Exhibit 10.23
AMENDED AND RESTATED EXECUTIVE AGREEMENT
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AMENDED AND RESTATED EXECUTIVE AGREEMENT, dated as of November 23, 1998, by
and between MathSoft, Inc. (the "Company") and Xxxxxxx X. Xxxxxx (the
"Executive").
WHEREAS, the Company and the Executive wish to amend and restate their
agreement dated July 28, 1997;
WHEREAS, the Executive continues to be the President and Chief Executive
Officer of the Company and has made and is expected to continue to make major
contributions to the Company;
WHEREAS, the Company desires continuity of management; and
WHEREAS, the Executive is willing to continue to render services to the
Company subject to the conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Executive agree
as follows:
1. TERM OF EMPLOYMENT. This Agreement shall be for an initial term of
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two (2) years. Upon the second anniversary of the date of this Agreement (and
upon each successive anniversary thereafter), this Agreement shall be
automatically renewed for an additional one (1) year term, unless either party
hereto notifies the other in writing of its intent not to renew this Agreement
upon not less than ninety (90) days notice prior to the end of the then-current
term. In the event either party gives the other proper notice of non-renewal,
then this Agreement shall only continue for the balance of the then existing
term. Notwithstanding anything contained herein to the contrary, any term of
employment may be earlier terminated as provided in Sections 3, 5, and 7 hereof.
2. SALARY.
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(a) As compensation for the services rendered by the Executive under
this Agreement, the Company shall pay to the Executive an annual salary equal to
the amount for the current fiscal year as listed on Exhibit A under the heading
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"Salary" (which may be amended or supplemented in writing by the parties from
time to time), payable to the Executive in accordance with the Company's payroll
practices in effect from time to time. The Compensation Committee of the Board
of Directors of the Company shall review the Executive's salary not less
frequently than annually.
(b) In addition, the Executive shall be eligible to earn a target bonus
(the "Target Annual Bonus") equal to the amount for the current fiscal year as
listed on Exhibit A under the heading "Target Annual Bonus" based upon the
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Company's achievement of the Annual Diluted Net Income Per Share Plan approved
by the Compensation Committee of the Board of Directors of the Company for such
fiscal year (subject to downward adjustment, or upward adjustment to an amount
not to exceed the amount identified on Exhibit A under the heading "Maximum
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Annual Bonus", based on the Company's achievement of the Annual Diluted Net
Income Per Share Plan for such fiscal year), plus such additional bonus payments
based on specific objectives as may be agreed upon between the Executive and the
Compensation Committee of the Board of Directors of the Company from time to
time. Any bonus, if earned, shall be payable to the Executive in accordance with
the Company's payroll practices in effect from time to time.
3. NOTICE OF VOLUNTARY TERMINATION BY THE EXECUTIVE. The Executive
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agrees to provide the Board of Directors of the Company with three months
advance written notice of his intention to terminate his employment with the
Company; provided, however, that the Executive is not required to provide any
notice if such termination is pursuant to Sections 6(b) and/or 7.
4. MEMBERSHIP ON THE BOARD OF DIRECTORS. After any termination of the
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Executive's employment with the Company, the Company may request that the
Executive serve as a non-executive member of the Board of Directors of the
Company. If the Executive agrees to serve in such a capacity following the
termination of his employment, the Executive shall be considered as maintaining
a "business relationship" with the Company during such period of service, and
any installments of any stock options held by the Executive on the termination
of his employment that are not exercisable and have not expired shall continue
to become exercisable in accordance with the terms of the relevant option
agreements and option plans during such period of service. When the Executive
ceases to be a non-executive member of the Board of Directors, he shall have
three years to exercise any then-exercisable, unexpired installments of any
stock options held by the Executive on the Executive's last date of service on
the Board of Directors.
