Exhibit 10.16
EMPLOYMENT AGREEMENT
AGREEMENT made as of this 20th day of September, 1999, by and between
Xxxxxxx X. Xxxxxxx, a person residing at 00 Xxxxxx Xxxx, Xxxxxxxxx Xxxxx,
Xxxxxxxxxxxxx 00000 (the "Employee") and Workgroup Technology Corporation, a
Delaware corporation with its principal place of business at 00 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000 (the "Company").
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the mutual
covenants and obligations herein contained, the parties hereto agree as follows:
1. Position and Responsibilities. During the term of this Agreement, the
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Employee agrees to serve as the President and Chief Executive Officer of the
Company. The Employee shall at all times report to, and his activities shall at
all times be subject to the direction and control of the Board of Directors of
the Company, and the Employee shall exercise such powers and comply with and
perform, faithfully and to the best of his ability, such directions and duties
in relation to the business and affairs of the Company as may from time to time
be vested in or requested of him. During the period of Employee's employment by
the Company, Employee shall devote substantially all of his time and best
efforts to the business of the Company. If Employee shall be elected to other
offices of the Company or any of its affiliates, he shall serve in such
positions without further compensation than provided for in this Agreement.
2. Compensation: Salary, Bonuses and Other Benefits. During the term of
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this Agreement, the Company shall pay the Employee the following compensation:
(A) Salary. In consideration of the services to be rendered by the Employee
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to the Company, the Company shall pay to the Employee a monthly salary of
Twenty-Eight Thousand Dollars ($28,000.00) (the Employee's "base rate")
during the term of this Agreement. Such salary shall be payable in conformity
with the Company's customary practices for executive compensation, as such
practices shall be established or modified from time to time.
(B) Fringe Benefits. The Employee will not be entitled to any health,
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welfare or other benefits from the Company. However, the Company will allow
the Employee to participate in benefit plans if: (a) it is mandated by law;
(b) it is mandated by master contract; or (c) if it is of no material cost to
the Company. If the Employee does participate in any benefits or plans, he
shall participate on the same general basis and subject to the same rules and
regulations as other Company employees and as such benefits or plans may be
modified or amended from time to time.
(C) Expenses. The Company shall pay or reimburse the Employee for all
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reasonable business expenses incurred or paid by the Employee in the
performance of his duties and responsibilities hereunder in accordance with
the expense policies of the Company as they may be established or modified
from time to time.
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(D) Vacation. During the term hereof, the Employee shall be entitled to
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four (4) weeks of vacation per fiscal year to be earned at the rate of one
week for each fiscal quarter during which Employee is an employee in good
standing on the first day of such fiscal quarter. Vacation will be taken at
such times and intervals as shall be agreed to by the Company and the
Employee in their reasonable discretion.
(E) Bonus. The Employee shall also be eligible to receive a bonus upon the
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termination of his employment or upon the occurrence of a Liquidity Event (as
hereinafter defined), subject to the terms set forth below:
1) If Employee's employment is terminated by the Company (a) other than
"for cause" pursuant to Section 4(D) or (b) by delivery of a notice of non-
renewal pursuant to Section 3, he shall be entitled to receive on the
effective date of his termination a bonus of Fifty Thousand Dollars
($50,000.00); in addition, if Employee is so terminated after a letter of
intent has been executed with respect to a transaction which would, if
effected, result in a Liquidity Event, and such transaction closes within
180 days of Employee's termination date, Employee shall, upon the closing
of such transaction, be entitled to a bonus calculated in accordance with
Section 2(E)2 below (reduced by the initial $50,000 bonus payment).
2) If a Liquidity Event occurs while Employee remains employed by the
Company, the Employee shall be entitled to a bonus equal to the greater of
(a) $50,000, or (b) an amount equal to the appreciation in value, if any,
of 200,000 shares of Common Stock of the Company from $1.25 per share (the
market value per share on September 20, 1999) to their market or other
realized price on the effective date of the Liquidity Event. Payment of
such bonus will be made within five (5) business days of the effective date
of the Liquidity Event.
3) No bonus shall be payable to Employee if (i) Employee's employment is
terminated "for cause" (as defined in Section 4(C) of this Agreement); (ii)
Employee resigns; or (iii) Employee delivers a notice of non-renewal
pursuant to Section 3 hereof.
(F) All payments in this Section 2 shall be subject to all applicable
federal, state and local withholding, payroll and other taxes.
3. Term. Subject to the earlier termination as hereafter provided in
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Section 4, the term of this Agreement shall commence on September 20, 1999 and
shall continue until March 31, 2000 (the "Initial Term"), provided, however, the
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Employee's employment under this Agreement shall be automatically renewed
thereafter for successive one (1) month terms unless ten (10) calendar days
prior to the expiration of the Initial Term or any renewal term, either party
shall give written notice of non-renewal to the other.
