Document:

exv10w52

 

Exhibit 10.52

SEPARATION AGREEMENT AND RELEASE

     This Separation Agreement and Release (“Agreement”) is made by and between Farhad Moghadam
(“Employee”) and Applied Materials, Inc. (the “Company”) (jointly referred to as the “Parties” and
individually referred to as a “Party”).

RECITALS

     WHEREAS, Employee is employed by the Company as its Senior Vice President and General Manager
of Thin Films Products Business Group and Foundation Engineering;

     WHEREAS, Employee signed an Employee Agreement with the Company on May 6, 1996 (the
“Confidentiality Agreement”);

     WHEREAS, Employee resigned from his employment with the Company effective September 1, 2007
(the “Termination Date”);

     WHEREAS, the Company and Employee have entered into Stock Option and Performance Share
Agreements, dated November 19, 2002, December 11, 2002, November 3, 2004, December 13, 2005 and
January 25, 2007, granting Employee performance shares (also called restricted stock units) and the
option to purchase shares of the Company’s common stock subject to the terms and conditions of the
Company’s Employee Stock Incentive Plan (the “Stock Option Plan”) and the relevant Performance
Share Agreements and Stock Option Agreements (collectively the “Stock Agreements”); and

     WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances,
charges, actions, petitions, and demands that the Employee may have against the Company and any of
the Releasees as defined below, including, but not limited to, any and all claims arising out of,
or in any way related to Employee’s employment with, or separation from, the Company.

     NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Employee
hereby agree as follows:

COVENANTS

     1. Consideration.

          a. Continuing Employment. The Company shall continue to employ Employee, and Employee
agrees to remain employed by the Company, in his role as Senior Vice President and General Manager
of Thin Films Products Business Group and Foundation Engineering, up to and including the
Termination Date. During Employee’s workdays through and including the Termination Date, Employee
shall perform the duties assigned to him by the Company’s Chief Executive Officer, which shall not
be inconsistent with his role as Senior Vice President and General Manager of Thin Films Products
Business Group and Foundation Engineering. The Company shall continue to pay
Employee his base salary in accordance with the Company’s regular payroll

 

 

practices up to and
including the Termination Date. Notwithstanding the foregoing, the Company may terminate
Employee’s employment prior to the Termination Date for “Cause” (as defined in Section 15 hereof).
If Employee is terminated for Cause prior to the Termination Date, he shall not be eligible for any
of the benefits or consideration set forth in this Agreement. Employee shall continue to comply
with his Confidentiality Agreement as well as all other Company policies. During his employment
with the Company, Employee shall continue to be eligible to participate in all benefits and
incidents of employment, including the Company’s health insurance plan, and he shall continue to
accrue vacation. In addition, Employee shall continue to vest in stock options and performance
shares on the same terms, schedule and conditions as set forth in the Stock Agreements. As a
result of such continued vesting, from the date of this Agreement through the Termination Date,
Employee is scheduled to vest in the number of stock options and performance shares indicated on
Exhibit A hereto.

          b. Cash. Provided that Employee does not breach this Agreement (including Section
12), the Company agrees to pay Employee the sum of One Million Six Hundred Thousand Dollars
($1,600,000.00), less applicable withholding. Provided that Employee does not breach this
Agreement (including Section 12), this payment shall be credited to Employee’s account under the
2005 Executive Deferred Compensation Plan (the “Deferred Compensation Plan”), pursuant to the terms
of Employee’s previous election under the Deferred Compensation Plan with respect to such severance
payment, in three installments as follows: 1) a lump sum amount of $400,000 shall be credited on
September 2, 2007; 2) a lump sum amount of $400,000 shall be credited on March 2, 2008; and 3) the
final lump sum amount of $800,000 shall be credited on December 31, 2008.

          c. Benefits. Employee’s health insurance benefits shall cease on September 30, 2007,
subject to Employee’s right to continue his health insurance benefits under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA). Provided that Employee does not
breach this Agreement (including Section 12), the Company agrees to reimburse Employee for the
payments Employee makes for COBRA coverage for a period of eighteen (18) months following the
Termination Date (or, if earlier, until Employee obtains substantially similar coverage under
another employer’s group insurance plan or ceases to be eligible for COBRA continuation coverage),
provided that Employee timely elects and pays for COBRA coverage. COBRA reimbursements shall be
made by the Company to Employee consistent with the Company’s normal expense reimbursement policy,
and will require documentation from Employee substantiating his payments for COBRA coverage.
Except as otherwise provided herein, Employee’s participation in all benefits and incidents of
employment, including, but not limited to, the accrual of bonuses, vacation, paid time off, and
vesting (including, but not limited to, vesting of equity awards), shall cease as of the
Termination Date.

          d. Equity Compensation. Provided that Employee executes the Supplemental Agreement
and Release attached hereto as Exhibit D on or within 21 days after the Termination Date,
and does not revoke the Supplemental Agreement and Release, the Company agrees to accelerate the
vesting of stock options to purchase a total of 112,500 shares of Company common stock granted
under the relevant Stock Option Agreements and the Company’s Stock Option Plan and to accelerate
the vesting of a total of 12,500 performance shares granted pursuant to the Performance Share
Agreement dated December 13, 2005 (the “Accelerated Performance Shares”)

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and the Company’s
Stock Option Plan, as detailed in Exhibit B attached hereto. Notwithstanding such
accelerated vesting, the Accelerated Performance Shares will be paid out to Employee in accordance
with the original vesting schedule contained in the Performance Share Agreement dated December 13,
2005. Effective as of the “Effective Date” (as defined in Section 25 hereof), Employee’s stock
options listed on Exhibit C hereto shall remain exercisable until the earlier of (1) the
one-year anniversary of the Termination Date, or (2) the applicable scheduled expiration dates of
such stock options as set forth in the relevant Stock Option Agreement. In all other respects,
such options, all of Employees other vested options and the issuance of any shares shall continue
to be governed by the terms and conditions of the Company’s Stock Agreements. Except as provided
herein, all stock options, performance shares and any shares issuable under such awards shall
continue to be subject to the terms and conditions of the Company’s Stock Agreements. The
accelerated vesting provided in this Section 1(d) constitutes an amendment to the Stock Option
Agreements and the Performance Share Agreement listed on Exhibit B and the option
exercisability extension provided in this Section 1(d) constitutes an amendment to the Stock Option
Agreements listed on Exhibit C. To the extent not explicitly amended hereby, the Stock
Agreements remain in full force and effect.

