Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this "AGREEMENT") is made and
entered into as of this 17th day of February 2004, by and between Thinking
Tools, Inc., a Delaware corporation (the "COMPANY") and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("EXECUTIVE").
1. ENGAGEMENT AND DUTIES.
1.1 Upon the terms and subject to the conditions set forth in this
Agreement, the Company hereby engages and employs Executive as an officer of the
Company, with the title and designation of Chief Executive Officer and Chief
Financial Officer of the Company. Executive hereby accepts such engagement and
employment.
1.2 Executive's duties and responsibilities shall be those normally and
customarily vested in the offices of the Chief Executive Officer and Chief
Financial Officer of a corporation, and Executive will have full responsibility
and authority for the management of the worldwide operations of the Company,
subject to the supervision, direction and control of the Board of Directors (the
"BOARD") of the Company. In addition, Executive's duties shall include those
duties and services for the Company and its affiliates as the Board shall from
time to time reasonably direct. Executive shall report directly to the Board and
its Chairman.
1.3 Executive will be elected to the Board, and Company will use its
best efforts to cause Executive to continue to be a member of such Board
throughout the term of this Agreement.
1.4 Executive agrees to devote his primary business time, energies,
skills, efforts and attention to his duties hereunder, and will not, without the
prior written consent of the Company, which consent will not be unreasonably
withheld, render any material services to any other business concern. Executive
will use his best efforts and abilities faithfully and diligently to promote the
Company's business interests.
1.5 Except for routine travel incident to the business of the Company,
Executive shall perform his duties and obligations under this Agreement
principally from an office provided by the Company in the New York City
metropolitan area (including in New York and/or Connecticut), as the Board may
from time to time determine.
2. TERM OF EMPLOYMENT.
2.1 The term of this Agreement (the "TERM") shall commence on the date
set forth above and shall continue until February 17, 2005, unless terminated
earlier in accordance with the provisions below.
2.2 Notwithstanding any portion of the foregoing to the contrary, this
Agreement shall terminate during the original term at the earliest to occur of
the following:
(a) the death of Executive;
(b) delivery to Executive of written notice of termination by the
Company if Executive shall suffer a "permanent disability," which for purposes
of this Agreement shall mean a physical or mental disability which renders
Executive, in the reasonable judgment of the Board, unable to perform his duties
and obligations under this Agreement for 90 days in any 12-month
period;
(c) delivery to Executive of written notice of termination by the
Company "for cause," by reason of: (i) the commission by Executive of a felony
or any crime involving moral turpitude; (ii) any act of personal misconduct
which is materially prejudicial or injurious to the financial or business
interests of the Company; (iii) any willful failure to act in good faith in
accordance with the policies of the Company or failure to comply with written
instructions of the Chairman of the Board of Directors, or the Board of
Directors as a whole; or (vi) any breach of any portion of this Agreement.
(d) delivery to Executive of written notice of termination by the
Company "without cause."
2.3 If the Executive's employment is terminated pursuant to Section
2.2(a), 2.2(b) or 2.2(c), the Company will pay Executive (or his estate or legal
representative) on the termination date, Executive's accrued and unpaid base
salary through the date of termination plus any accrued vacation pay and
unreimbursed expenses. If Executive's employment is terminated pursuant to
Section 2.2(d), the Company will pay, or otherwise provide to, Executive: (i) on
the termination date, an amount equal to Executive's accrued and unpaid salary
through the date of termination, plus any accrued vacation pay and any
unreimbursed expenses and any Incentive Bonus then earned but not already paid;
(ii) an amount equal to the greater of six (6) months of Executive's then
current salary, or the remainder of the term, in each case payable in equal
bi-monthly installments over such period (i.e., the 6-month period following
such termination, or greater period following such termination) (the payments
under clauses (ii)(A) and (ii)(B) herein shall be referred to as the "SEVERANCE
PAYMENTS"); (iii) medical insurance coverage for any period during which a
continuing Severance Payment is being paid to Executive.
