Exhibit 10.7
CHANGE-IN-CONTROL EMPLOYMENT AGREEMENT
Date
Executive Officer
Title
The Board of Directors (the "Board") of Avid Technology, Inc. (the "Company")
recognizes that your contributions to the past and future growth and success of
the Company have been and will be substantial and the Board desires to assure
the Company of your continued services for the benefit of the Company,
particularly in the face of a change-in-control of the Company.
This letter agreement ("Agreement") therefore sets forth those benefits which
the Company will provide to you in the event your employment within the Company
is terminated after a "Change in Control of the Company" (as defined in
paragraph 2 (I)) under the circumstances described below.
1. TERM
If a Change in Control of the Company should occur while you are still an
employee of the Company, then this agreement shall continue in effect from the
date of such Change in Control of the Company for so long as you remain an
employee of the Company, but in no event for more than three full calendar years
following a Change in Control of the Company; provided, however, that the
expiration of the term of this Agreement shall not adversely affect your rights
under this Agreement which have accrued prior to such expiration. If no Change
in Control of the Company occurs before your status as an employee of the
Company is terminated, this Agreement shall expire on such date. Prior to a
Change in Control of the Company, your employment may be terminated by the
Company with or without Cause (as defined in Paragraph 3(iii)), and/or this
Agreement may be terminated by the Company, at any time upon written notice to
you and, in either or both such events, you shall not be entitled to any of the
benefits provided hereunder; provided, however, that the Company may not
terminate this agreement following the occurrence of a Potential Change in
Control of the Company (as defined in Paragraph 2(ii)) unless (a) at least one
year has expired since the most recent event or transaction constituting a
Potential Change in Control of the Company and (b) in respect of a Potential
Change in Control of the Company which previously occurred, no facts or
circumstances continue to exist which, if initially occurring at the time any
termination of this Agreement is to occur, would constitute a Potential Change
in Control of the Company.
2. CHANGE IN CONTROL; POTENTIAL CHANGE IN CONTROL
(i) For purposes of this Agreement, a "Change in Control of the Company" shall
be deemed to have occurred if (A) there shall be consummated (I) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation, or pursuant to which shares of the
Company's Common Stock would be converted in whole or in part into cash,
securities, or other property, other than a merger of the Company in which the
holders of the Company's Common Stock immediately prior to the merger continue
to hold at least 50% of the outstanding voting securities of the surviving
corporation, or (II) any sale, lease, exchange or transfer (in one transaction
or a series of related transactions) of all or substantially all assets of the
Company, or (B) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or (C) any "person"
(as such term is used in Sections 13(d)(3) and 14 (d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), other than the Company
or a subsidiary thereof or any employee benefit plan sponsored by the Company
or a subsidiary thereof or a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock in the Company, shall become the beneficial owner (within
the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors ("Voting
Shares"), as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, or (D) at any time during a period
of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company shall cease for any reason to
continue at least a majority thereof, unless the election or the nomination for
election by the Company's shareholders of each new director during such
two-year period was approved by a vote of at least two-thirds of the directors,
or (E) any other event shall occur that would be required to be reported in
response to item 6(e) (or any successor provision) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act.
(ii) For purposes of this agreement, a ""Potential Change in Control of the
Company" shall be deemed to have occurred if (A) the Company shall enter into
an agreement, the consummation of which would result in the occurrence of a
Change in Control of the Company, or (B) any person shall publicly announce an
intention to take or to consider taking actions which if consummated would
constitute a Change in Control of the Company, or (C) the Company shall receive
any written communication from any third party or third parties, acting as
principal or as authorized representative of a disclosed principal, which is
publicly disclosed and proposes (or indicates a desire to engage in discussions
relating to the possibility of or with a view toward) a transaction the
consummation of which would result in the occurrence of a Change in Control of
the Company, or (D) any "person" (as such term is used in Sections 13(d)(3) and
14 (d)(2) of the Securities Exchange Act of 1934, other than the Company or a
subsidiary thereof or any employee benefit plan sponsored by the Company or a
subsidiary thereof or a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock in the Company, shall (I) become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act), (II) disclose
directly or indirectly to the Company or publicly a plan or intention to become
the beneficial owner or (E) any person described in clause (D) above who
becomes the beneficial owner, directly or indirectly, of voting shares
representing 20.0% or more of the combined voting power of the Company's then
outstanding Voting Shares shall increase his beneficial ownership of such
securities by 5% or more over the percentage acquired in the transaction which
previously gave rise to the occurrence of a Potential Change in Control of the
Company. Notwithstanding the foregoing, any event or transaction which would
otherwise constitute a Potential Change in Control of the Company shall not
constitute a Potential Change in Control of the Company if the negotiations or
other actions leading to such event or transaction were initiated by the
Company (it being understood that the occurrence of such a Company-initiated
event or transaction shall not affect the existence of any Potential Change in
Control of the Company resulting from any other event or transaction).