     2. Payment of Salary. Employee acknowledges and represents that the Company has paid
or provided all salary, wages, bonuses, accrued vacation/paid time off, housing allowances,
relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses,
commissions, stock, stock options, vesting, and any and all other benefits and compensation due to
Employee.

     3. Release of Claims.  Employee agrees that the consideration set forth in this
Agreement represents settlement in full of all outstanding obligations owed to Employee by the
Company and its current and former: officers, directors, employees, agents, investors, attorneys,
shareholders, administrators, affiliates, divisions, and subsidiaries, and predecessor and
successor corporations and assigns (collectively, the “Releasees”). Employee, on his own behalf
and on behalf of his respective heirs, family members, executors, agents, and assigns, hereby and
forever releases the Releasees from, and agrees not to sue concerning, or in any manner to
institute, prosecute or pursue, any claim, complaint, charge, duty, obligation, or cause of action
relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected,
that Employee may possess against any of the Releasees arising from any omissions, acts, facts, or
damages that have occurred up until and including the Effective Date of this Agreement, including,
without limitation:

          a. any and all claims relating to or arising from Employee’s employment relationship with the
Company and the termination of that relationship;

          b. any and all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;

          c. any and all claims for wrongful discharge of employment; termination in violation of public
policy; discrimination; harassment; retaliation; breach of contract, both express and
implied; breach of covenant of good faith and fair dealing, both express and implied;
promissory

Page 3 of 21

 

estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or
intentional misrepresentation; negligent or intentional interference with contract or prospective
economic advantage; unfair business practices; defamation; libel; slander; negligence; personal
injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability
benefits;

          d. any and all claims for violation of any federal, state, or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the
Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the
Fair Labor Standards Act, except as prohibited by law; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee
Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the
Family and Medical Leave Act, except as prohibited by law; the Sarbanes-Oxley Act of 2002; the
California Family Rights Act; the California Labor Code, except as prohibited by law; the
California Workers’ Compensation Act, except as prohibited by law; and the California Fair
Employment and Housing Act;

          e. any and all claims for violation of the federal or any state constitution;

          f. any and all claims arising out of any other laws and regulations relating to employment or
employment discrimination;

          g. any claim for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by Employee as a result of
this Agreement; and

          h. any and all claims for attorneys’ fees and costs.

Employee agrees that the release set forth in this section shall be and remain in effect in all
respects as a complete general release as to the matters released. This release does not extend to
any obligations incurred under this Agreement. This release does not release claims that cannot be
released as a matter of law, including, but not limited to: (1) Employee’s right to file a charge
with, or participate in a charge by, the Equal Employment Opportunity Commission or comparable
state agency against the Company (with the understanding that any such filing or participation does
not give Employee the right to recover any monetary damages against the Company; Employee’s release
of claims herein bars Employee from recovering such monetary relief from the Company); (2) claims
under Division 3, Article 2 of the California Labor Code (which includes California Labor Code
section 2802 regarding indemnity for necessary expenditures or losses by employee); and (3) claims
prohibited from release as set forth in California Labor Code section 206.5 (specifically “any
claim or right on account of wages due, or to become due, or made as an advance on wages to be
earned, unless payment of such wages has been made”).

     4. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is
waiving and releasing any rights he may have under the Age Discrimination in Employment Act of
1967 (“ADEA”), and that this waiver and release is knowing and voluntary. Employee agrees
that this waiver and release does not apply to any rights or claims that may arise under the

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ADEA
after the Effective Date of this Agreement. Employee acknowledges that the consideration given for
this waiver and release is in addition to anything of value to which Employee was already entitled.
Employee further acknowledges that he has been advised by this writing that: (a) he should consult
with an attorney prior to executing this Agreement; (b) he has twenty-one (21) days within
which to consider this Agreement; (c) he has seven (7) days following his execution of this
Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the
revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee
from challenging or seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law. In the event Employee signs this Agreement and returns it
to the Company in less than the 21-day period identified above, Employee hereby acknowledges that
he has freely and voluntarily chosen to waive the time period allotted for considering this
Agreement. Employee acknowledges and understands that revocation must be accomplished by a written
notification to Michael R. Splinter, President and Chief Executive Officer, that is received prior
to the Effective Date.

     5. California Civil Code Section 1542. Employee acknowledges that he has been advised
to consult with legal counsel and is familiar with the provisions of California Civil Code Section
1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

     Employee, being aware of said code section, agrees to expressly waive any rights he may have
thereunder, as well as under any other statute or common law principles of similar effect.

     6. No Pending or Future Lawsuits. Employee represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or entity, against the
Company or any of the other Releasees. Employee also represents that he does not intend to bring
any claims on his own behalf or on behalf of any other person or entity against the Company or any
of the other Releasees.

     7. Trade Secrets and Confidential Information/Company Property. Employee reaffirms
and agrees to observe and abide by the terms of the Confidentiality Agreement, specifically
including the provisions therein regarding nondisclosure of the Company’s trade secrets and
confidential and proprietary information. Employee’s signature below constitutes his certification
that he has returned to the Company all documents and other items provided to Employee by the
Company, developed or obtained by Employee in connection with his employment with the Company, or
otherwise belonging to the Company. Employee hereby grants consent to notification by the Company
to any new
employer about Employee’s obligations under this Section. Employee

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represents that he has not
to date misused or disclosed Confidential Information to any unauthorized party.