3. COMPENSATION.
3.1 The Company shall pay to Executive a base salary at an annual rate
of $200,000, less applicable deductions and withholdings (as described below),
during each fiscal year of this Agreement. The base salary will be subject to
annual review beginning at the end of the first year of the term, and may be
increased (but not decreased) for subsequent years. The base salary shall be
payable in installments throughout the year in the same manner and at the same
times the Company pays base salaries to other executive officers of the Company.
3.2 In addition to the base salary to be paid to Executive hereunder,
Executive shall be eligible to receive a bonus (the "INCENTIVE BONUS") in
accordance with the terms of the Company's Management Incentive Plan as may be
in affect from time to time.
3.3 Upon execution of this Agreement, Executive will be granted a
non-qualified stock option (the "OPTION") under the Company's 2004 Long-Term
Incentive Plan to acquire 16,250,000 shares of the Company's Common Stock,
subject to customary adjustments (the "OPTION SHARES"). The Option will have a
10-year term and an exercise price equal to the fair market value on the date of
grant. The Option will become exercisable (i.e., vest) as to the Option Shares
as follows: 25% at February 17, 2004, an additional 25% on February 17, 2005, an
additional 25% on February 17, 2006, and an additional 25% on February 17, 2007.
3.4 Executive shall be entitled each year to vacation for a minimum of
four
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calendar weeks, plus such additional period or periods as the Board may approve
in the exercise of its reasonable discretion, during which time his compensation
shall be paid in full, with unused vacation time accruing up to eight weeks.
3.5 Executive shall be entitled to reimbursement from the Company for
the reasonable costs and expenses which he incurs in connection with the
performance of his duties and obligations under this Agreement in a manner
consistent with the Company's practices and policies as adopted or approved from
time to time by the Board for executive officers.
3.6 The Company may deduct from any compensation payable to Executive
the minimum amounts sufficient to cover applicable federal, state and/or local
income tax withholding, old-age and survivors' and other social security
payments, state disability and other insurance premiums and payments.
4. OTHER BENEFITS. During the term of his employment hereunder, Executive
shall be eligible to participate in all operative employee benefit and welfare
plans of the Company then in effect from time to time and in respect of which
all executive officers of the Company generally are entitled to participate
("COMPANY EXECUTIVE BENEFIT PLANS"), including, to the extent then in effect,
all life, health (including medical, dental and vision) and long-term disability
insurance programs, all pension, profit-sharing and retirement plans and all
other fringe-benefit plans and programs, all on the same basis applicable to
employees of the Company whose level of management and authority is comparable
to that of Executive.
5. CONFIDENTIALITY OF PROPRIETARY INFORMATION AND MATERIAL.
5.1 Industrial Property Rights. For the purpose of this Agreement,
"INDUSTRIAL PROPERTY RIGHTS" shall mean all of the Company's patents,
trademarks, trade names, inventions, copyrights, know-how or trade secrets, now
in existence or hereafter developed or acquired by the Company or for its use,
relating to any and all products and services which are developed, formulated
and/or manufactured by the Company.
5.2 Trade Secrets. For the purpose of this Agreement, "TRADE SECRETS"
shall mean any formula, pattern, device, or compilation of information that is
used in the Company's business and gives the Company an opportunity to obtain an
advantage over its competitors who do not know and/or do not use it. This term
includes, but is not limited to, information relating to the marketing of the
Company's products and services, including price lists, pricing information,
customer lists, customer names, the particular needs of customers, information
relating to their desirability as customers, financial information, intangible
property and other such information which is not in the public domain.
5.3 Technical Data. For the purpose of this Agreement, "TECHNICAL DATA"
shall mean all information of the Company in written, graphic or tangible form
relating to any and all products which are developed, formulated and/or
manufactured by the Company, as such information exists as of the date of this
Agreement or is developed by the Company during the term hereof.
5.4 Proprietary Information. For the purpose of this Agreement,
"PROPRIETARY INFORMATION" shall mean all of the Company's Industrial Property
Rights, Trade Secrets and Technical Data. Proprietary Information shall not
include any information which (i)
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was lawfully in the possession of Executive prior to Executive's employment with
the Company, (ii) may be obtained by a reasonably diligent businessperson from
readily available and public sources of information, (iii) is lawfully disclosed
to Executive after termination of Executive's employment by a third party which
does not have an obligation to the Company to keep such information
confidential, or (iv) is independently developed by Executive after termination
of Executive's employment without utilizing any of the Company's Proprietary
Information.
