EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the 5th day of December
2011, between Progress Software Corporation, a Massachusetts corporation (the “Company”) and Xxx X.
Xxxxx, an individual residing at 00 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the “Executive”).
R E C I T A L S
A. The Company wishes to employ Executive, and Executive wishes to be employed by the Company.
B. The Board of Directors of the Company (the “Board”) has determined that it is in the best
interest of the Company and its stockholders to enter into this Agreement setting forth the terms
and conditions of Executive’s employment with the Company.
C. Executive accepts the terms of the Agreement.
D. Certain capitalized terms used in this Agreement are defined in Section 9 below.
In consideration of the mutual covenants herein contained and in consideration of the
continuing employment of Executive by the Company, the parties agree as follows:
1. Duties and Scope of Employment.
(a) Position and Duties. Effective December 5, 2011 (the “Commencement Date”), the
Company will employ Executive as President and Chief Executive Officer of the Company, reporting
directly to the Board. Executive will render such business and professional services in the
performance of his duties commensurate with his title and position, as are reasonably assigned to
him by the Board. The period of Executive’s employment under this Agreement is referred to herein
as the “Employment Period.”
(b) Board Membership. At the first regularly scheduled Board meeting which follows
the Commencement Date, Executive will be elected by the Board to serve as a member of the Board.
During the Employment Period, Executive will be considered as a candidate for re-election at each
annual meeting of the Company’s stockholders.
(c) Obligations. During the Employment Period, Executive will devote Executive’s full
business time and best efforts to the business of the Company. Executive will at all times comply
with the Company’s Code of Conduct. During the Employment Period, Executive will not engage in any
employment, occupation, consulting or other similar activity without the Board’s prior written
consent; provided, however, that Executive may (i) serve in any capacity
(consistent with position and duties) with any professional, community, industry, civic (including
governmental boards), educational, charitable, or other non-profit organization, (ii) serve on any
for-profit entity board, with the Board’s prior written consent, and (iii) subject
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to the Company’s Code of Conduct, make investments in other businesses and manage Executive’s
and Executive’s family’s personal investments and legal affairs;provided that any such
activities described in clauses (i)-(iii) above do not interfere with the performance of
Executive’s duties for the Company and do not otherwise violate this Agreement or any other written
agreement between the Company and Executive.
2. At-Will Employment. Executive and the Company agree that Executive’s employment
with the Company constitutes “at-will” employment. Executive and the Company acknowledge that this
employment relationship may be terminated at any time, upon written notice to the other
party, with or without good cause or for any or no cause, at the option either of the Company or
Executive. However, as described in this Agreement, Executive shall be entitled to severance
benefits in accordance with the terms of this Agreement.
(a) Notice of Termination. In the case of termination of Executive’s employment by
the Company for any reason, such termination may be effective immediately or upon such future date
as may specified by the Company. In the case of Executive’s voluntary resignation (which is not an
Involuntary Termination), Executive shall provide the Company with not less than 90 days’ prior
notice, which may be waived by the Company in its sole discretion (in which case the voluntary
resignation shall be effective immediately or upon a date specified by the Company), provided that
the Company shall pay and provide Executive his continued salary and employee benefits during any
such waived period, but Executive’s unvested equity awards shall not continue to vest, and the
exercise periods of those awards shall not be extended, by the continuation of such payments and
benefits. In the case of an Involuntary Termination, Executive’s employment with the Company
shall terminate on the 31st day following notice from Executive under Section 10(c)(ii) below
(which may be accelerated by the Company in its sole discretion to the date that such notice is
given).
(b) Other Offices Held. Executive agrees to resign from all positions that he holds
with the Company or any affiliate, including, without limitation, his positions as an officer or
director of the Company or of any affiliate of the Company and as a member of the Board,
immediately following the termination of his employment if the Company so requests. Executive
hereby irrevocably appoints the Company to be his attorney-in-fact to execute such documents and to
take such actions in his name and on his behalf that may be necessary to effect Executive’s
resignation and removal as a director and officer of the Company or any affiliate, should Executive
fail to resign following a request from the Company to do so. A written notification signed by a
director or duly authorized officer of the Company that any instrument, document or act falls
within the appointment of authority conferred by this paragraph (b) will be conclusive evidence
that it does so. The Company will prepare any documents, pay any filing fees, and bear any other
expenses related to this paragraph.
