EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.26
This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made as of the 7th day of September, 2006
between Moldflow Corporation, a Delaware corporation (the “Company”), and G. Xxxx Xxxxxxx
(“Executive”).
WHEREAS, the Company desires to employ Executive and Executive desires to be employed by the
Company on the terms contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Employment. The term of this Agreement shall extend from the date hereof (the
“Commencement Date”) until the first anniversary of the Commencement Date and shall automatically
be extended for one additional year on each anniversary thereafter unless, not less than 30 days
prior to each such date, either party shall have given notice that it does not wish to extend this
Agreement; provided, further, that following a Change in Control or Transfer of Business the term
of this Agreement shall continue in effect for a period of not less than twelve (12) months beyond
the month in which the Change in Control or Transfer of Business occurred. The term of this
Agreement shall be subject to termination as provided in Paragraph 6 and may be referred to herein
as the “Period of Employment.”
2. Position and Duties. During the Period of Employment, Executive shall serve as the
Senior Vice President and General Manager of the Manufacturing Solutions business unit
(“MMS Business Unit”) and shall have such duties as may from time to time be prescribed by the
Chief Executive Officer or the Board of Directors of the Company (the “Board”). Executive shall
devote his full working time and efforts to the business and affairs of the Company.
3. Compensation and Related Matters.
(a) Base Salary and Incentive Compensation. Executive’s initial annual base salary
shall be $218,000. Executive’s base salary shall be redetermined annually by the Chief Executive
Officer, the Board or a Committee thereof. The annual base salary in effect at any given time is
referred to herein as “Base Salary.” The Base Salary shall be payable in a manner consistent with
the general payroll policy of the Company. In addition to Base Salary, Executive shall be eligible
to participate in such incentive compensation plans and Employee Benefit Plans as may be available
to employees from time to time and as determined by the Chief Executive Officer or the Board of
Directors. As used herein, the term “Employee Benefit Plans” includes, without limitation, each pension and retirement plan;
supplemental pension, retirement and deferred compensation plan; savings and profit-sharing plan;
stock ownership plan; stock purchase plan; stock option plan; life insurance plan; medical
insurance plan; disability plan; and health and accident plan or arrangement established and
maintained by the Company.
(b) Vacations. Executive shall be entitled to twenty (20) paid vacation days in each fiscal
year, which shall be accrued ratably during the fiscal year, and Executive shall also be
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entitled to all paid holidays given by the Company to its executives. Executive shall be entitled
to additional vacation based on any policy of the Company that provides for additional vacation
based on years of service or other criteria.
(c) Indemnification and Directors’ and Officers’ Insurance. During Executive’s employment and
for the period of time following termination of the Executive for any reason during which time
Executive could be subject to any claim based on his position in the Company, Executive shall
receive the maximum indemnification protection from the Company as permitted by the Company’s
by-laws and shall receive directors’ and officers’ insurance coverage equivalent to that which is
provided to any other director or officer of the Company.
4. Unauthorized Disclosure. Executive acknowledges that in the course of his employment with the
Company and the predecessor to the Company’s MMS Business Unit, he has and will continue to be
brought into frequent contact with, has had and will continue to have access to and become informed
of confidential and proprietary information of the Company’s and its affiliates’, and particularly
the MMS Business Unit’s, business affairs, information, trade secrets, and other matters which are
of a proprietary or confidential nature, including but not limited to, methods of operations,
business opportunities, business methods and processes, price and cost information, finance,
customer information, product and service development information, production methodologies and
processes, business plans, various sales techniques, manuals, letters, notebooks, procedures,
reports, products, processes, services, and other confidential information and knowledge
(collectively the “Confidential Information”). Executive understands and acknowledges that such
Confidential Information is confidential, and he agrees not to disclose such Confidential
Information to anyone outside the Company except to the extent that (i) Executive deems such
disclosure or use reasonably necessary or appropriate in connection with performing his duties on
behalf of the Company; (ii) Executive is required by order of a court of competent jurisdiction (by
subpoena or similar process) to disclose or discuss any Confidential Information, provided that in
such case, Executive shall promptly inform the Company of such event, shall cooperate with the
Company in attempting to obtain a protective order or to otherwise restrict such disclosure, and
shall only disclose Confidential Information to the minimum extent
necessary to comply with any such court order; or (iii) such Confidential Information becomes
generally known to and available for use in the Company’s industry, other than as a result of any
action or inaction by Executive. Executive further agrees that he will not during employment and/or
at any time thereafter use such Confidential Information in competing, directly or indirectly, with
the Company. At such time as Executive shall cease to be employed by the Company, he will
immediately turn over to the Company all Confidential Information, including papers, documents,
writings, electronically stored information, other property, and all copies of them provided to or
created by him during the course of his employment with the Company. The foregoing provisions shall
be binding upon Executive’s heirs, successors, and legal representatives and shall survive the
termination of this Agreement for any reason.
