Exhibit 10.25
TRANSITION AGREEMENT
     This TRANSITION AGREEMENT is made as of June 20, 2007, between Moldflow
Corporation (“Moldflow” or the “Company”) and Christopher L. Gorgone
(“Executive”).
     WHEREAS, the Executive is currently employed by the Company as Executive
Vice President and Chief Financial Officer;
     WHEREAS, on July 8, 2005, the Executive and the Company entered an Amended
and Restated Executive Employment Agreement (the “Employment Agreement”);
     WHEREAS, the Company and the Executive have agreed that the Executive’s
employment will terminate no later than September 30, 2007 and that this
Agreement shall serve as the written notice required by Section 6(f) of the
Employment Agreement; and
     WHEREAS, the Company and the Executive seek to establish mutually
acceptable terms for the Executive’s transition and departure from the Company’s
employment.
     NOW, THEREFORE, in connection with the Executive’s transition from Moldflow
and in consideration of the mutual covenants below, the parties agree as
follows:
     1. Relationship with Moldflow. The Executive has agreed to resign from his
position as Executive Vice President, Chief Financial Officer, Treasurer and
Assistant Secretary and from all other positions and directorships that he holds
at Moldflow and its subsidiaries and/or affiliates on the date of this
Agreement. Beginning on the date hereof and continuing until the earlier of
(a) his decision to leave Moldflow’s employment voluntarily (b) Moldflow’s
decision to terminate his employment without Cause; or (c) September 30, 2007
(the earliest of which is referred to herein as the “Termination Date”), a
period hereinafter referred to as the “Transition Period”, the Executive has
agreed to provide services to Moldflow as Senior Advisor to the Chief Executive
Officer regarding matters related to the disposition of the MMS Division,
implementation of the Company’s ERP system and such other matters as may be
requested from time to time by the Chief Executive Officer.
     2. Compensation and Benefits during Transition Period.
          (a) During the Transition Period, the Executive shall receive his
current base salary, payable in accordance with Moldflow’s standard payroll
practice. Executive will be eligible to continue participating in Moldflow’s
401(k) plan, group medical and dental plans and other similar health and welfare
plans, including the Company’s portable life insurance plan with Unum, during
the Transition Period on the terms and conditions available to the other members
of the Company’s executive team.
          (b) Upon completion of the FY2007 audit and after approval by the
Board of Directors or the appropriate committee thereof, Executive will also
receive, if actually awarded, a bonus (the “FY07 Bonus”) pursuant to the terms
of the Moldflow Corporation Cash Bonus Plan, which FY07 Bonus will be calculated
using the same financial and non-financial targets and final fiscal 2007 actual
financial and non-financial results as are applied to the other members of the
executive team. The FY07 Bonus will be paid to Executive at the same time as the
bonuses for FY07 are paid to the other members of the Executive Team, it being
agreed that if the Termination Date occurs prior to such payment based on the
reason set forth in Section 1(a) hereof, then the Executive shall forfeit such
FY07 Bonus.
     3. Transition. The Executive agrees to fully cooperate in transitioning his
current responsibilities to such Moldflow employees as determined by Moldflow.
In addition, he agrees to sign,

 