3. Compensation.
(a) Base Salary. During the Employment Period, Executive will be paid an annual
salary of $700,000.00 as compensation for his services (the “Base Salary”), payable on regular pay
dates of the Company and subject to applicable employment tax, income tax and
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other customary withholdings. The Board or the Compensation Committee of the Board will
review the Base Salary no less frequently than annually, with the first review expected to occur
with respect to fiscal year 2013. The Board or the Compensation Committee of the Board may
increase, but shall not decrease, Executive’s Base Salary and if adjusted, such adjusted amount
will become the Base Salary for all purposes under this Agreement.
(b) Annual Bonus. Executive will be entitled to participate in the Company’s Executive
and Key Contributor Bonus program at an annual (fiscal year) target bonus of 150% of Base Salary
(the “Target Bonus”). Executive’s fiscal year 2012 Target Bonus will be payable upon achievement
of performance goals to be established in good faith by the Compensation Committee of the Board
(the “Committee”). Executive will have the opportunity to discuss such performance goals with the
Committee prior to such goals being established. Bonuses, if any, will accrue and become payable
in accordance with the Committee’s standard practices for paying executive incentive compensation;
provided, that any bonus payable under this Section 3(b) will be earned on the last day of the
Company’s fiscal year to which it relates and will be paid within sixty (60) days after the end of
such fiscal year.
(c) Equity Compensation. Subject to the Committee’s approval, on or as soon as
administratively practicable following the Commencement Date, Executive will be granted a new hire
equity award consisting of 900,000 stock options (“New Hire Option Award”) and 200,000 restricted
stock units (“New Hire RSU Award”).
(i) New Hire Option Award. The New Hire Option Award will have an exercise price
equal to the closing price of the Company’s common stock on the NASDAQ Global Stock Market on the
date of grant. Subject to continued employment, the New Hire Option Award will vest monthly over
four years commencing on the date of grant, with vesting beginning six months after the
Commencement Date (with 12.5% of the award being vested in the first installment on the six (6)
month anniversary, and the remainder vesting in 42 equal monthly installments). The New Hire
Option Award will otherwise be subject to the Company’s then standard terms and conditions for
executive stock option grants, except as otherwise provided in this Agreement or in the XXXX (as
defined below).
(ii) New Hire RSU Award. Subject to continued employment, the New Hire RSU Award will
vest in accordance with the following schedule: 50,000 restricted stock units will vest on April
1, 2012 and 50,000 restricted stock units will vest on October 1, 2012. The remaining 100,000
restricted stock units will vest semi-annually over the subsequent two years. The New Hire RSU
Award will otherwise be subject to the Company’s then standard terms and conditions for executive
restricted stock unit awards, except as otherwise provided in this Agreement or in the XXXX.
(iii) Future Equity Awards. Executive shall be eligible for additional future equity
awards as customarily granted to executive officers beginning in fiscal year 2013, determined in
the sole discretion of the Committee. Such awards if any will be granted at the same time as
annual awards are granted to other senior executives of the Company, but in no
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event later than the first meeting of the Board of Directors that follows the annual
shareholder meeting each year.
4. Employee Benefits; Vacation. During the Employment Period, Executive will be
eligible to participate in all Company employee benefit plans, policies, and arrangements that are
applicable to other senior executives of the Company, as such plans, policies, and arrangements may
be in effect from time to time, and subject to the terms thereof. Executive will be entitled to
vacation in accordance with the standard written policies of the Company.
5. Expenses. The Company will reimburse Executive for reasonable travel,
entertainment, and other business expenses incurred by Executive in the furtherance of the
performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement
policy as in effect from time to time.
6. Indemnification. The Company agrees that if Executive is made a party, or is
threatened to be made a party or witness, to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a “Proceeding”), by reason of the fact that Executive is
or was a director, officer or employee of the Company or is or was serving at the request of the
Company as a director, officer, member, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, including service with respect to Company benefit plans,
whether or not the basis of such Proceeding is Executive’s alleged action in an official capacity
while serving as a director, officer, member, employee or agent, Executive will be indemnified and
held harmless by the Company to the fullest extent legally permitted or authorized by the Company’s
articles of organization or bylaws or resolutions of the Board, or by the laws of the Commonwealth
of Massachusetts, against all costs, expenses, liabilities and losses (including attorneys’ fees,
judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974 or the
Internal Revenue Code of 1986, as amended (the “Code”), or penalties and amounts paid or to be
paid in settlement) incurred or suffered by Executive in connection therewith, and such
indemnification will continue as to Executive even if Executive has ceased to be a director,
officer, member, employee or agent of the Company or other entity and will inure to the benefit of
Executive’s heirs, successors, personal representatives, assigns, executors and administrators.