5. Covenants. Executive acknowledges and agrees that in his capacity of General Manager of the MMS
Business Unit and his prior capacity as a lead salesperson of the MMS Business Unit and its
predecessor, he has learned significant Confidential Information about the products and services of
the MMS Business Unit and that his duties on behalf of the MMS Business Unit have required him to
learn significant Confidential Information about the business of the
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Company. Executive further acknowledges and agrees that installing the MMS Business Unit’s products
and services at customer sites requires close integration of all of the company’s products and
services with customers’ manufacturing processes and that, as a result, Executive additionally has
learned Confidential Information about the Company’s customers. The Executive recognizes that
attempting to sell products and services that compete with the company’s products and services
inevitably would require the Executive to use and disclose Confidential Information. In
consideration for Executive’s employment by the Company under the terms provided in this Agreement
and as a means to aid in the performance and enforcement of the terms of the provisions of
Paragraph 4, Executive agrees that during the term of Executive’s employment with the Company and
for a period of twelve (12) months thereafter, regardless of the reason for termination of
employment, Executive will not directly or indirectly:
(a) solicit or induce any present or future employee of the Company or any affiliate of the
Company to accept employment with Executive or with any business, operation, corporation,
partnership, association, agency, or other person or entity with which Executive may be associated,
and Executive will not knowingly employ or cause any business, operation, corporation, partnership,
association, agency, or other person or entity with which Executive may be associated to employ any
present or future employee of the Company without providing the Company with ten (10) days’ prior
written notice of such proposed employment; and
(b) (i) solicit the business or patronage of any customer of the Company for any other person
or entity, (ii) divert, entice, or otherwise take away from the Company the business or patronage of any customer of the Company or attempt to do so, or (iii) solicit or
induce any customer of the Company to terminate or reduce its relationship with the Company.
Should Executive violate any of the provisions of this Paragraph, then in addition to all
other rights and remedies available to the Company at law or in equity, the duration of this
covenant shall automatically be extended for the period of time from which Executive began such
violation until he permanently ceases such violation.
6. Termination. Except for termination as specified in Subparagraph 6(a), any termination of
Executive’s employment by the Company or any such termination by Executive shall be communicated by
written notice of termination to the other party hereto (“Notice of Termination”). Executive’s
employment hereunder may be terminated without any breach of this Agreement under the following
circumstances:
(a) Death. Executive’s employment hereunder shall terminate upon his death.
(b) Disability. If, as a result of Executive’s incapacity due to physical or mental
illness, Executive shall have been unable to perform the material duties of his position for one
hundred eighty (180) calendar days in the aggregate in any twelve (12) month period, the Company
may terminate Executive’s employment hereunder.
(c) Termination by Company For Cause. At any time during the Period of Employment, the Company
may terminate Executive’s employment hereunder for Cause if such termination is approved by not
less than a majority of the Board. For purposes of this Agreement, “Cause” shall mean: (A) conduct
by Executive constituting a material act of willful
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misconduct in connection with the performance of his duties; (B) criminal or civil conviction of
Executive, a plea of nolo contendere by Executive or conduct by Executive that would reasonably be
expected to result in material injury to the reputation of the Company if he were retained in his
position with the Company; (C) continued, willful and deliberate non-performance by Executive of
his duties hereunder (other than by reason of Executive’s physical or mental illness, incapacity or
disability) which has continued for more than thirty (30) days following written notice of such
non-performance from the Board; or (D) a breach by Executive of any of the provisions contained in
Paragraphs 4 and 5 of this Agreement.
