1
EXHIBIT 10.36
XXXXXX X. XXXXX
EMPLOYMENT AGREEMENT
AGREEMENT dated January 20, 1999 between Chesapeake Decision Sciences,
Inc., ("Chesapeake") a wholly-owned subsidiary of Aspen Technology, Inc., a
Delaware corporation located at 00 Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx, 00000
(the "Company"), and Xxxxxx X. Xxxxx, an individual residing at 00 Xxxxx Xxxxxx,
Xxxxxxx, XX 00000, (the "Employee").
1. EMPLOYMENT. The Company agrees to employ the Employee in the
Chesapeake business carried on by the Company or in some other mutually
agreeable capacity, from the date of this Agreement and hereafter for a
period of eight years on the basis that the Employee shall work half-time
for the first five years, and thereafter as agreed to by the Employee. Such
period of time may be reduced by a month for every two month equivalent the
Employee, as agreed to between the Employee and the Company, does not
provide services during the first five years; provided that the Company
provide Employee written notice 30 days prior to any reduction of such
period. The Employee shall take a senior role in the development and
management of the Company's supply chain technology as well as a senior
role in the development of certain of the Company's other technology
initiatives. The Employee shall report directly to the President of the
Company. The Employee agrees, while employed hereunder, to perform his
duties faithfully and to the best of his ability. The Employee shall be
employed at the Company's offices in New Jersey, and his principal duties
shall be performed primarily in New Jersey, except for business trips
reasonable in number and duration required in furtherance of the Company's
business.
2. TERM. The employment of the Employee hereunder shall begin on the date of
this Agreement and shall continue until reduced or terminated in accordance
with Sections 1 or 5 (the "Term").
3. COMPENSATION.
a) As compensation for the Employee's services during the Term, the
Company shall pay the Employee an annual base salary, initially at the
rate of $ 363,000 per year.
b) The Employee shall be covered by the bonus plan currently maintained
by the Company for its similarly-situated employees.
4. EMPLOYEE BENEFITS. The Employee shall be entitled to participate in all
"employee pension benefit plans," all "employee welfare benefit plans"
(each as defined in the Employee Retirement Income Security Act of 1974)
and all pay practices and other compensation arrangements maintained by the
Company (collectively, "Benefits"), on the same basis as similarly situated
employees of the Company. The Company shall reimburse the Employee from
time to time for the reasonable expenses incurred by the Employee in
connection with the performance of his obligations hereunder, in accordance
with the Company's policies on expense reimbursement. In addition and in
consideration of the covenant not-to-compete under Paragraph 7, the key-man
life insurance policy on the Employee held by Chesapeake shall be used by
the Company to fund a split dollar insurance program and/or a deferred
compensation plan for Employee on terms approved by the Employee. In
addition, the Company shall pay the
2
annual cost of insurance relating to the split dollar insurance program
during the term of this Agreement in an amount not to exceed $2,000.00 per
annum.
5. TERMINATION DATE; CONSEQUENCES FOR COMPENSATION AND BENEFITS
a) DEFINITION OF TERMINATION DATE. The first to occur of the following
events shall be the "Termination Date":
i) The date on which the Employee becomes entitled to receive
long-term or short-term disability payments by reason of total
and permanent disability;
ii) The Employee's death;
iii) Voluntary resignation;
iv) Discharge of the Employee by the Company after one of the
following events shall have occurred, which event shall be
specified to the Employee by the Company at the time of
discharge: material willful misconduct in the discharge of his
duties, conviction of the Employee or the entry of a plea of
guilty or nolo contendere by the Employee to any crime involving
moral turpitude, or any material breach under paragraph 7, 8, 9
or 10 of this Agreement by the Employee which is not cured within
30 days after written notice from the Board of Directors of the
Company to the Employee setting forth the nature of the breach
("Discharge for Cause");
b) CONSEQUENCES FOR COMPENSATION AND BENEFITS. On Termination as a result
of a voluntary resignation or Discharge for Cause, the Company shall
pay base salary to the Employee through the Termination Date, and
shall pay to the Employee all Benefits accrued through the Termination
Date, payable in accordance with the respective terms of the plans,
practices and arrangements under which the Benefits were accrued, but
shall pay no cash bonus for the fiscal year in which the Termination
Date occurs. On a Termination due to the Employee's death or
disability, the Company shall continue to pay, at its option, base
salary or a lump sum equivalent to Employee or his estate. The Company
will obtain adequate disability and life insurance to secure such
payments and will provide Employee evidence of such coverage during
the term of this Agreement.