The Company shall cause Executive to be designated as a “Covered Person” under the Company’s
Directors and Officers Liability Insurance Policy for actions taken during the Employment Period.
7. Severance. Simultaneously with the execution of this Agreement, Executive and the
Company are also entering into an Employee Retention and Motivation Agreement (the “XXXX”), which
provides Executive with certain benefits upon a “Change of Control” (as defined therein). Section
8(b) below shall be applicable in the event an Involuntary Termination (as defined below) occurs
under circumstances other than those circumstances under which the XXXX shall be applicable. In
the event an Involuntary Termination occurs during the term of this Agreement in circumstances
under which the XXXX shall be applicable, any and all severance and other separation benefits to be
paid to Executive shall be governed by the terms and conditions of the XXXX and not Section 8(b)
below.
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8. Termination Benefits; Severance.
(a) If the Executive’s employment is terminated by the Company or the Executive for any reason
or no reason (except as stated in (iii) below), then the Executive shall be entitled to the
following:
(i) All accrued but unpaid Base Salary through the Termination Date, to be paid in a lump sum
cash payment within thirty (30) days following the Termination Date or sooner if required by law;
(ii) Pay for any vacation time earned but not used through the Termination Date, to be paid in
a lump sum cash payment within thirty (30) days following the Termination Date or sooner if
required by law;
(iii) Except in the event that Executive’s employment is terminated for Cause, any bonus
compensation awarded for the fiscal year preceding that in which the termination occurs, but unpaid
on the Termination Date, to be paid and provided in accordance with Section 3(b) above;
(iv) Any unpaid or unreimbursed business expenses incurred and documented in accordance with
the Company’s expense reimbursement policy then in effect by the Executive, to the extent incurred
during the Employment Period, to be paid in a lump sum cash payment within thirty (30) days
following the Termination Date; and
(v) Any accrued but unpaid benefits provided under the Company’s employee benefit plans, to be
paid and provided in accordance with the terms of the applicable plan.
(b) Involuntary Termination. Subject to Section 7 above, if Executive’s employment is
terminated as a result of an Involuntary Termination and such termination also constitutes a
“separation from service” within the meaning of Section 409A of the Code, then Executive shall be
entitled to the following:
(i) For a period of twelve (12) months after the Termination Date, the Company will pay an
amount equal to Executive’s total Target Compensation in equal installments over such 12 months in
accordance with the Company’s normal payroll practices and procedures and subject to all applicable
deductions and withholdings. Such payments shall commence on the first payroll date that occurs
thirty (30) days or more after the Termination Date. Solely for purposes of Section 409A of the
Code, each installment payment is considered a separate payment.
(ii) For a period of twelve (12) months after the Termination Date, the Company shall be
obligated to provide Executive with benefits that are substantially equivalent to Executive’s
benefits (medical, dental, vision and life insurance) that were in effect immediately prior to the
Involuntary Termination.
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(iii) All unvested stock options held by Executive which were granted prior to the Termination
Date under the Company’s stock option or equity incentive plans which would otherwise vest and
become fully exercisable during the twelve month period following the Termination Date shall
instead accelerate and become fully exercisable as of the Termination Date.
(iv) All shares of restricted equity held by Executive which were granted prior to the
Termination Date under the Company’s stock option or equity incentive plans which would otherwise
become nonforfeitable and not subject to any restrictions during the twelve month period following
the Termination Date shall instead become nonforfeitable and not subject to any restrictions as of
the Termination Date.
(v) Notwithstanding the foregoing, in the event of an Involuntary Termination within the
twelve months immediately following the Commencement Date, the references to “twelve (12)” in
Sections 8(b)(i)-(iv) inclusive shall be replaced with “twenty-four (24).”
Anything in this Agreement to the contrary notwithstanding, if, during the Employment Period,
the Company shall maintain a severance plan then applicable to members of the Company’s Executive
Committee providing severance benefits greater than those provided in this Section 8(b) with
respect to an Involuntary Termination, then Executive shall be entitled to such greater severance
benefits; provided, however, that this clause shall not apply to any executive
separation agreements between the Company and members of the Company’s Executive Committee in
effect as of the date of this Agreement.
