Exhibit 10.5
SALARY CONTINUATION AGREEMENT AND RELEASE
-----------------------------------------
This AGREEMENT is entered into by and between VIEWlogic
Systems, Inc. (the "Company") and Alain Hanover ("Hanover").
WHEREAS, the parties wish to establish the terms of
Hanover's separation from the Company and salary continuation
arrangement;
NOW, THEREFORE, in consideration of the promises and
conditions set forth herein, the sufficiency of which is hereby
acknowledged, the Company and Hanover agree as follows:
1. TRANSITION PERIOD. Hanover will resign from all
offices and directorships of the Company and its subsidiaries
effective May 13, 1997, and shall provide a resignation letter in
the form attached hereto as Exhibit A. Until May 13, 1997,
Hanover shall be considered by the Company to remain on his
current, paid leave, provided, however, that until May 13, 1997,
Hanover will continue to have access to the Company's offices and
to the assistance of the Company's administrative staff. Hanover
will continue to receive his current benefits and to be paid his
current salary at the annualized rate of Two Hundred and Thirty-
Three Thousand Dollars ($233,000.00) (the "Base Salary") through
May 13, 1997 in accordance with the Company's regular payroll
practices. Payments will be net of applicable state and federal
taxes, health, disability and/or other benefit contributions
customarily taken from Hanover's salary payments and employee
contributions, if any, to the applicable Company 401(K) plan.
14
2. SALARY CONTINUATION. In return for the execution
of this Salary Continuation Agreement and Release (the
"Agreement"), Hanover shall resign as an employee of the Company
effective December 31, 1998 and Hanover's employment with the
Company shall terminate on December 31, 1998. The Company will
continue to pay Hanover his Base Salary during the period from
May 13, 1997 through November 15, 1997 in accordance with the
Company's regular payroll practices. During the period from
November 15, 1997 through December 31, 1998, the Company will pay
Hanover a total salary of One Hundred Sixteen Thousand Five
Hundred Dollars ($116,500.00) in equal installments in accordance
with the Company's regular payroll practices. Payments under
this paragraph will be net of applicable state and federal taxes,
health, disability and/or other benefit contributions customarily
taken from Hanover's salary payments and Employee contributions,
if any, to the applicable Company 401(k) plan.
Hanover shall remain eligible for bonuses through the second
fiscal quarter of 1997 in accordance with the 1997 Executive
Bonus Plan adopted by the Compensation Committee of the Company's
Board of Directors on January 23, 1997, provided, however, that
Hanover shall be eligible only for Quarter Bonuses and shall not
participate in any part of any bonus plan which depends upon year-
end or full year performance or results.
During the period from May 13, 1997 through December 31,
1998, Hanover will hold himself available at mutually agreeable
times to perform special projects and services for the Company as
15
may be reasonably requested from time to time by the Chief
Executive Officer of the Company. The failure of the Company to
request the performance of such special projects or services
shall not alter or diminish the obligations of the Company
provided for in this Agreement.
Hanover shall not be entitled to any compensation, bonus
and/or benefit not expressly set forth in this Agreement.
Hanover shall not be entitled to participate in any new
compensation, bonus or benefit plan adopted by the Company, nor
any improvements to any existing compensation, bonus or benefit
plan adopted by the Company.
3. MEDICAL/DENTAL, DISABILITY AND LIFE INSURANCE.
(a) The Company shall allow Hanover to participate in
its medical, dental, disability and/or life insurance plans
through the earlier of December 31, 1998 or the date on which
Hanover becomes eligible for comparable coverage through another
employer. Hanover shall participate in such plans on a basis
comparable to other VIEWlogic executives in accordance with and
to the extent permitted by the terms of the plans and subject to
any changes in the plans that are applicable to other executive
participants. The parties further agree that if Hanover becomes
ineligible to participate in Company's medical, dental,
disability and/or life insurance plans prior to December 31, 1998
and is not eligible for comparable coverage through another
employer, the Company will continue to pay Hanover monthly
through December 31, 1998 an amount equal to the Company's
16
contribution for the medical, dental, disability and/or life
insurance premiums last paid by the Company for Hanover during
the period in which Hanover was eligible for coverage under the
plans.
