Employment Agreement - Lionbridge Technologies Inc. and Peter Wright
EMPLOYMENT AGREEMENT
This Employment Agreement is made as of February 28, 1997 by and among
Lionbridge Technologies, Inc., a Delaware corporation (the "Company"), and Peter
Wright (the "Executive").
RECITALS
1. The Company conducts an international localization service business.
2. The operations of the Company are a complex matter requiring skilled
management in a variety of areas.
3. The Executive has certain experience and expertise that qualify him to
provide the skilled management required by the Company and its subsidiaries.
4. Subject to the terms and conditions hereinafter set forth, the Company
therefore wishes to employ the Executive as its U.S. Sales Manager and the
Executive wishes to accept such employment.
AGREEMENT
Now, therefore, the parties hereto hereby agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions set forth in this
Agreement, the Company offers and the Executive hereby accepts employment,
effective as of __________ __, 1997 (such date being referred to herein as the
"Effective Date").
2. TERM. Subject to earlier termination as hereafter provided, the
Executive shall be employed hereunder for an original term commencing on the
Effective Date and ending on the date one (1) year from the Effective Date first
set forth above, which term shall be automatically extended thereafter for
successive terms of one (1) year each, unless either party provides notice to
the other at least three months prior to the expiration of the original or any
extension term that this Agreement is not to be extended. The term of this
Agreement, as from time to time modified and in effect, is hereafter referred to
as "the term of this Agreement" or "the term hereof."
3. CAPACITY AND PERFORMANCE.
3.1. OFFICES. During the term hereof, the Executive shall serve the
Company as U.S. Sales Manager of the Company. In such capacity, the Executive
will be responsible for financial controls and reporting of the Company. In
addition, the Executive will be expected to take primary responsibility for
implementing financing transactions, acquisition transactions and other
extraordinary corporate transactions. The Executive shall be subject to the
direction of, and shall have such other powers, duties and responsibilities
consistent with the Executive's position
<PAGE>
-2-
as U.S. Sales Manager as may from time to time be prescribed by, the President
and Chief Executive Officer of the Company.
3.2. PERFORMANCE. During the term hereof, the Executive shall be
employed by the Company and shall perform and discharge (faithfully, diligently
and to the best of his ability) such duties and responsibilities on behalf of
the Company and its subsidiaries as may be designated from time to time by the
President and Chief Executive Officer which are consistent with the Executive's
position as U.S. Sales Manager. The Executive shall devote substantially all of
his time, attention and energies to the business of the Company and shall not
engage in any other business activity or activities, whether or not such
business activity is pursued for gain, profit or other pecuniary advantage,
that, in the judgment of the President and Chief Executive Officer, may conflict
with the proper performance of the Executive's duties under this Agreement.
4. COMPENSATION AND BENEFITS. As compensation for the satisfactory
performance by the Executive of his duties and obligations to the Company and
its subsidiaries, pursuant to this Agreement and otherwise, and subject to
Section 5 hereof, the Executive shall receive, as appropriate:
4.1. BASE SALARY. During the term hereof the Company shall pay
the Executive a base salary at the rate of $125,000 per year, payable in
accordance with the payroll practices of the Company for its executives and
subject to increase from time to time (based on an annual review) by the Board
in its sole discretion. Such base salary, as from time to time increased, is
hereafter referred to as the "Base Salary." The Base Salary payable to the
Executive in 1997 shall be prorated for the period from the Effective Date
through December 31, 1997 and for any subsequent period of service of less than
one full year.
4.2. BONUS COMPENSATION. During the term hereof, the Company from
time to time shall pay the Executive an annual bonus (the "Bonus") of up to 50%
of Base Salary per year. The annual bonus in respect of 1997 operations will be
calculated and payable in accordance with the incentive bonus plan to be
determined and approved by the President and Chief Executive Officer of the
Company in consultation with the Board of Directors.