(vi) Anything in this Agreement to the contrary notwithstanding, if at the time of Executive’s
separation from service (within the meaning of Section 409A of the Code), Executive is considered a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment
that Executive becomes entitled to under this Agreement is considered deferred compensation subject
to interest and additional tax imposed pursuant to Section 409A(a) of the Code as a result of the
application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable prior to
the date that is the earliest of (A) six months after Executive’s “separation from service” (within
the meaning of Section 409A of the Code), (B) Executive’s death, or (C) such other date as will
cause such payment not to be subject to such interest and additional tax. If any such delayed cash
payment is otherwise payable on an installment basis, the first payment shall include a catch-up
payment covering amounts that would otherwise have been paid during the six-month period but for
the application of this provision, and the balance of the installments shall be payable in
accordance with their original schedule. The parties agree that this Agreement may be amended, as
reasonably requested by either party and as may be necessary to comply fully with Section 409A of
the Code and all related rules and regulations in order to preserve the payments and benefits
provided hereunder without additional cost to either party.
(c) Voluntary Resignation. If Executive’s employment terminates by reason of
Executive’s voluntary resignation (which is not an Involuntary Termination), then Executive
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shall not be entitled to receive any severance payments or other benefits except for such
benefits (if any) as specified in Section 8(a) above or as specifically required by applicable law,
and the Company shall have no obligation to provide for the continuation of any health and medical
benefit or life insurance plans in effect on the date of such termination, other than as
specifically required by applicable law.
(d) Disability; Death. If the Company terminates Executive’s employment as a result
of Executive’s Disability, or Executive’s employment is terminated due to the death of Executive,
then Executive shall not be entitled to receive any severance payments or other benefits except for
those (if any) as may then be established under the Company’s severance guidelines and benefit
plans in effect at the time of such Disability or death.
(e) Termination for Cause. If the Company terminates Executive’s employment for
Cause, then Executive shall not be entitled to receive any severance payments, bonus payments, or
other benefits following the date of such termination, other than such payments and benefits as
specified in Section 8(a) above or as specifically required by applicable law, and the Company
shall have no obligation to provide for the continuation of any health and medical benefit or life
insurance plans in effect on the date of such termination, other than as specifically required by
applicable law.
9. Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:
(a) Cause “Cause” shall mean (i) any act of personal dishonesty taken by the
Executive in connection with his responsibilities as an employee and intended to result in
substantial personal enrichment of the Executive; (ii) the conviction of a felony; (iii) a willful
act by the Executive which constitutes gross misconduct and which is injurious to the Company; (iv)
material breach of a material provision of this Agreement or of the Proprietary Information
Agreement (which is not cured within 30 days following notice); or (v) continued violations by
Executive of his obligations as an employee of the Company which are demonstrably willful and
deliberate on the Executive’s part after there has been delivered to Executive a written demand for
performance from the Company which describes the basis for Company’s belief that Executive has not
substantially performed his duties.
(b) Disability. “Disability” shall mean that Executive has been unable to perform his
duties as an employee of the Company as the result of incapacity due to physical or mental illness,
and such inability, at least twenty-six (26) weeks after its commencement, is determined to be
total and permanent by a physician selected by the Company or its insurers and acceptable to
Executive or Executive’s legal representative (such agreement as to acceptability not to be
unreasonably withheld). Termination resulting from Disability may only be effected after at least
thirty (30) days’ written notice by the Company of its intention to terminate Executive’s
employment. In the event that Executive resumes the performance of substantially all of his duties
as an employee of the Company before termination of his employment becomes effective, the notice of
intent to terminate shall automatically be deemed to have been revoked.