(d) Termination Without Cause. At any time during the Period of Employment, the Company may
terminate Executive’s employment hereunder without Cause if such termination is approved by a
majority of the Company’s Board of Directors. Any termination by the Company of Executive’s
employment under this Agreement which does not constitute a termination for Cause under
Subparagraph 6(c) or result from the death or disability of the Executive under Subparagraph 6(a) or (b) or result from a Transfer
of Business (as defined herein), shall be deemed a termination without Cause. If the Company
provides notice to Executive under Paragraph 1 that it does not wish to extend the Period of
Employment, such action shall be deemed a termination without Cause.
(e) Termination by Executive. At any time during the Period of Employment, Executive may
voluntarily terminate his employment hereunder. At any time after the earlier to occur of a Change
of Control (as defined herein) or a Transfer of Business (as defined herein), Executive may
terminate his employment hereunder for Good Reason upon thirty (30) days’ written notice to the
Company describing with particularity the Executive’s basis for asserting Good Reason unless the
Company cures the Good Reason within thirty (30) days of receipt. If Executive provides notice to
the Company under Paragraph 1 that he does not wish to extend the Period of Employment, such action
shall be deemed a voluntary termination by Executive and one without Good Reason. For purposes of
this Agreement, “Good Reason” shall mean: (A) a substantial diminution or other substantive adverse
change, not consented to by Executive, in the nature or scope of Executive’s responsibilities,
authorities, powers, functions or duties; (B) any removal, during the Period of Employment, from
Executive of his title as set forth in paragraph 2 of this Agreement; (C) an involuntary reduction
in Executive’s Base Salary except for across-the-board reductions similarly affecting all or
substantially all management employees; (D) a breach by the Company of any of its other material
obligations under this Agreement and the failure of the Company to cure such breach within thirty
(30) days after written notice thereof by Executive; (E) the involuntary relocation of the
Company’s offices at which Executive is principally employed or the involuntary relocation of the
offices of Executive’s primary workgroup to a location more than thirty (30) miles from such
offices, or the requirement by the Company that Executive be based anywhere other than the
Company’s offices at such location on an extended basis, except for required travel on the
Company’s business to an extent substantially consistent with Executive’s business travel
obligations; or (F) 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 Paragraph 10.
(f) Date of Termination. “Date of Termination” shall mean: (A) if Executive’s employment is
terminated by his death, the date of his death; (B) if Executive’s employment is terminated under
Subparagraph 6(b) or under Subparagraph 6(c), the date on which Notice of
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Termination is given; (C) if Executive’s employment is terminated by the Company under Subparagraph
6(d), thirty (30) days after the date on which a Notice of Termination is given; and (D) if
Executive’s employment is terminated by Executive under Subparagraph 6(e), thirty (30) days after
the date on which a Notice of Termination is given, unless the Company cures the Good Reason event,
if any, prompting the Executive to issue a Notice of Termination.
7. Compensation Upon Termination or During Disability.
(a) If Executive’s employment terminates by reason of his death, the Company shall, within
ninety (90) days of death, pay in a lump sum amount to such person as Executive shall designate in
a notice filed with the Company or, if no such person is designated, to Executive’s estate,
Executive’s accrued and unpaid Base Salary, plus accrued vacation, to the date of his death, plus
his accrued and unpaid incentive compensation, provided that any bonus payment, if any, under
Subparagraph 3(a) that is earned with respect to any financial period but which has not yet been
authorized for payment by the Board of Directors or any committee thereof, which shall be paid if
and when it is so authorized by the Board of Directors. Upon the death of Executive, (i) all stock
options that are granted to the Executive on or after the date of this Agreement, which would
otherwise vest over the next twelve (12) months shall immediately vest in Executive’s estate or
other legal representatives and become exercisable, and Executive’s estate or other legal
representatives shall have twelve (12) months from the Date of Termination or the remaining option
term, if earlier, to exercise all such stock options granted to Executive and (ii) all repurchase
rights and other restrictions on the shares of Restricted Stock that are granted to the Executive
on or after the date of this Agreement held by the Executive which would otherwise lapse over the
next twelve (12) months shall immediately lapse. All other stock-based grants and awards held by
Executive shall be canceled upon the death of Executive in accordance with their terms. For a
period of one (1) year following the Date of Termination, the Company shall pay such health and
dental insurance premiums as may be necessary to allow Executive’s spouse and dependents to receive
health and dental insurance coverage substantially similar to coverage they received immediately
prior to the Date of Termination. In addition to the foregoing, any payments to which Executive’s
spouse, beneficiaries, or estate may be entitled under any employee benefit plan shall also be paid
in accordance with the terms of such plan or arrangement. Such payments, in the aggregate, shall
fully discharge the Company’s obligations hereunder.
