EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the nineteenth day of April, 2001,
(hereinafter called the "Commencement Date"), by and between DATA RESEARCH
ASSOCIATES, INC., a Missouri corporation (hereinafter called the "Employer") and
Xxxxxxxxx X. Xxxxxx, an individual presently residing at 0000 Xxxxxxx Xxxxx
Xxxx, Xx. Xxxxx, Xxxxxxxx 00000 (hereinafter called the "Employee").
WHEREAS, Employee is presently the Vice President and has made
significant contributions to Employer during the term of Employee's employment;
and
WHEREAS, Employer wishes to assure itself both of the continued
availability of the services of Employee in the event of a "Change of Control,"
(as defined in Schedule I) and to assure itself of the availability of
Employee's services in the absence of a Change of Control; and
WHEREAS, Employee wishes to continue to be employed subsequent to any
Change of Control and is agreeable to the terms of continued employment set
forth herein; and
WHEREAS, the parties believe that it is to their mutual benefit to
enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the parties hereto mutually agree as follows:
FIRST: EMPLOYMENT OF THE EMPLOYEE. Employer, subject to the terms and
provisions and for the term hereinafter set forth, hereby employs Employee to
perform the duties of the Vice President. Employer hereby represents and
warrants to Employee that the Board of Directors of Employer (hereinafter called
the "Board"), at a meeting duly held or by unanimous written consent, has
authorized and approved this Agreement. Employee hereby agrees to perform the
duties described herein faithfully and to the best of Employee's ability.
SECOND: DUTIES. Employee, as the Vice President of Employer, shall
perform those duties and responsibilities required by law and as set forth in
the Articles of Incorporation and Bylaws of Employer and as may from time to
time be assigned to Employee by the Board in its reasonable discretion, and in
such capacity agrees that during the term of employment hereunder, Employee will
devote substantially all of Employee's working time and attention to the
business and affairs of Employer. Notwithstanding the foregoing, Employer shall
not, without the prior written consent of Employee, directly or indirectly
require Employee to be based at any office or location outside of, or to
relocate or move from, the St. Louis metropolitan area.
THIRD: SALARY AND BENEFITS.
(a) Employer will pay Employee for Employee's services during the term
of employment hereunder an annual base rate of compensation (hereinafter
called the "Base Compensation") of one hundred and fifty six thousand five
hundred dollars ($156,500), which Base Compensation shall be payable at
such intervals as the Employer pays its other senior executive employees,
but in any event, not less frequently than monthly. Each fiscal year
(commencing with fiscal year 2001), the Compensation Committee of the Board
(the "Compensation Committee") will set Employee's Base Compensation for
that fiscal year, taking into account the performance of Employee, the
total compensation paid to senior executive officers of similar companies
of comparable size to that of Employer and such other factors deemed
relevant by the Board, but in no event shall such Base Compensation for any
annual period be less than the Base Compensation set for the immediately
preceding annual period.
(b) Employer may also pay Employee a bonus for each fiscal year during
the term hereof, which will be determined at the sole discretion of the
Board.
(c) Employer agrees to reimburse Employee for all reasonable business
expenses incurred by Employee in the performance of Employee's duties
hereunder for Employer, which expenses shall be substantiated in accordance
with the procedures of Employer.
(d) Employer shall provide Employee, at Employer's expense, with
health, accident, long-term disability, major medical and such other
insurance coverages as are generally available to the senior executive
officers of Employer.
(e) During each fiscal year of Employer, Employee shall be entitled to
(5) weeks of paid vacation.
(f) Employee shall also be entitled to participate in all other
insurance and retirement plans, retirement benefits, death benefits, salary
continuation benefits, stock option plans and other fringe benefits and
other plans generally available for the senior executive officers of
Employer, but in no event shall such fringe benefits be less than the
benefits provided to Employee for the immediately preceding annual period.
(g) Employer shall, at Employer's expense, furnish such other
executive prerequisites at least equal in value to those furnished to the
senior executive officers of Employer.
FOURTH: TERM OF EMPLOYMENT. The initial term of Employee's employment
under this Agreement (hereinafter called the "Initial Term") shall be for a
period commencing on the Commencement Date and continuing until a date two years
from commencement date, unless sooner terminated as hereinafter provided.
