Document:

EMPLOYMENT AGREEMENT

Exhibit 10.3

 

SEVERANCE AGREEMENT

 

                This agreement is made between Commerce One

Operations, Inc. (“Commerce One”), a Delaware Corporation, and Charles Boynton

(“Mr. Boynton”).   In consideration for

Mr. Boynton’s continued employment at Commerce One, the sufficiency of which

both parties expressly acknowledge, Commerce One agrees as follows:  Except in the event of a Change of Control

(as defined in the Change of Control Severance Agreement between Commerce One

and Boynton dated June 5, 2002 (“Change of Control Agreement”)) in which case

the terms of the Change of Control Agreement shall govern, Commerce One shall

pay Mr. Boynton up to six (6) months of salary and health and dental benefits

(to the extent such benefits may be offered during such period under the

applicable plan) at his current salary and benefits-election levels as of the

time of termination, if any of the “Triggering Events” set forth below occur

between July 1, 2002 and June 30, 2003. 

The parties agree and understand that this Agreement will expire on July

1, 2003.

 

Payments

under this Agreement will be made on a normal payroll cycle on a semi-monthly

basis until the six-month period is completed, or until Mr. Boynton begins new

employment as described below.  To the

extent Mr. Boynton is entitled to separation benefits under WARN or any

comparable state statute, or under the Company’s severance plan as it exists at

the time of the Triggering Events, he will receive those benefits in full.  However, any benefits Mr. Boynton receives

under WARN, or as severance, will count toward the six-month salary

continuation so that the Company’s salary payments to Mr. Boynton will not

exceed a total of six (6) months.  The

Triggering Events are as follows:

 

(1)          Commerce One

terminates Mr. Boynton’s employment due to a Company-initiated reduction in

force; or

 

(2)          Without good

cause, if: (i) Commerce One terminates Mr. Boynton or (ii) Commerce One, without Mr. Boynton’s express written

consent, significantly reduc­es his title, duties, authority or responsibilities,

relative to the Employee’s title, duties, authority or responsibilities as in

effect immediately prior to such reduction, or the assignment to Employee of

such reduced title, duties, authority or responsibilities.  For purposes of this agreement, good cause

is defined as (1) a material failure by Mr. Boynton in the performance of his

job duties, which has not been cured after thirty days written notice by

Commerce One; (2) conviction of a felony of any type; (3) theft,

misappropriation, or embezzlement; (4) self-dealing, breach of fiduciary duty,

breach of confidentiality or breach of any other obligation to Commerce One as

set forth in any Company policy or any written agreement between Commerce One

and Mr. Boynton; (4) illegal use, possession or sale of illegal drugs; (5)

death or a disability that prevents Mr. Boynton from performing any essential

function of his position.;

 

Any payments to be made

under provisions (1) or (2) above shall cease if Mr. Boynton obtains other

full-time employment during the six-month period.  Payments will stop as of the day on which the new employment

begins.  Within three days of accepting

full-time employment during the six-month period, Mr. Boynton shall notify

Commerce One’s Chief Administrative Officer of the acceptance.  The parties expressly agree that failure by

Mr. Boynton to provide such notice will constitute a material breach of this

Agreement.  Notwithstanding the above,

to the extent the Company has a severance plan in effect at the time of the

Triggering Events that allows departing employees at Mr. Boynton’s level to

receive severance payments for some period of time regardless of whether or not

they obtained other employment after separation from the Company (as of the

Effective Date, this period is two months), this Agreement will provide 

 

 

 

the same benefit to Mr. Boynton.  Similarly, if at the time of the Triggering

Events the Company has a severance plan in effect that would otherwise provide

Mr. Boynton with greater salary or benefits than would this Agreement, Mr.

Boynton will receive the greater salary or benefits provided by that severance

plan instead of those provided by this Agreement.

 

This agreement and the

Change of Control Agreement constitute the entire understanding between the

parties with respect to the subject matter hereof and supersede and cancel all

prior or contemporaneous agreements, whether oral or written.  Notwithstanding the foregoing, nothing

herein shall affect the Employee Proprietary Information and Inventions Agreement

dated November 30, 1999 and the Indemnification Agreement dated June 1, 2002

between Mr. Boynton and Company, each of which shall remain in full force and

effect in accordance with their terms. 