     8. No Cooperation. Employee agrees that he will not knowingly encourage, counsel, or
assist any attorneys or their clients in the presentation or prosecution of any disputes,
differences, grievances, claims, charges, or complaints by any third party against any of the
Releasees, unless under a subpoena or other court order to do so. Employee agrees both to
immediately notify the Company upon receipt of any such subpoena or court order, and to furnish,
within three (3) business days of its receipt, a copy of such subpoena or other court order. If
approached by anyone for counsel or assistance in the presentation or prosecution of any disputes,
differences, grievances, claims, charges, or complaints against any of the Releasees, Employee
shall state no more than that he cannot provide counsel or assistance.

     9. Non-Disparagement. Employee agrees to refrain from any disparagement, defamation,
libel, or slander of any of the Releasees, and agrees to refrain from any tortious interference
with the contracts and relationships of any of the Releasees. Employee shall direct any inquiries
by potential future employers to the Company’s Vice President of Human Resources, who shall use
his/her best efforts to respond by providing only the Employee’s last position and dates of
employment. The Company agrees to refrain from any disparagement, defamation, libel, or slander of
Employee. Employee understands that the Company’s obligations under this paragraph extend only to
the Company’s current executive officers and members of its Board of Directors and only for so long
as each officer or director is an employee or director of the Company. The Parties further agree
that each Party shall have the opportunity to review and approve any press release or other
publicly distributed written communication (other than the Company’s filings pursuant to the
Securities Exchange Act of 1934, as amended) regarding Employee’s departure from the Company prior
to publication or release of such communication.

     10. Breach. Employee acknowledges and agrees that any material breach of this
Agreement (including any breach of Section 12) or the Confidentiality Agreement shall entitle the
Company immediately to recover and cease providing the consideration provided to Employee under
Section 1 of this Agreement, unless such breach constitutes a legal action by Employee challenging
or seeking a determination in good faith of the validity of the waiver herein under the ADEA or as
otherwise provided by law. Except as provided by law, Employee shall also be responsible to the
Company for all damages incurred by the Company, including reasonable attorneys’ fees and costs,
in: (a) enforcing Employee’s obligations under this Agreement or the Confidentiality Agreement,
including in any action to recover the consideration, if and only if Company prevails in any such
action, and (b) defending against a claim or suit brought or pursued by Employee in violation of
the terms of Sections 3-5 of this Agreement.

     11. No Admission of Liability. Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all actual or potential disputed
claims by Employee. No action taken by the Company hereto, either previously or in connection with
this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any
actual or
potential claims or (b) an acknowledgment or admission by the Company of any fault or
liability whatsoever to Employee or to any third party.

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     12. Non-Competition. During the period commencing on the Termination Date and ending
on December 31, 2008 (the “Non-Competition Period”), Employee shall not (other than in connection
with his employment services to the Company through the Termination Date), without the prior
express written permission of the Company’s Chief Executive Officer, work as an employee, officer,
director, consultant, contractor, advisor, or agent of any of the Company’s Competitors (as defined
below). The Company’s Competitors (“Competitors”) for purposes of this Agreement are the
following: Novellus, ASM International, Lam, TEL (Tokyo Electron), and Varian Semiconductor.

     13. Non-Solicitation. Employee agrees that for the duration of the Non-Competition
Period, Employee shall not directly or indirectly solicit, induce, recruit or encourage any of the
Company’s employees to leave their employment at the Company. Notwithstanding the foregoing, with
respect to the Company’s employees who are not included on a list that has been provided to
Employee (the “Key Employee List”), a general advertisement by a subsequent employer of Employee
that is not specifically directed to such employees shall not be deemed a violation of this Section
13. During the Non-Competition Period, the Employee may show the Key Employee List only to the
highest ranking human resources executive at Employee’s then-current employer solely for the
purpose of complying with this Section 13; however, such human resources executive may not copy or
distribute the Key Employee List, and must return such list and any and all copies thereof at the
end of the Employee’s employment with such employer or, if earlier, at the end of the
Non-Competition Period.

     14. Costs. The Parties shall each bear their own costs, attorneys’ fees, and other
fees incurred in connection with the preparation of this Agreement.

     15. Definitions.

	 	 a.	 	For purposes of this Agreement, “Cause” shall mean:

	 	i.	 	Employee’s conviction of, or plea of
guilty or nolo contendere to, a felony or Employee’s entry into a
deferred prosecution agreement with respect to a charge of a
felony;
	 
	 	ii.	 	A material breach by Employee of this
Agreement, the Confidentiality Agreement or of a Company policy
(provided that the Employee shall have twenty (20) days after
receipt of written notice of such violation by the Company to cure
any breach that is capable of cure), unless such breach constitutes
a legal action by Employee challenging or seeking a determination
in good faith of the validity of the waiver herein under the ADEA
or as otherwise provided by law;

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	 	iii.	 	Fraud, dishonesty, willful misconduct
or gross negligence by Employee that impacts the Company’s business
or reputation;
	 
	 	iv.	 	Employee being found liable in any
Securities and Exchange Commission or other civil or criminal
securities law action or entering into any cease and desist order
with respect to such action (regardless of whether or not Employee
admits or denies liability);
	 
	 	v.	 	Employee (A) obstructing or impeding;
(B) endeavoring to influence, obstruct or impede, or (C) failing to
cooperate in good faith with, any investigation authorized by the
Board or any governmental or self-regulatory entity (an
“Investigation”). However, Employee’s failure to waive
attorney-client privilege relating to communications with
Employee’s own attorney in connection with an Investigation will
not constitute “Cause”; or
	 
	 	vi.	 	Employee’s disqualification or bar by
any governmental or self-regulatory authority from serving in the
capacity contemplated by the Agreement or Employee’s loss of any
governmental or self-regulatory license that is reasonably
necessary for Employee to perform his responsibilities to the
Company under the Agreement, if (A) the disqualification, bar or
loss continues for more than thirty (30) days, and (B) during that
period the Company uses its good faith efforts to cause the
disqualification or bar to be lifted or the license replaced. While
any disqualification, bar or loss continues during Employee’s
employment, Employee will serve in the capacity contemplated by the
Agreement to whatever extent legally permissible and, if Employee’s
employment is not permissible, Employee will be placed on leave
(which will be paid to the extent legally permissible).