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execute, make and do all such deeds, documents, acts and things Moldflow may
reasonably require to effect such transition. The Executive and the Company
agree that the Executive will not be required to report to work after June 20,
2007 and that his duties shall be performed from time to time upon the request
of the Chief Executive Officer.
     4. Termination Payments.
          (a) Termination Without Cause, Voluntarily Termination, or Termination
on September 30, 2007. On the Termination Date, Moldflow shall pay the Executive
for all earned salary and accrued and unused vacation time as of that date.
Moldflow will provide the Executive with the following benefits, subject to
signing by the Executive of a general release of claims in a form and manner
satisfactory to the Company (the “Release”):
          (i) Moldflow shall pay the Executive one times the sum of (a) the
result of (x) his base salary in effect on the Termination Date which the
parties agree to be $222,789, less (y) the actual amount of base salary paid to
Executive between the date that is 30 days from the date of this Agreement and
the Date of Termination; and (b) a bonus amount which the parties agree to be
$46,659. Because at the time of the Executive’s separation from service within
the meaning of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), the Executive will be considered a “specified employee” within the
meaning of Section 409A(a)(2)(B)(i) of the Code, the payment described in this
Section 4(a)(i) shall not be paid prior to the date that is the earliest of
(i) six months and one day after the Date of Termination, or (ii) the
Executive’s death.
          (ii) Beginning on the Termination Date, the Executive will be eligible
to participate in Moldflow’s group medical and dental plans in accordance with
the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). To
continue medical and dental insurance coverage, the Executive must elect COBRA
continuation coverage. If the Executive elects COBRA continuation coverage and
provided that he and his beneficiaries remain eligible for COBRA continuation
coverage, Moldflow shall continue to pay for medical and dental insurance
premiums for coverage of him and his beneficiaries to the same extent as if he
had remained employed through the period determined by finding the result of
(x) the period that is 12 months from the Termination Date, less (y) the number
of whole months during which the Executive actually received such benefits
during the Transition Period in excess of 30 days from the date of this
Agreement. (For purposes of clarity in the event that the Date of Termination is
September 30, 2007, then the total number of months shall be 12 months less
2 months or 10 months). The Executive will be responsible for the remaining
portion of such coverage as if he remained employed. If the Executive elects
COBRA continuation coverage, he may continue coverage for himself and any
beneficiaries at his own expense for the remainder of the COBRA period; to the
extent he and they remain eligible. Executive may at his option continue his
life insurance after the Termination Date by contacting Unum directly.
          (iii) Upon the Termination Date, in accordance with the provisions of
the Employment Agreement, all stock options which would otherwise vest over the
next twelve (12) months shall immediately vest and become exercisable and,
subject to the terms of the Moldflow Corporation 2000 Stock Option and Incentive
Plan (the “Plan”), the Executive shall have 12 months from the Termination Date
or the remaining option term, if earlier, to exercise all such stock options. On
the Termination Date, in accordance with the provisions of the Employment
Agreement, all repurchase rights and other restrictions on the shares of
Restricted Stock 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 the Executive shall be canceled on the

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Termination Date in accordance with their terms. Executive understands and
agrees that the exercise and sale of any stock options and shares of restricted
stock shall be subject to the terms of the Plan and applicable securities law
and regulations, including the Company’s insider trading policies. For purposes
of this Section 4 (a)(iii) only, in the event that the Termination Date is
earlier than September 30, 2007 as a result of the Company’s action in
accordance with Section 1(b) hereof, then the acceleration of options and
restricted stock referred to herein shall be calculated as if the Termination
Date was September 30, 2007 and the twelve (12) months of acceleration shall be
calculated from such date.
     5. Nondisparagement. Executive agrees not to take any action or make any
statement, written or oral, to any current or former employee of the Company or
to any other person which disparages or criticizes the Company, its management,
or its practices or which disrupts or impairs its normal operations, including
but not limited to actions that would (a) harm the reputation of the Company
with its clients, suppliers, or the public; or (b) interfere with existing
contractual or employment relationships with clients, suppliers or employees.
The Company shall instruct all employees whom it informs of the terms of this
Agreement not to make any statement, oral or written, that disparages or
criticizes the Executive and, (a) that harms his reputation with suppliers or
prospective employers; or (b) interferes with his contractual or employment
relationships with others. These nondisparagement obligations shall not in any
way affect the Executive’s or their obligation to testify truthfully in any
legal proceeding.
     6. Return of Property. Executive confirms that, to the best of his
knowledge, he has returned to the Company all Company property, including,
without limitation, computer equipment, software, keys and access cards, credit
cards, files, customer lists, rolodexes and any documents (including
computerized data and any copies made of any computerized data or software)
containing information concerning the Company, its business or its business
relationships (in the latter two cases, actual or prospective). In the event
that the Company agrees that the Executive may retain some Company property
until the Termination Date, the Executive agrees to return all such property on
or prior to the Termination Date. In the event that the Executive discovers that
he continues to retain any such property, he shall return it to the Company
immediately.
     7. Information Concerning Actual, Potential or Alleged Financial
Irregularities. Executive represents that he is not aware of any actual,
potential or alleged financial irregularities or fraudulent activities
concerning the Company. Consistent with that representation, he acknowledges
that he will sign the quarterly representation letter required normally of the
Chief Financial Officer, as such representation letter relates to matters
occurring in the quarter and fiscal year while the Executive was Chief Financial
Officer of the Company.
     8. Securities Law Compliance. Executive agrees to adhere to, and fully
cooperate with the Company in complying with, (i) the securities law and related
disclosure requirements applicable to the Company and (ii) the Company’s
policies in effect with respect to its executive officers and its employees
generally. Executive acknowledges that his obligations under Section 15 of the
Employment Agreement are also applicable to any investigations conducted by the
Company or any governmental body.
     9. Release of Claims. In exchange for valuable consideration to which the
Executive acknowledges he is not otherwise eligible, he voluntarily and
irrevocably releases and discharges Moldflow, each related or affiliated entity,
employee benefit plans, and the predecessors, successors, and assigns of each of
them, and each of their respective current and former officers, directors,
shareholders, employees, and agents (any and all of which are referred to as
“Releasees”) generally from all charges, complaints, claims, promises,
agreements, causes of action, damages, and debts that relate in any manner to
the Executive’s employment with or services for Moldflow, known or unknown
(“Claims”), which he