3. TERMINATION FOLLOWING CHANGE IN CONTROL
If a Change in Control of the Company shall have occurred while you are still an
employee of the Company, you shall be entitled to the payments and benefits
provided in paragraph 4 hereof upon the subsequent termination of your
employment within two (2) full calendar years of such Change in Control, by you
or by the Company unless such termination is (a) because of your death,
"Disability" or "Retirement" (as defined below) (b) by the Company for "Cause"
(as defined below), or (c) by you other than for "Good Reason" (as defined
below) in any of which events you shall not be entitled to receive benefits
under this agreement.
(i) "Disability". If, as a result of your incapacity due to physical or mental
illness, you shall have been deemed "disabled" by the institution appointed by
the Company to administer the Company's Long-Term Disability Plan (or successor
plan) because you shall have been absent from your duties with the Company on a
full-time basis for six months and shall not have returned to full-time
performance of your duties within thirty days after written notice is given
you, the Company may terminate this Agreement for "Disability."
(ii) "Retirement". Retirement shall mean the voluntary termination by you of
your employment for other than "Good Reason" (as defined below) which
termination qualifies as retirement in accordance with any retirement
arrangement previously established; provided, however, that no mandatory
retirement, in accordance with any retirement arrangement, shall constitute
Retirement for purposes of this Agreement, unless you have previously consented
thereto in writing.
(iii) "Cause". For the purposes of this Agreement, the Company shall have
"Cause" to terminate your employment only upon
(A) the willful and continued failure by you substantially to perform your
duties with the Company (other than any such failure resulting from your
incapacity due to physical or mental illness or any failure resulting from
your terminating your employment with the Company for "Good Reason" (as
defined below)) after a written demand for substantial performance is
delivered to you by the Board which specifically identifies the manner in
which the Board believes that you have not substantially performed your
duties, or
(B) the willful engaging by you in gross misconduct materially and
demonstrably injurious to the Company.
For purposes of this paragraph, no act, or failure to act, on your part shall
be considered "willful" unless done, or omitted to be done, by you not in
good faith and without reasonable belief that your action or omission was in
the best interests of the Company. Not withstanding the foregoing, you shall
not be deemed to have been terminated for Cause unless and until there shall
have been delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of
the Board at a meeting of the Board called and held for that purpose (after
at least 20 days prior notice to you and an opportunity for you, together
with your counsel, to be heard before the Board), finding that in the good
faith opinion of the Board you failed to perform your duties or engaged in
misconduct as set forth in clause (A) or (B) of this paragraph 3(iii) and
that you did not correct such failure or cease such misconduct after being
requested to do so by the Board.
(iv) "Good Reason". You may terminate your employment for Good Reason. For
purpose of this Agreement, "Good Reason" shall mean:
(A) the assignment to you of any duties materially inconsistent with, or any
material diminution of, your positions, duties, responsibilities, and status
with the Company immediately prior to a Change in Control of the Company, or
a material change in your titles or offices as in effect immediately prior to
a Change in Control of the Company, or any removal of you from, or any
failure to reelect you to, any such positions;
(B) a reduction by the Company in your base salary in effect immediately
prior to a Change in Control of the Company or a failure by the Company to
increase your base salary (within fifteen months of your last increase) in an
amount which is substantially similar, on a percentage basis, to the average
percentage increase in base salary for all officers of the Company during the
twelve months preceding your increase;
(C) the failure by the Company to continue in effect any life insurance,
health or accident or disability plan in which you are participating or are
eligible to participate at the time of a Change in Control of the Company (or
plans providing you with substantially similar benefits), except as otherwise
required in terms of such plans as in effect at the time of any Change in
Control of the Company or the taking of any action by the Company which would
adversely affect your participation in or materially reduce your benefits
under any of such plans or deprive you of any material fringe benefits
enjoyed by you at the time of a Change in Control of the Company or the
failure by the Company to provide you with the number of paid vacation days
to which you are entitled in accordance with the vacation policies of the
Company in effect at the time of a Change in Control of the Company;
