Exhibit 10.6
EMPLOYMENT AGREEMENT
CONFIDENTIAL
Date
Executive Officer
Title
Continuity of management of Avid Technology, Inc. is a critical factor to the
continued growth and success of Avid. The Avid Board of Directors believes that
it is in the best interest of the Company to reinforce and encourage the
continued attention and dedication of key members of management to their
assigned duties.
In consideration of the mutual promises contained in this letter, it is hereby
agreed that Avid shall provide to you, and that you shall receive from Avid, the
benefits set forth in this letter ("Agreement") if your employment with Avid,
and its subsidiaries and affiliates, is terminated during the term of this
Agreement.
1. PURPOSE
This Agreement establishes certain basic terms and conditions relating to your
employment with Avid, and special arrangements relating to the termination of
your employment with Avid, for any reason other than: (i) your retirement; (ii)
your becoming totally and permanently disabled under the Avid long-term
disability plan or policy; or (iii) your death. This Agreement supersedes all
prior agreements with Avid related to this subject matter, and the special
severance benefits provided under this Agreement are to be provided instead of
any other Avid severance arrangements. The Avid severance policies and practices
are superseded except to the extent incorporated herein. Notwithstanding the
foregoing, neither your termination of employment nor anything contained in this
Agreement shall have any affect upon your rights under any tax qualified
"pension benefit plan", as such term is defined in the Employee Retirement
Income Security Act of 1974, as amended (ERISA); or any other "welfare benefit
plan" as defined in ERISA, including by way of illustration and not limitation,
any medical surgical or hospitalization benefit coverage or long-term disability
benefit coverage; or under any non-qualified deferred compensation arrangement,
including by way of illustration and not limitation, any stock incentive plan,
non-qualified pension plan, or phantom stock plan.
2. EMPLOYMENT
Avid agrees that, during the term of this Agreement, you will be employed with
Avid, in your present position or in a position that is comparable to your
present position in compensation, responsibility and stature and for which you
are suited by education and background and that:
(a) you are, and will continue to be, eligible to participate in any
employee benefit plan of Avid in accordance with its terms; and
(b) you will be entitled to the same treatment under any generally applicable
employment policy or practice as any other member of Senior Management
(defined as positions reporting to the Chief Executive Officer, or other such
Vice Presidents as applicable) whose position in the organization is
comparable to yours, except when plan provisions explicitly prohibit such
treatment.
Those plans, practices, and policies that generally apply to other members of
Senior Management will be referred to in this Agreement as your "Employment
Benefits." Examples of Employment Benefits include medical and dental insurance,
life insurance, disability coverage, etc. Your Employment Benefits may be
modified from time to time after the date hereof without violation of this
Agreement if the changes apply generally to other members of management.
3. TERM OF AGREEMENT
This Agreement is effective on Date, (the "Effective Date") and shall terminate
on the second anniversary of the Effective Date. The term shall be automatically
extended for successive one year periods after the second anniversary, unless 30
days advance written notice is given by you or by Avid terminating this
Agreement as of any anniversary date.
4. TERMINATION OF EMPLOYMENT
Your employment may be terminated in accordance with any of the following
paragraphs, but only upon one (1) month's advance written notice (which period
shall be referred to in this Agreement as the "Notice Period"):
(a) Involuntary Termination
Avid may terminate your employment without Cause. In such an event, you shall
continue to receive your full salary and Employment Benefits during the Notice
Period. The expiration of the Notice Period shall be your "Date of
Termination." Upon your Date of Termination, you shall be entitled to those
benefits provided under Section 5.
(b) Involuntary Termination for Cause
Avid may terminate your employment for "Cause" with written notice setting
forth the Cause for termination. "Cause" means a willful engaging in gross
misconduct materially and demonstrably injurious to Avid or the willful and
continued failure by you substantially to perform your duties with the Company
(other than any such failure resulting from your incapacity due to physical or
mental illness after a written demand for substantial performance is delivered
to you by the CEO or the Board which specifically identifies the manner in
which the CEO or the Board believes that you have not substantially performed
your duties.. "Willful" means an act or omission in bad faith and without
reasonable belief that such act or omission was in or not opposed to the best
interests of Avid.
(c) Voluntary Termination
You may voluntarily terminate your employment. In such an event, you shall
continue to receive your full salary and Employment Benefits during the Notice
Period provided you satisfactorily perform your duties during the Notice
Period unless relieved of those duties by Avid. The expiration of the Notice
Period is your "Voluntary Date of Termination." Upon your Voluntary Date of
Termination, you shall only be provided those benefits under Section 6.
