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Exhibit 10.7
August 8, 2000
PERSONAL & CONFIDENTIAL
Mr. Xxxxxxxxxxx Xxxxxx
00 Xxxx Xxxx
Xxxxxxx, XX 00000
Dear Xxxxx:
This letter agreement (the "Agreement") confirms the agreement that we
have reached regarding your transition and severance arrangements in connection
with the termination of your employment with Servicesoft Technologies Inc. (the
"Company"). The purpose of this Agreement is to establish an amicable
arrangement for ending your employment relationship, including releasing the
Company from claims that you may have against it or any related companies,
releasing you from claims that the Company may have against you, and permitting
you to receive separation pay and other benefits and retain certain restricted
stock.
You are entering into this Agreement voluntarily. You understand that
you are giving up your right to bring all possible legal claims against the
Company, including claims relating to your employment and termination. If you
were not to enter into this Agreement and were to bring any claims against the
Company, the Company would dispute the merits of those claims and would contend
that it acted lawfully and for good business reasons with respect to you.
You understand that by entering into this Agreement, the Company is not
admitting in any way that it violated any legal obligation that it owed to you
or to any other person.
With those understandings and in exchange for the promises of you and
the Company set forth below, you and the Company agree as follows:
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August 8, 2000
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1. EMPLOYMENT ARRANGEMENTS
You and the Company acknowledge and agree that effective as of July 7, 2000
(the "Termination Date"), your employment as President and Chief Executive
Officer of the Company pursuant to the employment offer letter dated August 9,
1999 (collectively, "Employment Letter") by and between you and the Company,
shall be terminated.
2. PAY
(a) Salary
The Company shall pay your current salary to you in twice monthly
installments of $8,333.33 through the Termination Date. The Company shall also
pay you for any accrued but unused vacation pay as of the Termination Date.
(b) Severance Pay
The Company shall continue your current annual salary of $200,000 for a
period of six (6) months commencing on the Termination Date (the "Severance
Period"), payable on the Company's regular bi-monthly payroll dates. Such
severance pay shall be inclusive of any pay in lieu of notice to which you may
be entitled.
(c) Bonus
The parties hereby acknowledge and agree that the Company shall pay you a
performance bonus for second quarter of 2000 as provided in the Fiscal Year 2000
Executive Compensation Plan.
3. BENEFITS
By signing this Agreement, you are exercising your right to continue
receiving group medical and dental insurance benefits to the extent authorized
by and consistent with 29 U.S.C. ss. 1161 ET SEQ. (commonly known as "COBRA")
from and after the Termination Date. Your rights and obligations under COBRA are
generally described in the Company's notice to you concerning COBRA rights and
obligations. Notwithstanding the terms of the COBRA notice, during the Severance
Period the Company will continue to pay on your behalf all medical and dental
insurance premiums, provided that you otherwise remain eligible for COBRA
coverage.
4. RESTRICTED STOCK
The Company hereby notifies you of the exercise of its Repurchase Right
under Section 3.1 of a certain Stock Restriction Agreement by and between you
and the Company (the "Stock Restriction Agreement") to repurchase 520,938.625
Shares issued under that Stock
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Mr. Xxxxx Xxxxxx
August 8, 2000
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Purchase Agreement for a per share purchase price of $1.00; provided, however,
that the Company shall retain the right to repurchase an additional 52,094
Shares on the same terms provided herein prior to the end of the Severance
Period if and only if you are in material breach of your obligations hereunder.
Such purchase price shall be applied by the Company in partial prepayment of a
certain Promissory Note in the initial principal amount of $833,502, which was
issued by you in consideration for your original purchase of the Shares. Such
prepayment shall discharge a like amount of the principal balance of the
Promissory Note together with any accrued interest on such discharged principal
balance. The restrictions on transfer set forth in Section 4 of the Stock
Restriction Agreement shall continue to apply to the Shares retained by you.