(b) The Company shall continue to pay the premiums for
the two "key-man" life insurance policies it maintains for its
benefit on the life of Hanover (U.S. Financial Life Insurance Co.
Policy No. 0010007149 and Security-Connecticut Life Insurance Co.
Policy No. 001023047B, collectively, the "key-man insurance
policies") until May 13, 1997. In exchange for the consideration
granted herein, the parties further agree that, after May 13,
1997, the Company will use reasonable efforts to transfer
ownership of the key-man insurance policies to Hanover, and
Hanover agrees to cooperate fully with the Company, including but
not limited to executing any documents which may be required, in
order to permit the Company to be paid the maximum possible cash
value of the key-man insurance policies prior to such transfer.
In the event Hanover fails to cooperate fully, in addition to any
other rights and remedies the Company might have, the Company
shall not be obligated to transfer ownership of the key-man
insurance policies to Hanover.
4. CONTRIBUTIONS TO 401(k) PLAN. The parties agree that
Hanover will be eligible to continue to be an active participant
in the Company's 401(k) plan for as long as he remains eligible
therefor under the terms of the plan and under federal and state
law, subject to any changes in the 401(k) plan that are
17
applicable to executive participants, provided, however, that the
Company shall not continue to match Hanover's 401(k)
contributions after May 13, 1997.
5. TRANSFER OF CERTAIN COMPANY PROPERTY. On or before May
13, 1997, the Company shall transfer to Hanover for no
consideration ownership of certain office equipment previously
assigned to him. This equipment consists of: (1) a personal
computer; (2) a laptop computer; (3) a facsimile machine; (4) a
cellular telephone; and (5) any accessories related to the
foregoing that were previously provided.
6. STOCK OPTIONS. Since Hanover will remain an employee
of the Company until December 31, 1998, the parties agree that
Hanover's stock options will continue to vest and will remain in
effect and be exercisable according to the terms of his stock
option agreements through the period ending December 31, 1998,
plus, with respect to the exercise of any options, the number of
days provided in the applicable agreement for the exercise of
such options.
7. RELEASE. Hanover hereby fully, forever, irrevocably
and unconditionally releases, remises and discharges the Company,
its officers, directors, stockholders, corporate affiliates,
attorneys, agents and employees from any and all claims, charges,
complaints, demands, actions, causes of action, suits, rights,
debts, sums of money, costs, accounts, reckonings, covenants,
contracts, agreements, promises, doings, omissions, damages,
executions, obligations, liabilities, and expenses (including
18
attorneys' fees and costs), of every kind and nature which he
ever had or now has against the Company, its officers, directors,
stockholders, corporate affiliates, attorneys, agents and
employees, including, but not limited to, all claims arising out
of his hiring or employment, all employment discrimination claims
under Title VII of the Civil Rights Act of 1964, 42 U.S.C. (S)2000e
ET SEQ., the Americans With Disabilities Act, 42 U.S.C. (S)12101 ET
SEQ., the Age Discrimination in Employment Act, 29 U.S.C. (S)621 ET
SEQ., and M.G.L. c.151B, (S)1 ET SEQ., and all wrongful discharge
claims and other common law claims, except for the obligations
set forth in this Agreement and in Hanover's stock option
agreements and any written amendments thereto.
8. REPRESENTATION ON LEGAL ACTION. Hanover further
represents and warrants that he has not filed any complaints,
charges, or claims for relief against the Company, its officers,
directors, stockholders, corporate affiliates, attorneys, agents
or employees with any local, state or federal court or
administrative agency which currently are outstanding.
9. NATURE OF AGREEMENT. Hanover understands and agrees
that this Agreement is a salary continuation agreement and
release and does not constitute an admission of liability or
wrongdoing on the part of the Company.