(D) the failure by the Company to pay you an award under the Company's
Executive and Senior Management Incentive Plan or a successor plan in the
amount at least equal to that last paid to you under said plan prior to a
Change in Control of the Company or the failure by the Company to continue in
effect any incentive plan or arrangement (including, without limitation, the
Executive and Senior Management Incentive Compensation Plan and the right to
receive performance awards and similar incentive compensation benefits) in
which you are participating at the time of a Change in Control of the Company
(or to substitute and continue other plans or arrangements providing you with
substantially similar benefits) or the taking of any action by the Company
which would otherwise adversely affect your benefits under any such plan;
(E) the relocation of the Company's principal executive offices to a location
outside the greater Boston metropolitan area, or the Company's requiring you
to be based anywhere other than the Company's principal executive offices
except for required travel on the Company's business to an extent
substantially consistent with your business travel obligations immediately
prior to a Change in Control of the Company, or, in the event you consent to
any such relocation of the Company's principal executive offices, the failure
by the Company to pay (or reimburse you for) all reasonable moving expenses
incurred by you relating to a change of your principal residence and
secondary residence, if any, in connection with such relocation and to
indemnify you against any loss (defined as the difference between the actual
sales price, net of brokerage fees, of such residence and the higher of (a)
your aggregate investment in such residence or (b) the fair market value of
such residence as determined the Company's real estate appraiser, realized in
the sale of such residence in connection with any such change in residence,
it being understood that you shall also be reimbursed by the Company for the
amount of any federal or state income tax attributable to such payment or
reimbursement pursuant to the provisions hereof;
(F) any material breach by the Company of any provision of this Agreement
(including, without limitation, paragraph 6); or
(G) any purported termination of your employment by the Company which is not
effected pursuant to a Notice of Termination satisfying the requirements of
subparagraph (v) below (and, if applicable, subparagraph (iii) above); and
for purposes of this Agreement, no such purported termination shall be
effective.
(v) Notice of Termination
Any termination by the Company pursuant to subparagraphs (i), (ii) or (iii)
above or by you pursuant to subparagraph (iv) above shall be communicated by
written Notice of Termination to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of your termination under the provision so indicated.
(vi) Date of Termination
"Date of Termination" shall mean
(A) if this Agreement is terminated for Disability, thirty days after Notice
of Termination is given (provided that you shall not have returned to the
performance of your duties on a full-time basis during such thirty-day
period),
(B) if your employment is terminated pursuant to subparagraph (iv) above, the
date specified in the Notice of Termination,
(C) if your employment is terminated for any other reason, the date on which
a Notice of Termination is given (or, if a Notice of Termination is not
given, the date of such termination), and
(D) if you are entitled to compensation pursuant to paragraph 6, the date
determined pursuant to such paragraph.
4. COMPENSATION DURING DISABILITY OR UPON TERMINATION
(i) If, after a Change in Control of the Company, you shall fail to perform
your duties hereunder as a result of incapacity due to physical or mental
illness, you shall continue to receive your full base salary twice a month at
the rate then in effect and any awards under the Executive and Senior
Management Incentive Plan or any successor plan shall continue to accrue and to
be paid during such period until your employment is terminated (and for any
longer period as may be provided under applicable plans); provided, however, in
the event the Company makes no interim individual accruals for the Executive
and Senior Management Compensation Plan or any successor plan in respect of any
period for which no award has been made under such Plan because of such
termination of this Agreement or of employment, you shall receive payment in
the amount equal to the product of (a) the amount awarded to you under such
Plan or any successor plan during the period most recently ended, multiplied by
(b) a fraction (hereinafter the "Partial Service Fraction""), the numerator of
which is the whole and partial months of service completed in the current
period, and the denominator of which is the number of months in the period most
recently ended for which an award was made.
(ii) If, after a Change in Control of the Company, your employment shall be
terminated for Cause, the Company shall pay you for your full base salary
through the Date of Termination at the rate in effect at the time Notice of
Termination is given and the Company shall have no further obligations to you
under this Agreement.
