Exhibit 10.15
Change-in-Control Agreement
THIS AGREEMENT by and between Applix, Inc., a Massachusetts corporation
(the "Company"), and ▇▇▇▇ ▇▇▇▇▇▇ (the "Employee") is made as of September 27,
2001 (the "Effective Date").
WHEREAS, the Company and the Employee are parties to a
Change-in-Control Agreement dated August __, 2001 (the "Original Agreement");
and
WHEREAS, the Company and the Employee desire to revise the terms of the
Original Agreement in certain respects.
NOW, THEREFORE, as an inducement for and in consideration of the
Employee remaining in its employ, the Company and the Employee agree that the
Original Agreement is hereby amended and restated to read in its entirety as
follows.
1. Key Definitions.
As used herein, the following terms shall have the following respective
meanings:
1.1 "Change in Control" means an event or occurrence set forth
in any one or more of subsections (a) through (d) below (including an event or
occurrence that constitutes a Change in Control under one of such subsections
but is specifically exempted from another such subsection):
(a) the acquisition by an individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership of any capital stock of the Company if, after such acquisition, such
Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 50% or more of either (i) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the Company or an underwriter or agent of the
Company), (ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i) and (ii)
of subsection (c) of this Section 1.1; or
(b) such time as the Continuing Directors (as defined
below) do not constitute a majority of the Board of Directors of the Company
(the "Board") (or, if applicable, the Board of Directors of a successor
corporation to the Company), where the term "Continuing
Director" means at any date a member of the Board (i) who was a member of the
Board on the date of the execution of this Agreement or (ii) who was nominated
or elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (ii)
any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board; or
(c) the consummation of a merger, consolidation,
reorganization, recapitalization or statutory share exchange involving the
Company or a sale or other disposition of all or substantially all of the assets
of the Company in one or a series of transactions (a "Business Combination"),
unless, immediately following such Business Combination, each of the following
two conditions is satisfied: (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of
the Company's assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the "Acquiring
Corporation") in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively; and (ii)
no Person (excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 30% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination); or
(d) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
1.2 "Change in Control Date" means the first date during the
Term (as defined in Section 2) on which a Change in Control occurs. Anything in
this Agreement to the contrary notwithstanding, if (a) a Change in Control
occurs, (b) the Employee's employment with the Company is terminated prior to
the date on which the Change in Control occurs, and (c) it is reasonably
demonstrated by the Employee that such termination of employment (i) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change in Control or (ii) otherwise arose in connection with or in anticipation
of a Change in Control, then for all purposes of this Agreement the "Change in
Control Date" shall mean the date immediately prior to the date of such
termination of employment.
1.3 "Cause" means:
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(a) the Employee's willful and continued failure to
substantially perform his/her reasonable assigned duties as an employee of the
Company (other than any such failure resulting from incapacity due to physical
or mental illness or any failure after the Employee gives notice of termination
for Good Reason), which failure is not cured within 30 days after a written
demand for substantial performance is received by the Employee from the Company
which specifically identifies the manner in which the Company believes the
Employee has not substantially performed the Employee's duties; or
(b) the Employee's willful engagement in illegal
conduct or gross misconduct which is materially and demonstrably injurious to
the Company.
For purposes of this Section 1.3, no act or failure to act by the
Employee shall be considered "willful" unless it is done, or omitted to be done,
in bad faith and without reasonable belief that the Employee's action or
omission was in the best interests of the Company.
1.4 "Good Reason" means the occurrence, without the Employee's
written consent, of any of the events or circumstances set forth in clauses (a)
through (g) below. Notwithstanding the occurrence of any such event or
circumstance, such occurrence shall not be deemed to constitute Good Reason if,
prior to the Date of Termination specified in the Notice of Termination (each as
defined in Section 3.2(a)) given by the Employee in respect thereof, such event
or circumstance has been fully corrected and the Employee has been reasonably
compensated for any losses or damages resulting therefrom (provided that such
right of correction by the Company shall only apply to the first Notice of
Termination for Good Reason given by the Employee).