4. Termination. The Employee's employment under this Agreement may be
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terminated as follows:
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(A) By Expiration of the Agreement: If this Agreement expires as set forth
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in Section 3 hereof, the Employee shall be entitled to no further payments,
severance or other benefits after the expiration date of the Agreement except
as required by law and except for, in the event the Company has delivered a
notice of non-renewal pursuant to Section 3, the bonus set forth in Section
2(E)1.
(B) At the Employee's Option. The Employee may terminate his employment
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hereunder at any time during the Initial Term of this Agreement by giving at
least thirty (30) calendar days' advance written notice to the Company. In
the event of such a termination at the Employee's option, the Company may
accelerate Employee's departure date and shall have no obligation to pay
Employee after his actual departure date. In the event of such a termination
at the Employee's option, the Employee shall be entitled to no further
payments, severance or other benefits after the effective date of his
termination, except as otherwise required by law.
(C) At the election of the Company for Cause. The Company may, immediately
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and unilaterally, terminate the Employee's employment hereunder "for cause"
at any time during the term of this Agreement by providing Employee written
notice of termination "for cause." Termination of the Employee's employment
by the Company shall constitute a termination "for cause" under this Section
4(C) if such termination is for one or more of the following causes:
(i) the willful failure or refusal of the Employee to render services to
the Company in accordance with the duties of Chief Executive Officer;
(ii) the commission by the Employee of an act of fraud or embezzlement;
(iii) the commission of illegal activity by the Employee; or
(iv) the Employee's breach of the terms of this Agreement.
In the event of a termination "for cause" pursuant to the provisions of
clauses (i) through (iv) above, inclusive, the Employee shall be entitled to
no further payments, severance or other benefits except as otherwise required
by law.
(D) At the Election of the Company for Reasons Other than for Cause. The
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Company may terminate the Employee's employment hereunder at any time during
the Initial Term of this Agreement without cause by giving thirty (30)
calendar days' advance written notice to the Employee of the Company's
election to terminate. At the Company's sole option, the Company may give
Employee thirty (30) days pay in lieu of such notice. During such thirty
(30) day period, the Employee will be available on a full-time basis for the
benefit of the Company to assist the Company in making the transition to a
successor officer of the Company. In the event of the Company's termination
of Employee under this Section 4(D), the Employee shall be entitled to no
further payments, severance or other benefits after the
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effective date of his termination, except for the bonus set forth in Section
2(E)1 and as otherwise required by law.
(E) Liquidity Event. In the event of a Liquidity Event the Employee's
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employment hereunder shall automatically terminate upon the effective date of
the Liquidity Event, except in the case of the sale of all or substantially
all of the assets of the Company, in which case Employee's employment shall
terminate thirty (30) calendar days after the closing of such sale. For the
purposes of this Agreement, "Liquidity Event" means (i) a sale of all or
substantially all of the assets of the Company; (ii) a merger or
consolidation of the Company with or into any other corporation, unless the
Company is the surviving entity and the shareholders of the Company
immediately prior to such event continue to own a majority of the outstanding
shares of the Company after such event; or (iii) the transfer, in a single
transaction or a series of related transactions, of a majority of the
outstanding shares of the Company. Upon termination of Employee's employment
in connection with a Liquidity Event, the Employee shall be entitled to no
further payments, severance or other benefits, except for the bonus set forth
in Section 2(E)2 and as otherwise required by law.
5. Survival of Certain Provisions. Provisions of this Agreement shall
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survive any termination of employment of this Agreement if so provided herein or
if necessary or desirable to fully accomplish the purposes of such provision.
Without limiting the foregoing, the obligations of the parties under Sections 6
and 7 hereof expressly survive any termination of employment or termination of
this Agreement.
6. Confidentiality. Employee shall not at any time during or within three
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years after the termination of his employment, reveal to any person or entity
any trade secrets or confidential information of the Company or any trade
secrets or confidential information of any third parties which the Company is
under an obligation to keep confidential, except to employees of the Company who
need to know such information for the purposes of their employment and except as
may be required in the course of performing his duties for the Company and
except as may be required by governmental investigations or in connection with
litigation proceedings. Confidential information includes, but is not limited
to, research and development activities, product designs, prototypes and
technical specifications, show how and know how, marketing plans and strategies,
pricing and costing policies, customer and suppliers lists and accounts,
nonpublic financial information, systems, processes, software programs, works of
authorship, inventions, projects, plans and proposals, but shall not include any
information (a) of which the Employee presently has knowledge and of which he
did not learn through his contact with the Company prior to the date hereof; (b)
which is subsequently designated as non-confidential or is treated as non-
confidential by the Company; (c) which is presently publicly available or a
matter of public knowledge generally; or (d) which is lawfully received by
Employee from a third party who is or was not bound in any confidential
relationship to the Company. The Employee shall keep secret all matters
entrusted to him and shall not use or attempt to use any confidential
information except as may be required in the course of performing his duties for
the Company.