All waivers must be in writing, and failure at any time to require the

other party’s performance of any obligation under this Agreement shall not

affect the right to require future performance of that obligation.  This Agreement shall be governed by the laws

of the State of California.  All

disputes arising from this agreement, or relating to this agreement, shall be

subject to the exclusive jurisdiction of the courts in the State of

California.  If any provision of this

Agreement is ruled invalid or unenforceable, such invalidity or

unenforceability will have no effect on the other provisions of this

Agreement.  In its place, a suitable and

equitable provision will be substituted to carry out, so far as may be valid

and enforceable, the intent and purpose of the invalid or unenforceable

provision.

 

 

	

  Dated:

  	

  July 29, 2002

  	

   

  	

  /s/ Charles Boynton

  
	

   

  	

   

  	

  Charles Boynton

  
	

   

  	

   

  	

   

  
	

  Dated:

  	

  July 29, 2002

  	

   

  	

  /s/ Diana Jacobs

  
	

   

  	

   

  	

  Diana Jacobs,

  
	

   

  	

   

  	

  Chief Administrative

  Officer

  
	

   

  	

   

  	

  For Commerce One

  Operations, Inc.

  

 

2[CK LETTERHEAD]

Exhibit

10.10

 

OMTOOL, LTD.

 

March

29, 2002

Personal and Confidential

 

Timothy P. Losik

525 South Road

Rye, New

Hampshire  03870

 

                Re:  Severance Eligibility

 

Dear Tim:

 

In connection with your

“at-will” employment offer by Omtool, Ltd. (“Omtool” or the “Company”), Omtool

agrees to provide you with eligibility for the severance benefits set forth in

this letter agreement (the “Agreement”) if your employment is terminated under

the circumstances described below:

 

1.             At-Will Employment.  This Agreement is not a contract to employ

you for a definite time period, and is not intended to be and does not

constitute a contract or part of a contractual agreement for continued

employment, either express or implied, between the Company and you, it being

acknowledged that your employment is “at will” and that either you or Omtool

may terminate the employment relationship at any time, for any or no reason,

with or without “Cause” (as defined herein) and with or without prior notice.

 

2.             Notice of Termination and other Matters.  Any termination of your employment, whether

by you or Omtool, will be communicated by written notice (“Notice of

Termination”) to the other party.  All

notices provided for in this Agreement will be in writing and will be effective

when delivered or mailed by U.S. mail, postage prepaid, addressed to Omtool,

Ltd., 8 Industrial Way, Salem, NH 03079, and to you at the address shown above

or to such other address as either Omtool or you may have furnished to the

other in writing.

 

3.             Severance

Payments and Benefits Upon a Qualified Termination.

 

(a) Omtool will provide

you with the severance payments listed below only in the event of a Qualified

Termination and provided that you execute a general release agreement in a form

acceptable to the Company, except that the release will not effect your rights

to indemnification or vested Benefits, and provided that you continue to adhere

to any post-termination obligations including, but not limited to, any

non-competition, non-disclosure and non-solicitation covenants.  A “Qualified Termination” means your

employment is terminated by the Company without “Cause” or by you for “Good

Reason” (i) within the first year of your employment, or (ii) anytime after a

Change of Control of the Company.  A

termination of your employment will not constitute a “Qualified

Termination” if your employment is terminated because (i) you die or become

Disabled, (ii) Omtool terminates you for “Cause,” (iii) you resign or retire

without “Good Reason”, (iv) you resign with “Good Reason” or you are terminated

without “Cause” after the first year of your employment but before a Change of

Control, or (v) the Company files for 

 

 

bankruptcy.

 

(b) If a Qualified

Termination occurs, you will be eligible to receive the following severance pay

and benefits:

 

                (i) Severance Pay.  Severance pay, in equal monthly installments at your monthly base

salary rate in effect immediately prior to the Qualified Termination, for

twelve months from the date of the Qualified Termination.  The first severance payment will be made

upon the first regularly scheduled Company payday on or following your

execution of the release agreement referenced above, in accordance with the

Company’s normal payroll practices as established or modified from time to

time, and will be subject to all federal, state and/or local payroll and

withholding taxes.