(b) During any period while the Executive remains employed but fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, Executive shall continue to
receive his accrued and unpaid Base Salary, plus accrued vacation, and accrued and unpaid incentive
compensation (including any bonus payment, if any, under Subparagraph 3(a) that is earned with
respect to any financial period but which has not yet been authorized for payment by the Board of
Directors or any committee thereof, which shall be paid if and when it is so authorized by the
Board of Directors), until Executive’s employment is terminated due to disability in accordance
with Subparagraph 6(b). Upon the Date of Termination, (i) all stock options that are granted to the
Executive on or after the date of this Agreement which would otherwise vest over the next twelve
(12) months shall immediately vest and become exercisable, and Executive shall have twelve (12)
months from the Date of Termination or the remaining option term, if earlier,
to exercise all such stock options granted to Executive and (ii) all repurchase rights and
other restrictions on the shares of Restricted Stock that are granted to the
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Executive on or after the date of this Agreement held by the Executive which would otherwise lapse
over the next twelve (12) months shall immediately lapse. All other stock-based grants and awards
held by Executive shall vest or be canceled upon the Date of Termination in accordance with their
terms. For a period of one (1) year following the Date of Termination, the Company shall pay such
health and dental insurance premiums as may be necessary to allow Executive and Executive’s spouse
and dependents to receive health and dental insurance coverage substantially similar to coverage
they received prior to the Date of Termination. In addition to the foregoing, any payments to which
Executive may be entitled under any employee benefit plan shall also be paid in accordance with the
terms of such plan or arrangement.
(c) If Executive’s employment is terminated by Executive then the Company shall, through the
Date of Termination, pay Executive his accrued and unpaid Base Salary plus accrued vacation, at the
rate in effect at the time Notice of Termination is given. Thereafter, the
Company shall have no further obligations to Executive except as otherwise expressly provided under
this Agreement. In addition, all vested but unexercised stock options held by Executive as of the
Date of Termination must be exercised by Executive within three (3) months following the Date of
Termination or by the end of the option term, if earlier. All other stock-based grants and awards
held by Executive shall vest or be canceled upon the Date of Termination in accordance with their
terms.
(d) If Executive’s employment is terminated by the Company without Cause as provided in
Subparagraph 6(d), then the Company shall, through the Date of Termination, pay Executive his
accrued and unpaid Base Salary, plus accrued vacation, at the rate in effect at the time Notice of
Termination is given and his accrued and unpaid incentive compensation (including any bonus
payment, if any, under Subparagraph 3(a) that is earned with respect to any financial period but
which has not yet been authorized for payment by the Board of Directors or any committee thereof,
which shall be paid if and when it is so authorized by the Board of Directors). In addition,
subject to signing by Executive of a general release of claims in a form and manner satisfactory to
the Company (a “Release”), the Company shall provide the following benefits to Executive:
(i) The Company shall pay Executive an amount equal one (1) times the sum of (A)
Executive’s Base Salary in effect on the Date of Termination and (B) the Executive’s
average annual bonus or other variable cash compensation (including commissions) over the
five (5) fiscal years immediately prior to the year of termination (the “Termination
Amount”). The Termination Amount shall be calculated by the Company within ten (10)
business days following the Date of Termination and communicated to the Executive in
writing and shall then be paid out in a lump sum within 30 days following the effective
date of the Release, subject to Paragraph 11 below.
(ii) Upon the Date of Termination, (i) all stock options that are granted to the
Executive on or after the date of this Agreement which would otherwise vest over the next
twelve (12) months shall immediately vest and become exercisable, and Executive shall have
twelve (12) months from the Date of Termination or the remaining option term, if earlier,
to exercise all such stock options granted to Executive and (ii) all repurchase rights and
other restrictions on the shares of Restricted Stock that are granted to the Executive on
or after the date of this Agreement held by the Executive which
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would otherwise lapse over the next twelve (12) months shall immediately lapse. All other
stock-based grants and awards held by Executive shall be canceled upon the Termination Date
in accordance with their terms.
