Exhibit 10.15
Execution
Copy
EXECUTIVE EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (the
“Agreement”) is entered into as of this 16
th
Day of May, 2005, by
and between Jacqueline Arthur (the “Executive”) and
Monotype Imaging, Inc., a Delaware corporation (the
“Company”).
W I T N E S S E T H
:
WHEREAS, the Company desires to
employ the Executive, and the Executive desires to obtain
employment with the Company;
NOW, THEREFORE, in consideration of
the mutual promises and covenants herein contained, the parties
hereto agree as follows:
1. Effective Date; Employment
. Subject to the provisions of Section 6, the Company agrees
to employ Executive and Executive agrees to become an employee and
perform services for the Company, upon the terms and conditions
hereinafter set forth.
2. Term of Employment .
Subject to the provisions of Section 6, the term of
Executive’s employment pursuant to this Agreement shall
commence on and as of the date hereof (the “Effective
Date”) and shall terminate on the first anniversary of the
Effective Date (such period, the “Term”).
Notwithstanding the foregoing, but subject to the provisions of
Section 6, the Term shall automatically extend for an
additional year on each anniversary of the Effective Date unless
either party provides written notice to the other party within
thirty (30) days of the date on which the Term would expire
that he or it chooses not to extend the Term.
3. Duties; Extent of Service
. During Executive’s employment under this Agreement,
Executive (a) shall serve as an employee of the Company with
the title and position of Chief Financial Officer, reporting to the
Board of Directors (or the Chief Executive Officer, as appropriate)
of the Company, (b) shall have such executive responsibilities
consistent with the foregoing title and position as the Board of
Directors (or the Chief Executive Officer, as appropriate) of the
Company shall from time to time designate, provided that ,
in all cases Executive shall be subject to the oversight and
supervision of the Board of Directors (or the Chief Executive
Officer, as appropriate) of the Company in the performance of his
duties, (c) upon the request of the Board of Directors (or the
Chief Executive Officer, as appropriate) of the Company, shall
serve as an officer and/or director of any of the Company’s
subsidiaries, and (d) shall render all services reasonably
incident to the foregoing. Executive hereby accepts such
employment, agrees to serve the Company in the capacities
indicated, and agrees to use Executive’s reasonable best
efforts in, and shall devote Executive’s full working time,
attention, skill and energies to, the advancement of the interests
of the Company and its subsidiaries and the performance of
Executive’s duties and responsibilities hereunder. The
foregoing, however,
shall not be construed as preventing Executive
from (i) engaging in religious, charitable or other community
or non-profit activities, or (ii) managing Executive’s
personal investments and business interests, in each case in a
manner that does not impair Executive’s ability to fulfill
Executive’s duties and responsibilities under this Agreement
(the activities described in clauses (i) and (ii), the
“Permitted Activities”).
4. Salary and Bonus
.
(a) During Executive’s
employment under this Agreement, the Company shall pay Executive a
salary at the annual rate of $185,000 per annum (the “Base
Salary”). Such Base Salary shall be subject to withholding
under applicable law, shall be pro rated for partial years and
shall be payable in periodic installments in accordance with the
Company’s usual payroll practice for executive officers of
the Company as in effect from time to time.
(b) For each one-year calendar
period or portion thereof during Executive’s employment under
this Agreement, Executive shall be eligible to participate in any
bonus or other performance plan established by the Board of
Directors from time to time for senior management of the
Company.
5. Benefits .
(a) During Executive’s
employment under this Agreement, Executive shall be entitled to
participate in any and all medical, pension, profit sharing, dental
and life insurance plans and disability income plans, retirement
arrangements and other employment benefits, including option plans,
as in effect from time to time for senior management of the Company
generally. Such participation shall be subject to (i) the
terms of the applicable plan documents (including, as applicable,
provisions granting discretion to the Board of Directors of the
Company or any administrative or other committee provided for
therein or contemplated thereby), and (ii) generally
applicable policies of the Company. Executive shall be eligible to
participate in all such plans and other benefits as of the
Effective Date.
(b) During Executive’s
employment under this Agreement, Executive shall receive paid
vacation annually in accordance with the Company’s practices
for executive officers, as in effect from time to time.
(c) The Company shall promptly
reimburse Executive for all reasonable business expenses incurred
by Executive during Executive’s employment hereunder in
accordance with the Company’s practices for senior executive
officers of the Company, as in effect from time to time.
(d) Except to the extent expressly
provided in this Agreement, compliance with the provisions of this
Section 5 shall in no way create or be deemed to create any
obligation, express or implied, on the part of the Company or any
of its affiliates with respect to the continuation of any
particular benefit or other plan or arrangement maintained by them
or their subsidiaries as of or prior to the Effective Date or the
creation and maintenance of any particular benefit or other plan or
arrangement at any time after the Effective Date.