(a) the assignment to the Employee of duties
inconsistent in any material respect with the Employee's position (including
status, offices, titles and reporting requirements), authority or
responsibilities in effect immediately prior to the earliest to occur of (i) the
Change in Control Date, (ii) the date of the execution by the Company of the
initial written agreement or instrument providing for the Change in Control or
(iii) the date of the adoption by the Board of Directors of a resolution
providing for the Change in Control (with the earliest to occur of such dates
referred to herein as the "Measurement Date"), or any other action or omission
by the Company which results in a material diminution in such position,
authority or responsibilities; provided, however, that if the Employee
terminates his/her employment for Good Reason pursuant to this paragraph, he/she
must provide to the Company or the acquiring entity, during the three month
period following the Change in Control Date, such cooperation as the Company or
acquiring entity may reasonably request with respect to transition matters,
which cooperation shall not entail a commitment by the Employee of more than 20
hours per month;
(b) a reduction in the Employee's annual base salary
as in effect on the Measurement Date or as the same was or may be increased
thereafter from time to time;
(c) the failure by the Company to (i) continue in
effect any material compensation or benefit plan or program (including without
limitation any life insurance, medical, health and accident or disability plan
and any vacation or automobile program or policy) (a "Benefit Plan") in which
the Employee participates or which is applicable to the Employee immediately
prior to the Measurement Date, unless an equitable arrangement
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(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan or program, (ii) continue the Employee's participation
therein (or in such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amount of benefits provided and the level
of the Employee's participation relative to other participants, than the basis
existing immediately prior to the Measurement Date or (iii) award cash bonuses
to the Employee in amounts and in a manner substantially consistent with past
practice in light of the Company's financial performance;
(d) a change by the Company in the location at which
the Employee performs his/her principal duties for the Company to a new location
that is both (i) outside a radius of 35 miles from the Employee's principal
residence immediately prior to the Measurement Date and (ii) more than 20 miles
from the location at which the Employee performed his/her principal duties for
the Company immediately prior to the Measurement Date; or a requirement by the
Company that the Employee travel on Company business to a substantially greater
extent than required immediately prior to the Measurement Date;
(e) the failure of the Company to obtain the
agreement from any successor to the Company to assume and agree to perform this
Agreement, as required by Section 6.1;
(f) any failure of the Company to pay or provide to
the Employee any portion of the Employee's compensation or benefits due under
any Benefit Plan within seven days of the date such compensation or benefits are
due, or any material breach by the Company of this Agreement or any employment
agreement with the Employee.
For purposes of this Agreement, any good faith determination of "Good
Reason" made by the Employee shall be conclusive, binding and final. The
Employee's right to terminate his/her employment for Good Reason shall not be
affected by his/her incapacity due to physical or mental illness.
1.5 "Disability" means the Employee's absence from the
full-time performance of the Employee's duties with the Company for 180
consecutive calendar days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Employee or the Employee's
legal representative.
2. Term of Agreement. This Agreement, and all rights and obligations of
the parties hereunder, shall take effect upon the Effective Date and shall
expire upon the first to occur of (a) the expiration of the Term (as defined
below) if a Change in Control has not occurred during the Term, (b) the
termination of the Employee's employment prior to the Change in Control Date,
(c) the date 12 months after the Change in Control Date, if the Employee is
still employed by the Company as of such later date, or (d) the fulfillment by
the Company of all of its obligations under Sections 4 and 5.2 if the Employee's
employment with the Company terminates within 12 months following the Change in
Control Date. "Term" shall mean the period commencing as of the Effective Date
and continuing in effect through December 31, 2002; provided, however, that
commencing on January 1, 2003 and each January 1 thereafter, the Term shall be
automatically extended for one additional year unless, not later than 90 days
prior to the scheduled expiration
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of the Term (or any extension thereof), the Company shall have given the
Employee written notice that the Term will not be extended.
3. Employment Status; Termination Following Change in Control.
3.1 Not an Employment Contract. The Employee acknowledges that
this Agreement does not constitute a contract of employment or impose on the
Company any obligation to retain the Employee as an employee and that this
Agreement does not prevent the Employee from terminating employment at any time.
If the Employee's employment with the Company terminates for any reason and
subsequently a Change in Control shall occur, the Employee shall not be entitled
to any benefits hereunder except as otherwise provided pursuant to Section 1.2.