Following the Initial Term, this Agreement shall automatically continue in
effect for an additional term of one (_1__) year (hereinafter called the
"Additional Term") unless either party, by written notice delivered to the other
not less than ninety (90) days prior to the termination of the Initial Term,
indicates the intention not to enter into the Additional Term. At the
termination of the Initial Term or the Additional Term, as the case may be, the
obligation of Employer to pay further compensation or expenses to Employee shall
cease, provided, however, that any obligations hereunder of either party to the
other party at the time of such termination shall not be affected thereby.
FIFTH: TERMINATION. Employer shall have the right to terminate this
Agreement if any of the following events shall occur during the Initial or
Additional Term hereof:
(a) Employee's willful failure or refusal to render services as
required hereunder after written notice from Employer and a reasonable
opportunity on the part of Employee to correct any deficiency in
performance specified in such written notice from Employer, to the
satisfaction of the Board or as otherwise required by applicable law; or
(b) Acts of fraud, dishonesty or breach of fiduciary duty involving
personal profit (in each instance as determined by the Board in its sole
discretion) or the conviction of a felony committed in connection with the
business of Employer shall be grounds for termination of this Agreement
upon at least two (2) days' prior written notice but without the
opportunity to cure; or
(c) The permanent disability of Employee, which, for the purposes
hereof, shall be deemed to have occurred upon the commencement of benefits
under any policy maintained by the Company providing for long-term
disability coverage; or
(d) The death of Employee. Except as expressly set forth herein, the
obligation of Employer to pay further compensation or expenses of Employee
shall cease as of the day on which termination under this Article FIFTH
shall occur.
SIXTH: CHANGE OF CONTROL. Employer and Employee agree that the
following provisions shall immediately and automatically become operational upon
the occurrence of a Change of Control (as defined in Schedule I hereof), without
further action on the part of either Employer or Employee:
(a) In the event of the involuntary termination or significant
reduction in the position, duties or responsibilities of Employee, for
reasons other than those defined in paragraphs (a), (b), (c) and (d) of
Article FIFTH hereof (herein collectively referred to as a "Termination")
Employee shall be entitled to an amount, payable within sixty (60) days of
the occurrence of the Termination, equal to a percentage of the greater of
the Base Compensation in effect as of the date of such Change of Control or
such Termination as follows: (i)one hundred and fifty percent (150%) if the
Termination occurs within the first year following a Change of Control;
(ii) seventy-five percent (75%) if the Termination occurs within the second
year following a Change of Control.
(b) All options to purchase shares of the common stock of Employer
held by Employee pursuant to a stock option plan of Employer (the "Stock
Options") shall be fully vested and exercisable.
(c) At the sole discretion of the Board, Employee may be awarded a
bonus (the "Special Executive Bonus") on a "grossed up" basis (to take into
account the taxability for federal income purposes of the Special Executive
Bonus to the Employee) equal to the amount of federal income tax payable by
the Employee arising from the vesting of Employee's interests in the Stock
Options, assuming the maximum statutory rate of federal income tax then
applicable to an individual taxpayer.
SEVENTH: INDEMNIFICATION. Employer shall indemnify, defend and hold
harmless Employee for any and all acts or decisions made by Employee, in good
faith, in connection with the performance by Employee of services for Employer,
which indemnification shall be to the fullest extent permitted by law. Employer
shall use its best efforts to insure its obligations under this paragraph
SEVENTH which insurance coverage shall expressly include all expenses
(including, without limitation, attorneys' fees) actually and necessarily
incurred by or on behalf of the Employee in connection with the defense of any
suit or proceeding (including appeals therefrom), which coverage shall, to the
fullest extent permitted by law, include the cost of out-of-court settlements.
EIGHTH: GOVERNING LAW. This Agreement is executed and delivered in the
State of Missouri and shall be construed and enforced in accordance with, and
shall be governed by, the laws of such State.
NINTH: NOTICE. All notices, requests, consents and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed sufficient if delivered by certified or registered mail, return receipt
requested, postage paid, in the case of Employee to Employee's last known
address on file with Employer, and, in the case of Employer, to its principal
office. Such notice shall be effective upon deposit in the United States mail or
actual delivery, as the case may be.