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7. Indemnification. The Employee shall be entitled to indemnification in
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accordance with the provisions of Article TENTH of the Amended and Restated
Certificate of Incorporation of the Company, as in effect on the date hereof.
The Company represents to Employee that attached hereto as Exhibit A is a true
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copy of said Article TENTH, as in effect on the date hereof. The Company shall
not amend the provisions of said Article TENTH without the consent of the
Employee. During the period of Employee's employment with the Company, the
Company will maintain its existing directors and officers insurance policy, with
its current $5 million policy limits, for the benefit of the Employee. The
Employee shall also be entitled to all other additional rights of
indemnification and exculpation, if any, as may be provided by law or by Company
policy in his capacity as an officer and employee of the Company.
8. Consent and Waiver by Third Parties. The Employee hereby represents and
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warrants that he has obtained all waivers and/or consents from third parties
which are necessary to enable him to enjoy employment with the Company on the
terms and conditions set forth herein and to execute and perform this Agreement
without being in conflict with any other agreement, obligation or understanding
with any such third party. The Employee represents that he is not bound by any
agreement or any other existing or previous business relationship which
conflicts with, or may conflict with, the performance of his obligations
hereunder or prevent the full performance of his duties and obligations
hereunder.
9. Due Authorization. The Company represents to Employee that this
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Agreement has been duly authorized by all necessary corporate action and that,
upon execution of this Agreement by the Chairman of the Company, it will be a
duly authorized, executed and delivered agreement of the Company, enforceable
against it in accordance with its terms.
10. Governing Law. This Agreement, the employment relationship contemplated
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herein and any claim arising from such relationship, whether or not arising
under this Agreement, shall be governed by and construed in accordance with the
internal laws of the Commonwealth of Massachusetts, without giving effect to the
principles of choice of law or conflicts of laws of such Commonwealth and this
Agreement shall be deemed to be performable in Massachusetts. Any claims or
legal actions by one party against the other arising out of the relationship
between the parties contemplated herein (whether or not arising under this
Agreement) shall be commenced or maintained in any state or federal court
located in Massachusetts, and Employee and Company hereby submit to the
jurisdiction and venue of any such court.
11. Severability. In case any one or more of the provisions contained in
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this Agreement for any reason shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement. Moreover, if one or more
of the provisions contained in this Agreement shall for any reason be held to be
excessively broad as to scope, activity, subject or otherwise so as to be
unenforceable at law, such provision or provisions shall be construed and
reformed by the appropriate judicial body by limiting or reducing it or them, so
as to be enforceable to the maximum extent compatible with the applicable law as
it shall then appear.
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12. Remedies Upon Breach: The Employee agrees that any breach of this
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Agreement by him will cause irreparable damage to the Company and that in the
event of such breach the Company shall have, in addition to any and all remedies
of law, the right to an injunction, specific performance or other equitable
relief to prevent the violation of Employee's obligations hereunder.
13. Waivers and Modifications. This Agreement may be modified, and the
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rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 13. No waiver by either party of
any breach by the other or any provision hereof shall be deemed to be a waiver
of any later or other breach thereof or as a waiver of any other provision of
this Agreement. This Agreement sets forth all of the terms of the
understandings between the parties with reference to the subject matter set
forth herein and may not be waived, changed, discharged or terminated orally or
by any course of dealing between the parties, but only by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought. No modification or waiver by the Company shall be
effective without the consent of the Chairman of the Board of Directors.
14. Assignment. The Employee may not assign any of his rights or delegate
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any of his duties or obligations under this Agreement provided, however, that
the rights of Employee hereunder shall inure to the benefit of his legal
representatives and heirs in the event of his death or disability. 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.
15. Entire Agreement. This Agreement constitutes the entire understanding
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of the parties relating to the subject matter hereof and supersedes and cancels
all agreements, written or oral, made prior to the date hereof between the
Employee and the Company.
16. Notices. All notices hereunder shall be in writing and shall be
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delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:
If to the Company, to: Workgroup Technology Corporation
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Chairman
With a Copy to: Xxxxxx X. Xxxxxx, Xx. Esq.
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
If to the Employee, to: Xxxxxxx X. Xxxxxxx
00 Xxxxxx Xxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
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17. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
18. Section Headings. The descriptive section headings herein have been
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inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement effective as of the date first above written.
WORKGROUP TECHNOLOGY CORPORATION
By: /s/ Xxxxx Xxxxxx
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Title: Chairman
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
XXXXXXX/8675.1A859873-1