4.3. STOCK/OPTIONS.
4.3.1. The Company shall grant to the Executive, pursuant to
the 1996 Stock Plan (the "Plan"), options to purchase shares of Common
Stock of the Company at an exercise price of $.10 per share. The
number of such options shall be determined by the Board of Directors
of the Company. The options granted to the Executive as contemplated
hereby will become exercisable according to the following schedule:
25% on the first anniversary of the date hereof; and 12.5% on each
subsequent semi-annual date, up to and including the fourth year
anniversary of the date hereof.
4.3.2. Prior to issuing any shares or options to the
Executive, the Company may require that the Executive provide such
representations regarding the
<PAGE>
-3-
Executive's sophistication and investment intent and other matters as
the Company may reasonably request. None of the Company's securities
will be registered under applicable securities laws for the indefinite
future and there will be substantial restrictions on resale imposed by
the Company's corporate charter, the Stockholders' Agreement, and
applicable law.
4.3.3. (a) Upon any termination of the Executive's
employment or after expiration of this Agreement, the Company may, but
shall have no obligation to, repurchase at a price equal to the Fair
Market Value (as defined and determined pursuant to the Plan) up to
all of the shares issued or issuable by the Company to the Executive
upon his exercise of any vested options granted to the Executive
pursuant to Section 4.3.1. or granted by the Company to the Executive
after the date hereof.
(b) The Company shall exercise any repurchase
election pursuant to subsection (a) by notice to the Executive within
90 days of termination of the Executive's employment. Notwithstanding
anything to the contrary contained herein, the repurchase right of the
Company set forth in this Section 4.3.3 shall terminate upon the
completion of a firm commitment underwritten initial public offering
of the Company's Common Stock.
4.4. VACATIONS. During the term hereof, the Executive shall be
entitled to four (4) weeks of vacation per annum, to be taken at such times
and intervals as shall be determined by the Executive in his reasonable
discretion. The Executive may not accumulate or carry over from one calendar
year to another any unused, accrued vacation time. The Executive shall not be
entitled to compensation for vacation time not taken.
4.5. OTHER BENEFITS. During the term hereof and subject to any
contribution therefor generally required of executives of the Company, the
Executive shall be entitled to participate in all employee benefits plans
(other than any profit sharing or bonus compensation programs) from time to
time adopted by the Board and in effect for executives of the Company
generally, except to the extent such plans are in a category of benefit
otherwise provided to the Executive. Such participation shall be subject to
(i) the terms of the applicable plan documents, (ii) generally applicable
Company policies, and (iii) the discretion of the Board or any administrative
or other committee provided for in or contemplated by such plan. The Company
may alter, modify, add to, or delete its employee benefits plans at any time,
as the Board, in its sole judgment, determines to be appropriate.
4.6. BUSINESS EXPENSES. The Company shall pay or reimburse the
Executive for all reasonable business expenses incurred or paid by the
Executive in the performance of his duties and responsibilities hereunder,
subject to (i) any expense policy of the Company set by the Board or the
President and Chief Executive Officer from time to time, and (ii) such
reasonable substantiation and documentation requirements as may be specified
by the Board or the President and Chief Executive Officer from time to time.
<PAGE>
-4-
4.7. MINIMUM GUARANTEED SEVERANCE. In the event the
Executive's employment with the Company terminates other than as a result of a
termination by the Company for Cause, as defined in Section 8.2 hereof, the
Executive will be entitled to six monthly severance payments, each in an amount
equal to the Executive's monthly base compensation at the time of such
termination (I.E., 1/12th of the Base Salary).