     16. ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS
OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT
TO ARBITRATION IN SANTA CLARA COUNTY, CALIFORNIA, BEFORE JAMS, PURSUANT TO ITS EMPLOYMENT
ARBITRATION RULES & PROCEDURES (“JAMS RULES”). THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER
RELIEF IN SUCH DISPUTES. THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE
WITH CALIFORNIA LAW, INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL
APPLY SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY
CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH
CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL BE
FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE
PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED

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TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION AWARD.
THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH
ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES;
PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING
PARTY, EXCEPT AS PROHIBITED BY LAW OR AS OTHERWISE PROVIDED HEREIN. THE PARTIES HEREBY AGREE TO
WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY.
NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE
RELIEF (OR ANY OTHER PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND
THE SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED
HEREIN BY REFERENCE.

     17. Tax Consequences. The Company makes no representations or warranties with respect
to the tax consequences of the payments and any other consideration provided to Employee or made on
his behalf under the terms of this Agreement. Employee agrees and understands that he is
responsible for payment, if any, of local, state, and/or federal taxes on the payments and any
other consideration provided hereunder by the Company and any penalties or assessments thereon.
Employee further agrees to indemnify and hold the Company harmless from any claims, demands,
deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any
government agency against the Company for any amounts claimed due on account of (a) Employee’s
failure to pay or the Company’s failure to withhold, or Employee’s delayed payment of, federal or
state taxes, or (b) damages sustained by the Company by reason of any such claims, including
attorneys’ fees and costs.

     18. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement. Employee represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through him to bind them to
the terms and conditions of this Agreement. Each Party warrants and represents that there are no
liens or claims of lien or assignments in law or equity or otherwise of or against any of the
claims or causes of action released herein.

     19. No Representations. Employee represents that he has had an opportunity to consult
with an attorney, and has carefully read and understands the scope and effect of the provisions of
this Agreement. Employee has not relied upon any representations or statements made by the Company
that are not specifically set forth in this Agreement.

     20. Severability. In the event that any provision or any portion of any provision
hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal,
unenforceable, or void, this Agreement shall continue in full force and effect without said
provision or portion of provision.

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     21. Attorneys’ Fees. Except with regard to a legal action challenging or seeking a
determination in good faith of the validity of the waiver herein under the ADEA, in the event that
either Party brings an action to enforce or effect its rights under this Agreement, the prevailing
Party shall be entitled to recover its costs and expenses, including the costs of mediation,
arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with
such an action, except as otherwise provided herein.

     22. Entire Agreement. This Agreement, the Confidentiality Agreement, and the Stock
Agreements (as amended hereby) represent the entire agreement and understanding between the Company
and Employee concerning the subject matter of this Agreement and Employee’s employment with and
separation from the Company and the events leading thereto and associated therewith, and supersede
and replace any and all prior agreements and understandings concerning the subject matter of this
Agreement and Employee’s relationship with the Company. To the extent that there is any conflict
or inconsistency between this Agreement and the Confidentiality Agreement, this Agreement shall
govern.

     23. No Oral Modification. This Agreement may only be amended in a writing signed by
Employee and the Company’s Chief Executive Officer.

     24. Governing Law. This Agreement shall be governed by the laws of the State of
California, without regard for choice-of-law provisions.

     25. Effective Date. Each Party has seven (7) days after that Party signs this
Agreement to revoke it. This Agreement will become effective on the eighth day after it has been
signed by both parties, so long as it is not revoked by either Party before that date (the
“Effective Date”).

     26. Counterparts. This Agreement may be executed in counterparts and by facsimile,
and each counterpart and facsimile shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the undersigned.

     27. Voluntary Execution of Agreement. Employee understands and agrees that he
executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of
the Company or any third party, with the full intent of releasing all of his claims against the
Company and any of the other Releasees. Employee acknowledges that:

	 	(a)	 	he has read this Agreement;
	 
	 	(b)	 	he has been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of his own choice or has elected
not to retain legal counsel;
	 
	 	(c)	 	he understands the terms and consequences of this Agreement and
of the releases it contains; and
	 
	 	(d)	 	he is fully aware of the legal and binding effect of this Agreement.

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth
below.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	FARHAD MOGHADAM, an individual
	 	 
	 
	 	 	 	 	 	 	 	 
	Dated:

	 	7/19/07
	 	 	 	/s/ Farhad Moghadam	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Farhad Moghadam	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	APPLIED MATERIALS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	7/19/07
	 	 	 	By
	 	/s/ Jeannette Liebman	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Jeannette Liebman	 	 
	 

	 	 	 	 	 	 	 	Group Vice President, Global Human Resources	 	 

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Exhibit A

Options and Performance Shares Scheduled to Vest Through the Termination Date

	 	 	 	 	 	 	 
	 	 	 	 	 	 	# of Shares
	Grant ID	 	Grant Date	 	Award Type	 	Scheduled to Vest
	AMI561013
	 	12/13/05	 	Stock Option	 	50,000
	AMI561019
	 	12/13/05	 	Performance Shares (RSU)	 	12,500

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Exhibit B

Options and Performance Shares to Accelerate on the Termination Date

	 	 	 	 	 	 	 
	Grant ID	 	Grant Date	 	Award Type	 	# of Shares to Accelerate
	AMI561019
	 	12/13/05	 	Performance Shares (RSU)	 	12,500
	AMI212600
	 	11/03/04	 	Stock Option	 	62,500
	AMI561013
	 	12/13/05	 	Stock Option	 	50,000

