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EXHIBIT 10.6
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October 11, 1999
PERSONAL & CONFIDENTIAL
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Mr. Xxxx Xxxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Xxxx:
This letter agreement (the "Agreement") confirms the understanding that
we have reached regarding transition arrangements in connection with your
resignation as a Chief Executive Officer of Servicesoft Technologies Inc. (the
"Company"). The purpose of this Agreement is to establish an amicable
arrangement pursuant to which you would remain available to serve the Company as
a Director and consultant. With that understanding and in exchange for the
promises of you and the Company set forth below, you and the Company agree as
follows:
1. EMPLOYMENT ARRANGEMENTS
Reference is hereby made to the Employment Agreement dated as of
February 12, 1999 by and between you and the Company (the "Employment
Agreement"). The Employment Agreement shall be amended and superseded as and to
the extent expressly provided by this Agreement. The Company and you acknowledge
that you resigned as CEO of the Company effective as of the date on which Mr.
Xxxxx Xxxxxx was first employed by the Company. From that date through October
12, 1999, you have and will continue to serve as an officer and employee of the
Company. Thereafter, you shall serve as a consultant to the Company and Chairman
of its Board of Directors as provided in Paragraph 4 below.
2. COMPENSATION AND BENEFITS
The Company shall pay your current salary through October 12, 1999 (the
"Transition Date"). The Company shall also pay you: (a) for any accrued but
unused vacation days as of the Transition Date; and (b) an annual performance
bonus for calendar year 1999 as provided in the current senior management bonus
plan approved by the Company's Board of Directors in April 1999, which such
bonus shall be paid after the end
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Mr. Xxxx Xxxxxxxxx
October 11, 1999
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of the calendar year and prorated through the Transition Date. In addition, the
Company shall pay you $15,000 for each of October and November 1999, which shall
be payable consistent with the Company's regular payroll practices.
Finally, the Company will continue to pay on your behalf all medical
and dental insurance premiums and continue your other employee benefits through
January 31, 2000. You shall also be entitled to receive $750 per day for each
day or portion thereof that you consult with the Company pursuant to Section 5
hereof. In addition, you shall be entitled to reimbursement for all reasonable
business expenses incurred by you in connection with such services.
3. STOCK AND STOCK OPTIONS
All of your currently unvested stock options will continue to vest for
so long as you serve as a Director of the Company. In addition, all of the
common shares in the Company that are beneficially owned by you and held in
escrow pursuant to Section 4.9 of the Employment Agreement are hereby released
to you or your assignees. The Company agrees to notify the escrow agent of such
release and otherwise to take such actions as you may reasonably request so as
to effect that release.
4. BOARD OF DIRECTORS; CONSULTANTCY
You hereby agree to continue to serve as Chairman of the Company's
Board of Directors through the date of any sale of the Company or such earlier
date as may be reasonably requested in writing by the Board of Directors in
connection with any other major corporate development, subject to re-election by
the Company's shareholders. Commencing on the Transition Date, you also agree to
be available for consultation with the senior management of the Company on
strategic matters for up to 3 days per week through December 31, 1999. Any
consulting services required hereunder may be provided by you from Toronto,
Canada.
5. GENERAL RELEASES OF CLAIMS
For good and valuable consideration, the sufficiency of which is hereby
acknowledged, you hereby irrevocably and unconditionally release, acquit and
forever discharge the Company, its predecessors, subsidiaries, successors,
affiliates, and assigns, and the directors, officers, employees, shareholders,
members and representatives of any of the foregoing, and all persons acting on
behalf or through any of the foregoing (any and all of whom or which are
hereinafter referred to as "Servicesoft"), from any and all charges, complaints,
claims, liabilities, obligations, promises, agreements, controversies, damages,
actions, causes of action, suits, rights, demands, costs, losses, debts and
expenses (including attorney's fees and costs actually incurred), of any nature
whatsoever, known or unknown (collectively, "Claims"), that you now have, own,
or hold, or claim to have, own, or hold, or that you at any time had, owned, or
held, or claimed to have had, owned, or held against Servicesoft, other than:
(a) claims arising under this Agreement (or the
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Mr. Xxxx Xxxxxxxxx
October 11, 1999
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Employment Agreement as amended hereby); or (b) claims relating to rights of
indemnification to which you may be entitled under the Company's Certificate of
Incorporation or By-laws or otherwise.
For good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Company hereby irrevocably and unconditionally releases,
acquits and forever discharges you from any and all Claims that the Company now
has, owns, or holds or claims to have, own, or hold or that the Company at any
time had, owned, or held, or claimed to have had, owned, or held against you as
a result of good faith acts or omissions undertaken in the best interests of the
Company. This general release of Claims includes, without implication of
limitation, a release of all Claims related to your performance of your
responsibilities as an employee of the Company.
6. NONCOMPETE AGREEMENT
Notwithstanding anything in the Employment Agreement to the contrary,
the non-competition provisions of Section 4.4 in the Employment Agreement shall
remain in effect only through October 12, 2000 and such provisions shall not
preclude you from being a principal, shareholder and full-time employee of a
technology company incubator and venture capital fund, or serving as a director
of, or consulting with, any of their portfolio companies, so long as you are not
in breach of your other obligations under the Employment Agreement. In
furtherance of the foregoing, you acknowledge and agree that your obligations
under Sections 4.2 (non-disclosure), 4.5 (non-solicitation), 4.6 (employees),
and 4.7 (assignment of rights), remain in full force and effect without
modification or amendment, it being understood that the provisions of Sections
4.5 and 4.6 shall remain in effect only through October 12, 2000 and the
provisions of Section 4.7 relate only to the Company's property and business.
7. NONDISPARAGEMENT
The Company agrees not to make any statements that disparage you and
you agree not to make any statements that disparage the Company or any of its
products, services, employees, officers or directors. Notwithstanding the
foregoing, statements made in the course of sworn testimony in legal proceedings
or other statements required by law shall not be subject to this Section 7.
8. TAX DEDUCTIONS AND REPORTING
The Company shall reduce payments made to you pursuant to this
Agreement by deductions and withholdings that it reasonably determines to be
required for tax purposes and the Company shall make such tax-related reporting
that it reasonably determines to be required with respect to consideration
provided pursuant to this Agreement. All payments hereunder shall be in U.S.
dollars.
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9. NOTICES, ACKNOWLEDGMENTS AND OTHER TERMS
You are advised to consult with an attorney before signing this
Agreement. By signing this Agreement, you acknowledge that you are doing so
voluntarily. You also acknowledge that you are not relying on any
representations by any representative of the Company concerning the meaning of
any aspect of this Agreement.
In the event of any dispute, this Agreement will be construed as a
whole, will be interpreted in accordance with its fair meaning, and will not be
construed strictly for or against either you or the Company. The law of
Massachusetts will govern any dispute about this Agreement, including any
interpretation or enforcement of this Agreement, without giving effect to the
conflict of laws provisions of Massachusetts law. In the event that any
provision or portion of a provision of this Agreement shall be determined to be
unenforceable, the remainder of this Agreement shall be enforced to the fullest
extent possible as if such provision or portion of a provision were not
included. This Agreement may be modified only by a written agreement signed by
you and an authorized representative of the Company.
If you agree to these terms, please sign and date below and return this
Agreement to the Company within the time limitation set forth above.
Sincerely,
SERVICESOFT TECHNOLOGIES INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Chief Executive Officer
ACCEPTED AND AGREED:
/s/ Xxxx Xxxxxxxxx October 12, 1999
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Xxxx Xxxxxxxxx Date