5. TERMINATION OF EMPLOYMENT AND SEVERANCE BENEFITS. Notwithstanding the
provisions of Section 2 hereof, the Executive's employment hereunder shall
terminate prior to the expiration of the term of this Agreement under the
following circumstances:
5.1. RETIREMENT OR DEATH. In the event of the Executive's
retirement or death during the term hereof, the Executive's employment hereunder
shall immediately and automatically terminate. In the event of the Executive's
retirement after the age of sixty-five with the prior consent of the Board or
death during the term hereof, the Company shall pay to the Executive (or in the
case of death, the Executive's designated beneficiary or, if no beneficiary has
been designated by the Executive, to his estate) any Base Salary earned but
unpaid through the date of such retirement or death, any Bonus for the fiscal
year preceding the year in which such retirement or death occurs that was earned
but has not yet been paid and, at the times the Company pays it executives
bonuses in accordance with its general payroll policies, an amount equal to that
portion of any Bonus earned but unpaid during the fiscal year of such retirement
or death (pro-rated based on a formula, the denominator of which shall be 365
and the numerator of which shall be the number of days during the fiscal year of
such retirement or death in which the Executive was employed by the Company).
5.2. DISABILITY.
5.2.1. The Company may terminate the Executive's
employment hereunder, upon notice to the Executive, in the event that
the Executive becomes disabled during his employment hereunder through
illness, injury, accident or condition of either a physical or
psychological nature and, as a result, is unable to perform
substantially all of his duties and responsibilities hereunder for an
aggregate of ninety (90) days, whether or not consecutive, during any
period of three hundred and sixty-five (365) consecutive calendar
days.
5.2.2. The Board may designate another employee to act
in the Executive's place during any period of the Executive's
disability. Notwithstanding any such designation, the Executive shall
continue to receive the Base Salary in accordance with Section 4.1 and
to receive benefits in accordance with Section 4.5, to the extent
permitted by the then-current terms of the applicable benefit plans,
until the Executive becomes eligible for disability income benefits
under any disability income plan maintained by the Executive.
5.3. BY THE COMPANY FOR CAUSE. The Company may terminate the
Executive's employment hereunder for Cause at any time upon notice to the
Executive setting forth in reasonable detail the nature of such Cause. Upon the
giving of notice of termination of the
<PAGE>
-5-
Executive's employment hereunder for Cause, the Company shall have no further
obligation or liability to the Executive relating to the Executive's employment
hereunder, or the termination thereof, other than for Base Salary earned but
unpaid through the date of termination. Without limiting the generality of the
foregoing, the Company shall have no further obligation to pay any Bonus amounts
for any year(s) in the event of termination of employment pursuant to this
Section 5.3, whether or not earned but unpaid in respect of a fiscal year
preceding the year in which such termination occurs.
5.4. BY THE COMPANY OTHER THAN FOR CAUSE. The Company may
terminate the Executive's employment hereunder other than for Cause at any time
upon notice to the Executive. In the event of such termination, then the Company
shall pay the Executive (i) Base Salary earned but unpaid through the date of
termination plus (ii) the amounts specified in Section 4.7 plus (iii) any unpaid
portion of any Bonus for the fiscal year preceding the year in which such
termination occurs that was earned but has not been paid.
5.5. POST-AGREEMENT EMPLOYMENT. In the event the Executive
remains in the employ of the Company or any of its Affiliates following
termination of this Agreement, by the expiration of the term hereof or
otherwise, then such employment shall be at will, unless otherwise agreed in
writing.
6. EFFECT OF TERMINATION. The provisions of this Section 6
shall apply in the event of termination due to the expiration of the term,
pursuant to Section 5 or otherwise.
6.1. PAYMENT IN FULL. Payment by the Company of any Base
Salary, Bonus and other amounts and contributions to the cost of the Executive's
continued participation in the Company's benefits plans that may be due the
Executive under the applicable termination provision of Section 5 shall
constitute the entire obligation of the Company to the Executive, except that
nothing in this Section 6.1 is intended or shall be construed to affect the
rights and obligations of the Company and its Affiliates, on the one hand, and
the Executive, on the other, with respect to any loans, stock pledge
arrangements, option plans or other agreements to the extent said rights or
obligations survive termination of employment. Acceptance by the Executive of
payment by the Company shall constitute full settlement of any claim that the
Executive might otherwise assert against the Company, its Affiliates, or any of
their respective shareholders, partners, directors, officers, employees or
agents relating to such termination.