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6. Termination and Termination
Benefits . Notwithstanding the provisions of Section 2,
Executive’s employment under this Agreement shall terminate
under the following circumstances set forth in this
Section 6.
(a) Termination by the Company
for Cause . Executive’s employment under this Agreement
may be terminated for cause without further liability on the part
of the Company or any affiliate thereof effective immediately upon
a vote of the Board of Directors of the Company (or determination
by the Chief Executive Officer, as appropriate) and written notice
to Executive. Only the following shall constitute
“cause” for such termination:
(i) any act, whether or not
involving the Company or any of its affiliates or their respective
businesses, of fraud, gross misconduct or harassment that
materially and adversely affects the Company;
(ii) any act of dishonesty, deceit
or illegality, in any such case, materially and adversely affecting
the Company;
(iii) the conviction of Executive
of, or indictment of Executive for (A) a felony, or
(B) any misdemeanor involving moral turpitude
(“indictment”, for these purposes, meaning an
indictment, or determination of probable cause in a probable cause
hearing or any other similar procedure pursuant to which an initial
determination of probable cause with respect to such offense is
made), if, in the case of an indictment, such indictment has
material adverse affect on the Company;
(iv) the commission, in the
reasonable judgment of the Board of Directors of the Company, of an
act involving a violation of procedures or policies of the Company
which are material to the Company;
(v) a material and sustained failure
of Executive to perform the duties and responsibilities assigned or
delegated under this Agreement, which such failure continues for
thirty (30) days after written notice has been given to the
Executive by the Board of Directors (or the Chief Executive
Officer, as appropriate);
(vi) gross negligence or willful
misconduct by Executive that materially and adversely affects the
Company; or
(vii) a material breach by Executive
of any of Executive’s obligations under Section 7
below.
(b) Termination by Executive
Other than for Good Reason . Executive’s employment under
this Agreement may be terminated by Executive without further
liability on the part of Executive (other than with respect to
those provisions of this Agreement expressly surviving such
termination) by written notice to the Board of Directors at least
sixty (60) days prior to such termination.
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(c) Termination by Executive for
Good Reason . Subject to the payment of Termination Benefits
pursuant to Section 6(e) below, Executive’s employment
under this Agreement also may be terminated by Executive for Good
Reason (as defined below) (which termination must be within one
hundred twenty (120) days of the occurrence of the event or
events giving rise to such Good Reason) by written notice to the
Board of Directors setting forth such Good Reason and giving the
Company a reasonable period of time, not less than ten
(10) business days, to eliminate and cure such Good Reason.
For purposes of this Agreement, “Good Reason” shall
mean the occurrence of any of the following events: (i) a
substantial adverse change in the nature or scope of the
Executive’s responsibilities, authorities, powers, functions
or duties under this Agreement; (ii) a reduction in the
Executive’s annual Base Salary, except for an
across-the-board salary reduction similarly affecting all or
substantially all management employees; or (iii) a requirement
by the Company (not consented to by the Executive) that the
Executive be based anywhere other than thirty (30) miles
fromWoburn, Massachusetts; or (iv) the breach by the Company
of any of its material obligations under this Agreement, but only
after notice by the Executive to the Company of such breach and the
Company’s failure to cure such breach within thirty
(30) days of receipt of such notice. It is expressly agreed
and understood that if Executive’s employment is terminated
by Executive for Good Reason as provided in this Section 6(c),
it shall not impair or otherwise affect Executive’s
Continuing Obligations (as defined below). It is further expressly
agreed and understood that if the Company elects not to extend the
Term as provided in Section 2 above, such election shall be
deemed a termination upon expiration of the Term of the
Executive’s employment under this Agreement without cause
under this Section 6(d) and shall entitle the Executive to
payment of the Termination Benefits pursuant to
Section 6(e).
(d) Termination by the Company
Without Cause . Subject to the payment of Termination Benefits
pursuant to Section 6(e), Executive’s employment under
this Agreement may be terminated without cause by the Company by a
vote of the Board of Directors of the Company (or determination by
the Chief Executive Officer, as appropriate) upon written notice to
Executive. It is expressly agreed and understood that if
Executive’s employment is terminated by the Company without
cause as provided in this Section 6(d), it shall not impair or
otherwise affect Executive’s Continuing
Obligations.