5. TERMINATION PRIOR TO A CHANGE OF CONTROL. If, prior to a "Change of
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Control" (as such term is defined in Section 8(c) below), the Company terminates
the Executive's employment with the Company (i) without "Cause" (as such term is
defined in Section 8(d) below) or (ii) by electing not to renew this Agreement
pursuant to Section 1, the Company shall:
(a) Continue to pay to the Executive, in accordance with the Company's
normal payroll practices and policies in effect from time to time (including any
required withholding), the Executive's base salary (at the monthly base salary
rate in effect for such Executive immediately prior to the termination of his
employment) for eighteen (18) months following the termination of the
Executive's employment; provided, however, that the Company shall not be
obligated to make any payments pursuant to this Section 5(a) during any period
in which the Executive is in violation of the terms of his Confidential
Information, Inventions and Non-Competition Agreement with the Company.
(b) Provide the Executive with health insurance substantially similar
to that which the Executive was receiving immediately prior to the termination
of his employment until the earlier of: (i) the date which is eighteen (18)
months following the termination of the Executive's employment; or (ii) the date
the Executive begins receiving substantially similar insurance from a subsequent
employer.
(c) Provide that the Executive shall have three years to exercise any
then-exercisable, unexpired installments of any stock options held by the
Executive on the Executive's last date of employment or if later, the date when
the Executive ceases to be a member of the Board of Directors of the Company.
6. CHANGE OF CONTROL. (a) Upon a Change of Control, and if the
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Executive is an employee of the Company at the time of such Change of Control,
the Company shall cause half of any unexercisable installments of any stock
options held by the Executive on the Change of Control that have not expired to
become exercisable on the Change of Control; provided, however, that such
acceleration of exercisability shall not occur to the extent that: (A) the
Change of Control is intended to be accounted for as a pooling of interests; and
(B) the Company concludes, after consulting with its independent accountants,
that such acceleration would prevent the Change of Control transaction from
being accounted for as a pooling of interests for financial accounting purposes.
(b) Following a Change of Control, (i) if the Executive is terminated
by the Company without Cause, (ii) if the Executive remains employed with the
Company through the ninety-first day after such Change of Control, or (iii) if
the Executive terminates his employment for "Good Reason" (as such term is
defined in Section 7(b) below) and the Executive provides mutually agreeable
consulting services through the ninety-first day after such Change of Control
the Company shall pay to the Executive a lump sum amount (net of any required
withholding) equal to $250,000 (the "Retention Bonus") payable upon the date the
Executive is terminated or the Executive's ninety-first day of employment
following the Change of Control, whichever is earlier.
7. TERMINATION FOLLOWING A CHANGE OF CONTROL.
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(a) If, at any time after a Change in Control, the Company terminates
the Executive's employment without Cause or the Executive terminates his
employment with the Company for "Good Reason" (as such term is defined in
Section 7(b) below) (the "Termination Date"), the Company shall:
(1) Subject to Section 7(c) below, continue to pay to the Executive, in
accordance with the Company's normal payroll practices and policies in effect
from time to time (including any required withholding), (i) the Executive's
current base salary (at the monthly base salary rate in effect for such
Executive immediately prior to the termination of his employment) for eighteen
(18) months following the Termination Date and (ii) one hundred fifty percent
(150%) of the Executive's bonus (which shall be the greater of (A) the Target
Bonus set by the Company's Board of Directors for the fiscal year in which the
termination of employment occurred and (B) the actual amount of all bonuses paid
or payable in respect of the preceding fiscal year) paid ratably on a monthly
basis during the eighteen (18) months following the Termination Date
(collectively, the "Severance Payments").
(2) Pay to the Executive a lump sum amount (net of any required
withholding) within thirty (30) days following the termination of his
employment, determined as follows: (i) for each full calendar quarter during
which Executive was employed by the Company that has elapsed since January 1st
of the year in which his employment terminated, the total of each applicable
amount(s) specified on Exhibit A attached hereto under the heading "Quarterly
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Diluted Net Income Per Share-Based Bonus Amount"; provided, however, that the
amounts described in this clause (i) shall only be payable if the Company
achieved the relevant portion of the Quarterly Diluted Net Income Per Share Plan
approved by the Compensation Committee of the Board of Directors for each of
such quarters and (ii) for any partial calendar quarter during which the
Executive was employed by the Company that has elapsed since the end of the last
full fiscal quarter ending prior to the date the Executive's employment was
terminated, a pro rated portion of the amount specified on Exhibit A hereto
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under the heading "Quarterly Diluted Net Income Per Share-Based Bonus Amount"
for such quarter equal to the number of days during such quarter that the
Executive was employed by the Company divided by 90, multiplied by the
applicable Quarterly Diluted Net Income Per Share-Based Bonus Amount.
