Exhibit 10.35
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of the
1st day of February, 2000 between MOLDFLOW CORPORATION, a Delaware corporation
(the "Company"), and XXXX XXXXXX ("Executive").
WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company on the terms contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT. The term of this Agreement shall extend from the date hereof
(the "Commencement Date") until the first anniversary of the Commencement Date
and shall automatically be extended for one additional year on each anniversary
thereafter unless, not less than 30 days prior to each such date, either party
shall have given notice that it does not wish to extend this Agreement;
provided, further, that following a Change in Control the term of this Agreement
shall continue in effect for a period of not less than twelve (12) months beyond
the month in which the Change in Control occurred. The term of this Agreement
shall be subject to termination as provided in Paragraph 6 and may be referred
to herein as the "Period of Employment."
2. POSITION AND DUTIES. During the Period of Employment, Executive shall serve
as the President and Chief Executive Officer and shall be a member of the Board
of Directors, and shall have control over and responsibility for the day-to-day
business and affairs of the Company and shall have such other powers and duties
as may from time to time be prescribed by the Board of Directors of the Company
(the "Board"). Executive shall devote his full working time and efforts to the
business and affairs of the Company.
3. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY AND INCENTIVE COMPENSATION. Executive's initial annual
base salary shall be $215,000. Executive's base salary shall be redetermined
annually by the Board or a Committee thereof. The annual base salary, together
with the car allowance set forth in Subparagraph 3(c)(i), in effect at any given
time is referred to herein as "Base Salary." The Base Salary shall be payable in
a manner consistent with the general payroll policy of the Company. In addition
to Base Salary, Executive shall be eligible to participate in such incentive
compensation plans and Employee Benefit Plans as the Board or a Committee
thereof shall determine from time to time for senior executives of the Company.
As used herein, the term "Employee Benefit Plans" includes, without limitation,
each pension and retirement plan; supplemental pension, retirement and deferred
compensation plan; savings and profit-sharing plan; stock ownership plan; stock
purchase plan; stock option plan; life insurance plan; medical insurance plan;
disability plan; and health and accident plan or arrangement established and
maintained by the Company.
(b) VACATIONS. Executive shall be entitled to twenty (20) paid vacation
days in each fiscal year, which shall be accrued ratably during the fiscal year,
and Executive shall also be entitled to all paid holidays given by the Company
to its executives. Executive shall be entitled to additional vacation based on
any policy of the Company that provides for additional vacation based on years
of service or other criteria.
(c) ADDITIONAL BENEFITS. During the Period of Employment, Executive
shall be entitled to the following additional benefits:
(i) Executive shall receive a car allowance in an amount equal to
$1,000 per month.
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(ii) The Company will retain in force and effect and continue full
payment of the premiums with respect to a term life insurance
policy in the amount of $2.0 million payable to the spouse of
Executive.
(iii)The Company will purchase and / or maintain a supplemental
policy of long-term disability insurance for the Executive.
(d) INDEMNIFICATION AND DIRECTORS' AND OFFICERS' INSURANCE. During
Executive's employment and for the period of time following termination of the
Executive for any reason during which time Executive could be subject to any
claim based on his position in the Company, Executive shall receive the maximum
indemnification protection from the Company as permitted by the Company's
by-laws and shall receive directors' and officers' insurance coverage equivalent
to that which is provided to any other director or officer of the Company.