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(c) Involuntary Termination “Involuntary Termination” shall mean that either (i) that
the Company has terminated Executive’s employment other than for Cause, Disability or Executive’s
death, or (ii) that the conditions set forth in of subsections (i), (ii) and (iii) below have all
occurred:
(i) Any of the following “Events” occurs without Executive’s prior written consent during the
term of this Agreement:
| (A) | the (x) assignment to Executive of any duties or the significant reduction of Executive’s duties, either of which is materially inconsistent with Executive’s position with the Company and responsibilities in effect immediately prior to such assignment, or (y) the removal of Executive from such position and responsibilities, which is not effected for Disability or for Cause (for the avoidance of doubt, the failure of Executive to be nominated or elected as a member of the Board shall be a material diminution in responsibilities); | ||
| (B) | a material reduction by the Company in the Base Salary and/or Target Bonus of Executive as in effect immediately prior to such reduction; | ||
| (C) | the relocation of Executive to a facility or a location more than fifty (50) miles from Executive’s then present location, without Executive’s express written consent; | ||
| (D) | any purported termination of Executive by the Company which is not effected for death or disability or for Cause, or any purported termination for Cause for which the grounds relied upon are not valid; or | ||
| (E) | A material breach of this Agreement by the Company. |
(ii) Within sixty (60) days after the first occurrence of an Event described in Sections
9(c)(i)(A)(y), (B), (C) or (D) or within 120 days of an Event described in Sections 9(c)(i)(A)(x)
or (E), Executive provides written notice to the Company describing with reasonable specificity the
Event and stating his intention to resign from employment due to such Event; and
(iii) Either the Company does not cure, or cause to be cured, such Event within thirty (30)
days after receipt of Executive’s notice or the Company in its sole discretion concedes the
occurrence of such Event and gives notice that it does not intend to cure such Event.
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(d) Target Compensation. “Target Compensation” shall mean the sum of Executive’s Base
Salary and Target Bonus.
(e) Termination Date. “Termination Date” shall mean the date Executive’s employment
with the Company terminates.
10. Conditions to Receipt of Severance. The Company’s obligation to pay any
severance pursuant to Section 8(b) will be subject to the performance by Executive of his
obligations as follows:
(a) Separation Agreement and Release of Claims. Executive shall sign and return to
the Company (without revoking) a separation agreement and release of claims, the form of which
shall agreed upon by the parties within thirty (30) days of the Commencement Date, by the deadline
specified therein, which shall in all events be no later than the thirtieth (30th) day following
the Termination Date. Such agreement will provide (among other things) that Executive will not
disparage the Company, its directors, or its executive officers during the Restricted Period (as
defined below). The Company will have no obligation to make any payment under Section 8(b) or
otherwise except as specifically required by law until it has received an effective separation and
release of claims agreement, and the return of all Company property under Section 10(b).
(b) Return and Protection of Company Property. Executive shall return to the Company
all Company documents and property no later than five (5) days after the Termination Date, and he
shall abide by the terms of the Employee Proprietary Information and Confidentiality Agreement
being entered into by the Company and Executive simultaneously with the execution of this Agreement
(the “Proprietary Information Agreement”).
(c) Cooperation. Executive shall make himself available to the Company after the
Termination Date and through the end of the period with respect to which severance is paid or
payable either by telephone or in person upon reasonable notice and with reasonable accommodation
to Executive’s personal and business affairs, to assist the Company in connection with any matter
relating to services performed by Executive on behalf of the Company prior to the Termination Date.
Executive, also upon reasonable notice and with reasonable accommodation to his personal and
business affairs, further agrees to reasonably cooperate with the Company in the defense or
prosecution of any claims or actions now in existence or which may be brought or threatened in the
future against or on behalf of the Company, its directors, shareholders, officers, or employees and
which relates to the aforesaid services, including without limitation, by meeting with the
Company’s counsel and appearing to testify truthfully in any proceeding without the necessity of a
subpoena. The Company shall reimburse Executive for his reasonable documented expenses incurred in
connection with such cooperation. Notwithstanding the aforesaid, Executive’s obligations set forth
above shall not apply to any proceeding in which Executive’s interests are adverse to those of the
Company. Reimbursements of expenses shall be paid within thirty (30) days of the Company’s receipt
of an invoice from Executive or his designee for the same. Any reimbursement in one calendar year
shall not affect the amount that may be reimbursed in any other calendar year and a
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reimbursement (or right thereto) may not be exchanged or liquidated for another benefit or
payment. Any business expense reimbursements subject to Section 409A of the Code shall be made no
later than the end of the calendar year following the calendar year in which such business expense
is incurred by Executive. Executive shall submit any such expense requests in a sufficiently
timely manner so as to permit the Company to comply with the previous sentence.
(d) Non-Competition.