3.2 Termination of Employment.
(a) If the Change in Control Date occurs during the
Term, any termination of the Employee's employment by the Company or by the
Employee within 12 months following the Change in Control Date (other than due
to the death of the Employee) shall be communicated by a written notice to the
other party hereto (the "Notice of Termination"), given in accordance with
Section 7. Any Notice of Termination shall: (i) indicate the specific
termination provision (if any) of this Agreement relied upon by the party giving
such notice, (ii) to the extent applicable, set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated and (iii) specify the
Date of Termination (as defined below). The effective date of an employment
termination (the "Date of Termination") shall be the close of business on the
date specified in the Notice of Termination (which date may not be less than 15
days or more than 120 days after the date of delivery of such Notice of
Termination), in the case of a termination other than one due to the Employee's
death, or the date of the Employee's death, as the case may be.
(b) The failure by the Employee or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason or Cause shall not waive any right of the Employee or
the Company, respectively, hereunder or preclude the Employee or the Company,
respectively, from asserting any such fact or circumstance in enforcing the
Employee's or the Company's rights hereunder.
(c) Any Notice of Termination for Cause given by the
Company must be given within 90 days of the occurrence of the event(s) or
circumstance(s) which constitute(s) Cause.
4. Benefits to Employee.
4.1 Stock Option Acceleration and Repayment of Promissory
Note.
(a) If the Change in Control Date occurs during the
Term, then, effective upon the Change in Control Date, each outstanding option
to purchase shares of Common Stock of the Company held by the Employee shall
become immediately exercisable in full.
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(b) If the Change in Control Date occurs during the
Term, then, effective upon the Change in Control Date, the Employee shall have
the right and option to repay the Secured Promissory Note, dated July 31, 2000,
in the original principal amount of $110,000.63 (the "Note"), by applying
against the outstanding balance of the Note the amount of cash and/or securities
(based on the fair market value of such securities on the Change in Control
Date) received by the Employee in exchange for the 25,143 shares of the
Company's common stock which the Employee has pledged as collateral security for
his obligations under the Note. In the event the Employee exercises his right
under this Section 4.1(b), (i) any remaining balance on the Note shall be
forgiven by the Company and (ii) the Company shall pay to the Employee an amount
equal to the sum of (A) the amount necessary to pay all taxes imposed on (or
economically borne by) the Employee attributable to the Company's forgiveness of
the balance of the Note and (B) the amount necessary to pay all additional taxes
imposed on (or economically borne by) the Employee attributable to the receipt
of the payment described in clause (A). For purposes of the preceding sentence,
all taxes shall be computed assuming the application of the maximum rates
provided by law.
4.2 Compensation. If the Change in Control Date occurs during
the Term and the Employee's employment with the Company terminates within 12
months following the Change in Control Date, the Employee shall be entitled to
the following benefits:
(a) Termination Without Cause or for Good Reason. If
the Employee's employment with the Company is terminated by the Company (other
than for Cause, Disability or Death) or by the Employee for Good Reason within
12 months following the Change in Control Date, then the Employee shall be
entitled to the following benefits:
(i) the Company shall pay to the Employee in
a lump sum in cash within 30 days after the Date of Termination the sum of (A)
the Employee's base salary through the Date of Termination, (B) any accrued
bonus which the Employee is entitled to receive as of the Date of Termination,
(C) the amount of any compensation previously deferred by the Employee (together
with any accrued interest or earnings thereon) and any accrued vacation pay, in
each case to the extent not previously paid (the sum of the amounts described in
clauses (A), (B), and (C) shall be hereinafter referred to as the "Accrued
Obligations"); and
(ii) for six months after the Date of
Termination, the Company shall continue to pay to the Employee his/her highest
annual base salary during the three-year period prior to the Date of
Termination.
(b) Resignation without Good Reason; Termination for
Death or Disability. If the Employee voluntarily terminates his/her employment
with the Company within 12 months following the Change in Control Date,
excluding a termination for Good Reason, or if the Employee's employment with
the Company is terminated by the Company for Cause or by reason of the
Employee's death or Disability within 12 months following the Change in Control
Date, then the Company shall pay the Employee (or his/her estate, if
applicable), in a lump sum in cash within 30 days after the Date of Termination,
the Accrued Obligations.