6.2. TERMINATION OF BENEFITS. Except for medical and dental
insurance coverage continued pursuant to Section 5.2 hereof and any right of
continuation of health coverage to the extent provided by Sections 601 through
608 of ERISA, the Executive's benefits shall terminate pursuant to the terms of
the applicable benefit plans based on the date of termination of the Executive's
employment without regard to any continuation of Base Salary or other payments
to the Executive following such date of termination pursuant to Section 5.
6.3. SURVIVAL OF CERTAIN PROVISIONS. Provisions of this
Agreement shall survive any termination if so provided herein or if necessary or
desirable fully to accomplish the purposes of such provision, including, without
limitation, the obligations of the Executive under
<PAGE>
-6-
the terms of the Non-Competition Agreement (the "Non-Competition Agreement") and
the Employee Non-Disclosure and Developments Agreement (the "Non-Disclosure
Agreement"), of even date herewith, by and between the Executive and the
Company. The obligation of the Company to make payments to or on behalf of the
Executive under Sections 4.7 or 5.5 hereof is expressly conditioned upon the
Executive's continued full performance of obligations under the terms of the
Non-Competition Agreement and the Non-Disclosure Agreement. The Executive
recognizes that, except as expressly provided in Section 4.7 or 5.4, no
compensation is earned after termination of employment.
7. CONFLICTING AGREEMENTS. The Executive hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which or
by which the Executive is a party or is bound and that the Executive is not now
subject to any covenants against competition or similar covenants that would
affect the performance of his obligations hereunder. The Executive will not
disclose to or use on behalf of the Company or any of its Affiliates any
proprietary information of a third party without such party's consent.
8. DEFINITIONS. The following terms shall have the following meanings:
8.1. AFFILIATES. "Affiliates" means all persons and entities directly
or indirectly controlling, controlled by or under common control with the
Company.
8.2. CAUSE. The following events or conditions shall constitute
"Cause" for termination: (i) fraud, embezzlement, or other act of dishonesty by
the Executive that causes material injury to the Company or any of its
Affiliates; (ii) conviction of, or plea of nolo contendere to, any felony
involving dishonesty or moral turpitude; or (iii) a failure by the Executive to
take or refrain from taking any corporate action consistent with his duties as
U.S. Sales Manager as specified in written directions of the Board or the
President and Chief Executive Officer following receipt by the Executive of such
written directions, which failure is not cured within 30 days after written
notice that failure to take or refrain from taking such action shall constitute
"Cause" for purposes hereof.
8.3. ERISA. "ERISA" means the federal Employee Retirement Income
Security Act of 1974 or any successor statute, and the rules and regulations
thereunder, and in the case of any referenced section thereof any successor
section thereto, collectively and as from time to time amended and in effect.
8.4. PERSON. "Person" means an individual, a corporation, an
association, a partnership, a limited liability company, an estate, a trust and
any other entity or organization.
9. WITHHOLDING. All payments made by the Company under this Agreement
shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law. In addition, the Company shall be entitled to
reduce any payments by the Company of Base Salary or Bonus under this Agreement
by the amount of any tax or other amounts required to be withheld by the Company
under applicable law with respect to deemed compensation arising out
<PAGE>
-7-
of or related to options granted to the Executive, imputed interest on any loans
by the Company to the Executive, or other arrangements deemed to be
compensatory.