(iii) The Company shall, for so long as the Executive, his spouse and beneficiaries
remain eligible for continuation coverage under the law know as COBRA, but not for longer
than a period of one (1) year commencing on the Date of Termination, pay such health and
dental insurance premiums as may be necessary to allow Executive and Executive’s spouse and
dependents to continue to receive health and dental insurance coverage substantially
similar to coverage they received prior to the Date of Termination. In addition to the
foregoing, any payments to which Executive may be entitled under any employee benefit plan
shall also be paid in accordance with the terms of such plan or arrangement.
(e) If Executive’s employment is terminated by the Company for Cause as provided in
Subparagraph 6(c), then the Company shall, through the Date of Termination, pay Executive his
accrued and unpaid Base Salary at the rate in effect at the time Notice of Termination is given.
Thereafter, the Company shall have no further obligations to Executive except as otherwise
expressly provided under this Agreement. In addition, all stock options held by Executive as of the
Date of Termination shall cease to vest as of the Date of Termination and Executive shall have 30
days from the Date of Termination or the remaining option term, if earlier, to exercise all such
vested stock options. All other stock-based grants and awards held by Executive shall be canceled
upon the Termination Date in accordance with their terms.
(f) Nothing contained in the foregoing Subparagraphs 7(a) through 7(e) shall be construed so
as to affect Executive’s rights or the Company’s obligations relating to agreements or benefits
that are unrelated to termination of employment.
8. Change in Control and Transfer of Business Benefit.
(a) Change in Control. Upon a Change of Control of the Company the following
provisions shall apply in lieu of, and expressly supersede, the provisions of Subparagraph 7(d).
(i) In the event that within 12 months following a Change of Control, the Executive
terminates his employment for Good Reason or if the Executive’s employment is terminated by
the Company without Cause and subject to the Executive’s entry into a Release, the Company
shall pay Executive an amount equal to 1.5 times the sum of (A) Executive’s Base Salary and
(B) the Executive’s cash bonus or other variable cash compensation (including commissions)
that would be payable to the Executive during the fiscal year in which the Change of
Control occurred if the Company and the Executive had met all of the targets required for a
full payment of such cash bonus or other variable cash compensation (collectively, the
“Severance Amount”); and, for so long as the Executive, his spouse and beneficiaries remain
eligible for continuation coverage under the law know as COBRA, but not for longer than a
period of one (1) year commencing on the Date of Termination, pay such health and dental
insurance premiums as may be necessary to allow Executive, Executive’s spouse and
dependents to continue to receive health and dental insurance coverage substantially
similar to the coverage they received
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prior to the Date of Termination. The Severance Amount shall be calculated by the Company
within ten (10) business days following the Date of Termination and communicated to the
Executive in writing and shall then be paid out in a lump sum within 30 days after the
effective date of the Release, subject to Paragraph 11 below. For purposes of this
Agreement, “Base Salary” shall mean the annual Base Salary in effect on the Date of
Termination. Furthermore, in the event Executive terminates his employment for Good Reason
as provided in Subparagraph 6(e), he shall be entitled to the Severance Amount only if he
provides the Notice of Termination provided for in Paragraph 6 within sixty (60) days after
the occurrence of the event or events which constitute such Good Reason as specified in
Subparagraph 6(e); and
(ii) Notwithstanding anything to the contrary in any applicable option agreement or
stock-based award agreement, upon a Change in Control, all stock options and other
stock-based awards that are granted to the Executive shall immediately accelerate and
become exercisable or non-forfeitable as of the effective date of such Change in Control.
Executive shall also be entitled to any other rights and benefits with respect to
stock-related awards, to the extent and upon the terms provided in the employee stock
option or incentive plan or any agreement or other instrument attendant thereto pursuant to
which such options or awards were granted.
(b) Transfer of Business. In the event that at any time the Company engages in a
Transfer of Business which is not a Change of Control, as defined herein, the following
provisions shall apply in lieu of, and expressly supersede, the provisions of Subparagraph 7(d).