(e) Certain Termination
Benefits . Unless otherwise specifically provided in this
Agreement or otherwise required by law, all compensation and
benefits payable to Executive under this Agreement shall terminate
on the date of termination of Executive’s employment under
this Agreement. Notwithstanding the foregoing, in the event of
termination of Executive’s employment with the Company
pursuant to Section 6(c) or Section 6(d) above, the
Company shall provide to Executive the following termination
benefits (“Termination Benefits”):
(i) continuation of salary at a rate
equal to one-hundred (100%) of Executive’s Base Salary
as in effect on the date of termination for a period of twelve
months from the date of termination (payment shall be subject to
withholding under applicable law and shall be made in periodic
installments in accordance with the Company’s usual payroll
practice for executive officers of the Company as in effect from
time to time);
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(ii) continuation of group health
plan benefits during the twelve months in which Executives is
receiving payments pursuant to subsection (i) above, to the
extent authorized by and consistent with 29 U.S.C. § 1161
et seq . (commonly known as “COBRA”), with the
cost of the regular premium for such benefits shared in the same
relative proportion by the Company and Executive as in effect on
the date of termination; and
(iii) payment of the bonus that the
Executive would have been entitled to receive under the bonus or
other performance plan referred to in Section 4(b) had his
employment not been terminated, pro rated for the number of days
the Executive was employed by the Company during the relevant
period. Such payment shall be made to the Executive at the time
bonuses under such plan are generally paid to other
participants.
The Company shall have the right to
terminate all of the Termination Benefits set forth in
Section 6(e)(i) and Section 6(e)(ii) in the event that
Executive fails to comply in any material respect with
Executive’s Continuing Obligations under this Agreement. The
Company’s liability for Base Salary continuation pursuant to
Section 6(e)(i) shall be reduced by the amount of any
severance pay paid to Executive pursuant to any severance pay plan
of the Company. Notwithstanding the foregoing, nothing in this
Section 6(e) shall be construed to affect Executive’s
right to receive COBRA continuation entirely at Executive’s
own cost to the extent that Executive may continue to be entitled
to COBRA continuation after Executive’s right to cost sharing
under Section 6(e)(ii) ceases. The Company and Executive agree
that the Termination Benefits paid by the Company to Executive
under this Section 6(e) shall be in full satisfaction,
compromise and release of any claims arising exclusively out of any
termination of Executive’s employment pursuant to
Section 6(c) or Section 6(d), and that the payment of the
Termination Benefits shall be contingent upon Executive’s
delivery of a general release effectuating such full satisfaction,
compromise and release, in favor of the Company and its affiliates
of any and all claims (other than those arising under this
Agreement or under the Stockholders Agreement dated as of
November 5, 2004 by and among Monotype Imaging Holdings Corp.
and the Investors and Management Stockholders party thereto), which
general release shall be effective upon termination of employment
and shall be in a form reasonably satisfactory to the Company, it
being understood that no Termination Benefits shall be provided
unless and until Executive executes and delivers such
release.
(f) Disability . If Executive
shall be deemed disabled under the Company’s then existing
long-term disability plan, the Board of Directors (or the Chief
Executive Officer, as appropriate) may remove Executive from any
responsibilities and/or reassign Executive to another position with
the Company for the remainder of the Term or during the period of
such disability. Notwithstanding any such removal or reassignment,
Executive shall continue to receive Executive’s full Base
Salary (less any disability pay or sick pay benefits to which
Executive may be entitled under the Company’s policies) and
benefits under Section 5 of this Agreement (except to the
extent that Executive is ineligible for one or more such benefits
under applicable plan terms) for a period of up to twelve
(12) months, and Executive’s employment
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may be terminated by the Company at any time
thereafter. In the event of such termination, the Executive is
entitled to receive payment of the bonus that the Executive would
have been entitled to receive under the bonus or other performance
plan referred to in Section 4(b) had his employment not been
terminated, pro rated for the number of days the Executive was
employed by the Company during the relevant period. Such payment
shall be made to the Executive at the same time bonuses under such
plan are generally paid to other participants. In the event of such
termination, the Company shall have no further obligations except
to make Executive’s accrued Base Salary and benefit payments
contemplated by this Section 6(f) through the date of such
termination. If any question shall arise as to whether during any
period Executive is disabled so as to be unable to perform the
essential functions of Executive’s then existing position or
positions with or without reasonable accommodation, Executive may,
and at the request of the Company shall, submit to the Company a
certification in reasonable detail by a physician (local to the
Company’s principal offices) selected by the Company to whom
Executive or Executive’s guardian has no reasonable objection
as to whether Executive is so disabled or how long such disability
is expected to continue, and such certification shall for the
purposes of this Agreement be conclusive of the issue. Executive
shall cooperate with any reasonable request of the physician in
connection with such certification. If such question shall arise
and Executive shall fail to submit such certification, the
Company’s determination of such issue shall be binding on
Executive. Nothing in this Section 6(e) shall be construed
to