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Exhibit C

Options to Be Extended up to the One-Year Anniversary of the Termination Date

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Maximum Expiration	 	# of Shares Subject	 	Exercise Price Per
	Grant ID	 	Grant Date	 	Date	 	to Option	 	Share
	AMI311527

	 	10/29/03
	 	10/29/10
	 	 	100,000	 	 	$	22.58	 
	AMI311528

	 	10/29/03
	 	10/29/10
	 	 	200,000	 	 	$	22.58	 
	116052

	 	08/16/01
	 	08/16/08
	 	 	20,000	 	 	$	22.35	 

Page 14 of 21

 

Exhibit D

SUPPLEMENTAL AGREEMENT AND RELEASE

     This Supplemental Agreement and Release (“Supplemental Agreement”) is made by and between
Farhad Moghadam (“Employee”) and Applied Materials, Inc. (the “Company”) (jointly referred to as
the “Parties” or individually referred to as a “Party”).

     1. Separation Agreement. The Company and Employee agree that the terms of the
Separation Agreement and Release that became effective on July ___, 2007 (the “Agreement”) shall
remain in full force and effect and are fully incorporated herein except to the extent they are
inconsistent with this Supplemental Agreement.

     2. Consideration.

          a. Cash and Benefits. Provided Employee has not breached the Agreement, has not been
terminated for “Cause” prior to his “Termination Date” (as such terms are defined in the Agreement)
and executes and does not revoke this Supplemental Agreement, Employee shall continue to receive
the cash and benefits provided in Sections 1(b), 1(c) and 1(d) of the Agreement.

          b. Equity Compensation. The Company agrees to accelerate the vesting of stock options
to purchase a total of 112,500 shares of Company common stock granted under the relevant Stock
Option Agreements and the Company’s Stock Option Plan and to accelerate the vesting of a total of
12,500 performance shares granted pursuant to the Performance Share Agreement dated December 13,
2005 (the “Accelerated Performance Shares”) and the Company’s Stock Option Plan, as detailed in
Exhibit B to the Agreement. Notwithstanding the accelerated vesting, the Accelerated
Performance Shares will be paid out to Employee in accordance with the original vesting schedule
contained in the Performance Share Agreement dated December 13, 2005. Effective as of the
“Effective Date” (as defined in Section 25 of the Agreement), Employee’s stock options listed on
Exhibit C to the Agreement shall remain exercisable until the earlier of (1) the one-year
anniversary of the Termination Date, or (2) the applicable scheduled expiration dates of such stock
options as set forth in the relevant Stock Option Agreement. In all other respects, such options,
all of Employees other vested options and the issuance of any shares shall continue to be governed
by the terms and conditions of the Company’s Stock Agreements Except as provided herein or in the
Agreement, all stock options, performance shares and the shares issuable under such awards shall
continue to be subject to the terms and conditions of the Company’s Stock Agreements. The
acceleration provided in this Section 1(b) constitutes an amendment to the Option Agreements and
the Performance Share Agreement listed on Exhibit B and the option exercisability extension
provided in this Section 1(b) constitutes an amendment to the Stock Option Agreements listed on
Exhibit C. To the extent not explicitly amended hereby, the Stock Agreements remain in
full force and effect.

     3. Payment of Salary. Employee acknowledges and represents that the Company has paid
or provided all salary, wages, bonuses, accrued vacation/paid time off, housing allowances,

Page 15 of 21

 

relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses,
commissions, stock, stock options, vesting, and any and all other benefits and compensation due to
Employee.

     4. Release of Claims.  Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Employee by the Company and its current
and former officers, directors, employees, agents, investors, attorneys, shareholders,
administrators, affiliates, divisions, and subsidiaries, and predecessor and successor corporations
and assigns (collectively, the “Releasees”). Employee, on his own behalf and on behalf of his
respective heirs, family members, executors, agents, and assigns, hereby and forever releases the
Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute or
pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to any matters
of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may
possess against any of the Releasees arising from any omissions, acts, facts, or damages that have
occurred up until and including the Effective Date of this Supplemental Agreement, including,
without limitation:

          a. any and all claims relating to or arising from Employee’s employment relationship with the
Company and the termination of that relationship;

          b. any and all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;

          c. any and all claims for wrongful discharge of employment; termination in violation of public
policy; discrimination; harassment; retaliation; breach of contract, both express and implied;
breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel;
negligent or intentional infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

          d. any and all claims for violation of any federal, state, or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the
Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the
Fair Labor Standards Act, except as prohibited by law; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee
Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the
Family and Medical Leave Act, except as prohibited by law; the Sarbanes-Oxley Act of 2002; the
California Family Rights Act; the California Labor Code, except as prohibited by law; the
California Workers’ Compensation Act, except as prohibited by law; and the California Fair
Employment and Housing Act;

          e. any and all claims for violation of the federal or any state constitution;

Page 16 of 21

 

          f. any and all claims arising out of any other laws and regulations relating to employment or
employment discrimination;

          g. any claim for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by Employee as a result of
this Supplemental Agreement; and

          h. any and all claims for attorneys’ fees and costs.

Employee agrees that the release set forth in this section shall be and remain in effect in all
respects as a complete general release as to the matters released. This release does not extend to
any obligations incurred under this Supplemental Agreement. This release does not release claims
that cannot be released as a matter of law, including, but not limited to: (1) Employee’s right to
file a charge with, or participate in a charge by, the Equal Employment Opportunity Commission or
comparable state agency against the Company (with the understanding that any such filing or
participation does not give Employee the right to recover any monetary damages against the Company;
Employee’s release of claims herein bars Employee from recovering such monetary relief from the
Company); (2) claims under Division 3, Article 2 of the California Labor Code (which includes
California Labor Code section 2802 regarding indemnity for necessary expenditures or losses by
employee); and (3) claims prohibited from release as set forth in California Labor Code section
206.5 (specifically “any claim or right on account of wages due, or to become due, or made as an
advance on wages to be earned, unless payment of such wages has been made”).