| (i) | Upon the closing of any such Transfer of Business, subject to signing by Executive of a Release, the Company shall either pay directly or arrange for the direct payment to Executive of a bonus payment of $62,000, which shall be paid in a lump sum to Executive upon the closing of the Transfer of Business. | ||
| (ii) | Upon the closing of any such Transfer of Business (i) all stock options that are granted to the Executive on or after the date of this Agreement shall immediately vest and become exercisable, and Executive shall have twelve (12) months from the Date of Termination or the remaining option term, if earlier, to exercise all such stock options granted to Executive and (ii) all repurchase rights and other restrictions on the shares of Restricted Stock that are granted to the Executive on or after the date of this Agreement held by the Executive shall immediately lapse. | ||
| (iii) | In addition to the foregoing, subject to signing by Executive of a Release, Executive shall be entitled to certain other benefits in the event that his employment is terminated at the time of or following a Transfer of Business, as set forth below: |
| 1. | In the event that within 12 months following a Transfer of Business, the Executive terminates his employment for Good Reason or if the Executive’s |
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| employment is terminated by the acquiring company without Cause, the Company shall pay the Executive an amount equal to 1 times the sum of (A) Executive’s Base Salary and (B) the Executive’s cash bonus or other variable cash compensation (including commissions) that would be payable to the Executive during the fiscal year in which the Transfer of Business occurred if the Company and the Executive had met all of the targets required for a full payment of such cash bonus or other variable cash compensation (collectively, the “Severance Amount”). | |||
| 2. | In the event that at the time of a Transfer of Business, the Executive’s employment is terminated without Cause, the Company or the acquiring company shall pay the Executive an amount equal to 1 times Executive’s Base Salary (the “Severance Amount”). | ||
| 3. | In the event of termination of employment pursuant to item 1 or 2 of this section, for so long as the Executive, his spouse and beneficiaries remain eligible for continuation coverage under the law know as COBRA, but not for longer than a period of one (1) year commencing on the Date of Termination, the Company or the acquiring company will pay such health and dental insurance premiums as may be necessary to allow Executive, Executive’s spouse and dependents to continue to receive health and dental insurance coverage substantially similar to the coverage they received prior to the Date of Termination. The Severance Amount shall be calculated by the Company within ten (10) business days following the date of closing of the termination of employment and communicated to the Executive in writing and shall then be paid out in a lump sum within 30 days after the effective date of the Release, subject to Paragraph 11 below. For purposes of this Agreement, “Base Salary” shall mean the annual Base Salary in effect on the date of the Transfer of Business. |
(c) Definitions. For purposes of this Agreement, the following terms shall have the following
meanings:
(i) “Change in Control” shall mean any of the following:
(a) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Act”) (other than the Company, any of its
subsidiaries, or any trustee, fiduciary or other person or entity holding securities under
any employee benefit plan or trust of the Company or any of its subsidiaries), together
with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the
Act) of such person, shall become the “beneficial owner” (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, of securities of the Company representing
forty percent (40%)or more of either (A) the combined voting power of the Company’s then
outstanding securities having the right to vote in an election of the Company’s Board
(“Voting Securities”) or (B) the then outstanding shares of Company’s common stock, par
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value $0.01 per share (“Common Stock”) (other than as a result of an acquisition of
securities directly from the Company); or
(b) persons who, as of the Commencement Date, constitute the Company’s Board (the
“Incumbent Directors”) cease for any reason, including, without limitation, as a result of
a tender offer, proxy contest, merger or similar transaction, to constitute at least a
majority of the Board, provided that any person becoming a director of the Company
subsequent to the Commencement Date shall be considered an Incumbent Director if such
person’s election was approved by or such person was nominated for election by a vote of at
least a majority of the Incumbent Directors; but provided further, that any such person
whose initial assumption of office is in connection with an actual or threatened election
contest relating to the election of members of the Board or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the Board,
including by reason of agreement intended to avoid or settle any such actual or threatened
contest or solicitation, shall not be considered an Incumbent Director; or
(c) the stockholders of the Company shall approve (A) any consolidation or merger of
the Company where the stockholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation
or merger, beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate more than fifty percent (50%)
of the voting shares of the Company issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if any), (B) any sale, lease, exchange or
other transfer (in one transaction or a series of transactions contemplated or arranged by
any party as a single plan) of all or substantially all of the assets of the Company or
(C) any plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred for
purposes of the foregoing clause (a) solely as the result of an acquisition of securities by the
Company which, by reducing the number of shares of Common Stock or other Voting Securities
outstanding, increases the proportionate number of shares beneficially owned by any person to
forty percent (40%) or more of either (A) the combined voting power of all of the then outstanding
Voting Securities or (B) Common Stock; provided, however, that if any person
referred to in this sentence shall thereafter become the beneficial owner of any additional shares
of Voting Securities or Common Stock (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities directly from the Company) and
immediately thereafter beneficially owns forty percent (40%) or more of either (A) the combined
voting power of all of the then outstanding Voting Securities or (B) Common Stock, then a “Change
of Control” shall be deemed to have occurred for purposes of the foregoing clause (a).