5. BOARD OF DIRECTORS; OTHER POSITIONS
You hereby resign as a Director on the Company's Board of Directors and as
a director and officer of any of the Company's subsidiaries effective as of the
Termination Date. The parties agree that such resignation shall be effective
without any further notice or action on your part.
6. GENERAL RELEASES OF CLAIMS
(a) General Release of Claims by You
1. For good and valuable consideration, the sufficiency of which is
hereby acknowledged, you hereby irrevocably and unconditionally release, acquit
and forever discharge the Company, its predecessors, subsidiaries, successors,
affiliates, and assigns, and the directors, officers, employees, shareholders,
members and representatives of any of the foregoing, and all persons acting on
behalf or through any of the foregoing (any and all of whom or which are
hereinafter referred to as "Servicesoft"), from any and all charges, complaints,
claims, liabilities, obligations, promises, agreements, controversies, damages,
actions, causes of action, suits, rights, demands, costs, losses, debts and
expenses (including attorney's fees and costs actually incurred), of any nature
whatsoever, known or unknown (collectively, "Claims"), that you now have, own,
or hold, or claim to have, own, or hold, or that you at any time had, owned, or
held, or claimed to have had, owned, or held against Servicesoft, including
Claims relating to your employment and termination of employment. This general
release of Claims includes, without implication of limitation, the complete
release of all Claims of breach of express or implied contract; all Claims
arising under the Employment Letter; all Claims of wrongful termination of
employment whether in contract or tort; all Claims of intentional, reckless, or
negligent infliction of emotional distress; all Claims of breach of any express
or implied covenant of employment, including the covenant of good faith and fair
dealing; all Claims of interference with contractual or advantageous relations,
whether prospective or existing; all Claims of deceit or misrepresentation; all
Claims of discrimination under state or federal law, including, without
implication of limitation, Tide VII of the Civil Rights Act of 1964, 42 U.S.C.
2000e et seq., as amended, the Age Discrimination in Employment Act of 1967, 29
U.S.C. ss. 621 et seq., as amended, and Chapter 151B of the
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Mr. Xxxxx Xxxxxx
August 8, 2000
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Massachusetts General Laws; all Claims of defamation or damage to reputation;
all Claims for reinstatement; all Claims for punitive or emotional distress
damages; all Claims for wages, bonuses, severance, back or front pay or other
forms of compensation and all Claims for attorney's fees and costs. This general
release of Claims shall not be construed to include a release of Claims that
arise from the Company's obligations under this Agreement or any rights of
indemnification to which you may be entitled under the Company's Certificate of
Incorporation or By-laws. With respect to the Claims you are waiving herein, you
are waiving your right to receive money or any other relief in any action
instituted on your behalf by any other person, entity or government agency. You
further agree that if any agency or court assumes jurisdiction over any
complaint or charge on your behalf against Servicesoft, you will request the
immediate dismissal of the matter.
(b) General Release of Claims by the Company
For good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Company hereby irrevocably and unconditionally releases,
acquits and forever discharges you from any and all Claims that the Company now
has, owns, or holds or claims to have, own, or hold or that the Company at any
time had, owned, or held, or claimed to have had, owned, or held against you as
a result of good faith acts or omissions undertaken in the best interests of the
Company. This general release of Claims includes, without implication of
limitation, a release of all Claims related to your performance of your
responsibilities as an employee of the Company.
7. NONCOMPETE AGREEMENT
Notwithstanding anything in this Agreement to the contrary, you shall
continue to be subject to the Employee Agreement between you and the Company
(the "Noncompete Agreement"). Without otherwise limiting the scope of the
Noncompete Agreement, you acknowledge and agree that you shall be subject to the
following obligations during the period from the date hereof through the first
anniversary of the Termination Date:
(a) You will not engage, directly or indirectly (including as an owner,
manager, stockholder, consultant, director, officer or employee) in a
self-employment business or work for any enterprise which manufactures,
assembles or markets products or services which compete with those of the
Company without the express written authorization of the Company. The Company
agrees that this post-termination restriction does not pertain to work you may
engage in that does not relate to products or services being developed or
marketed to maintenance and service organizations. Notwithstanding the
foregoing, the Company agrees that you may own stock of a corporation that
provides goods or services which are competitive with goods or services provided
(or proposed to be provided) by the Company, if: (i) such stock is traded on a
regular basis on regular securities exchanges or in over-the-counter markets;
(ii) you promptly provide written notice to the Company of your ownership of
such stock; and (iii) the amount of such stock owned by you does not constitute
more than two
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August 8, 2000
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percent (2%) of the outstanding stock of any such corporation.