(i) Executive recognizes the highly competitive nature of the Company’s business and that
Executive’s position with the Company and access to and use of the Company’s confidential records
and proprietary information renders Executive special and unique. Executive hereby agrees that for
a period of twelve (12) months from the Termination Date (the “Restricted Period”), he shall not,
directly or indirectly, own, manage, operate, join, control, participate in, invest in or otherwise
be connected or associated with, in any manner, including as an officer, director, employee,
independent contractor, stockholder, member, partner, consultant, advisor, agent, proprietor,
trustee or investor, any Competing Business (as defined below); provided, however, that (i)
ownership of two percent (2%) or less of the stock or other securities of a publicly traded
corporation and (ii) passive ownership of less than a five percent (5%) interest as a limited
partner of a venture capital fund, private equity fund or similar investment vehicle or ownership
of shares in a mutual fund shall not constitute a breach of this Section, in each case under this
clause (ii), with respect to which Executive has no role in the review, selection or management of
any investments. For purposes hereof, the term, “Competing Business,” shall mean IBM/WebSphere
Unit, Tibco, Informatica, Software AG and Oracle and, in each case, their respective subsidiaries.
(ii) Executive acknowledges that the business of the Company is worldwide in scope and
therefore understands and agrees that there is no geographic limitation on the scope of this
Section 10(d). Executive further agrees that the nature of the Company’s confidential information
and the goodwill relationship that were developed for the Company during Executive’s employment
support the continuation of the restrictions pursuant to this Section for twelve (12) months.
Notwithstanding the foregoing, if a court determines that the geographic scope of this Section or
the length of the Restricted Period is excessive, the parties agree that this Section should be
enforced to the maximum extent that the court determines to be permissible.
(iii) The parties agree that, throughout his employment with the Company, Executive has been
obligated to render personal services of a special, unique, unusual, extraordinary and intellectual
character, thereby giving this Agreement special value, and, in the event of a breach of the
covenants of Executive in this Section 10, the injury or imminent injury to the value and the
goodwill of the Company’s business could not be reasonably or adequately compensated in damages in
an action at law. Accordingly, Executive acknowledges that, in addition to any other remedies that
may be awarded, the Company shall be entitled to receive specific performance, injunctive relief or
any other equitable remedy
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against Executive, without the posting of a bond, in the event of any breach of any provision
of this Agreement by Executive. In addition, in the event Executive breaches this Section 10 of
this Agreement, such breach will entitle the Company, without posting of a bond, to an injunction
prohibiting Executive from violating the terms of this Section 10.
(iv) Notwithstanding the foregoing, in the event of an Involuntary Termination within the
twelve months immediately following the Commencement Date, the references to “twelve (12)” in this
Section 10(d) shall be replaced with “twenty-four (24)”.
(e) Breach of Obligations. Anything to the contrary contained herein notwithstanding,
but except solely as specifically required by applicable law, in the event that Executive
materially breaches the separation agreement and release of claims or the Proprietary Information
Agreement or Executive’s obligations under Section 10(a), (b) or (d) above, the Company: (i) shall
have no obligations to make any further payments under Section 8(b) above, or to otherwise pay any
severance or benefits otherwise owed under this Agreement following the termination of Executive’s
employment (and all such obligations shall be terminated), and (ii) shall have the full and
unfettered right to recover from Executive all payments that may have been made under Section 8(b)
above, and all severance or severance benefits otherwise paid under this Agreement following the
termination of Executive’s employment. The termination under this paragraph of the Company’s
payment obligations or its recovery of amounts paid shall have no effect on Executive’s continuing
obligations under this Agreement, including without limitation Executive’s obligations under
Section 10(a), (b) and (d) above.
11. Successors.
(a) Company’s Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise) or to all or
substantially all of the Company’s business and/or assets shall assume the obligations under (and
be entitled to the benefits of and to enforce) this Agreement and shall expressly agree to perform
the obligations under this Agreement in the same manner and to the same extent as the Company would
be required to perform such obligations in the absence of a succession. For all purposes under
this Agreement, the term “Company” shall include any successor to the Company’s business and/or
assets which executes and delivers an assumption agreement described in this subsection (a) or
which becomes bound by the terms of this Agreement by operation of law.
(b) Executive’s Successors. The terms of this Agreement and all rights of Executive
hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributes, devisees and legatees.
12. Notice.
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(a) General. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the
case of Executive, mailed notices shall be addressed to him or her at the home address which he or
she most recently communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall be directed to the
attention of its General Counsel.
