EXHIBIT 10.18
AGREEMENT RELATING TO EMPLOYMENT
Agreement dated June 1, 1994, by and between Frontier Software
Development, Inc., a Delaware corporation ("Frontier") and Xxxxxxxx Xxxxx, a
founder of Frontier ("Xx. Xxxxx").
INTRODUCTION AND BACKGROUND
Xx. Xxxxx is one of the founders of Frontier and in that capacity over the past
ten years has worked diligently, for long hours and for relatively low pay.
As a result of Xx. Xxxxx'x efforts, in the past year Frontier has
begun to experience growth and income as its products have started to become
sought after in the marketplace.
In recognition of Xx. Xxxxx'x efforts and desiring to continue to
retain Xx. Xxxxx'x services, the Board of Directors of Frontier has authorized
the granting of the benefits described in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is
acknowledged, the parties, intending to be legally bound, agree as follows:
1. TITLE AND DUTIES. Frontier hereby employs Xx. Xxxxx to serve
Frontier in the capacities of President and Chief Operating
Officer. In accordance with such position Xx. Xxxxx will have
appropriate responsibilities, duties and authority for the
management of Frontier, sufficient for the accomplishment of the
goals set for him by the Board of Directors to whom he shall be
responsible. Xx. Xxxxx shall use his best efforts in directing
the business of Frontier with the objective of providing maximum
profit and return on invested capital; establishing current and
long-range objectives, plans and policies subject to the approval
of the Board, and representing Frontier with its major customers,
the financial community and the public.
The term of this Agreement will be for five (5) years commencing
on June 1, 1994 and shall be automatically renewed for additional
one-year periods thereafter unless either Frontier or Xx. Xxxxx
gives the other written notice of non-renewal at least twelve
(12) months prior to the expiration of the original term or any
renewal term hereof.
Xx. Xxxxx'x salary and bonuses will be determined by the Board of
Directors on an annual basis based on the condition and prospects
of Frontier and the achievements of Xx. Xxxxx. Xx. Xxxxx will be
eligible for annual merit increases in accordance with Frontier's
compensation plan.
2. BONUS PLAN. Xx. Xxxxx will participate in Frontier's executive
incentive plan with a target level bonus of 40% and a maximum
bonus of 50% of base salary as outline in Frontier's executive
incentive plan as from time to time in effect.
3. BENEFITS. Frontier will provide Xx. Xxxxx with and shall pay for
$2,000,000 in life insurance. In addition Xx. Xxxxx will be
eligible for and receive all Frontier benefits, including but not
limited to, disability insurance at no less than 100% of salary,
eight (8) weeks of paid vacation, and Frontier's medical, dental
and vision care plans providing for family coverage as from time
to time in effect.
4. DEATH OF XX. XXXXX. If Xx. Xxxxx'x employment terminates by
reason of death, Frontier will have no severance obligations to
Xx. Xxxxx aside from the foregoing Frontier provided life
insurance; provided, however, if the proceeds of such life
insurance are not available to Xx. Xxxxx'x beneficiaries for any
reason, then Frontier will pay such beneficiaries an amount which
is equivalent to Xx. Xxxxx'x Xxxxxxxxx Pay (as defined below) as
if Xx. Xxxxx were terminated without Due Cause.
5. DISABILITY. If Xx. Xxxxx'x employment terminates because Xx.
Xxxxx is Disabled, then Frontier will pay Xx. Xxxxx an amount
equal to (a) his base salary minus (b) any payments he actually
receives under the disability policy provided for him by
Frontier. This amount will be paid monthly until he is no longer
Disabled. In addition during such period Frontier will provide
Xx. Xxxxx with all benefits in effect prior to his termination.
As used herein the terms "Disabled" and "Disability" shall have
the meanings set forth in the disability income insurance policy
provided for Xx. Xxxxx by Frontier.
6. TERMINATION WITHOUT DUE CAUSE. In the event that Xx. Xxxxx is
terminated by Frontier without Due Cause, as defined herein,
Frontier's sole liability to Xx. Xxxxx will be to pay the amounts
set forth in this Section. Specifically Frontier will pay Xx.
Xxxxx Severance Pay for a period of three (3) years as follows:
(a) for the first twelve (12) month period following such
termination an amount equal to the greater of (i) $175,000 and
(ii) Xx. Xxxxx'x base salary as of the date of termination, and
(b) for each subsequent period of twelve (12) months an amount
equal to 120% of the amount of Xx. Xxxxx'x Severance Pay for the
immediately preceding twelve (12) months. Payments of Severance
Pay will be made at such time as Frontier makes its normal
payroll payments. Notwithstanding the foregoing, Xx. Xxxxx'x
Severance Pay will be discontinued if Xx. Xxxxx secures
comparable alternative employment as to position and pay. During
the period in which Frontier is required to make payments of
Severance Pay to Xx. Xxxxx Frontier will continue to provide to
Xx. Xxxxx all benefits, reimbursement of expenses for his company
car, reimbursement for full out-placement assistance by a
counselor of Xx. Xxxxx'x choice up to a maximum of $25,000
reimbursement, and reimbursement for
2
reasonable travel and expenses (to the extent not reimbursed by
others) connected with Xx. Xxxxx'x efforts to seek comparable
employment.