6. LIQUIDATED DAMAGES; NO DUTY TO MITIGATE DAMAGES. The amounts payable
pursuant to Section 5(b) shall be deemed liquidated damages for the early
termination of this Agreement and shall be paid to the Employee regardless
of any income the Employee may receive from any other employer, and the
Employee shall have no duty of any kind to seek employment from any other
employer until the Termination Date.
7. AGREEMENT NOT TO COMPETE. The Employee agrees that, while serving as an
Employee of the Company, he will not serve as an employee or director of
any business entity other than the Company and its affiliates, but may
serve as a director of a reasonable number of not-for-profit corporations
and may devote a reasonable amount of time to charitable and community
service. In consideration of the payments and agreements hereunder, for one
year following any Termination Date, the Employee shall not engage,
directly or indirectly, in any business competitive with the Company's
business in the area of supply chain planning and scheduling software,
consulting services and support. The Employee may hold stock or a limited
2
3
partnership interest of 5% or less in any publicly traded entity without
violating this Agreement.
8. AGREEMENT NOT TO SOLICIT. In consideration of the payments and agreements
hereunder and under the Agreement and Plan of Reorganization, for the
greater of two years after the date of this Agreement or one year following
any Termination Date, the Employee shall not solicit any employee of the
Company or an affiliate to leave such employment to provide services to the
Employee or any other business entity, whether or not the Employee is
employed by such entity, or the Employee has a material financial interest
therein. Soliciting a former employee of the Company or an affiliate to
provide such services shall not be a violation of this Agreement.
9. CONFIDENTIAL INFORMATION: NON-DISCLOSURE. Employee acknowledges that the
business of Company, and their affiliates is highly competitive and that
Company has provided and will provide Employee with access to Confidential
Information relating to the business of Company and their affiliates.
"Confidential Information" means and includes Company's confidential and/or
proprietary information and/or trade secrets that have been developed or
used and/or will be developed and that cannot be obtained readily by third
parties from outside sources. Confidential Information includes, by way of
example and without limitation, the following: information regarding
customers, employees, contractors, and the industry not generally known to
the public; strategies, methods, books, records, and documents; technical
information concerning products, equipment, services, and processes;
procurement procedures and pricing techniques; the names of and other
information concerning customers, investors, and business affiliates (such
as contact name, service provided, pricing for that customer, amount of
services used, credit and financial data, and/or other information relating
to Company's relationship with that customer); pricing strategies; plans
and strategies for expansion or acquisitions; budgets; customer lists;
electronic databases; models; specifications; computer programs; internal
business records; contracts benefiting or obligation Company; bids or
proposals submitted to any third party; technologies and methods; training
methods and training processes; organizational structure; salaries of
personnel; payment amounts or rates paid to consultants or other service
providers; and other such confidential or proprietary information. Employee
acknowledges that this Confidential Information constitutes a valuable,
special, and unique asset used by Company, or their affiliates in their
business to obtain a competitive advantage over their competitors. Employee
further acknowledges that protection of such Confidential Information
against unauthorized disclosure and use is of critical importance to
Company, and their affiliates in maintaining their competitive position.
Employee also will have access to, or knowledge of, Confidential
Information of third parties, such as actual and potential customers,
suppliers, partners, joint venturers, investors, financing sources and the
like, of Company, and their affiliates.
Employee agrees that Employee will not, at any time during or after
Employee's employment with Company, make any unauthorized disclosure of any
Confidential Information of Company or their affiliates, or make any use
thereof, except in the carrying out of his or her employment
responsibilities hereunder, except that following termination of his
employment Employee shall have the right, on prior consent of the Company
which consent shall not be unreasonably withheld, to use MIMI software and
ancillary software and information in non-commercial projects (including
the application of MIMI's optimization and simulation technology to the
AmericaOne challenge yacht's design process for which permission is hereby
expressly granted) that do not compete with the Company's business.