(b) Notice of Termination by the Company. Any termination by the Company of
Executive’s employment with the Company shall be communicated by notice given to Executive in
accordance with Section 12(a) of this Agreement. Such notice shall specify the termination date
and whether the termination is considered by the Company to be for Cause as defined in Section 9(a)
in which case the Company shall identify the specific subsection(s) of Section 9(a) asserted by the
Company as the basis for the termination and shall set forth in reasonable detail the facts and
circumstances relied upon by the Company in categorizing the termination as for Cause.
13. Miscellaneous Provisions.
(a) No Duty to Mitigate. Executive shall not be required to mitigate the amount of
any payment contemplated by this Agreement (whether by seeking new employment or in any other
manner), nor shall any such payment be reduced by any earnings that Executive may receive from any
other source.
(b) Waiver. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed in writing and signed by Executive and by an
authorized officer of the Company (other than Executive). No waiver by either party of any breach
of, or non-compliance with, any condition or provision of this Agreement by the other party shall
be considered a waiver of any other condition or provision of the same condition or provision at
another time.
(c) Entire Agreement. This Agreement, the XXXX and the Proprietary Information
Agreement represent the entire agreement of the Company and Executive and will supersede any and
all previous term sheets, negotiations, memoranda, contracts, arrangements, discussions or
understandings between the Company and Executive.
(d) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the Commonwealth of Massachusetts. The parties each
hereby (i) agree that all legal proceedings arising out of or in connection with this Agreement
shall be brought, and (ii) irrevocably consent and agree to the exercise of personal jurisdiction,
exclusively in the appropriate state and federal courts within the Commonwealth of Massachusetts.
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(e) Severability. The invalidity or enforceability of any provisions or provisions of
this Agreement shall not affect the validity or enforceability of any other provision hereof, which
shall remain in full force and effect.
(f) Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by final and binding arbitration in Massachusetts, in
accordance with the rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator’s award in any court having jurisdiction.
(g) No Assignment of Benefits. The rights of any person to payments or benefits under
this Agreement shall not be made subject to option or assignment, either by voluntary or
involuntary assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor’s process, and any action in violation of this subsection
(g) shall be void.
(h) Employment Taxes. All payments made pursuant to this Agreement will be subject to
withholding of applicable income and employment taxes.
(i) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.
(j) Acknowledgment. Executive acknowledges that he has had the opportunity to
discuss this matter with and obtain advice from his private attorney, has had sufficient time to,
and has carefully read and fully understands all the provisions of this Agreement, and is knowingly
and voluntarily entering into this Agreement.
(k) No Conflict of Interest. Executive confirms that Executive has fully disclosed to
the Company, to the best of his knowledge, all circumstances under which Executive, Executive’s
immediate family and other persons who reside in Executive’s household have or may have a conflict
of interest with the Company. Executive further agrees to fully disclose to the Company any such
circumstances that might arise during Executive’s employment upon Executive’s becoming aware of
such circumstances.
(l) Other Agreements. Executive hereby represents that his performance of all the
terms of this Agreement and the performance of Executive’s duties as an employee of the Company
does not and will not breach any agreement to keep in confidence proprietary information, knowledge
or data acquired by Executive in confidence or in trust prior to employment with the Company.
Executive also represents that he is not a party to or subject to any restrictive covenants, legal
restrictions, policies, commitments or other agreements in favor of any entity or person that would
in any way preclude, inhibit, impair or limit Executive’s ability to perform his obligations under
this Agreement, including noncompetition agreements or nonsolicitation agreements, and Executive
further represents that his performance of the duties and obligations under this Agreement does not
violate the terms of any agreement to which Executive is a party.
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(m) Legal Expenses. The Company will reimburse Executive up to $35,000 for reasonable
expenses relating to legal advice obtained by him in connection with the negotiation and execution
of this Agreement. In the event of arbitration or litigation between the parties arising under
or in connection with this Agreement, the prevailing party shall be entitled to recover its
reasonable costs and attorneys’ fees.
(n) No Oral Modification, Waiver, Cancellation or Discharge. This Agreement may only
be amended, canceled or discharged or any obligations thereunder waived through a writing signed by
Executive and a representative of the Company duly authorized by the Board.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the date first above written.
| PROGRESS SOFTWARE CORPORATION |
||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: | Xxxxxxx X. Xxxx | |||
| Title: | Chairman of the Board | |||
| EXECUTIVE |
||||
| /s/ Xxx X. Xxxxx | ||||
| Xxx X. Xxxxx | ||||
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