4. UNAUTHORIZED DISCLOSURE.
Executive acknowledges that in the course of his employment with the
Company (and, if applicable, its predecessors), he has and will become
acquainted with the Company's business affairs, information, trade secrets, and
other matters which are of a proprietary or confidential nature, including but
not limited to the Company's and its affiliates' and predecessors' operations,
business opportunities, price and cost information, finance, customer
information, product development information, business plans, various sales
techniques, manuals, letters, notebooks, procedures, reports, products,
processes, services, and other confidential information and knowledge
(collectively the "Confidential Information") concerning the Company's and its
affiliates' and predecessors' business. Executive understands and acknowledges
that such Confidential Information is confidential, and he agrees not to
disclose such Confidential Information to anyone outside the Company except to
the extent that (i) Executive deems such disclosure or use reasonably necessary
or appropriate in connection with performing his duties on behalf of the
Company; (ii) Executive is required by order of a court of competent
jurisdiction (by subpoena or similar process) to disclose or discuss any
Confidential Information, provided that in such case, Executive shall promptly
inform the Company of such event, shall cooperate with the Company in attempting
to obtain a protective order or to otherwise restrict such disclosure, and shall
only disclose Confidential Information to the minimum extent necessary to comply
with any such court order; or (iii) such Confidential Information becomes
generally known to and available for use in the Company's industry, other than
as a result of any action or inaction by Executive. Executive further agrees
that he will not during employment and/or at any time thereafter use such
Confidential Information in competing, directly or indirectly, with the Company.
At such time as Executive shall cease to be employed by the Company, he will
immediately turn over to the Company all Confidential Information, including
papers, documents, writings, electronically stored information, other property,
and all copies of them provided to or created by him during the course of his
employment with the Company. The foregoing provisions shall be binding upon
Executive's heirs, successors, and legal representatives and shall survive the
termination of this Agreement for any reason.
5. COVENANT NOT TO COMPETE. In consideration for Executive's employment by the
Company under the terms provided in this Agreement and as a means to aid in the
performance and enforcement of the terms of the provisions of Paragraph 4,
Executive agrees that:
(a) during the Period of Employment and for a period of twelve (12)
months thereafter, regardless of the reason for termination of employment,
Executive will not, directly or indirectly, as an owner, director, principal,
agent, officer, employee, partner, consultant, servant, or otherwise, carry on,
operate, manage, control, or become involved in any manner with any business,
operation, corporation, partnership, association, agency, or other person or
entity which is engaged in a business that is directly competitive with any of
the Company's products which are produced or in development by the Company as of
the date of Executive's termination of employment, anywhere in the world;
provided, however, that the foregoing shall not prohibit Executive from owning
up to one percent (1%) of the outstanding stock of a publicly held company
engaged in activities competitive with that of the Company; and
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(b) during the term of Executive's employment with the Company and for
a period of twelve (12) months thereafter, regardless of the reason for
termination of employment, Executive will not directly or indirectly solicit or
induce any present or future employee of the Company or any affiliate of the
Company to accept employment with Executive or with any business, operation,
corporation, partnership, association, agency, or other person or entity with
which Executive may be associated, and Executive will not knowingly employ or
cause any business, operation, corporation, partnership, association, agency, or
other person or entity with which Executive may be associated to employ any
present or future employee of the Company without providing the Company with ten
(10) days' prior written notice of such proposed employment.
Should Executive violate any of the provisions of this Paragraph, then
in addition to all other rights and remedies available to the Company at law or
in equity, the duration of this covenant shall automatically be extended for the
period of time from which Executive began such violation until he permanently
ceases such violation.
6. TERMINATION. Except for termination as specified in Subparagraph 6(a), any
termination of Executive's employment by the Company or any such termination by
Executive shall be communicated by written notice of termination to the other
party hereto. Executive's employment hereunder may be terminated without any
breach of this Agreement under the following circumstances:
(a) DEATH. Executive's employment hereunder shall terminate upon his
death.
(b) DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been absent from his duties
hereunder on a full-time basis for one hundred eighty (180) calendar days in the
aggregate in any twelve (12) month period, the Company may terminate Executive's
employment hereunder.