(iii) If, after a Change in Control if the Company, the Company shall terminate
your employment, other than pursuant to paragraph 3(i), 3(ii) or 3(iii) hereof
or by reason of death, or you shall terminate your employment for Good Reason
or you shall be entitled to payments pursuant to paragraph 6, then
(A) The Company shall pay you as severance pay (and without regard to the
provisions of any benefit plan) in a lump sum in cash on the fifth day
following the Date of Termination, the following amounts:
(x) your full base salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given and an amount equal to the
amount, if any, of any incentive compensation awards which have not been
paid but which have been earned by you under the Executive and Senior
Management Incentive Compensation Plan or any successor plan (including
awards which have been deferred, except to the extent such awards have been
transferred, prior to a Change in Control of the Company, by the Company to
a trustee in an irrevocable trust) it being understood that you shall have
earned in each year for which an award shall be payable an amount equal to
the product of (a) the amount awarded you under such Plan or any successor
plan during the period most recently ended, multiplied by (b) the Partial
Service Fraction; and
(y) an amount equal to the product of (a) the sum of your annual base salary
at the highest rate in effect during the twelve (12) month period
immediately preceding the Date of Termination plus the amount of the highest
award to you under the Executive and Senior Management Incentive
Compensation Plan or any successor plan during the twenty-four (24) month
period ended on the Date of Termination, multiplied by (b) the number two
(2);
(B) Accelerated vesting of any stock options that were granted under the
Stock Option Plan, or any successor plan, provided that if such vesting
acceleration would disqualify the change in control from being accounted for
as a pooling of interests and such accounting treatment would otherwise be
available, such vesting will not be accelerated.
(iv) You shall not be required to mitigate the amount of any payment provided
for in this paragraph 4 or in paragraphs 6 or 16 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this paragraph 4
be reduced by any compensation earned by you as the result of employment by
another employer after the Date of Termination, or otherwise.
(v) The Provisions of this Agreement and any payment provided for hereunder,
shall not reduce any amounts otherwise payable, or in any way diminish your
existing rights, or rights which would accrue solely as a result of the passage
of time, under any employee benefit plan of the Company, any employment
agreement or other contract, plan or arrangement of the Company, except to the
extent necessary to prevent double payment under any other severance plan or
program of the Company in effect at the Date of Termination.
5. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY
(a) Anything in this Agreement to the contrary notwithstanding and except as
set forth below, in the event it shall be determined that any payment or
distribution by the Company to or for the your benefit (whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code or any interest or penalties are
incurred by you 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 you shall be entitled to receive an additional payment
(a "Gross-Up Payment") in an amount such that after the payment by you of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest an penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
you retain an amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments. Not withstanding the foregoing provisions of this Section
5(a), if it shall be determined that you are entitled to a Gross-Up Payment,
but that you, after taking into account the Payments and the Gross-Up Payment,
would not receive a net after-tax benefit of at least $50,000 (taking into
account both income taxes and any Excise Tax) as compared to the net after-tax
proceeds to you resulting from an elimination of the Gross-Up Payment and a
reduction of the Payments, in an aggregate, to an amount (the "Reduced Amount")
such that the receipt of Payments would not give rise to any Excise Tax, then
no Gross-Up Payment shall be made to you and the Payments, in the aggregate,
shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 5(a), all determinations required to
be made under this Section 5, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Coopers and
Xxxxxxx or such other certified public accounting firm as may be designated by
the Company (the "Accounting Firm") which shall provide detailed supporting
calculations to both the Company and you within 15 business days of the receipt
of notice from you that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity, or group affecting the Change
of Control, the Company shall appoint another nationally recognized accounting
firm to make the determinations required hereunder.
All fees and expenses of the Accounting Firm shall be borne by the Company. Any
Gross-Up Payment, as determined pursuant to this Section 5, shall be paid by
the Company to you within ten business days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm shall be binding
upon the Company and you. 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 ("Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 5(c) and you
thereafter are required to make a payment of any Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for your benefit.
(c) You 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 practical
but no later than ten business days after you are informed in writing of such a
claim and shall apprise the Company of the nature of the claim and the date on
which such claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which
it 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 you in writing prior to the expiration of such period that it desires
to contest such claim, you shall:
(i) give the Company any information reasonably requested by the Company
relating to such claim,
(ii) 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 reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order to effectively
contest such claim, and
(iv) 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 you 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 on the foregoing provisions of
this Section 5(c), 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 you to pay the tax claimed and xxx for a refund or to contest the claim
in any permissible manner, and you agree 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 you to pay such claim
and xxx for a refund, the Company shall advance the amount of such payment to
you, on an interest-free basis, and shall indemnify and hold the you 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 your taxable year 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 you shall be entitled
to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or other taxing authority.
(d) If, after the receipt by you of an amount advanced by the Company pursuant
to Section 5(c), you become entitled to receive any refund with respect to such
a claim, you shall (subject to the Company's complying with the requirements of
Section 5(c)) 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 you of an amount advanced by the Company pursuant to
Section 5(c), a determination is made that you shall not be entitled to any
refund with respect to such claim any the Company does not notify you 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.