 

                (ii) Payment of COBRA Premiums.  If you are eligible for and elect to

continue health and dental continuation coverage in accordance with the

Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company

will pay your COBRA premium (equal to the amount it paid during your

employment) until the earlier of (x) 12 months from the date of the Qualified

Termination, or (y) the date on which you become ineligible to receive COBRA

coverage.  During the period in which

the Company is providing this benefit, you will be responsible for paying the

portion of the premiums required for active employees, which will be

automatically deducted from the severance payments referenced in Section

3(b)(i).  Thereafter, you will be

responsible for all COBRA payments.

 

(c) In addition to the

amounts set forth in Section 3(b), in the event a Qualified Termination occurs

within one year after a Change of Control, any unvested stock options

issued to you will become immediately vested and exercisable.

 

(d) In the event it shall

be determined that any payment by the Company to you (or for your benefit

pursuant to this Agreement) is an “excess parachute payment” within the meaning

of Section 280G of the Internal Revenue Code of 1986, as amended (the

“Code”), in connection with, or arising out of, your employment with the

Company or a Change in Control of the Company or a substantial portion of its

assets (a “Payment”), and would be subject to the excise tax imposed by

Section 4999 of the Code (the “Excise Tax”), then the Company shall pay to

you an additional payment (the “Gross-Up Payment”) in an amount such that the

amount paid to you, net of any Excise Tax on such Payment and any additional Excise

Tax or Income Tax on the Gross-Up Payment, shall equal the amount of such

Payment.  Such Gross-Up Payment shall be

subject to and paid net of any applicable withholding.  The amount of any Gross-Up Payment or Excise

Tax shall be reasonably determined by the Company after consultation with its

legal and tax advisors.  In the event

that the Excise Tax with respect to the Payments is subsequently determined to

be less than the amount taken into account for purposes of calculating the

Gross-Up Payment, you shall promptly repay to the Company the portion of the

Gross-Up Payment that exceeds the Gross-Up Payment that otherwise would have

been payable in connection with the actual Excise Tax imposed on the

Payments.  If the Actual Excise Tax

imposed on the Payments is greater than originally calculated Company the

Company will promptly make any required additional payments to fulfill its

obligations under this section.

 

2

 

 

(e) You will not be

entitled to any of the severance payments and/or benefits set forth above in

Sections 3(b) or 3(c) if your employment termination from Omtool is not a

Qualified Termination.  If your

employment termination is not a Qualified Termination, your employment and this

Agreement will automatically terminate and the Company will pay you (or in the

case of death, your designated beneficiary or, if no beneficiary has been

designated by you, your estate) your base salary earned but unpaid and vacation

pay accrued but unused as of the termination date.

 

                (f) If Omtool determines that you have violated the

terms of any non-competition or confidentiality provision contained in any

employment, consulting, advisory, non-disclosure, non-competition or other

similar agreement between you and Omtool, then you agree that Omtool,

regardless of the manner of your employment termination, can refuse to pay

and/or cease paying and/or performing all severance-related obligations under

this Section 3 to the extent permitted by applicable law.  The cessation of these severance payments

and benefits shall be in addition to, and not as an alternative to, any other

remedies at law or in equity available to the Company, including the right to

seek an injunction, which you shall not oppose.

 

                4.             Definitions.  For the purposes of this Agreement, the

terms listed below are defined as follows:

 

(a) Disabled.  You are “Disabled” for the purposes of this

Agreement if you have been absent from the full-time performance of your duties

with Omtool for 180 days, whether or not consecutively, within a any

consecutive 12-month period, because of incapacity due to physical or mental

impairment that substantially limits a major life activity, and you fail to

resume performance of your essential job duties, with or without reasonable

accommodation (provided that any such accommodation does not cause the Company

an undue hardship).