10. AMENDMENT. This Agreement shall be binding upon the
parties and may not be abandoned, supplemented, changed or
modified in any manner, orally or otherwise, except by an
instrument in writing of concurrent or subsequent date signed by
19
a duly authorized representative of the parties hereto. This
Agreement is binding upon and shall inure to the benefit of the
parties and their respective agents, assigns, heirs, executors,
successors and administrators.
11. VALIDITY. Should any provision of this Agreement be
declared or be determined by any court of competent jurisdiction
to be illegal, invalid or unenforceable, the validity of the
remaining parts, terms, or provisions shall not be affected
thereby and said illegal, invalid or unenforceable part, term or
provision shall be amended to the extent and in a manner
necessary to most closely reflect the intent of the parties
hereto on the date hereof and to be legal, valid and enforceable.
12. CONFIDENTIALITY. The parties understand and agree that
the terms and contents of this Agreement, the contents of the
negotiations and discussions resulting in this Agreement, and any
dispute resolved by this Agreement shall be maintained as
confidential by the parties, their respective agents, attorneys
and representatives, and none of the above shall be disclosed
except to the extent required by federal or state law or
regulations or by any stock exchange or other entity the
authority of which the Company is subject (voluntarily or
otherwise) or as otherwise agreed to in writing by the authorized
agent of each party.
13. NON-DISPARAGEMENT. Hanover agrees that, as a condition
for the consideration provided herein, both monetary and
otherwise, he will not make any false, disparaging or derogatory
20
statements in public or private regarding the Company or any of
its officers, directors, stockholders, corporate affiliates,
attorneys, agents or employees or the Company's business affairs
or financial condition.
14. PROPRIETARY AND CONFIDENTIAL INFORMATION AND
INVENTIONS. Hanover agrees that he shall remain bound by the
provisions of the Proprietary Information, Inventions and Non-
Competition Agreement previously executed between Hanover and
Qualogy Systems, Inc. (the Company's predecessor) and attached
hereto as Exhibit B, except to the limited extent it may be
modified by the provisions set forth in Paragraph 15 of this
Agreement.
15. NON-COMPETITION AGREEMENT.
(a) The parties understand and agree that Hanover
shall not be bound by the non-compete provision contained in
Section 12 of Exhibit B, hereto. However, in exchange for the
consideration set forth in this Agreement, Hanover agrees that,
until December 31, 1998, Hanover will not, without the express
written consent of the Chief Executive Officer of the Company,
affiliate in any way with or provide any advice or services to
(including, but not limited to, as an individual proprietor,
partner, stockholder, officer, employee, director, joint
venturer, investor, lender, consultant or in any other capacity
whatsoever (other than as the holder of not more than one percent
(1%) of the total outstanding stock of a publicly held company)),
or engage directly or indirectly in, any business or entity which
21
competes with the Company and/or which operates in the Electronic
Design Automation ("EDA") industry.
(b) Hanover further agrees that until December 31,
1998 he will not recruit, solicit, induce, or attempt to induce,
any employee or employees of the Company to terminate their
employment with or otherwise cease their relationship with the
Company, or to affiliate with, join or engage directly or
indirectly in any business or entity which competes with the
Company and/or which operates in the EDA industry.
(c) Notwithstanding the provisions contained in
section (a) of this paragraph, nothing herein shall be construed
as preventing Hanover, with the written consent of the Company,
from joining the board of directors of, or providing consulting
services to, any business or entity in the EDA industry which
does not compete with the Company and which is not likely to
compete with the Company. The Company retains the right in its
discretion to determine whether a particular business or entity
in the EDA industry competes, or is likely to compete, with the
Company through December 31, 1998. Prior to December 31, 1998,
should Hanover wish to join the board of directors of, or provide
consulting services to, a business or entity in the EDA industry
which Hanover believes does not compete with the Company and is
not likely to compete with the Company, he shall not do so
without seeking and receiving the express written consent of the
Chief Executive Officer of the Company. Prior to December 31,
1998, the Company may withdraw any consent previously given, and
22
Hanover shall immediately resign from the board of directors
and/or stop providing all consulting services, if the Company
deems that any business or entity not previously considered by
the Company to be a competitor has begun competing with the
Company or is likely to begin competing with the Company.