7. TERMINATION FOR DUE CAUSE. In the event that Xx. Xxxxx is
terminated for Due Cause he will not be entitled to any severance
payment and Frontier will have all of the rights and remedies
available to it at law and in equity.
"Due Cause", as used herein, shall mean that (a) Xx. Xxxxx has
committed a willful, serious act, such as embezzlement, against
Frontier intending to enrich himself at the expense of Frontier
or, (e) the conviction of Xx. Xxxxx of a felonious crime, but not
a misdemeanor, involving moral turpitude. For purposes of this
paragraph, no act, or failure to act, on Xx. Xxxxx'x part shall
be considered "willful" unless done, or omitted to be done, by
Xx. Xxxxx, not in good faith and without reasonable belief that
Xx. Xxxxx'x action or omission was in the best interest of
Frontier.
Notwithstanding the foregoing, Xx. Xxxxx shall not be deemed to
have been terminated for Due Cause unless and until there shall
have been delivered to him a copy of a resolution duly adopted by
the unanimous affirmative vote of all of the members of the Board
of Directors (exclusive of Xx. Xxxxx) at a meeting of the Board
called and held for the purpose (after reasonable notice to Xx.
Xxxxx and an opportunity for Xx. Xxxxx, together with his
counsel, to be heard before the Board) finding that in the good
faith opinion of the Board Xx. Xxxxx was guilty of conduct set
forth above and specifying the particulars thereof in detail.
8. TERMINATION BY XX. XXXXX FOR GOOD REASON. If in anticipation of
or following a Change in Control of Frontier, or following an
investment of at least $1,000,000 by investors in Frontier or
following an initial public offering of Frontier's stock, Xx.
Xxxxx terminates his employment for Good Reason he shall be paid
the Severance Pay described above. As used herein the term
"Change in Control" shall mean any event as a result of which the
stockholders of Frontier immediately prior to such Change in
Control would not immediately after such Change in Control
beneficially own voting securities representing in the aggregate
more than 50% of the combined voting power of the voting
securities of the surviving entity, or the members of the Board
of Directors of Frontier immediately prior to the Change in
Control would not immediately after the change in Control
constitute a majority of the Board of Directors of the subsequent
corporation or entity. As used herein the term "Good Reason"
shall mean:
(a) Without Xx. Xxxxx'x express written consent, the assignment
to Xx. Xxxxx of any duties inconsistent with his positions,
duties, responsibilities and status with frontier
immediately prior to a Change in Control, as defined above,
or a change in his reporting responsibilities, title or
offices as in effect
3
immediately prior to a Change in Control, or a reduction in
job responsibilities or authority to a position subordinate
to that provided for in this Agreement or any removal of Xx.
Xxxxx from or any failure to re-elect him to any of such
positions, except in connection with the termination of his
employment for Due Cause, disability or retirement or as a
result of his death or by Xx. Xxxxx other than for Good
Reason;
(b) A reduction in Xx. Xxxxx'x base salary or benefits or a
breach of Frontier's obligations undertaken in this
Agreement
9. COMPANY CAR. Frontier will provide Xx. Xxxxx with or will
reimburse Xx. Xxxxx for the cost of leasing a company car or make
and model comparable to that provided to senior executives of
companies in the computer hardware or software industries.
Frontier will reimburse Xx. Xxxxx for all operating expenses,
maintenance and fees, including automobile insurance. In the
event Xx. Xxxxx'x employment is terminated Frontier will at its
expense purchase and transfer to Xx. Xxxxx title to such company
car.
10. Frontier shall require any successor to all or substantially all
of the business or assets of Frontier to assume and agree to
perform this agreement in the same manner and to the same extent
that Frontier would be required to perform it if no such
succession had taken place.
11. The laws of the Commonwealth of Massachusetts shall apply to the
construction, interpretation and enforcement of this Agreement.
FRONTIER SOFTWARE DEVELOPMENT, INC. XX. XXXXX
By: /s/ Xxxx Xxxxxxx /s/ Xxxxxxxx Xxxxx
------------------------------- -------------------------------
Title: Chairman Xxxxxxxx Xxxxx
-----------------------
4