(c) TERMINATION BY COMPANY FOR CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder for Cause
if such termination is approved by not less than a majority of the Board. For
purposes of this Agreement, "Cause" shall mean: (A) conduct by Executive
constituting a material act of willful misconduct in connection with the
performance of his duties; (B) criminal or civil conviction of Executive, a plea
of nolo contendere by Executive or conduct by Executive that would reasonably be
expected to result in material injury to the reputation of the Company if he
were retained in his position with the Company; (C) continued, willful and
deliberate non-performance by Executive of his duties hereunder (other than by
reason of Executive's physical or mental illness, incapacity or disability)
which has continued for more than thirty (30) days following written notice of
such non-performance from the Board; or (D) a breach by Executive of any of the
provisions contained in Paragraphs 4 and 5 of this Agreement.
(d) TERMINATION WITHOUT CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder without
Cause if such termination is approved by a majority of the Company's Board of
Directors. Any termination by the Company of Executive's employment under this
Agreement which does not constitute a termination for Cause under Subparagraph
6(c) or result from the death or disability of the Executive under Subparagraph
6(a) or (b) shall be deemed a termination without Cause. If the Company provides
notice to Executive under Paragraph 1 that it does not wish to extend the Period
of Employment, such action shall be deemed a termination without Cause.
(e) TERMINATION BY EXECUTIVE. At any time during the Period of
Employment, Executive may terminate his employment hereunder for any reason,
including but not limited to Good Reason. If Executive provides notice to the
Company under Paragraph 1 that he does not wish to extend the Period of
Employment, such action shall be deemed a voluntary termination by Executive and
one without Good Reason. For purposes of this Agreement, "Good Reason" shall
mean: (A) a substantial diminution or other substantive adverse change, not
consented to by Executive, in the nature or scope of Executive's
responsibilities, authorities, powers, functions or duties; (B) any removal,
during the Period of Employment, from Executive of his title of President and
Chief Executive Officer, or the non-election of the Executive to the Board of
Directors; (C) an involuntary reduction in Executive's Base Salary except for
across-the-board reductions similarly affecting all or substantially all
management employees; (D) a breach by the Company of any of its other material
obligations under this Agreement
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and the failure of the Company to cure such breach within thirty (30) days after
written notice thereof by Executive; (E) the involuntary relocation of the
Company's offices at which Executive is principally employed or the involuntary
relocation of the offices of Executive's primary workgroup to a location more
than thirty (30) miles from such offices, or the requirement by the Company that
Executive be based anywhere other than the Company's offices at such location on
an extended basis, except for required travel on the Company's business to an
extent substantially consistent with Executive's business travel obligations; or
(F) the failure of the Company to obtain the agreement from any successor to the
Company to assume and agree to perform this Agreement as required by Paragraph
10.
(f) DATE OF TERMINATION. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by his death, the date of his death; (B) if
Executive's employment is terminated under Subparagraph 6(b) or under
Subparagraph 6(c), the date on which Notice of Termination is given; (C) if
Executive's employment is terminated by the Company under Subparagraph 6(d),
thirty (30) days after the date on which a Notice of Termination is given; and
(D) if Executive's employment is terminated by Executive under Subparagraph
6(e), thirty (30) days after the date on which a Notice of Termination is given,
unless the Company cures the Good Reason event prompting the Executive to issue
a Notice of Termination.
7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) If Executive's employment terminates by reason of his death, the
Company shall, within ninety (90) days of death, pay in a lump sum amount to
such person as Executive shall designate in a notice filed with the Company or,
if no such person is designated, to Executive's estate, Executive's accrued and
unpaid Base Salary to the date of his death, plus his accrued and unpaid
incentive compensation (including any bonus payment that is earned but
unauthorized), if any, under Subparagraph 3(a). Upon the death of Executive, (i)
all stock options which would otherwise vest over the next twelve (12) months
shall immediately vest in Executive's estate or other legal representatives and
become exercisable, and Executive's estate or other legal representatives shall
have twelve (12) months from the Date of Termination or the remaining option
term, if earlier, to exercise all such stock options granted to Executive and
(ii) all repurchase rights and other restrictions on the shares of Restricted
Stock held by the Executive which would otherwise lapse over the next twelve
(12) months shall immediately lapse. All other stock-based grants and awards
held by Executive shall be canceled upon the death of Executive in accordance
with their terms. For a period of one (1) year following the Date of
Termination, the Company shall pay such health and dental insurance premiums as
may be necessary to allow Executive's spouse and dependents to receive health
and dental insurance coverage substantially similar to coverage they received
immediately prior to the Date of Termination. In addition to the foregoing, any
payments to which Executive's spouse, beneficiaries, or estate may be entitled
under any employee benefit plan shall also be paid in accordance with the terms
of such plan or arrangement. Such payments, in the aggregate, shall fully
discharge the Company's obligations hereunder.
