Exhibit 10.6
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT (the "Agreement"), is made as of the 1/st/ day of
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July, 1999 (the "Effective Date") by and between Embedded Support Tools
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Corporation, a Massachusetts corporation with its principal place of business at
000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (the "Company"), and Xxxx T. W.
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Xxxxxxx, an individual residing at 00 Xxxxxxx Xxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxxx ("Xxxxxxx").
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WHEREAS, Xxxxxxx is one of the founders of the Company and is currently
employed by the Company.
WHEREAS, Xxxxxxx, other founders of the Company and the Company have
entered into a certain First Amended and Restated Founding Shareholders
Agreement as of the date hereof (the "Shareholders Agreement"), pursuant to
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which Xxxxxxx is entitled to redeem a portion of his capital stock in the
Company each year and obtain loans from the Company, which loans shall be
secured by his capital stock of the Company;
WHEREAS, Xxxxxxx now wishes to reduce his involvement with and
responsibilities for the Company, but has agreed to continue to provide services
to the Company, and the Company has agreed to extend his employment with the
Company, all in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the terms, conditions, agreements and
covenants hereinafter set forth, the parties hereto acting in reliance upon the
representations and warranties of the others contained in this Agreement, agree
as follows:
1. Continued Employment of Xxxxxxx
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1.1 As of the Effective Date, the title of "Chief Financial Officer"
of the Company and day-to-day responsibilities associated
therewith shall be transferred from Xxxxxxx to Xxxx X. Xxxxxx.
From the Effective Date through December 31, 1999 (the
"Transition Period"), Xxxxxxx shall (i) retain the titles of
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"Treasurer" and "Vice-President," and (ii) perform the
responsibilities associated with such positions. In consideration
of Xxxxxxx'x agreement to perform such services, the Company
hereby agrees to pay to Xxxxxxx a salary of Two Hundred Fifty
Thousand Dollars ($250,000) per year (pro-rated) during the
Transition Period. In addition, during the Transition Period,
Xxxxxxx shall be entitled to participate in all benefit programs
that the Company makes available to its employees, to the extent
that his position, tenure, age, health and other qualifications
make him eligible to participate. During the Transition Period,
Xxxxxxx shall not be required to be in the offices of the Company
more than 20 hours per week, on average, but he shall be
available by telephone during normal business hours upon
reasonable notice. Notwithstanding the foregoing, from the
Effective Date through August 31, 1999 Xxxxxxx is entitled to
take a paid leave of absence while retaining the aforementioned
positions and benefits, during which time he will not be required
to be in the offices of the Company or be available by telephone.
1.2 Upon the expiration of the Transition Period, Xxxxxxx shall
resign as Treasurer but shall remain on the Board of Directors of
the Company, subject to the terms of Section 12 of the
Shareholders Agreement. During the period from January 1, 2000
through December 31, 2000, Xxxxxxx shall assume the role of Vice-
President, Human Resources and shall fulfill the duties of such
position as directed by the President of the Company, provided,
however, that Xxxxxxx shall not be required to spend more than 20
hours per week, on average, providing such services to the
Company. During this one-year period, Xxxxxxx shall be paid an
annual salary of One Hundred Twenty-Five Thousand Dollars
($125,000) and shall be entitled to participate in all benefit
programs that the Company makes available to its employees, to
the extent that his position, tenure, age, health and other
qualifications make him eligible to participate.
1.3 After December 31, 2000, Xxxxxxx may, in his sole discretion,
continue to provide services to the Company at the same level of
compensation and benefits through December 31, 2002, provided,
however, that if Xxxxxxx reduces his responsibilities or time
commitment to the Company, his [compensation and benefits
dependent upon amount of compensation] shall be proportionately
reduced.
2. Employment Termination.
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2.1 It is hereby understood and agreed by the parties hereto that the
Company shall not be entitled to terminate Xxxxxxx'x employment
prior to December 31, 2000 (and if Xxxxxxx elects to extend such
employment pursuant to Section 1.3 above, then prior to December
31, 2002, subject to subsection 2.2 below) other than for cause.
For purposes hereof, "cause"shall be defined as (i) a good faith
finding by the Board of Directors (which shall not include
Xxxxxxx if he is a Director at such time) of failure by Xxxxxxx
to perform his assigned duties for the Company, dishonesty, gross
negligence or misconduct or (ii) the conviction of Xxxxxxx of or
the entry of a plea of guilty or nolo contendre by Xxxxxxx to,
any crime involving moral turpitude or any felony.