(ii) “Transfer of Business” shall mean the closing date of any transaction or related
series or combination of transactions whereby the Company’s MMS Business
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Unit is acquired by a third party in a sale or exchange of stock, merger or consolidation,
sales of assets, or other similar transaction not in the ordinary course of the Company’s
business. A Transfer of Business shall not include any transaction related to the Company’s
MMS Business Unit in the event that such transaction is part of a Change of Control.
9. Notice. For purposes of this Agreement, notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed
by United States certified mail, return receipt requested, postage prepaid, addressed as follows:
if to the Executive:
At his home address as shown
in the Company’s personnel records;
in the Company’s personnel records;
if to the Company:
Moldflow Corporation
000 Xxx Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Copy to: General Counsel
000 Xxx Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Copy to: General Counsel
or to such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.
10. Successor to Company. The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business or 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 succession had taken place. Failure of the Company to
obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be
a breach of this Agreement and shall constitute Good Reason if the Executive elects to terminate
employment.
11. Taxes. The Company shall undertake to make deductions, withholdings and tax reports with
respect to payments and benefits under this Agreement to the extent that it reasonably and in good
faith believes that it is required to make such deductions, withholdings and tax reports. Payments
under this Agreement shall be in amounts net of any such deductions or withholdings. Nothing in
this Agreement shall be construed to require the Company to make any payments to compensate the
Executive for any adverse tax effect associated with any payments or benefits or for any deduction
or withholding from any payment or benefit. To the extent required by Section 409A of the Internal
Revenue Code and regulations thereunder to avoid imposition of the 20% additional tax, the
severance payments set forth in Subparagraphs 7(d), 8(a)(i) and 8(b)(i) shall be delayed until at
least six (6) months after the Date of Termination.
12. Miscellaneous. No provisions of this Agreement may be modified, waived, or discharged unless
such waiver, modification, or discharge is agreed to in writing and signed by
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Executive and such officer of the Company as may be specifically designated by the Board. No
agreements or representations, oral or otherwise, express or implied, unless specifically referred
to herein, with respect to the subject matter hereof have been made by either party which are not
set forth expressly in this Agreement. The validity, interpretation, construction, and performance
of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts (without
regard to principles of conflicts of laws).
13. Validity. The invalidity or unenforceability of any provision or provisions 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.
14. Counterparts. This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the same instrument.
15. Arbitration; Other Disputes. In the event of any dispute or controversy arising under or in
connection with this Agreement, the parties shall first try in good faith for a period of 30 days
to settle such dispute or controversy by mediation under the applicable rules of the American
Arbitration Association before resorting to arbitration. Following such time period, the parties
will settle any remaining dispute or controversy 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. Notwithstanding
the above, the Company shall be entitled to seek a restraining order or injunction in any court of
competent jurisdiction to prevent any continuation of any violation of Paragraph 4 or 5 hereof.
16. Litigation and Regulatory Cooperation. During and after Executive’s employment, Executive shall
reasonably cooperate with the Company in the defense or prosecution of any claims or actions now in
existence or which may be brought in the future against or on behalf of the Company which relate to
events or occurrences that transpired while Executive was employed by the Company; provided,
however, that such cooperation shall not materially and adversely affect Executive or expose
Executive to an increased probability of civil or criminal litigation. The Company shall also
provide Executive with compensation on an hourly basis (to be derived from his Base Salary) for
requested litigation and regulatory cooperation that occurs after his termination of employment,
and reimburse Executive for all costs and expenses incurred in connection with his performance
under this Paragraph 16, including, but not limited to, reasonable attorneys’ fees and costs.
—remainder of the page intentionally blank—
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Signature Page of Employment Agreement between Xxxx Xxxxxxx and Moldflow
Corporation.
Corporation.
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year
first above written.
| MOLDFLOW CORPORATION | ||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Its: | President and Chief Executive Officer | |||
| EXECUTIVE | ||||
| /s/ G. Xxxx Xxxxxxx | ||||
| G. Xxxx Xxxxxxx | ||||
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