(b) During any period that Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, Executive
shall continue to receive his accrued and unpaid Base Salary and accrued and
unpaid incentive compensation (including any bonus payment that is earned but
unauthorized), if any, under Subparagraph 3(a), until Executive's employment is
terminated due to disability in accordance with Subparagraph 6(b) or until
Executive terminates his employment in accordance with Subparagraph 6(e),
whichever first occurs. Upon the Date of Termination, (i) all stock options
which would otherwise vest over the next twelve (12) months shall immediately
vest and become exercisable, and Executive shall have twelve (12) months from
the Date of Termination or the remaining option term, if earlier, to exercise
all such stock options granted to Executive and (ii) all repurchase rights and
other restrictions on the shares of Restricted Stock held by the Executive which
would otherwise lapse over the next twelve (12) months shall immediately lapse.
All other stock-based grants and awards held by Executive shall vest or be
canceled upon the Date of Termination in accordance with their terms. For a
period of one (1) year following the Date of Termination, the Company shall pay
such health and dental insurance premiums as may be necessary to allow Executive
and Executive's spouse and dependents to receive health and dental insurance
coverage substantially similar to coverage they received prior to the Date of
Termination.
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(c) If Executive's employment is terminated by Executive other than for
Good Reason as provided in Subparagraph 6(e), then the Company shall, through
the Date of Termination, pay Executive his accrued and unpaid Base Salary at the
rate in effect at the time Notice of Termination is given. Thereafter, the
Company shall have no further obligations to Executive except as otherwise
expressly provided under this Agreement. In addition, all vested but unexercised
stock options held by Executive as of the Date of Termination must be exercised
by Executive within three (3) months following the Date of Termination or by the
end of the option term, if earlier. All other stock-based grants and awards held
by Executive shall vest or be canceled upon the Date of Termination in
accordance with their terms.
(d) If Executive terminates his employment for Good Reason as provided
in Subparagraph 6(e) or if Executive's employment is terminated by the Company
without Cause as provided in Subparagraph 6(d), then the Company shall, through
the Date of Termination, pay Executive his accrued and unpaid Base Salary at the
rate in effect at the time Notice of Termination is given and his accrued and
unpaid incentive compensation (including any bonus payment that is earned but
unauthorized), if any, under Subparagraph 3(a). In addition, subject to signing
by Executive of a general release of claims in a form and manner satisfactory to
the Company, the Company shall provide the following benefits to Executive:
(i) The Company shall pay Executive an amount equal one (1) times the sum
of Executive's Base Salary in effect on the Date of Termination (the
"Severance Amount"). The Severance Amount shall be paid out in accordance
with the Company's standard payroll practices. Notwithstanding the
foregoing, (i) if the Executive breaches any of the provisions contained in
Paragraphs 4 and 5 of this Agreement or (ii) if Executive obtains a
"Comparable Position", as defined herein, during the period over which the
Severance Amount is being paid, then all further payments of the Severance
Amount shall immediately cease. For purposes of this Agreement "Comparable
Position" means a full time executive management position with a similar
scope of duties and responsibilities as that described in Paragraph 2
hereof and an equivalent or better compensation package as that described
in Paragraph 3 hereof. The Executive shall have no obligation to seek or
accept a Comparable Position during the period over which the Severance
Amount is being paid.