(3) Provide the Executive with health insurance substantially similar
to that which the Executive was receiving immediately prior to the Termination
Date until the earlier of: (i) the date which is eighteen (18) months following
the Termination Date; or (ii) the date the Executive begins receiving
substantially similar health insurance from a subsequent employer.
(4) Provide the Executive not more than $20,000 of outplacement
services annually from an outplacement company selected by the Company, with
such services to extend until the two-year anniversary of the Termination Date.
(5) Provide that the Executive shall have three years to exercise any
then-exercisable, unexpired installments of any stock options held by the
Executive on the Executive's last date of employment or, if later, the date when
the Executive ceases to be a member of the Board of Directors of the Company.
(b) For purposes of Sections 6 and 7, "Good Reason" shall mean the
occurrence of one or more of the following events following a Change of Control:
(i) the assignment to the Executive of any duties inconsistent with his
position, authority, duties or responsibilities immediately prior to the Change
of Control or any other action by the Company which results in a diminution in
such position, authority, duties or responsibilities; (ii) a reduction in the
aggregate of the Executive's base or incentive compensation or the termination
of the Executive's rights to any employee benefits immediately prior to the
Change of Control, except to the extent any such benefit is replaced with a
substantially similar benefit, or a reduction in scope or value thereof; or
(iii) a relocation of the Executive's place of business which results in the
one-way commuting distance for the Executive increasing by more than 40 miles
from the location thereof immediately prior to the Change of Control (provided,
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however, that travel consistent with past practices for business purposes shall
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not be considered "commuting" for purposes of this clause (iii)); or (iv) a
failure by the Company to obtain the agreement referenced in Section 8(f).
(c) If the Executive finds employment with a subsequent employer or
becomes self-employed after the Termination Date (a "Reemployment Event"), then
the Severance Payments shall be paid in full for the first six (6) months
following the Termination Date and then shall be reduced by fifty percent (50%)
for the remaining twelve (12) months or for that shorter portion of such twelve
(12) month period following the date of the Reemployment Event. For purposes of
this Section 7(c), when determining whether a Reemployment Event has occurred,
employment or self-employment (including ad hoc or temporary assignments) for
which the Executive receives remuneration in any year in an aggregate amount
(including remuneration received from all such employment or self-employment
during such year) which does not exceed 50% of the Executive's base salary rate
with the Company at the time of his termination, shall be excluded.
8. GENERAL.
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(a) Notwithstanding anything else to the contrary herein: (i) the
Company's obligation to provide any of the amounts and benefits set forth in
this Agreement shall be subject to, and conditioned upon, the Executive's
execution of a full release of claims satisfactory to the Company releasing the
Company and its affiliates, subsidiaries, divisions, directors, employees and
agents from any claims arising from or related to the Executive's employment or
severance from employment with the Company, including any claims arising from
this Agreement, such release to be substantially in the form of Exhibit B hereto
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(the "Release"); (ii) the Company shall not be obligated to provide any of the
amounts and benefits set forth in this Agreement until any applicable period
within which the Executive may revoke the Release has expired; and (iii) any
amounts and benefits set forth in this Agreement shall be reduced by any and all
other severance or other amounts or benefits paid or payable to the Executive as
a result of the termination of his employment.
(b) In the event the Executive's employment with the Company is
terminated by the Company for any reason other than without Cause, or the
Executive terminates his employment with the Company for any reason other than
Good Reason, the Executive shall not be entitled to any severance benefits or
other considerations described herein.