16. ENTIRE AGREEMENT. This Agreement contains and
constitutes the entire understanding and agreement between the
parties hereto with respect to Hanover's employment and
severance and settlement and cancels all previous oral and
written negotiations, agreements, commitments, and writings in
connection therewith.
17. APPLICABLE LAW. This Agreement shall be governed by
the laws of the Commonwealth of Massachusetts, and is binding
upon and shall inure to the benefit of the parties and their
respective agents, assigns, heirs, executors, successors and
administrators.
18. ACKNOWLEDGMENTS. Hanover acknowledges that he has been
given twenty-one days to consider this Agreement and that the
Company advised him to consult with any attorney of his own
choosing prior to signing this Agreement. Hanover may revoke this
Agreement by written notice to the Company for a period of seven
(7) days after the execution of this Agreement, and the Agreement
shall not be effective or enforceable until the expiration of
this seven (7) day revocation period.
19. VOLUNTARY ASSENT. Hanover affirms that no other
promises or agreements of any kind have been made to or with him
23
by any person or entity whatsoever to cause him to sign this
Agreement, and that he fully understands the meaning and intent
of this Agreement. Hanover states and represents that he has had
an opportunity to fully discuss and review the terms of this
Agreement with an attorney. Hanover further states and
represents that he has carefully read this Agreement, understands
the contents herein, freely and voluntarily assents to all of the
terms and conditions hereof, and signs his name of his own free
act.
IN WITNESS WHEREOF, all parties have set their hand and seal
to this Agreement as of the date written below.
/s/ Xxxxx X. Xxxxxxx Date: 5/5/97
-------------------- -------------
ALAIN HANOVER
VIEWLOGIC SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx Date: 5/5/97
-------------------- ------------
Xxxxx X. Xxxxxxx,
Vice President & General Counsel
24
Exhibit A
Xxxxxxx X. Xxxxxx,
Chief Executive Officer
VIEWlogic Systems, Inc.
000 Xxxxxx Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Dear Will:
Effective May 13, 1997, I hereby resign from my position as
a member of the Board of Directors of VIEWlogic Systems, Inc.
(the "Company") and from all offices and directorships that I may
hold in the Company and/or any of its subsidiary companies. I
also resign as an employee of the Company effective December 31,
1998.
Very truly yours,
Alain Hanover
25
Exhibit B
QUALOGY SYSTEMS, INC.
PROPRIETARY INFORMATION, INVENTIONS AND
NON-COMPETITION AGREEMENT
AGREEMENT between Qualogy Systems, Inc., a Massachusetts
corporation (the "Company"), and the undersigned employee of the
Company.
WITNESSETH:
----------
In consideration of my employment or continued employment,
as the case may be, by the Company and of other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, I hereby agree with the Company as follows:
1. I recognize that the Company is engaged in a continuous
program of research, development, production, and marketing
respecting its business, present and future.
2. I understand that:
A. As part of my employment by the Company I am (or may be)
expected to make new contributions and inventions of value to the
Company; and
B. My employment by the Company creates a relationship of
confidence and trust between me and the Company with respect to
certain information:
(i) Applicable to the business of the Company; or
(ii) Applicable to the business of any client or customer of the
Company, which may be made known to me by the Company or by any
client or customer of the Company, or learned by me during the
period of my employment.
C. The Company possesses and will continue to possess
information that has been created, discovered, developed, or
otherwise become known to the Company (including, without
limitation, information created, discovered, developed or made
known by me during the period of or arising out of my employment
by the Company) or in which property rights have been assigned or
otherwise conveyed to the Company, which information has
commercial value in the business in which the Company is engaged
and is treated by the Company as confidential. All such
information
26
is hereinafter called "Proprietary Information." By
way of illustration, but not limitation, Proprietary Information
includes processes, formulas, data. programs, know-how,
improvements, discoveries, developments, designs, inventions,
techniques, marketing plans, strategies, forecasts, new products,
unpublished financial statements, budgets, projections, licenses,
prices, costs, and customer and supplier lists. The development
and acquisition of the Proprietary Information are the result of
great effort and expense on the part of the Company and are
critical to the success and survival of the Company.