(ii) Upon the Date of Termination, (i) all stock options which
would otherwise vest over the next twelve (12) months shall immediately
vest and become exercisable, and Executive shall have twelve (12) months
from the Date of Termination or the remaining option term, if earlier, to
exercise all such stock options granted to Executive and (ii) all
repurchase rights and other restrictions on the shares of Restricted Stock
held by the Executive which would otherwise lapse over the next twelve (12)
months shall immediately lapse. All other stock-based grants and awards
held by Executive shall be canceled upon the Termination Date in accordance
with their terms.
(iii) In addition to any other benefits to which Executive may
be entitled in accordance with the Company's then existing severance
policies, the Company shall, for a period of one (1) year commencing on the
Date of Termination, pay such health and dental insurance premiums as may
be necessary to allow Executive and Executive's spouse and dependents to
continue to receive health and dental insurance coverage substantially
similar to coverage they received prior to the Date of Termination.
(e) If Executive's employment is terminated by the Company for Cause as
provided in Subparagraph 6(c), then the Company shall, through the Date of
Termination, pay Executive his accrued and unpaid Base Salary at the rate in
effect at the time Notice of Termination is given. Thereafter, the Company shall
have no further obligations to Executive except as otherwise expressly provided
under this Agreement. In addition, all stock options held by Executive as of the
Date of Termination shall cease to vest as of the Date of Termination and
Executive shall have 30 days from the Date of Termination or the remaining
option term, if earlier, to exercise all such vested stock options. All other
stock-based grants and awards held by Executive shall be canceled upon the
Termination Date in accordance with their terms.
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(f) Nothing contained in the foregoing Subparagraphs 7(a) through 7(e)
shall be construed so as to affect Executive's rights or the Company's
obligations relating to agreements or benefits that are unrelated to termination
of employment.
8. CHANGE IN CONTROL BENEFIT. Upon a Change of Control of the Company the
following provisions shall apply in lieu of, and expressly supersede, the
provisions of Subparagraph 7(d).
(a) CHANGE IN CONTROL.
(i) In the event that the Executive terminates his employment
for Good Reason or if the Executive's employment is terminated by the
Company without Cause, the Company shall pay Executive an amount equal one
(1) times the sum of Executive's Base Salary (the "Severance Amount"). The
Severance Amount shall be paid out in accordance with the Company's
standard payroll practices. For purposes of this Agreement, "Base Salary"
shall mean the annual Base Salary in effect on the Date of Termination.
Notwithstanding the foregoing, if the Executive breaches any of the
provisions contained in Paragraphs 4 and 5 of this Agreement then all
further payments of the Severance Amount shall immediately cease.
Furthermore, in the event Executive terminates his employment for Good
Reason as provided in Subparagraph 6(e), he shall be entitled to the
Severance Amount only if he provides the Notice of Termination provided for
in Subparagraph 6(a) within sixty (60) days after the occurrence of the
event or events which constitute such Good Reason as specified in
Subparagraph 6(e); and
(ii) Notwithstanding anything to the contrary in any
applicable option agreement or stock-based award agreement, upon a Change
in Control, all stock options and other stock-based awards granted to
Executive by the Company shall immediately accelerate and become
exercisable or non-forfeitable as of the effective date of such Change in
Control. Executive shall also be entitled to any other rights and benefits
with respect to stock-related awards, to the extent and upon the terms
provided in the employee stock option or incentive plan or any agreement or
other instrument attendant thereto pursuant to which such options or awards
were granted; and
(iii) The Company shall, for a period of one (1) year
commencing on the Date of Termination, pay such health and dental insurance
premiums as may be necessary to allow Executive, Executive's spouse and
dependents to continue to receive health and dental insurance coverage
substantially similar to the coverage they received prior to the Date of
Termination.
(b) GROSS UP PAYMENT.