Employee also agrees to preserve and protect
3
4
the confidentiality of third party Confidential Information to the same
extent, and on the same basis, as Company's Confidential Information.
10. PROPRIETARY RIGHTS. All Proprietary Information in any form, whether
patentable or copyrightable or not, which Employee generates either solely
or jointly during Employee's employment by The Company (the "Developments")
will be the sole and exclusive property of The Company (and in the case of
copyrightable material, will be a "WORK MADE FOR HIRE" by the Employee for
The Company). Employee will promptly and fully disclose all Developments to
The Company and, if deemed necessary by The Company and at The Company's
expense, will execute and deliver such instruments as The Company may
request to protect its right, title, and interest in and to any of the
Developments.
a) RECORDS AND EQUIPMENT. Immediately upon the termination of Employee's
employment, or otherwise on demand by the Company, Employee will
deliver to the Company all Proprietary Information, including without
limitation, papers, photographs, drawings, notes, plans, computer
programs, tapes, listings, copies of correspondence, memoranda,
reports, customer lists, addresses, computers and other materials or
equipment made or compiled by Employee or made available to Employee
during the course of employment. Employee may not retain any copies
without the Company's express written permission.
b) REPRESENTATION. The Employee understands that it is the Company's
policy not to accept the confidential or proprietary information of
third parties without appropriate permission. Consequently, the
Employee represents and warrants that he has not brought with him, and
will not disclose to the Company at any time, any confidential
information belonging to a third party without such third party's
express written permission. The Employee understands and agrees that
breach of the foregoing representation and warranty is cause for
discipline, up to and including termination of employment, but such
termination would not be considered a "Discharge for Cause".
11. ARBITRATION. In the event that either party hereto has any claim hereunder,
the party shall promptly notify the other party of such claim. If within 30
days of the receipt of such notice of claim, the parties cannot agree on a
resolution of such claim, the parties agree to submit such dispute to
binding arbitration to be held in Boston, Massachusetts under the rules of
the American Arbitration Association. Three arbitrators shall conduct any
such arbitration, one of whom shall be selected by the Employee, one of
whom shall be selected by the Company and one of whom shall be selected by
the arbitrators so selected. The expenses of any such arbitration shall be
paid by the non-prevailing party, as determined by the final order of the
arbitrators.
12. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement of the parties and may be altered or amended or any provision
hereof waived only by an agreement in writing signed by the party against
whom enforcement of any alteration, amendment, or waiver is sought. No
waiver by any party of any breach of this Agreement shall be considered as
a waiver of any subsequent breach.
13. BINDING OBLIGATIONS. This Agreement shall be binding upon and inure to the
benefit of the Company and their successors and assigns and the Employee
and his personal representatives.
4
5
14. ASSIGNABILITY. Neither this Agreement nor any benefits payable to the
Employee hereunder shall be assigned, pledged, anticipated, or otherwise
alienated by the Employee, or subject to attachment or other legal process
by any creditor of the Employee, and notwithstanding any attempted
assignment, pledge, anticipation, alienation, attachment, or other legal
process, any benefit payable to the Employee hereunder shall be paid only
to the Employee or his estate. The Company may assign this Agreement to
Chesapeake, provided that the Company shall remain as guarantor of all
obligations and responsibilities of the Company hereunder.
15. GOVERNING LAW. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts.
16. OTHER AGREEMENTS. The obligations and agreements contained herein are in
addition to and do not supercede or replace any obligations, covenants,
representations or warranties contained in the Agreement and Plan of
Reorganization among the Company, Chesapeake and AT Acquisition, Inc.,
including without limitation all exhibits entered into therewith, and the
Non-Competition Agreement between Employee, Chesapeake, and the Company.
IN WITNESS WHEREOF, the Company and the Employee have signed and sealed
this Agreement as of the date first written above.
ASPEN TECHNOLOGY, INC. Xxxxxx X. Xxxxx
By:
--------------------------------- ---------------------------------