3. All Proprietary Information shall be the sole property of
the Company and its assigns, and the Company and its assigns
shall be the sole owner of all patents, copyrights, and other
rights in connection therewith. I hereby assign to the Company
any rights I may have or acquire in such Proprietary Information.
At all times, both during my employment by the Company and after
its termination for whatever reason, I will keep in strictest
confidence and trust all Proprietary Information, and I will not
use or disclose any Proprietary Information without the written
consent of the Company, except as may be necessary in the
ordinary course of performing my duties as an employee of the
Company.
4. I agree that during the period of my employment by the
Company, I will not, without the Company's express written
consent, engage in any employment or business other than for the
Company.
5. In the event of the termination of my employment by me or by
the Company for any reason, I will deliver to the Company all
documents, notes, drawings, specifications, data, and other
materials of any nature pertaining to my work with the Company
and I will not take with me any of the foregoing, any
reproduction of any of the foregoing, or any Proprietary
Information that is embodied in a tangible medium of expression.
6. I will promptly disclose to the Company (or any persons
designated by it) all discoveries, developments, designs,
improvements, inventions, formulas, processes, techniques, know-
how, programs, and data, whether or not patentable or registrable
under copyright or similar statutes, made or conceived or reduced
to practice or learned by me, either alone or jointly with
others, during the period of my employment that are related to or
useful in the business of the Company, result from tasks assigned
to me by the Company, or result from the use of premises owned,
leased, or contracted for the Company (all such discoveries,
developments, designs, improvements, inventions,
27
formulas,processes, techniques, programs, know-how, and data are
hereinafter referred to as "Inventions"). I will also promptly
disclose to the Company, and the Company hereby agrees to receive
all such disclosures in confidence, all other discoveries,
developments, designs, improvements, inventions, formulas,
processes, techniques, programs, strategies, know-how, and data,
whether or not patentable or registrable under copyright or
similar statutes, made or conceived or reduced to practice or
learned by me, either alone or jointly with others, during the
period of my employment for the purpose of determining whether
they constitute "Inventions" as defined above.
7. I agree that all Inventions shall be the sole property of
the Company and its assigns, and the Company and its assigns
shall be the sole owners of all patents, copyrights, and other
rights in connection therewith. I hereby assign to the Company
any rights I may have or acquire in such Inventions. I further
agree as to all such Inventions to assist the Company in every
proper way (but at the Company's expense) to obtain and from time
to time enforce patents, copyrights, and other rights and
protections relating to said Inventions in any and all
countries, and to that end I will execute all documents for use
in applying for and obtaining such patents, copyrights, and other
rights and protections on and enforcing such Inventions, as the
Company may desire, together with any assignments thereof to the
Company or persons designated by it. My obligation to assist the
Company in obtaining and enforcing patents copyrights, and other
rights and protections relating to such Inventions in any and all
countries shall continue beyond the termination of my employment,
but the Company shall compensate me at a reasonable rate after my
termination for time actually spent by me at the Company's
request on such assistance. In the event the Company is unable,
after reasonable effort, to secure my signature on any document
or documents needed to apply for or prosecute any patent,
copyright or other right of protection relating to an Invention,
whether because of my physical or mental incapacity or for any
other reason whatsoever, I hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents
as my agent and attorney-in-fact, to act for and in my behalf and
stead to execute and file any such application or applications
and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyrights, or similar
protections thereon with the same legal force and effect as if
executed by me.
8. As a matter of record I have identified on item 1 of Exhibit
A all inventions or improvements relevant to the subject matter
of my employment by the Company that have been
28
made or conceived or first reduced to practice by me alone or jointly with
others prior to my engagement by the Company and that I desire to remove
from the operation of the Agreement. I represent and warrant
that such list is complete. If there is no such list on Exhibit
A, I represent that I have made no such inventions and
improvements at the time of signing this Agreement.
9. I represent that my performance of all the terms of this
Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence proprietary
information acquired by me in confidence or in trust prior to my
employment by the Company. I have not entered into, and I agree
I will not enter into, any agreement either written or oral in
conflict herewith.