(i) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any compensation,
payment or distribution by the Company to or for the benefit of Executive,
whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise (the "Severance Payments"), would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") such that the net
amount retained by Executive, after deduction of any Excise Tax on the
Severance Payments, any Federal, state, and local income tax, employment
tax and Excise Tax upon the payment provided by this subsection, and any
interest and/or penalties assessed with respect to such Excise Tax, shall
be equal to the Severance Payments.
(ii) Subject to the provisions of Subparagraph 8(b)(iii), all
determinations required to be made under this Subparagraph 8(b)(ii),
including whether a Gross-Up Payment is required and the amount of such
Gross-Up Payment, shall be made by PriceWaterhouseCoopers or any other
nationally recognized accounting firm selected by the Company (the
"Accounting Firm"), which shall provide
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detailed supporting calculations both to the Company and Executive within
fifteen (15) business days of the Date of Termination, if applicable, or at
such earlier time as is reasonably requested by the Company or Executive.
For purposes of determining the amount of the Gross-Up Payment, Executive
shall be deemed to pay federal income taxes at the highest marginal rate of
federal income taxation applicable to individuals for the calendar year in
which the Gross-Up Payment is to be made, and state and local income taxes
at the highest marginal rates of individual taxation in the state and
locality of Executive's residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. The initial Gross-Up Payment, if
any, as determined pursuant to this Subparagraph 8(b)(iii), shall be paid
to Executive within five (5) days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is
payable by Executive, the Company shall furnish Executive with that
determination. Any determination by the Accounting Firm shall be binding
upon the Company and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have
been made (an "Underpayment"). In the event that the Company exhausts its
remedies pursuant to Subparagraph 8(b)(iii) and Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred, consistent with
the calculations required to be made hereunder, and any such Underpayment,
and any interest and penalties imposed on the Underpayment and required to
be paid by Executive in connection with the proceedings described in
Subparagraph 8(b)(iii), shall be promptly paid by the Company to or for the
benefit of Executive.
(iii) Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require
the payment by the Company of the Gross-up Payment. Such notification shall
be given as soon as practicable but no later than ten (10) business days
after Executive knows of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be
paid. Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which he gives such notice to the
Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies Executive
in writing prior to the expiration of such period that it desires to
contest such claim, provided that the Company has set aside adequate
reserves to cover the Underpayment and any interest and penalties thereon
that may accrue, Executive shall:
(A) give the Company any information reasonably requested by the
Company relating to such claim,
(B) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company,
(C) cooperate with the Company in good faith in order to
effectively contest such claim, and
(D) permit the Company to participate in any proceedings relating
to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold Executive harmless, on an after-tax basis, for any
Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing
provisions of this Subparagraph 8(b)(iii), the Company shall control
all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and xxx for a refund or
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contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however,
that if the Company directs Executive to pay such claim and xxx for a
refund, the Company shall advance the amount of such payment to
Executive on an interest-free basis and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect thereto,
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes
for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and Executive shall be entitled to settle or
contest, as the case may be, any other issues raised by the Internal
Revenue Service or any other taxing authority.
(iv) If, after the receipt by Executive of an amount advanced
by the Company pursuant to Subparagraph 8(b)(iii), Executive becomes
entitled to receive any refund with respect to such claim, Executive shall
(subject to the Company's complying with the requirements of Subparagraph
8(b)(iii)) promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto).
If, after the receipt by Executive of an amount advanced by the Company
pursuant to Subparagraph 8(b)(iii), a determination is made that Executive
shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.