10. MISCELLANEOUS.
10.1. ASSIGNMENT. Neither the Company nor the Executive may make any
assignment of this Agreement or any interest herein (provided, however, that
nothing contained herein shall be construed to place any limitation or
restriction on the transfer of the Company's Common Stock in addition to any
restrictions set forth in the Company's Restated Certificate of Incorporation or
any stockholder agreement applicable to the holders of such shares), by
operation of law or otherwise, without the prior written consent of the other;
provided, however, that the Company may assign its rights and obligations under
this Agreement without the consent of the Executive in the event that the
Company shall hereafter effect a reorganization, consolidate with, or merge
into, any other Person or transfer all or substantially all of its properties or
assets to any other Person, in which event such other person shall be deemed the
"Company" hereunder for all purposes. This agreement shall inure to the benefit
of and be binding upon the Company and the Executive, and their respective
successors, executors, administrators, heirs and permitted assigns.
10.2. SEVERABILITY. If any portion or provision of this Agreement
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the application of such provision in such circumstances shall
be deemed modified to permit its enforcement to the maximum extent permitted by
law, and both the application of such portion or provision in circumstances
other than those as to which it is so declared illegal or unenforceable and the
remainder of this Agreement shall not be affected thereby, and each portion and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
10.3. WAIVER; AMENDMENT. No waiver of any provision hereof shall be
effective unless made in writing and signed by the waiving party. The failure of
either party to require the performance of any term or obligation of this
Agreement, or the waiver by either party of any breach of this Agreement, shall
not prevent any subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach. This Agreement may be amended or modified only
by a written instrument signed by the Executive and the Company.
10.4. NOTICES. Any and all notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
deemed effective when delivered in person or two business days after being
deposited in the United States mail, postage prepaid, registered or certified,
and addressed (a) in the case of the Executive, to:
Peter Wright
320 Bradwyck Ct.
Matthews, NC 28105
<PAGE>
-8-
or, (b) in the case of the Company, at its principal place of business and to
the attention of the Board of Directors. Alternatively, such communications may
be directed to any other address as either party may specify by notice to the
other.
10.5. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the terms and conditions of the
Executive's employment and, except as otherwise provided herein, supersedes all
prior communications, agreements and understandings, written or oral, with the
Company or any of its Affiliates or predecessors with respect to the terms and
conditions of the Executive's employment.
10.6. HEADINGS. The headings and captions in this Agreement are for
convenience only and in no way define or describe the scope or content of any
provision of this Agreement.
10.7. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be original and both of which together shall
constitute one and the same instrument.
10.8. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic substantive laws of the Commonwealth of
Massachusetts without giving effect to any choice or conflicts of law provision
or rule that would cause the application of the domestic substantive laws of any
other jurisdiction.
10.9. CONSENT TO JURISDICTION. Each of the Company and the Executive,
by its or his execution hereof, (i) hereby irrevocably submits to the exclusive
jurisdiction of the state courts of the Commonwealth of Massachusetts for the
purpose of any claim or action arising out of or based upon this Agreement or
relating to the subject matter hereof, (ii) hereby waives, to the extent not
prohibited by applicable law, and agrees not to assert by way of motion, as a
defense or otherwise, in any such claim or action, any claim that it or he is
not subject personally to the jurisdiction of the above-named courts, that its
or his property is exempt or immune from attachment or execution, that any such
proceeding brought in the above-named courts is improper, or that this Agreement
or the subject matter hereof may not be enforced in or by such court, and (iii)
hereby agrees not to commence any claim or action arising out of or based upon
this Agreement or relating to the subject matter hereof other than before the
above-named courts nor to make any motion or take any other action seeking or
intending to cause the transfer or removal of any such claim or action to any
court other than the above-named courts whether on the grounds of inconvenient
forum or otherwise. Each of the Company and the Executive hereby consents to
service of process in any such proceeding in any manner permitted by
Massachusetts law, and agrees that service of process by registered or certified
mail, return receipt requested, at the addresses specified pursuant to Section
10.4 hereof is reasonably calculated to give actual notice.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
-9-
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by
its duly authorized representative, and by the Executive, as of the date first
above written.
THE COMPANY
LIONBRIDGE TECHNOLOGIES, INC.
By:
------------------------------
Name: Rory J. Cowan
Title: President
THE EXECUTIVE
---------------------------------
Peter Wright