5.5 Agreement Not To Copy Or Use. Executive agrees, at any time during
the term of his employment and for a period of ten years thereafter, not to
copy, use or disclose (except as required by law after first notifying the
Company and giving it an opportunity to object) any Proprietary Information
without the Company's prior written permission. The Company may withhold such
permission as a matter within its sole discretion during the term of this
Agreement and thereafter.
6. RETURN OF CORPORATE PROPERTY AND TRADE SECRETS. Upon any termination of
this Agreement, Executive shall turn over to the Company all property, writings
or documents then in his possession or custody belonging to or relating to the
affairs of the Company or comprising or relating to any Proprietary Information.
7. DISCOVERIES AND INVENTIONS.
7.1 Disclosure. Executive will promptly disclose in writing to the
Company complete information concerning each and every invention, discovery,
improvement, device, design, apparatus, practice, process, method, product or
work of authorship, whether patentable or not, made, developed, perfected,
devised, conceived or first reduced to practice by Executive, whether or not
during regular working hours (hereinafter referred to as "Developments"), either
solely or in collaboration with others, (a) prior to the term of this Agreement
while working for the Company, (b) during the term of this Agreement or (c)
within six months after the term of this Agreement, if relating either directly
or indirectly to the business, products, practices, techniques or confidential
information of the Company.
7.2 Assignment. Executive, to the extent that he has the legal right to
do so, hereby acknowledges that any and all Developments are the property of the
Company and hereby assigns and agrees to assign to the Company any and all of
Executive's right, title and interest in and to any and all of such
Developments; provided, however, that the provisions of this Section 7.2 shall
not apply to any Development that the Executive developed entirely on his own
time without using the Company's equipment, supplies, facilities or trade secret
information except for those Developments that either:
(a) relate at the time of conception or reduction to practice
of the Development to the Company's business, or actual or demonstrably
anticipated research or development of the Company; or
(b) result from any work performed by Executive for the
Company.
7.3 Assistance of Executive. Upon the Company's reasonable request and
without further compensation therefor, but at no cost or expense to Executive,
and whether during the term of this Agreement or thereafter, Executive will, at
times mutually agreed upon by Company and Executive, do all reasonable lawful
acts, including, but not limited to, the
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execution of papers and lawful oaths and the giving of testimony, that, in the
reasonable opinion of the Company, its successors and assigns, may be necessary
or desirable in obtaining, sustaining, reissuing, extending and enforcing United
States and foreign Letters Patent, including, but not limited to, design
patents, on any and all Developments and for perfecting, affirming and recording
the Company's complete ownership and title thereto, subject to the proviso in
Section 7.2 hereof, and, at times mutually agreed upon by Company and Executive,
Executive will otherwise reasonably cooperate in all proceedings and matters
relating thereto.
7.4 Records. Executive will keep complete and accurate accounts, notes,
data and records of all Developments in the manner and form requested by the
Company. Such accounts, notes, data and records shall be the property of the
Company, subject to the proviso in Section 7.2 hereof, and, upon request by the
Company, Executive will promptly surrender the same to it or, if not previously
surrendered upon its request or otherwise, Executive will surrender the same,
and all copies thereof, to the Company upon the conclusion of his employment.
7.5 Obligations, Restrictions and Limitations. Executive understands
that the Company may enter into agreements or arrangements with agencies of the
United States Government and that the Company may be subject to laws and
regulations which impose obligations, restrictions and limitations on it with
respect to inventions and patents which may be acquired by it or which may be
conceived or developed by employees, consultants or other agents rendering
services to it. Executive agrees that he shall be bound by all such obligations,
restrictions and limitations applicable to any such invention conceived or
developed by him during the term of this Agreement and shall take any and all
further action which may be required to discharge such obligations and to comply
with such restrictions and limitations.