2.2 Notwithstanding any provision contained in this Agreement to the
contrary, in the event of a Change in Control (as defined in the
Shareholders Agreement), or an IPO (as defined in the
Shareholders Agreement), the Company shall be entitled to
terminate Xxxxxxx'x engagement by and/or employment with the
Company with or without cause upon two (2) weeks' notice any time
after December 31, 2000 without any obligation to pay severance
or other amounts in lieu thereof.
3. Proprietary Information
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3.1 Xxxxxxx acknowledges that his relationship with the Company is
one of high trust and confidence and that in the course of
performing services for the Company, he has had and will have
access to and contract with Proprietary Information (as defined
below). Xxxxxxx agrees that he will
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not, during the time he is providing services to the Company, or
at any time thereafter, disclose to others, or use for his
benefit or the benefit of others, any Proprietary Information.
For purposes of this Agreement, Proprietary Information shall
mean, by way of illustration and not limitation, all information
(whether or not patentable and whether or not copyrightable)
owned, possessed or used by the Company or any affiliate of the
Company, including, without limitation, any invention, formula,
vendor, information, customer information, apparatus, equipment,
trade secret, process, research, report, technical data, know-
how, computer program software, software documentation, hardware
design, technology, marketing or business plan, forecast,
unpublished financial statement, budget, license, price, cost and
employee list that is communicated to, learned of, developed or
otherwise acquired by Xxxxxxx in the course of his employment by
the Company.
3.2 Xxxxxxx'x obligations under this Section 3 shall not apply to any
information that (a) is or becomes known to the general public
under circumstances involving no breach by Xxxxxxx or others of
the terms of this Section 3,(b) is generally disclosed to third
parties by the Company without restriction on such third parties,
(c) is approved for release by written authorization of the Board
of Directors of the Company, or (d) which Xxxxxxx can show was
independently developed or acquired by him without reliance in
any way on Proprietary Information.
3.3 Upon termination of Xxxxxxx'x engagement by the Company or at any
other time upon request by the Company, Xxxxxxx shall promptly
deliver to the Company all records, files, memoranda, notes,
designs, data, reports, price list, customer lists, drawings,,
plans, computer programs, software, software documentation,
sketches, laboratory and research notebooks and other documents
(and all copies or reproductions of such materials) relating to
the business of the Company.
3.4 Xxxxxxx acknowledges that the Company from time to time may have
agreements with third parties that impose obligations or
restrictions on the Company regarding inventions made during the
course of work under such agreements or regarding the
confidential nature of such work. Xxxxxxx agrees to be bound by
all such obligations and restrictions that are known to him and
at no cost or expense to himself to take all action within the
scope of his position(s) and duties at the Company necessary to
discharge the obligations of the Company under such agreements.
3.5 Xxxxxxx acknowledges that any breach of the provisions of this
Section 3 shall result in serious and irreparable injury to the
Company for which the Company cannot be adequately compensated by
monetary damages alone. Xxxxxxx agrees, therefore, that, in
addition to any other remedy it may have, the Company shall be
entitled to enforce the specific performance of this Agreement
and to seek both temporary and permanent injunctive
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relief (to the extent permitted by law) without the necessity of
proving actual damages.
4. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject
matter of this Agreement.
5. Amendment; Survival. This Agreement may be amended or modified only
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by a written instrument executed by both the Company and Xxxxxxx.
Sections 3 and 7 of this Agreement shall survive termination of this
Agreement for any reason.
6. Governing Law. This Agreement shall be construed, interpreted and
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enforced in accordance with the laws of the Commonwealth of
Massachusetts.
7. Successors and Assigns; No Third Party Beneficiaries. This Agreement
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shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Xxxxxxx may not assign
his rights or obligations hereunder without the prior written consent
of the Company. The Company may assign its rights hereunder only in
connection with a Change in Control. Otherwise, the Company may not
assign its rights and obligations hereunder without the prior written
consent of Xxxxxxx.
Except as expressly set forth herein, nothing herein expressed or
implied is intended or shall be construed to confer upon or give to
any person or entity other than the parties hereto and their
successors or permitted assigns, any rights or remedies under or by
reason of this Agreement.
8. Miscellaneous.
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8.1 No delay or omission by the any party to this Agreement in
exercising any right under this Agreement shall operate as a
waiver of that or any other right. A waiver or consent given by
any party to this Agreement on any one occasion shall be
effective only in that instance and shall not be construed as a
bar or waiver of any right on any other occasion.
8.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or
affect the scope or substance of any section of this Agreement.
8.3 In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be
affected or impaired thereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
COMPANY: EMBEDDED SUPPORT TOOLS
CORPORATION,
a Massachusetts corporation
By: _________________________
Xxxxx Xxxxxx, President
XXXXXXX: By: _________________________
Xxxx X.X. Xxxxxxx
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