     5. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is
waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967
(“ADEA”), and that this waiver and release is knowing and voluntary. Employee agrees that this
waiver and release does not apply to any rights or claims that may arise under the ADEA after the
Effective Date of this Supplemental Agreement. Employee acknowledges that the consideration given
for this waiver and release is in addition to anything of value to which Employee was already
entitled. Employee further acknowledges that he has been advised by this writing that: (a) he
should consult with an attorney prior to executing this Supplemental Agreement; (b) he has
twenty-one (21) days within which to consider this Supplemental Agreement; (c) he has seven (7)
days following his execution of this Supplemental Agreement to revoke this Supplemental Agreement;
(d) this Supplemental Agreement shall not be effective until after the revocation period has
expired; and (e) nothing in this Supplemental Agreement prevents or precludes Employee from
challenging or seeking a determination in good faith of the validity of this waiver under the ADEA,
nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically
authorized by federal law. In the event Employee signs this Supplemental Agreement and returns it
to the Company in less than the 21-day period identified above, Employee hereby acknowledges that
he has freely and voluntarily chosen to waive the time period allotted for considering this
Supplemental Agreement. Employee acknowledges and understands that revocation must be accomplished
by a written notification to Michael R. Splinter, President and Chief Executive Officer, that is
received prior to the Effective Date of this Supplemental Agreement.

Page 17 of 21

 

     6. California Civil Code Section 1542. Employee acknowledges that he has been advised
to consult with legal counsel and is familiar with the provisions of California Civil Code Section
1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

     Employee, being aware of said code section, agrees to expressly waive any rights he may have
thereunder, as well as under any other statute or common law principles of similar effect.

     7. No Pending or Future Lawsuits. Employee represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or entity, against the
Company or any of the other Releasees. Employee also represents that he does not intend to bring
any claims on his own behalf or on behalf of any other person or entity against the Company or any
of the other Releasees.

     8. Breach. Employee acknowledges and agrees that any material breach of this Supplemental
Agreement, unless such breach constitutes a legal action by Employee challenging or seeking a
determination in good faith of the validity of the waiver herein under the ADEA, shall entitle the
Company immediately to recover and/or cease providing the consideration provided to Employee under
this Supplemental Agreement, except as provided by law. Except as provided by law, Employee shall
also be responsible to the Company for all costs, attorneys’ fees, and any and all damages incurred
by the Company in: (a) enforcing Employee’s obligations under this Supplemental Agreement,
including in any action to recover the consideration, if and only if Company prevails in any such
action, and (b) defending against a claim or suit brought or pursued by Employee in violation of
the terms of Sections 4-6 of this Agreement.

     9. ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS
OF THIS SUPPLEMENTAL AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL
BE SUBJECT TO ARBITRATION IN SANTA CLARA COUNTY, CALIFORNIA, BEFORE JAMS, PURSUANT TO ITS
EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”). THE ARBITRATOR MAY GRANT INJUNCTIONS AND
OTHER RELIEF IN SUCH DISPUTES. THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN
ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE
ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT
REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION. TO THE EXTENT THAT THE JAMS RULES
CONFLICT WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE DECISION OF THE ARBITRATOR
SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO

Page 18 of 21

 

THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL BE
ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION
AWARD. THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF
SUCH ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES;
PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING
PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY
DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. NOTWITHSTANDING THE FOREGOING,
THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL
REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF THEIR DISPUTE
RELATING TO THIS SUPPLEMENTAL AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN BY REFERENCE.

     10. Tax Consequences. The Company makes no representations or warranties with respect
to the tax consequences of the payments and any other consideration provided to Employee or made on
his behalf under the terms of this Supplemental Agreement. Employee agrees and understands that he
is responsible for payment, if any, of local, state, and/or federal taxes on the payments and any
other consideration provided hereunder by the Company and any penalties or assessments thereon.
Employee further agrees to indemnify and hold the Company harmless from any claims, demands,
deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any
government agency against the Company for any amounts claimed due on account of (a) Employee’s
failure to pay or the Company’s failure to withhold, or Employee’s delayed payment of, federal or
state taxes, or (b) damages sustained by the Company by reason of any such claims, including
attorneys’ fees and costs.

     11. No Representations. Employee represents that he has had an opportunity to consult
with an attorney, and has carefully read and understands the scope and effect of the provisions of
this Supplemental Agreement. Employee has not relied upon any representations or statements made
by the Company that are not specifically set forth in this Supplemental Agreement.

     12. Severability. In the event that any provision or any portion of any provision
hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal,
unenforceable, or void, this Supplemental Agreement shall continue in full force and effect without
said provision or portion of provision.

     13. Attorneys’ Fees. Except with regard to a legal action challenging or seeking a
determination in good faith of the validity of the waiver herein under the ADEA, in the event that
either Party brings an action to enforce or effect its rights under this Supplemental Agreement,
the prevailing Party shall be entitled to recover its costs and expenses, including the costs of
mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in
connection with such an action.

Page 19 of 21

 

     14. Entire Agreement. This Supplemental Agreement represents the entire agreement and
understanding between the Company and Employee concerning the subject matter of this Supplemental
Agreement and Employee’s relationship with the Company, the termination thereof, and the events
leading thereto and associated therewith, and supersedes and replaces any and all prior agreements
and understandings concerning the subject matter of this Supplemental Agreement and Employee’s
relationship with the Company, with the exception of the Agreement, the Confidentiality Agreement
and the Stock Agreements (as identified and defined in the Agreement).

     15. No Oral Modification. This Supplemental Agreement may only be amended in a
writing signed by Employee and the Company’s Chief Executive Officer.

     16. Governing Law. This Supplemental Agreement shall be governed by the laws of the
State of California, without regard for choice-of-law provisions.

