at the rate in effect at the commencement of any such period
(offset by all compensation payable to you under the Company's disability plan
or program or other similar plan during such period) until your employment is
terminated by reason of Disability. Thereafter, or in the event your employment
is terminated by reason of death, your benefits shall be determined under the
Company's long-term disability, retirement, insurance and other compensation
programs then in effect in accordance with the terms of such programs.
(b) CAUSE AND VOLUNTARY TERMINATION OTHER THAN FOR GOOD REASON. If
your employment shall be terminated by the Company for Cause or by you other
than for Good Reason following a Change in Control, the Company shall pay you
your full base salary and all other compensation through the Date of Termination
at the rate in effect at the time the Notice of Termination is given, no later
than the full fifth day following the Date of Termination, plus all other
amounts to which you are entitled under any compensation plan of the Company at
the time such payments are due, and the Company shall have no further
obligations to you under this Agreement.
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(c) TERMINATION WITHOUT CAUSE; VOLUNTARY TERMINATION FOR GOOD REASON.
If your employment with the Company is terminated by the Company (other than for
Cause, Disability or your death) or by you for Good Reason within 24 months
after a Change in Control, then you shall be entitled to the benefits below:
(i) the Company shall pay to you (A) your full base salary and
all other compensation through the Date of Termination at the rate in effect at
the time the Notice of Termination is given, no later than the full fifth day
following the Date of Termination, plus all other amounts to which you are
entitled under any compensation plan of the Company at the time such payments
are due and (B) if you so elect, in lieu of your right to continue to receive
deferred compensation under any deferred compensation plan of the Company then
in effect, no later than the fifth full day following the Date of Termination, a
lump-sum amount, in cash, equal to the deferred amounts together with any
earnings credited on such amounts under such plan;
(ii) the Company will pay as severance pay to you, at the time
specified in Subsection (d) below, a severance payment in an amount equal to
2.99 times the sum of (A) the higher of (x) your annual base salary in effect on
the Date of Termination or (y) your annual base salary in effect immediately
prior to the Change in Control, and (B) 100% of the average annual incentive
bonus paid or payable to you by the Company for the two fiscal years ending
immediately prior to the fiscal year in which the Change of Control occurs;
(iii) the Company shall pay to you, as incurred, to the extent
permitted by law, all legal fees and expenses reasonably incurred by you in
seeking to obtain or enforce any right or benefit provided by this Agreement;
and
(iv) for an 18-month period after such termination, the Company
shall arrange to provide you with life, dental, and group health insurance
benefits on terms substantially similar to those applicable immediately prior to
the Notice of Termination. Notwithstanding the foregoing, the Company shall not
provide any benefit otherwise receivable by you pursuant to this paragraph (iv)
if an equivalent benefit is actually received by you from another employer
during the 18-month period following your termination, and any such benefit
actually received by you shall be reported to the Company.
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(d) The payments provided for in Subsection 4(c)(ii) shall be made in
thirty-nine (39) substantially equal bi-weekly installments over the three-year
period following the Date of Termination.
(e) You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as a result of employment by another
employer, by retirement benefits or by offset against any amount claimed to be
owed by you to the Company or otherwise.
(f) The Company's obligation to provide the installment payments and
benefits set forth in Subsection 4(c) are subject to your compliance in all
material respects with all agreements and covenants between you and the Company
set forth in the Employment Agreement attached hereto as EXHIBIT A, including
without limitation your agreement to refrain from (i) competing with the
Company, (ii) disclosing or using confidential or proprietary information of the
Company, or (iii) soliciting or otherwise inducing Company employees to leave
the employment of the Company.
5. Successors; Binding Agreement.
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(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain an assumption of this Agreement at or prior to the
effectiveness of any succession shall be a breach of this Agreement and shall
constitute Good Reason if you elect to terminate your employment, except that
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in
this Agreement, Company shall mean the Company as defined above and any
successor to its business or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors,
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administrators, successors, heirs, distributees, devisees and legatees. If you
should die while any amount would still be payable to you hereunder if you had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisee, legatee or
other designee or if there is no such designee, to your estate.
6. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
duly given when delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed to the
Company, at Computervision Corporation, 000 Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx
00000, Attention: General Counsel, and to you at the address shown above or to
such other address as either the Company or you may have furnished to the other
in writing in accordance herewith, except that notice of change of address shall
be effective only upon receipt.
7. Miscellaneous.
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(a) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
(b) The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware.
(c) No waiver by you at any time of any breach of, or compliance with,
any provision of this Agreement to be performed by the Company shall be deemed a
waiver of that or any other provision at any subsequent time.
(d) This Agreement may be executed in counterparts, each of which
shall be deemed to be an original but both of which together will constitute one
and the same instrument.
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(e) Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law.
(f) This Agreement and the Exhibits attached hereto set forth the
entire agreement of the parties hereto in respect of the rights and obligations
of the parties after the occurrence of a Change of Control and supersedes all
prior agreements, promises, covenants and arrangements, whether oral or written,
by any officer, employee or representative of any party hereto in respect of a
Change of Control, PROVIDED, HOWEVER, that the terms and provisions of any
employment agreement now in effect or subsequently entered into between you and
the Company which governs the terms of your employment prior to or without
regard to a Change of Control shall continue to remain in full force and effect
and shall not be modified or superseded by this Agreement.
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter, which
will then constitute our agreement on this subject.
Sincerely,
COMPUTERVISION CORPORATION
By /s/ Xxxxxxx X. Xxxxx
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Title: Vice President, General Counsel
Agreed to as of the 4th day of September, 1996.
/s/ Rock Xxxxxx Xxxxxxxxx
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(Signature)
Rock Xxxxxx Snatovich
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Print Name
Address: 00 Xxxx Xxxxxx
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Xxxxxxxxx, Xx 00000
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