(c) DEFINITIONS. For purposes of this Paragraph 8, the following terms
shall have the following meanings:
"CHANGE IN CONTROL" shall mean any of the following:
(a) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act") (other
than the Company, any of its subsidiaries, or any trustee, fiduciary or
other person or entity holding securities under any employee benefit plan
or trust of the Company or any of its subsidiaries), together with all
"affiliates" and "associates" (as such terms are defined in Rule 12b-2
under the Act) of such person, shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing forty percent (40%)or more of either
(A) the combined voting power of the Company's then outstanding securities
having the right to vote in an election of the Company's Board ("Voting
Securities") or (B) the then outstanding shares of Company's common stock,
par value $0.01 per share ("Common Stock") (other than as a result of an
acquisition of securities directly from the Company); or
(b) persons who, as of the Commencement Date, constitute the
Company's Board (the "Incumbent Directors") cease for any reason,
including, without limitation, as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a majority
of the Board, provided that any person becoming a director of the Company
subsequent to the Commencement Date shall be considered an Incumbent
Director if such person's election was approved by or such person was
nominated for election by a vote of at least a majority of the Incumbent
Directors; but provided further, that any such person whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of members of the Board or other actual or
threatened solicitation of proxies or consents by or on behalf of a person
other than the Board, including by reason of agreement intended to avoid or
settle any such actual or threatened contest or solicitation, shall not be
considered an Incumbent Director; or
8
(c) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company where the stockholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate more than fifty percent (50%) of the
voting shares of the Company issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company or (C) any
plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases the proportionate number of shares beneficially owned by any person to
forty percent (40%) or more of either (A) the combined voting power of all of
the then outstanding Voting Securities or (B) Common Stock; PROVIDED, HOWEVER,
that if any person referred to in this sentence shall thereafter become the
beneficial owner of any additional shares of Voting Securities or Common Stock
(other than pursuant to a stock split, stock dividend, or similar transaction or
as a result of an acquisition of securities directly from the Company) and
immediately thereafter beneficially owns forty percent (40%) or more of either
(A) the combined voting power of all of the then outstanding Voting Securities
or (B) Common Stock, then a "Change of Control" shall be deemed to have occurred
for purposes of the foregoing clause (a).
9. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
if to the Executive:
At his home address as shown
in the Company's personnel records;
if to the Company:
Moldflow Corporation
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Board of Directors of Moldflow Corporation
Copy to: Corporate Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
10. SUCCESSOR TO COMPANY. The Company shall 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 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 the Executive elects to terminate employment.
11. MISCELLANEOUS. No provisions of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by Executive and such officer of the Company as may be
specifically designated by the Board. No agreements or representations, oral or
otherwise, express or implied, unless specifically referred to herein, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction, and
9
performance of this Agreement shall be governed by the laws of the Commonwealth
of Massachusetts (without regard to principles of conflicts of laws).
12. VALIDITY. The invalidity or unenforceability of any provision or provisions
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.
13. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
14. ARBITRATION; OTHER DISPUTES. In the event of any dispute or controversy
arising under or in connection with this Agreement, the parties shall first try
in good faith for a period of 30 days to settle such dispute or controversy by
mediation under the applicable rules of the American Arbitration Association
before resorting to arbitration. Following such time period, the parties will
settle any remaining dispute or controversy exclusively by arbitration in
Boston, Massachusetts in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction. Notwithstanding the above, the Company shall be
entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of Paragraph 4 or 5
hereof.
15. LITIGATION AND REGULATORY COOPERATION. During and after Executive's
employment, Executive shall reasonably cooperate with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while Executive was employed by the Company;
provided, however, that such cooperation shall not materially and adversely
affect Executive or expose Executive to an increased probability of civil or
criminal litigation. The Company shall also provide Executive with compensation
on an hourly basis (to be derived from his Base Salary) for requested litigation
and regulatory cooperation that occurs after his termination of employment, and
reimburse Executive for all costs and expenses incurred in connection with his
performance under this Paragraph 15, including, but not limited to, reasonable
attorneys' fees and costs.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year first above written.
MOLDFLOW CORPORATION
By: /s/ Xxxxxxx X. Xxx
---------------------
Its: Chairman of the Board
---------------------
EXECUTIVE
/s/ Xxxx Xxxxxx
-------------------------
Xxxx Xxxxxx