     17. Effective Date. Each Party has seven (7) days after that Party signs this
Supplemental Agreement to revoke it. This Supplemental Agreement will become effective on the
eighth day after it has been signed by both parties, so long as it is not revoked by either Party
before that date (the “Effective Date”).

     18. Counterparts. This Supplemental Agreement may be executed in counterparts and by
facsimile, and each counterpart and facsimile shall have the same force and effect as an original
and shall constitute an effective, binding agreement on the part of each of the undersigned.

     19. Voluntary Execution of Agreement. Employee understands and agrees that he
executed this Supplemental Agreement voluntarily, without any duress or undue influence on the part
or behalf of the Company or any third party, with the full intent of releasing all of his claims
against the Company and any of the other Releasees. Employee acknowledges that:

	 	(a)	 	he has read this Supplemental Agreement;
	 
	 	(b)	 	he has been represented in the preparation, negotiation, and
execution of this Supplemental Agreement by legal counsel of his own choice or
has elected not to retain legal counsel;
	 
	 	(c)	 	he understands the terms and consequences of this Supplemental
Agreement and of the releases it contains; and
	 
	 	(d)	 	he is fully aware of the legal and binding effect of this Supplemental Agreement.

Page 20 of 21

 

IN WITNESS WHEREOF, the Parties have executed this Supplemental Agreement on the respective dates
set forth below.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	FARHAD MOGHADAM, an individual
	 	 
	 
	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Farhad Moghadam	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	APPLIED MATERIALS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	By	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Jeannette Liebman	 	 
	 

	 	 	 	 	 	 	 	Group Vice President, Global Human Resources	 	 

Page 21 of 21exv10w1

 

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

         This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made as of the 27th day of August, 2007
between Moldflow Corporation, a Delaware corporation (the “Company”), and Gregory Magoon
(“Executive”).

         WHEREAS, the Company and the Executive are party to a Change of Control Agreement dated
December 13, 2006 (“Prior Agreement”) and,

         WHEREAS, the Company and the Executive desire to replace the Prior Agreement with this
Executive Employment Agreement, which, upon execution will completely supersede the Prior
Agreement; provided, however that the parties agree that the terms and conditions of the Prior
Agreement shall have been in effect at all times from the date thereof until the date of this
Executive Employment Agreement.

         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 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 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 Executive
Vice President of Finance and Chief Financial Officer, Treasurer and Assistant Secretary 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 annual base salary shall be $205,000.
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 the Board or a Committee thereof
shall determine from time to time for senior executives of the Company. 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 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)      Additional Benefits. During the Period of Employment the Company will reimburse the
Executive for the cost of a supplemental policy of long-term disability insurance for the
Executive.

1

 

         (d)      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, if
applicable, its predecessors), he has and will become acquainted with the Company’s business
affairs, information, trade secrets, and other matters which are of a proprietary or confidential
nature, including but not limited to the Company’s and its affiliates’ and predecessors’
operations, business opportunities, price and cost information, finance, customer information,
product development information, business plans, various sales techniques, manuals, letters,
notebooks, procedures, reports, products, processes, services, and other confidential information
and knowledge (collectively the “Confidential Information”) concerning the Company’s and its
affiliates’ and predecessors’ business. 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.      Covenant Not to Compete. 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:

         (a)      during the Period of Employment and for a period of twelve (12) months thereafter,
regardless of the reason for termination of employment, Executive will not, directly or indirectly,
as an owner, director, principal, agent, officer, employee, partner, consultant, servant, or
otherwise, carry on, operate, manage, control, or become involved in any manner with any business,
operation, corporation, partnership, association, agency, or other person or entity which is
engaged in a business that is directly competitive with any of the Company’s products which are
produced or in development by the Company as of the date of Executive’s termination of employment,
anywhere in the world; provided, however, that the foregoing shall not prohibit Executive from
owning up to one percent (1%) of the outstanding stock of a publicly held company engaged in
activities competitive with that of the Company; and

         (b)      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 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.

2

 

         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 absent from his duties hereunder on a full-time basis 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 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) 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 terminate his employment hereunder for any reason, including but not limited to Good Reason.
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 material 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; (E) a
material change in the geographic location at which Executive must perform his services; 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. To constitute a termination for Good
Reason, the Executive must provide notice to the Company within 90 days following the initial
existence of any event constituting Good Reason and may not terminate employment pursuant to this
Section unless the Company fails to take action to remedy the event constituting Good Reason within
30 days of such notice.

         (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 Termination is given; (C)
if Executive’s employment is terminated by the Company under Subparagraph 6(d), thirty (30) days or such longer period as
the Board of

3

 

Directors may approve, 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.

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
the pro-rata portion (based on months worked during the fiscal year) of the actual cash bonus that
the Executive would have received had the Company met all of the “at plan” targets in the annual
bonus plan that has been approved by the Board of Directors for the fiscal year in which
Executive’s death occurred. Upon the death of Executive, (i) all stock options granted to
Executive on or after June 1, 2007, 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 granted to Executive on or after June 1, 2007 and 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 that Executive 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 until Executive’s employment is terminated due to disability in accordance
with Subparagraph 6(b) or until Executive terminates his employment in accordance with Subparagraph
6(e), whichever first occurs. Upon the Date of Termination, Executive shall receive the pro-rata
portion (based on months worked during the fiscal year) of the actual cash bonus that the Executive
would have received had the Company met all of the “at plan” targets in the annual bonus plan that
has been approved by the Board of Directors for the fiscal year in which the Date of Termination
occurred and (i) all stock options granted to Executive on or after June 1, 2007, 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 granted to Executive on or after June 1,
2007 and 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 other than for Good Reason as
provided in Subparagraph 6(e), 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

4

 

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 terminates his employment for Good Reason as provided in Subparagraph 6(e) or
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 plus the pro-rata portion (based on months worked during the fiscal year) of the actual cash
bonus that the Executive would have received had the Company met all of the “at plan” targets in
the annual bonus plan that has been approved by the Board of Directors for the fiscal year in which
termination occurred. In addition, subject to signing by Executive of a general release of claims
(the “Release”) in a form and manner satisfactory to the Company, 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 effective date of the Release.
Anything in this Agreement to the contrary notwithstanding, if 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 is considered a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment
that the Executive becomes entitled to under this Agreement is considered deferred
compensation subject to interest, penalties and additional tax imposed pursuant to Section
409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code,
then no such payment shall be payable prior to the date that is the earlier of (i) six
months and one day after the Executive’s separation from service, or (ii) the Executive’s
death. Any such deferred payment shall earn interest calculated at the short-term
applicable federal rate. On or before the Executive’s Date of Termination, the Company
shall make an irrevocable contribution to a rabbi trust with an independent bank
trustee            in an amount equal to the amount of such deferred payment plus interest.