TENTH: SUMS DUE TO EMPLOYEE. If any amount payable to Employee or
vesting of Stock Options pursuant to Article SIXTH, or portion thereof,
constitutes a "parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") (determined without
regard to this Article TENTH), then such payment shall be reduced and such Stock
Options shall not vest pursuant to Article SIXTH, as determined by Employer in
its sole discretion, to the extent, and only to the extent, necessary to prevent
any such payment or vesting of Stock Options, or portion thereof, from
constituting a "parachute payment"; provided, however, that any such reduction
in payments otherwise payable pursuant to Article SIXTH or nonvesting of Stock
Options that would otherwise vest pursuant to Article SIXTH shall occur if and
only if, after taking into account the twenty percent (20%) tax set forth in
Section 4999 of the Code, such reduction and/or nonvesting causes Employee to
realize a greater after-tax benefit than Employee would realize if such
reduction and/or nonvesting pursuant to this Article TENTH had not occurred.
Employee shall be entitled to "rollover" any sums payable hereunder into
individual retirement accounts or similar entities to the fullest extent
provided by law.
ELEVENTH: SEVERABILITY AND INTERPRETATION. Whenever possible, each
provision of this Agreement and any portion thereof shall be interpreted in such
a manner as to be effective and valid under applicable law, rules and
regulations. If any covenant or other provision of this Agreement (or portion
thereof) is invalid, illegal, or incapable of being enforced, by reason of any
rule of law rule, regulation, administrative order, judicial decision or public
policy, all other conditions and provisions of this Agreement shall,
nevertheless, remain in full force and effect, and no covenant or provision
shall be deemed dependent upon any other covenant or provision (or portion)
unless so expressed herein. The parties hereto desire and consent that the court
or other body making such determination shall, to the extent necessary to avoid
any unenforceability, so reform such covenant, term, condition or other
provision or portion of this Agreement to the minimum extent necessary so as to
render the same enforceable in accordance with the intent herein expressed.
TWELFTH: ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties relative to the employment by Employer of Employee
and any and all prior representations, agreements, correspondence or memoranda
with respect thereto are superseded hereby. Notwithstanding the foregoing this
agreement does not affect the obligation of employee under that certain
Non-Solicitation and Non-Competition Agreement dated the twenty-second of
October, 1999. No promises, covenants or representations of any character or
nature other than those expressly stated herein have been made to induce either
party to enter into this Agreement. This Agreement shall not be modified, waived
or discharged except in a writing duly signed by each of the parties or their
permitted assignees, and shall be binding upon, and inure to the benefit of, the
successors of the parties hereto.
THIRTEENTH: ASSIGNABILITY. The services to be performed by Employee
hereunder are personal in nature and therefore Employee shall not assign all or
any portion of Employee's right, or delegate all or any portion of Employee's
obligations, under this Agreement, and any attempted or purported assignment or
delegation not expressly permitted by Employer in writing shall be null and
void, ab initio.
FOURTEENTH: SUCCESSORS. Subject to the provisions of paragraph
THIRTEENTH hereof, this Agreement shall be binding upon and shall inure to the
benefit of Employer and Employee and their respective heirs, executors,
administrators, legal administrators, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
DATA RESEARCH ASSOCIATES, INC.
EMPLOYER
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, President and CEO
EMPLOYEE
/s/ Xxxxxxxxx X. Xxxxxx
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Xxxxxxxxx X. Xxxxxx
SCHEDULE I
Definition of Change of Control
A Change of Control shall be deemed to have occurred upon the happening
of any of the following events:
(a) the acquisition by any person of more than 50% of the Employer's
outstanding common stock or any other class of stock representing more than 50%
of the aggregate voting power of all classes of stock as a whole; or
(b) a merger or consolidation of the Employer with any other
corporation pursuant to which the resulting aggregate ownership of Employer (or
the parent or surviving corporation resulting from such merger or consolidation)
held by or attributable to those persons who were stockholders of Employer
immediately prior to such merger or consolidation is less than 50% of the
aggregate common stock of Employer (or the parent or surviving corporation
resulting from such merger or consolidation) outstanding as a result of such
merger or consolidation; the term "merger" shall include a reorganization
effected by means of a sale of Employer's assets or any other substantial
portion of the assets of the Employer; or
(c) election to the Board of Directors of the Employer at any
stockholders meeting of any nominee other than a nominee on whose behalf proxies
were solicited by or on behalf of the incumbent management or directors of the
Employer; or
(d) removal by the stockholders of all or any of the incumbent
directors of the Employer other than a removal for cause.