(c) For purposes of this Agreement, "Change of Control" shall mean the
closing of: (i) a merger, consolidation, liquidation or reorganization of the
Company, with or without its wholly-owned subsidiary, Statistical Sciences, Inc.
("StatSci"), into or with another company or other legal person, after which
merger, consolidation, liquidation or reorganization the capital stock of the
Company outstanding prior to consummation of the transaction is not converted
into or exchanged for or does not represent more than 50% of the aggregate
voting power of the surviving or resulting entity; (ii) the direct or indirect
acquisition by any person (as the term "person" is used in Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended) of more than 50% of
the voting capital stock of the Company, which may or may not include the voting
capital stock of StatSci, in a single or series of related transactions; or
(iii) the sale, exchange, or transfer of all or substantially all of the
Company's assets, which may or may not include StatSci's assets, (other than a
sale, exchange or transfer to one or more entities where the stockholders of the
Company immediately before such sale, exchange or transfer retain, directly or
indirectly, at least a majority of the beneficial interest in the voting stock
of the entities to which the assets were transferred).
(d) For purposes of this Agreement, "Cause" shall mean: (i) the
commission of the Executive of a felony, either in connection with the
performance of his obligations to the Company or which adversely affects the
Executive's ability to perform such obligations; (ii) gross negligence,
dishonesty or breach of fiduciary duty; or (iii) the commission by the Executive
of an act of fraud or embezzlement which results in loss, damage or injury to
the Company, whether directly or indirectly.
(e) Notwithstanding anything to the contrary in this Agreement, if the
Company determines in its sole discretion after consultation with its tax and
accounting advisors that the Executive is a Disqualified Individual (as defined
in Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"))
and that any portion of any payment or distribution by the Company to or for the
benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a "Payment")
would be an Excess Parachute Payment (as defined in Section 280G of the Code)
but for the application of this sentence, then the amount of all such Payments
otherwise payable to the Executive pursuant to this Agreement shall be reduced
to the minimum extent necessary (but in no event to less than zero) so that no
portion of any Payment, as so reduced, constitutes an Excess Parachute Payment.
For purposes of this reduction, no portion of any Payment shall be taken into
account to the extent that such Payment, in the opinion of the Company, after
consultation with its tax and accounting advisors, does not constitute a
"parachute payment" within the meaning of Section 280G(b)(2) of the Code.
(f) Except as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the Company and any successor (whether
direct or indirect, by purchase, merger, consolidation, reorganization or
otherwise) of the Company; provided, however, that the Company shall obtain the
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written agreement of any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) of the Company to be bound
by the provisions of this Agreement as if such successor were the Company and
for purposes of this Agreement, any such successor of the Company shall be
deemed to be the "Company" for all purposes.
(g) Nothing in this Agreement shall create any obligation on the part
of the Company or any other person to continue the employment of the Executive.
If the Executive elects to receive the severance and benefits set forth in this
Agreement by executing the Release, the Executive shall not be entitled to any
other salary continuation, severance or other termination benefits in the event
of his cessation of employment with the Company.
(h) Nothing herein shall affect the Executive's obligations under any
key employee, non-competition, confidentiality, option or similar agreement
between the Company and the Executive currently in effect or which may be
entered into in the future.
(i) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement constitutes
the entire Agreement between the Executive and the Company concerning the
subject matter hereof and supersedes any prior negotiations, understandings or
agreements concerning the subject matter hereof, whether oral or written, and
may be amended or rescinded only upon the written consent of the Company and the
Executive. The invalidity or unenforceability of any provision of this
Agreement shall not affect the other provisions of this Agreement and this
Agreement shall be construed and reformed to the fullest extent possible. The
Executive may not assign any of his rights or obligations under this Agreement;
the rights and obligations of the Company under this Agreement shall inure to
the benefit of, and shall be binding upon, the successors and assigns of the
Company. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
The Company:
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MATHSOFT, INC.
By: /s Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: VP Finance and Administration, CFO
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The Executive:
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/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