(ii)     Upon the Date of Termination, (i) all stock options granted to Executive on or
after June 1, 2007 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 granted to Executive on or after June 1, 2007 and 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
Termination Date in accordance with their terms.

(iii)    In addition to any other benefits to which Executive may be entitled in
accordance with the Company’s then existing severance policies, 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 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

5

 

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 Benefit. 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).

         (a)      Change in Control.

            (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, 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 calculated at an
amount equal to the actual cash bonus that the Executive would have received if the Company
had met all of the aggressive targets in the annual bonus plan that has been approved by the
Board of Directors for the fiscal year in which the change of control occurred or, if
greater, the fiscal year in which the termination of employment is effective (collectively,
the “Severance Amount”). 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 following the effective date
of the Release. For purposes of this Agreement, “Base Salary” shall mean the annual Base
Salary in effect on the Date of Termination). Anything in this Agreement to the contrary
notwithstanding, if at the time of the Executive’s separation from service within the
meaning of Section 409A of the Code, the Executive is considered a “specified employee”
within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment that the
Executive becomes entitled to under this Agreement is considered deferred compensation
subject to interest, penalties and additional tax imposed pursuant to Section 409A(a) of the
Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such
payment shall be payable prior to the date that is the earlier of (i) six months and one day
after the Executive’s separation from service, or (ii) the Executive’s death. Any such
deferred payment shall earn interest calculated at the short-term applicable federal rate.
On or before the Executive’s Date of Termination, the Company shall make an irrevocable
contribution to a rabbi trust with an independent bank trustee in an amount equal
to the amount of such deferred payment plus interest.

            (ii)     Notwithstanding anything to the contrary in any applicable option agreement or
stock-based award agreement, upon a Change in Control, all stock options, shares of
Restricted Stock and other stock-based awards granted to Executive by the Company 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; and

            (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, 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.

         (b)      Additional Limitation.

            (i)      Anything in this Agreement to the contrary notwithstanding, in the event that any

6

 

compensation, payment or distribution by the Company to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise (the “Severance Payments”), would be subject to the excise tax imposed by Section 4999 of
the Code, the following provisions shall apply:

                    (A)      If the Severance Payments, reduced by the sum of (1) the Excise Tax and (2) the
total of the Federal, state, and local income and employment taxes payable by the Executive
on the amount of the Severance Payments which are in excess of the Threshold Amount, are
greater than or equal to the Threshold Amount, the Executive shall be entitled to the full
benefits payable under this Agreement.

                    (B)      If the Threshold Amount is less than (x) the Severance Payments, but greater than
(y) the Severance Payments reduced by the sum of (1) the Excise Tax and (2) the total of the
Federal, state, and local income and employment taxes on the amount of the Severance
Payments which are in excess of the Threshold Amount, then the benefits payable under this
Agreement shall be reduced (but not below zero) to the extent necessary so that the maximum
Severance Payments shall not exceed the Threshold Amount. To the extent that there is more
than one method of reducing the payments to bring them within the Threshold Amount, the
Executive shall determine which method shall be followed; provided that if the Executive
fails to make such determination within 45 days after the Company has sent the Executive
written notice of the need for such reduction, the Company may determine the amount of such
reduction in its sole discretion.

                 (ii)     For the purposes of this Section 8(b), “Threshold Amount” shall mean three times the
Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations
promulgated thereunder less one dollar ($1.00); and “Excise Tax” shall mean the excise tax imposed
by Section 4999 of the Code, and any interest or penalties incurred by the Executive with respect
to such excise tax.

                 (iii)    The determination as to which of the alternative provisions of Section 8(b)(i) shall
apply to the Executive shall be made by a nationally recognized accounting firm selected by the
Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the Date of Termination, if applicable, or at
such earlier time as is reasonably requested by the Company or the Executive. For purposes of
determining which of the alternative provisions of Section 8(b)(i) shall apply, the Executive shall
be deemed to pay federal income taxes at the highest marginal rate of federal income taxation
applicable to individuals for the calendar year in which the determination is to be made, and state
and local income taxes at the highest marginal rates of individual taxation in the state and
locality of the Executive’s residence on the Date of Termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and local taxes. Any
determination by the Accounting Firm shall be binding upon the Company and the Executive.

          (c)      Definitions. For purposes of this Paragraph 8, the following terms shall have the
following meanings:

          “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 value $0.01 per share (“Common
Stock”) (other than as a result of an acquisition of securities directly from the Company);
or

7

 

            (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).

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;
	 
	 	 	 	 
	 	 	if to the Company:
	 

	 	 	 	Moldflow Corporation

492 Old Connecticut Path, Ste. 401

Framingham, MA 01701

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

8

 

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.     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 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).

12.     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.

13.     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.

14.     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.

15.     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 15, including, but not limited to, reasonable attorneys’ fees and
costs.

9

 

          IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year
first above written.

	 	 	 	 	 
	 	MOLDFLOW CORPORATION

 	 
	 	By:  	/s/
A. Roland Thomas 	 
	 	Its: 	President, CEO and Chairman of the Board of Directors 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	/s/
Gregory W. Magoon 	 
	 	Gregory W. Magoon 	 
	 	 	 
	 

10

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