6. SUCCESSOR'S BINDING AGREEMENT
(i) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or the assets of the Company, by agreement in form and
substance satisfactory to you, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle you to
compensation from the Company in the same amount and on the same terms as you
would be entitled hereunder if you terminated your employment for Good Reason
(whether or not you terminate your employment), except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
"Company" shall mean the Company as herein defined before defined and any
successor to its business and/or assets as aforesaid which executes and
delivers the agreement provided for in this paragraph 6 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law. If you received payments pursuant to this paragraph 6 prior to termination
of your employment, you shall not be entitled to any benefits hereunder at the
time of any subsequent termination of your employment.
(ii) This Agreement shall inure to the benefit of, and be enforceable by, your
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should die while any amounts
would still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or, if there
be no such designee, to your estate.
7. EMPLOYMENT
In consideration of the foregoing obligations of the Company, you agree to be
bound by the terms and conditions of this Agreement and to remain in the employ
of the Company during any period following the announcement by any person of any
proposed transaction or transactions which, if effected, would result in a
Change in Control of the Company until a Change in Control of the Company has
taken place, or in the opinion of the Board, such person has abandoned or
terminated its efforts to effect a Change in Control of the Company. Subject to
the foregoing, nothing contained in this Agreement shall impair or interfere in
any way with your right to terminate your employment or the right of the Company
to terminate your employment with or without Cause prior to a Change in Control
of the Company. Nothing contained in this Agreement shall be construed as a
contract of employment between the Company and you or as a right for you to
continue in the employ of the Company, or as a limitation on the right of the
Company to discharge you with or without Cause prior to a Change in Control of
the Company.
8. COMPETITIVE ACTIVITY
If your employment terminates under circumstances that entitle you to receive
benefits under this Agreement (as described in the first sentence of paragraph 3
of this Agreement), then, unless the Company materially breaches this Agreement,
you agree that, for a period of one year from the effective Date of Termination,
you will not engage in any business which competes or plans to compete with the
Company in the business of the development, manufacture, promotion, distribution
or sale of digital film, video or audio editing systems or products. The
foregoing shall include, without limitation, Data Translation, Discrete Logic,
FAST Technology, Lightworks and Immix.
You also agree that, for a period of one year from the effective Date of
Termination, you will not solicit the employment, either as an employee or as an
independent contractor, including through any agency or new employer or
otherwise, of any person who at any time during the one year preceding such
solicitation was an employee or independent contractor of the Company or any of
the Company's affiliates.
9. INJUNCTIVE RELIEF
You acknowledge and agree that the remedy of the Company at law for any breach
of the covenants and agreements contained in paragraph 8 of this Agreement will
be inadequate, and that the Company shall be entitled to injunctive relief
against any such breach or threatened breach. You represent and agree that such
injunctive relief shall not prohibit you from earning a livelihood acceptable to
you.
10. NOTICE
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth on the first page of this Agreement, provided that all other notices
to the Company should be directed to the attention to the Corporate Secretary of
the Company, or to such 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.
11. INDEMNIFICATION
The Company will indemnify you to the extent set forth in the Certificate of
Incorporation and By-laws of the Company as in effect on the date of the Change
in Control of the Company.
12. FURTHER ASSURANCES
Each party hereto agrees to furnish and execute such additional forms and
documents, and to take such further action, as shall be reasonable and
customarily required in connection with the performance of this Agreement or the
payment of benefits hereunder.
13. MISCELLANEOUS
No provision of this Agreement may be modified, waived, or discharged unless
such waiver, modification, or discharge is agreed to in writing signed by you
and such officer as may be specifically designated by the Board of Directors of
the Company. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any time prior
or subsequent time. No agreements or representations, oral or otherwise, express
or implied, 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 performance of this Agreement shall be governed
by the Commonwealth of Massachusetts.
14. VALIDITY
The invalidity or unenforceability of any provision 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.
15. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one in the
same instrument.
16. LEGAL FEES AND EXPENSES
In addition to any other benefits to which you may be entitled hereunder, the
Company shall pay all reasonable legal fees and expenses which you may incur as
a result of the Company's contesting the validity, enforceability or your
interpretation of, or determination under, this Agreement or otherwise as a
result of any termination as a result of which you are entitled to the benefits
set forth in this Agreement.
If this Agreement correctly sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this
Agreement which will then constitute our agreement on this subject.
Sincerely,
Avid Technology, Inc.
By:
-------------------------------
Xxxxxxx X. Xxxxxx
I acknowledge receipt and agree with the foregoing terms and conditions.
--------------------------------
Executive Officer
Date: _______________________
Encl.: one copy of this letter
cc: Xxxxxxxx Xxxxxxx, Esq.
Xxxx Xxxxxx, Esq.