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has, claims to have, ever had, or ever claimed to have had against any of the
Releasees through the date on which he executes this Agreement. This general
release of Claims includes, without implication of limitation, all Claims
related to the compensation provided to the Executive by Moldflow, his
transition and separation from Moldflow, his resignation from his position as
Executive Vice President, Chief Financial Officer, Treasurer and Assistant
Secretary, directorships, offices and other positions with Moldflow, or his
activities on behalf of Moldflow, including, without implication of limitation,
any Claims of wrongful discharge, breach of contract, breach of an implied
covenant of good faith and fair dealing, tortious interference with advantageous
relations, any intentional or negligent misrepresentation, and unlawful
retaliation or discrimination or deprivation of rights under the common law or
any statute or constitutional provision (including, without implication of
limitation, the Employee Retirement Income Security Act, the Sarbanes-Oxley Act
of 2002, Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act and Chapter 151B of the
Massachusetts General Laws). The Executive also waives any Claim for
reinstatement, damages of any nature, severance pay, attorney’s fees, or costs.
Nothing in this general release shall be construed to bar or limit the
Executive’s rights, if any, to his rights under this Agreement, or to challenge
the validity of this general release under the Age Discrimination in Employment
Act.
     The Executive explicitly acknowledge that because he is over forty
(40) years of age, he has specific rights under the Age Discrimination in
Employment Act (“ADEA”) and the Older Workers Benefits Protection Act (“OWBPA”),
which prohibit discrimination on the basis of age, and that the release set
forth in this section is intended to release any right that he may have to file
a claim against Moldflow alleging discrimination on the basis of age.
     It is Moldflow’s desire and intent to make certain that the Executive fully
understands the provisions and effects of this Transition Agreement. To that
end, he has been encouraged and given the opportunity to consult with legal
counsel for the purpose of reviewing the terms of this Transition Agreement.
Consistent with the provisions of ADEA and OWBPA, the Executive is being
provided with twenty-one (21) days in which to consider and accept the terms of
this Transition Agreement by signing below and returning it to Carol Trask,
Director of Human Resources. In addition, the Executive may rescind his assent
to this Transition Agreement within seven (7) days after he signs it (the
“Effective Date”). To do so, the Executive must deliver a notice of rescission
to Carol Trask. To be effective, such rescission must be hand delivered or
postmarked within the seven (7) day period and sent by certified mail, return
receipt requested.
     10. Tax Treatment. 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 determines 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.
     11. Assignability. This Transition Agreement shall not be assignable by the
Executive but, except to the foregoing extent, shall be binding on the parties
hereto and their respective heirs, legal representatives, successors and assigns
and shall inure to the benefit of and be assumed by Moldflow’s successors and
assigns.
     12. Amendments; Waivers. This Transition Agreement and any exhibit attached
hereto may be amended only by agreement in writing of all parties. No waiver of
any provision nor consent to any exception to the terms of this Agreement shall
be effective unless in writing and signed by the party to be bound and then only
to the specific purpose, extent and instance so provided.

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     13. Integration. This Transition Agreement, together with any exhibit
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements and understandings of the
parties in connection therewith, whether oral or written; provided that
Sections 4, 5, 6(c), 14, and 15 of the Employment Agreement remain in full force
and effect.
     14. Choice of Law; Forum. This Transition Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts,
and shall in all respects be interpreted, enforced and governed under the
internal laws of the Commonwealth without giving effect to the principles of
conflict of law.
Moldflow Corporation

             
      /s/ Roland Thomas
 
By: Roland Thomas
        6/20/07
 
Date    
Title: President and CEO
           
 
           
/s/ Christopher L. Gorgone
        6/20/07    
 
           
Christopher L. Gorgone
      Date    

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