10. I represent, as part of the consideration for the offer of
employment extended to me by the Company and of my employment or
continued employment by the Company, that I have not brought and
will not bring with me to the Company for use in the performance
of any responsibilities at the Company any materials or documents
of a former employer that are not generally available to the
public, unless I have obtained express written authorization from
the former employer for their possession and use.
Accordingly, this is to advise the Company that the only
materials or documents of a former employer that are not
generally available to the public that I will bring to the
Company or use in my employment are identified on item 2 of
Exhibit A (if attached hereto), and as to each such item, I
represent that I have obtained express written authorization
for their possession and use in my employment with the Company.
11. I also understand that, in my employment with the Company, I
am not to breach any obligation of confidentiality that I have to
former employers, and I agree that I shall fulfill all such
obligations during my employment with the Company.
12. I agree that during the period of my employment with the
Company and for a period of twelve (12) months following the
termination of my employment by me or by the Company for any
reason, I will not without the express written consent of the
Company, directly or indirectly, engage in any business anywhere
in the United States of America which is engaged in design,
development, marketing or sale of computer software or integrated
systems which software or systems are intended for use in
computer aided design and/or computer aided engineering. It is
29
understood that I shall be deemed to be engaged in a business of
the type referred to above if I am a director, officer, employee,
trustee, agent or partner of or consultant to any person, firm,
corporation, association, trust or other entity which is engaged
in such a business or if I or any member of my immediate family
owns, directly or indirectly, stock or shares of beneficial
interest or otherwise has a financial interest in such a firm,
corporation, association, trust or otherwise; provided, however,
that my ownership of one percent (1%) or less of the stock of a
company whose shares are listed on a national securities exchange
or on the automated quotation system of the National Association
of Securities Dealers shall not be deemed to be engaging
indirectly in the business of such company. The term "immediate
family" as used in this Agreement includes spouses and ancestors,
descendants, siblings and spouses of any of them.
13. I agree that during the period of my employment with the
Company and for a period of twelve (12) months following the
termination of my employment by me or by the Company for any
reason, I will not persuade, induce or encourage any other
employee of the Company to join or form any other corporation,
partnership, association, joint venture or business entity of any
kind engaged in, or to be engaged in the future in, the design,
development, marketing or sale of computer software or integrated
systems which software or systems are intended for use in
computer aided design and/or computer aided engineering, or in
any other business then engaged in by the Company.
14. As used in this Agreement, the period of my employment
includes any time during which I may be retained by the Company
as an employee or a consultant or act as a director.
15. This agreement shall be effective as of the day of my
employment by the Company, set forth on the signature page of
this Agreement.
16. In case any provision of this Agreement shall be determined
to be invalid or unenforeceable under applicable law, by reason
of being vague or unreasonable as to duration, or geographic
scope or scope of activities restricted, or for any other reason,
such provision shall, insofar as possible, be construed or
applied in such manner as will permit enforcement. If any
provision of this Agreement cannot be enforced at all, the
remaining provisions of this Agreement shall remain in effect and
shall be construed as though such provision had never been made a
part hereof. This Agreement shall be governed by and construed
in accordance with the laws of The Commonwealth of Massachusetts.
30
17. This Agreement shall be binding upon me, my heirs,
executors, assigns, and administrators and shall inure to the
benefit of the Company and its successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, intending the same to take effect as a sealed
instrument.
Date of Employment: Oct. 1, 1984 Xxxxx X. Xxxxxxx
-------------- --------------------
(Signature of Employee)
0 Xxxxxxxx Xx, Xxxxxxxxxx
--------------------------
(Address)
QUALOGY SYSTEMS, INC.
By: Xxx Xxxxxxx
---------------
Title: VP of Finance &
Treasurer
---------------
Date Executed: Oct. 5, 1984
--------------
31
EXHIBIT A
---------
Item 1
------
Previous Inventions or improvements, if any:
NONE
Item 2
------
Materials or documents of former employer(s), if any:
NONE
32