4.3 Mitigation. The Employee shall not be required to mitigate
the amount of any payment or benefits provided for in this Section 4 by seeking
other employment or
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otherwise. Further, the amount of any payment or benefits provided for in this
Section 4 shall not be reduced by any compensation earned by the Employee as a
result of employment by another employer.
5. Disputes.
5.1 Settlement of Disputes; Arbitration. All claims by the
Employee for benefits under this Agreement shall be directed to and determined
by the Board of Directors of the Company and shall be in writing. Any denial by
the Board of Directors of a claim for benefits under this Agreement shall be
delivered to the Employee in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Agreement relied upon. The
Board of Directors shall afford a reasonable opportunity to the Employee for a
review of the decision denying a claim. Any further dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Boston, 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.
5.2 Expenses. The Company agrees to pay as incurred, to the
full extent permitted by law, all legal, accounting and other fees and expenses
which the Employee may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by the Company, the Employee or others
regarding the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Employee regarding the amount of any payment or benefits
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code.
6. Successors.
6.1 Successor to Company. The Company shall require any person
or entity that purchases all or substantially all of the assets of the Company
expressly to assume and agree to perform this Agreement to the same extent that
the Company would be required to perform it if no such purchase had taken place.
As used in this Agreement, "Company" shall mean the Company as defined above and
any successor to its business or assets as aforesaid which assumes and agrees to
perform this Agreement, by operation of law or otherwise.
6.2 Successor to Employee. This Agreement shall inure to the
benefit of and be enforceable by the Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Employee should die while any amount would still
be payable to the Employee or his/her family hereunder if the Employee had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Employee's estate.
7. Notice. All notices, instructions and other communications given
hereunder or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or certified
mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable
nationwide overnight courier service, in each case addressed to the
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Company, at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and to the
Employee at the address set forth below his/her name on the signature page
hereto (or to such other address as either the Company or the Employee may have
furnished to the other in writing in accordance herewith). Any such notice,
instruction or communication shall be deemed to have been delivered five
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a reputable
nationwide overnight courier service. Either party may give any notice,
instruction or other communication hereunder using any other means, but no such
notice, instruction or other communication shall be deemed to have been duly
delivered unless and until it actually is received by the party for whom it is
intended.
8. Miscellaneous.
8.1 Employment by Subsidiary. For purposes of this Agreement,
the Employee's employment with the Company shall not be deemed to have
terminated solely as a result of the Employee continuing to be employed by a
wholly-owned subsidiary of the Company.
8.2 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
8.3 Injunctive Relief. The Company and the Employee agree that
any breach of this Agreement by the Company is likely to cause the Employee
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Employee
shall have the right to specific performance and injunctive relief.
8.4 Governing Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflicts of law principles.
8.5 Waivers. No waiver by the Employee at any time of any
breach of, or compliance with, any provision of this Agreement to be performed
by the Company shall be deemed a waiver of that or any other provision at any
subsequent time.
8.6 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but both of which
together shall constitute one and the same instrument.
8.7 Tax Withholding. Any payments provided for hereunder shall
be paid net of any applicable tax withholding required under federal, state or
local law.
8.8 Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements (including but not limited to any
stock option acceleration agreement between the Company and the Employee),
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto in respect of the subject matter contained herein; and any
prior agreement of
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the parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled. Notwithstanding the foregoing, in the event that this
Agreement is terminated as a result of (a) the expiration of the Term prior to
the occurrence of a Change in Control or (b) the termination of the Employee's
employment by the Company prior to the Change in Control Date, any such stock
option acceleration agreement shall not be superseded and shall continue in full
force and effect in accordance with its terms.
8.9 Amendments. This Agreement may be amended or modified only
by a written instrument executed by both the Company and the Employee.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first set forth above.
Applix, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, September 27, 2001
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Title: President and CEO
/s/ ▇▇▇▇ ▇▇▇▇▇▇, September 27, 2001
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▇▇▇▇ ▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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