(b) You shall not solicit, induce, attempt to hire, or hire any employee
of the Company (or any person who may have been employed by the Company during
any portion of the six (6) month period immediately preceding the Termination
Date), or assist in such hiring by any other person or business entity or
encourage any such employee to terminate his or her employment with the Company.
(c) Induce or attempt to induce any of the Company's customers to reduce
or curtail their business with the Company or terminate their relationship with
the Company.
8. NONDISPARAGEMENT
The Company agrees not to make any statements that disparage you and you
agree not to make any statements that disparage the Company or any of its
products, services, employees, officers or directors. Notwithstanding the
foregoing, statements made in the course of sworn testimony in legal proceedings
or other statements required by law shall not be subject to this Section 8.
9. TAX DEDUCTIONS AND REPORTING
The Company shall reduce payments made to you pursuant to this Agreement by
deductions and withholdings that it reasonably determines to be required for tax
purposes and the Company shall make such tax-related reporting that it
reasonably determines to be required with respect to consideration provided
pursuant to this Agreement.
10. NOTICES, ACKNOWLEDGMENTS AND OTHER TERMS
You are advised to consult with an attorney before signing this Agreement.
This Agreement is the entire agreement between you and the Company, and all
previous agreements, or promises between you and the Company are superseded,
null, and void, except your Noncompete Agreement.
You acknowledge that you have been given the opportunity, if you so
desired, to consider this Agreement for twenty-one (21) days before executing
it. If not signed by you and returned to the Company so that it is received by
the Company within twenty-one (21) days of your receipt of this Agreement, this
Agreement will not be valid. In the event that you execute and return this
Agreement within less than twenty-one (21) days of the date of its delivery to
you, you acknowledge that such decision was entirely voluntary and that you had
the opportunity to consider this letter agreement for the entire twenty-one (21)
day period. The Company acknowledges that for a period of seven (7) days from
the date of the execution of this Agreement, you shall retain the right to
revoke this Agreement by written notice that the Company receives before the end
of such period, and that this Agreement shall not become
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August 8, 2000
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effective or enforceable until the expiration of such revocation period. The
"Effective Date" of this Agreement shall be the date which is seven (7) days
from the date of execution of this Agreement.
By signing this Agreement, you acknowledge that you are doing so
voluntarily. You also acknowledge that you are not relying on any
representations by any representative of the Company concerning the meaning of
any aspect of this Agreement.
In the event of any dispute, this Agreement will be construed as a whole,
will be interpreted in accordance with its fair meaning, and will not be
construed strictly for or against either you or the Company. The law of
Massachusetts will govern any dispute about this Agreement, including any
interpretation or enforcement of this Agreement, without giving effect to the
conflict of laws provisions of Massachusetts law. In the event that any
provision or portion of a provision of this Agreement shall be determined to be
unenforceable, the remainder of this Agreement shall be enforced to the fullest
extent possible as if such provision or portion of a provision were not
included. This Agreement may be modified only by a written agreement signed by
you and an authorized representative of the Company.
If you agree to these terms, please sign and date below and return this
Agreement to the Company within the time limitation set forth above.
This Agreement may be executed simultaneously in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute but one and the
same document.
Sincerely,
SERVICESOFT TECHNOLOGIES INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: CFO
ACCEPTED AND AGREED:
/s/ Xxxxx Xxxxxx August 10, 2000
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Xxxxx Xxxxxx Date