5. SPECIAL SEVERANCE BENEFITS
If your employment with Avid is involuntarily terminated in accordance with
Section 4(a), then you shall receive the following benefits:
(a) your base salary shall be continued in effect for a period of twelve (12)
months from your Date of Termination (hereinafter called your "Severance Pay
Period"); provided that you may, at any time during the Notice Period, request
a single lump-sum payment of the aggregate salary payable in accordance with
this paragraph 5(a), such payment to be delivered to you within ten (10)
business days of your Date of Termination. Avid will also pay you, during the
months thirteen through twenty-four following termination, on a semi-monthly
basis, the amount by which your monthly base salary at the time of termination
exceeds your monthly compensation from your new employer;
(b) you will receive an incentive compensation payment within ten (10) days of
your Date of Termination in one lump-sum in an amount equal to your target
award for the calendar year immediately preceding the calendar year in which
your Date of Termination occurs. There is no right to any pro-rated incentive
compensation in respect of the year of termination;
(c) notwithstanding any provision to the contrary in any Avid stock plan, or
under the terms of any grant, award agreement or form for exercising any right
under any such plan, you shall have the right to continued vesting of any
stock options outstanding and unexercised as of the first day of your Notice
Period until the first to occur of the first anniversary of your Date of
Termination or the date the award expires by its terms.
(d) your Employment Benefits shall be continued during your Severance Pay
Period, subject to the right of Avid to make any changes to your Employment
Benefits permitted in accordance with Section 2; provided, however, that you
shall not:
(i) accumulate vacation pay for periods after your Date of Termination;
(ii) first qualify for sickness and accident plan benefits by reason of an
accident occurring or a sickness first manifesting itself after your Date of
Termination; or
(iii) be eligible to continue to make any contributions to any Internal
Revenue Code 401(k) plan maintained by Avid or qualify for a share of any
employer contribution made to any tax qualified defined contribution plan.
(e) you shall qualify for full COBRA health benefit continuation coverage upon
the expiration of your Severance Pay Period;
(f) you shall be entitled to full executive outplacement assistance with an
agency selected by Avid; and
(g) you may qualify to commence long-term disability benefits if a qualifying
disability should occur during your Severance Pay Period.
6. BENEFITS UPON VOLUNTARY TERMINATION OR TERMINATION FOR CAUSE
Upon your Date of Termination for Cause in accordance with Section 4(b) or your
Voluntary Date of Termination in accordance with Section 4(c), all benefits
under this Agreement will be void. In such an event, you shall be eligible for
any benefits provided in accordance with the plans and practices of Avid which
are applicable to employees generally.
7. CONFIDENTIALITY
The provisions of the Employee Invention and Non-Disclosure Agreement between
you and Avid shall continue in full force and effect.
8. CONFLICTS OF INTEREST
You agree for so long as you are employed by Avid to avoid dealings and
situations which would create the potential for a conflict of interest with
Avid. In this regard, you agree to comply with the Avid policy regarding
conflicts of interest.
9. RELATIONSHIP TO CHANGE-IN-CONTROL AGREEMENT
In the event you become entitled to any benefits under the Change-in-Control
Employment Agreement between you and Avid, then this agreement is void and of no
effect.
10. COVENANT NOT TO COMPETE AND NOT TO SOLICIT
During the term of this Agreement, and for a period of two (2) years following
the termination of your employment for any reason other than as set forth in
Section 4(b), you agree you will not engage in any business which competes or
plans to compete with Avid in the business of the development, manufacture,
promotion, distribution or sale of digital film, video or audio editing systems
or products. The foregoing shall include, without limitation, Data Translation,
Discrete Logic, FAST Technology, Lightworks and Immix.
You also agree that, for a period of two (2) years from the effective date of
your termination, you will not solicit the employment, either as an employee or
as an independent contractor, including through any agency or new employer or
otherwise, of any person who at any time during the one year preceding such
solicitation was an employee or independent contractor of Avid or any Avid
affiliate.
11. NOTICE
Notice required or permitted under this Agreement shall be in writing and shall
be deemed to have been given when delivered or mailed by the United States
certified mail, return receipt requested, postage prepaid, in a properly
addressed envelope. Notices to Avid shall be addressed to the Corporate
Secretary.
12. MODIFICATION; WAIVER; SUCCESSORS
No provision of this Agreement may be waived, modified, or discharged except
pursuant to a written instrument signed by you and the Chief Executive Officer
of Avid. This agreement is binding upon any successor to all or substantially
all business or assets of Avid.
13. VALIDITY; COUNTERPARTS
This agreement shall be governed by and construed under the laws of the
Commonwealth of Massachusetts. The validity or enforceability of any provision
hereof shall not affect the validity or enforceability of any other provision
hereof. This Agreement may be executed in one or more counterparts, each of
which together will constitute one and the same instrument.
Accepted and Agreed Sincerely,
to this date of
________, 1997
By:______________________
____________________________ Xxxxxxx X. Xxxxxx
(name) Chief Executive Officer