 

(b) Cause.  “Cause,” which shall be determined by the

Company’s Board of Directors (the “Board”), shall mean: (i) your failure or

refusal to render services to the Company, (ii) your failure to perform

adequately the duties of your employment after you receive written notice from

the Board setting forth in reasonable detail the nature of the performance

inadequacies and you fail to cure such inadequacies within 30 days from

receiving such notice, (iii) your commission of any act of gross negligence,

dishonesty which materially affects the Company or its employees,

insubordination or breach of fiduciary duty, (iv) your material breach of any

term of this Agreement or any other agreement with Omtool, (v) your conviction

of or plea of nolo contendere to (A) any felony or (B) any misdemeanor

involving fraud, deceit, moral turpitude or embezzlement, (vi) your disregard

of or failure to follow the Company’s rules or policies, or your commission of

any other action that may cause material injures to the Company, including your

misappropriation of any money or other assets or property (tangible or

intangible) of the Company.

 

(c) Change of Control.  A “Change of Control” shall mean the

occurrence of an “Acquisition” as defined in the Company’s 1997 Stock Plan, as

amended, during the period in which you are eligible to receive the severance

payments listed in Section 3.

 

(d) Good Reason.  A termination by you for “Good Reason” will

occur whenever any of 

 

3

 

the following

circumstances have taken place, without your written consent, which the Company

and the Board, after receiving written notice thereof, have failed to cure

within 30 days of receiving such notice: (i) your position, duties and/or

responsibilities are significantly and materially diminished, such that you are

effectively demoted; (ii) your base salary is reduced; or (iii) in the event of

a Change of Control, Omtool or any person in control of Omtool requires you to

perform your principal duties in a new location outside a radius of 30 miles

from your business location at the time of the Change of Control.

 

5.            Assignment. 

Omtool may assign this Agreement, which will inure to the benefit of and

be enforceable by Omtool’s successors and assigns.  You may not assign this Agreement.

 

6.           Confidentiality. 

The terms and conditions of this Agreement are strictly

confidential.  You shall not discuss or

reveal any information concerning this letter agreement to any past or present

Omtool employee or any third person or entity other than your counsel and

members of your immediate family.

 

7.             Miscellaneous.

 

(a) In the event of any

dispute, this Agreement will be construed as a whole, will be interpreted in

accordance with its fair meaning, and will not be construed strictly for or

against either you or the Company.  If

one or more of the provisions contained in this Agreement shall for any reason

be held to be excessively broad as to scope, activity, subject or otherwise so

as to be unenforceable at law, such provision or provisions shall be construed

by the appropriate judicial body by limiting or reducing it or them, so as to

be enforceable to the maximum extent compatible with the applicable law as it

shall then appear.

 

(b) This Agreement shall

be deemed to be made and entered into in the State of New Hampshire.  This Agreement and any claims arising out of

this Agreement (or any other claims arising out of the relationship between the

parties) shall be governed by and construed in accordance with the laws of the

State of New Hampshire and shall in all respects be interpreted, enforced and

governed under the internal and domestic laws of such State, without giving

effect to the principles of conflicts of laws of such State.

 

(c) No waiver by the

Company of any breach by you of any provision hereof shall be deemed to be a

waiver of any later or other breach thereof or as a waiver of any other

provision of this Agreement.  This

Agreement may not be waived, changed, discharged or terminated orally or by any

course of dealing between the parties, but only by an instrument in writing

signed by you and either the Company’s Chief Executive Officer or a designated,

disinterested member of the Company’s Board of Directors.

 

(d) You must execute a

legally enforceable separation agreement and general release in a form

acceptable to Omtool prior to the receipt of any payments set forth above.

 

(e) This Agreement is the

exclusive agreement with respect to the severance benefits payable to you in

the event of a termination of your employment. 

All prior negotiations and agreements regarding severance benefits,

whether oral or written, express or implied, are hereby 

 

4

 

superseded and cancelled.

 

If this letter

sets forth our agreement, kindly sign and return to Omtool the enclosed copy of

this letter.

 

	

   

  	

  Sincerely,

  
	

   

  	

   

  
	

   

  	

  OMTOOL, LTD.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Robert Voelk

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Title:

  	

  President & CEO

  
	

   

  	

   

  
	

  Accepted and agreed to

  this 1st day of April, 2002

  
	

   

  
	

  Timothy P. Losik

  	

   

  
	

  Name — please print

  	

   

  
	

   

  	

   

  
	

  /s/ Timothy P. Losik

  	

   

  
	

  Signature

  	

   

  
					

 

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