8. NON-SOLICITATION COVENANT.
8.1 Nonsolicitation and Noninterference. During the term of this
Agreement and for a period of two years thereafter, Executive shall not (a)
induce or attempt to induce any employee of the Company to leave the employ of
the Company or in any way interfere adversely with the relationship between any
such employee and the Company, (b) induce or attempt to induce any employee of
the Company to work for, render services or provide advice to or supply
confidential business information or trade secrets of the Company to any third
person, firm or corporation, or (c) induce or attempt to induce any customer,
supplier, licensee, licensor or other business relation of the Company to cease
doing business with the Company or in any way interfere with the relationship
between any such customer, supplier, licensee, licensor or other business
relation and the Company.
8.2 Indirect Solicitation. Executive agrees that, during the term of
this Agreement and the period covered by Section 8.1 hereof, he will not,
directly or indirectly, assist or encourage any other person in carrying out,
directly or indirectly, any activity that would be prohibited by the provisions
of Section 8.1 if such activity were carried out by Executive, either directly
or indirectly; and, in particular, Executive agrees that he will not, directly
or indirectly, induce any employee of the Company to carry out, directly or
indirectly, any such activity.
9. INJUNCTIVE RELIEF. Executive hereby recognizes, acknowledges and
agrees that in the event of any breach by Executive of any of his covenants,
agreements, duties or obligations
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contained in Sections 5, 6, 7 and 8 of this Agreement, the Company would suffer
great and irreparable harm, injury and damage, the Company would encounter
extreme difficulty in attempting to prove the actual amount of damages suffered
by the Company as a result of such breach, and the Company would not be
reasonably or adequately compensated in damages in any action at law. Executive
therefore covenants and agrees that, in addition to any other remedy the Company
may have at law, in equity, by statute or otherwise, in the event of any breach
by Executive of any of his covenants, agreements, duties or obligations
contained in Sections 5, 6, 7 and 8 of this Agreement, the Company shall be
entitled to seek and receive temporary, preliminary and permanent injunctive and
other equitable relief from any court of competent jurisdiction to enforce any
of the rights of the Company, or any of the covenants, agreements, duties or
obligations of Executive hereunder, and/or otherwise to prevent the violation of
any of the terms or provisions hereof, all without the necessity of proving the
amount of any actual damage to the Company or any affiliate thereof resulting
therefrom; provided, however, that nothing contained in this Section 9 shall be
deemed or construed in any manner whatsoever as a waiver by the Company of any
of the rights which the Company may have against Executive at law, in equity, by
statute or otherwise arising out of, in connection with or resulting from the
breach by Executive of any of his covenants, agreements, duties or obligations
hereunder.
10. MISCELLANEOUS.
10.1 Notices. All notices, requests and other communications
(collectively, "NOTICES") given pursuant to this Agreement shall be in writing,
and shall be delivered by personal service or by United States first class,
registered or certified mail (return receipt requested), postage prepaid,
addressed to the party at the address set forth below:
If to Company:
Thinking Tools, Inc.
Attention: Board of Directors
If to Executive:
▇▇. ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any Notice shall be deemed duly given when received by the addressee thereof,
provided that any Notice sent by registered or certified mail shall be deemed to
have been duly given three days from date of deposit in the United States mails,
unless sooner received. Either party may from time to time change its address
for further Notices hereunder by giving notice to the other party in the manner
prescribed in this section.
10.2 Entire Agreement. This Agreement contains the sole and entire
agreement
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and understanding of the parties with respect to the entire subject matter of
this Agreement, and any and all prior discussions, negotiations, commitments and
understandings, whether oral or otherwise, related to the subject matter of this
Agreement are hereby merged herein. No representations, oral or otherwise,
express or implied, other than those contained in this Agreement have been
relied upon by any party to this Agreement.
10.3 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES THEREOF.
10.4 Captions. The various captions of this Agreement are for reference
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
10.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10.6 Business Day. If the last day permissible for delivery of any
Notice under any provision of this Agreement, or for the performance of any
obligation under this Agreement, shall be other than a business day, such last
day for such Notice or performance shall be extended to the next following
business day (provided, however, under no circumstances shall this provision be
construed to extend the date of termination of this Agreement).
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In witness whereof, the parties have executed this Agreement as of the date
first set forth above.
Company: Executive:
THINKING TOOLS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ /s/ N.E. Paciotti
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: Chairman
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