Exhibit 10.1
OMTOOL, LTD.
Personal and
Confidential
Via Hand Delivery
Karen Cummings
Omtool, Ltd.
6 Riverside Drive
Andover, MA 01810
Re: Change of Control
Severance Eligibility
Dear Karen:
In connection with your
“at-will” employment with 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
personally delivered (e.g., hand delivery or via electronic mail,
where applicable) or mailed by U.S. mail, postage prepaid,
addressed to Omtool, Ltd., 6 Riverside Drive, Andover, MA 01810,
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 separation agreement and general release in a form
acceptable to the Company, except that the release will not effect
your rights to indemnification, any rights under applicable
directors and officers liability insurance, or vested benefits (if
any), 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,” in either case only within
the first twelve months after a Change of Control of the
Company. A termination of your employment will not
constitute
a “Qualified
Termination” if your employment is terminated at any time
because (i) you die or become Disabled, (ii) Omtool terminates you
for “Cause,” (iii) you resign or retire without
“Good Reason”, or (iv) the Company files for
bankruptcy. In addition, a termination of your employment
will not constitute a “Qualified Termination” if
you resign with “Good Reason” or you are terminated
without “Cause” before a Change of
Control.
(b)
If a Qualified Termination occurs, you will be eligible to receive
the following severance pay and benefits:
(i)
Severance Pay . Severance will be paid, 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)
You will not be entitled to any of the severance payments and/or
benefits set forth above in Sections 3(b)(i)-(ii) 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, as well as any bonus and/or commission payment,
to the extent such payment is earned and due in accordance with any
such bonus and/or commission plan.
(d)
If Omtool determines that you have materially breached 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 commission of any act of
gross negligence, dishonesty, insubordination or breach of
fiduciary duty which materially adversely affects the Company or
its employees, (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, or (vi) your disregard of or failure to follow the
Company’s rules or policies in any material respect, or your
commission of any other action that may cause material injuries 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 one of the following events during the
period in which you are eligible to receive the severance payments
and other benefits listed in Section 3: (i) any transaction in
which the Company is to be consolidated with or acquired by another
entity in a merger, tender offer or other reorganization in which
the holders of the outstanding voting stock of the Company
immediately preceding the consummation of such event, shall,
immediately following such event, hold, as a group, less than a
majority of the voting securities of the surviving or successor
entity, or (ii) the sale of all or substantially all of the
Company’s assets. Notwithstanding the foregoing, the
Board of Directors of the Company may, prior to the closing of any
transaction in which the Company is to be consolidated with or
acquired by another entity in a merger or other reorganization,
determine that such transaction constitutes a “Change of
Control” for the purposes of this Agreement.
(d)
Good Reason . A termination by you for “Good
Reason” will occur whenever any of the following
circumstances have taken place: (i) your position, duties and/or
responsibilities are significantly and materially diminished; (ii)
your base salary is reduced, other than such reduction that is part
of a general reduction or other concessionary arrangement affecting
all executive corporate officers of Omtool and its successors; or
(iii) Omtool or any person in control of Omtool requires you to
perform your duties principally 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.
Notwithstanding the forgoing, this Agreement will inure to and be
binding upon the Company’s successors. The Company will
require any successor who effects an Acquisition to agree in
writing to assume 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 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 (i) the
applicable law as it shall then appear and (ii) the parties’
intent.
(b)
This Agreement shall be deemed to be made and entered into in The
Commonwealth of Massachusetts. 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 Commonwealth of
Massachusetts and shall in all respects be interpreted, enforced
and governed under the internal and domestic laws of such
Commonwealth, without giving effect to the principles of conflicts
of laws of such Commonwealth.
(c)
No waiver by either party of any breach by you of any provision
hereof shall be deemed to be a waiver of any later or other breach
thereof
