EXHIBIT 10.26
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), made and entered into this 19th day of July,
1994, by and between XXXXXXXXXXX X. XXXX, an individual currently a resident of
the United Kingdom (hereinafter referred to as "Employee"), and THE SYSTEM
WORKS, INC., a Georgia corporation (hereinafter referred to as the "Company"):
W I T N E S S E T H :
WHEREAS, Company desires to employ Employee, and Employee desires to be
employed by Company, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
SECTION 1. EMPLOYMENT.
Subject to the terms hereof, Company hereby employs Employee, and Employee
hereby accepts such employment. Employee shall serve as the President and Chief
Executive Officer of Company in accordance with the Bylaws of the Company. In
such capacity, Employee shall devote his full business time (except for such
responsibilities to serving on other boards of directors and other commitments
as shall be approved by the Company) and best efforts to the performance of his
duties on behalf of the Company, as directed by the Board of Directors (the
"Board") of the Company. Unless Company and Employee agree otherwise,
Employee's principal office shall be located in the Company's corporate offices
in the vicinity of metropolitan Atlanta, Georgia. The Company shall use its best
efforts to cause the Employee to be nominated and elected to its Board.
SECTION 2. TERM.
2.1 GENERAL. The employment of Employee hereunder shall commence as of
May 23, 1994 and shall continue until August 15, 1995 or until earlier
terminated upon the occurrence of any of the following events:
(i) The death or total disability of Employee (total disability
meaning the failure of Employee to perform his normal required services
hereunder
for a period of two (2) or more months during any consecutive 6 month
period during the term hereof by reason of Employee's mental or physical
disability;
(ii) The mutual written agreement of the Company and Employee to
terminate this Agreement; and
(iii) The termination of Employee's employment hereunder by the
Company for "good cause." For the purpose of this Agreement, "good cause"
shall mean (a) a material breach by Employee of his obligations hereunder;
or (b) conduct by Employee amounting to fraud, dishonesty or negligence.
2.2 NO REPAYMENT OBLIGATION OF EMPLOYEE. In the event this Agreement is
terminated pursuant to Section 2.1 herein, Employee shall have no obligation to
repay any amounts or benefits previously paid to Employee pursuant to this
Agreement, and, except for amounts due to Employee through the date of
termination, including any accrued Base Salary to the date of termination, the
Company shall have no obligation to pay Employee any further amounts and further
benefits after the date of termination.
SECTION 3. COMPENSATION; EXPENSES.
3.1 SALARY. Employee shall be paid a base salary (the "Base Salary")
during the term of his employment hereunder at the rate of Two Hundred Fifty
Thousand Dollars ($250,000) per annum for the period commencing on the date
hereof and ending upon the termination of Employee's employment hereunder.
Unless otherwise increased by the Board of Director in its sole discretion, the
Base Salary will continue to be Two Hundred Fifty Thousand Dollars ($250,000)
during the term of Employee's employment hereunder. The Base Salary shall be
paid to Employee in equal installments on normal Company pay dates, but in no
event less often than monthly in arrears, less all applicable withholding taxes.
3.2 BONUS PLANS. Company shall allow Employee to participate at a level
consistent with his status as President and Chief Executive Officer in any
pension or profit sharing plan now or as may hereafter be provided or offered to
the Company's senior executive officers in accordance with the terms and
requirements of the applicable plan. The Company agrees to work with Employee
in designing and implementing an incentive bonus plan for Employee to commence
with the fiscal year beginning April 1, 1994.
3.3 EXPENSES. Employee shall be reimbursed for all ordinary and
reasonable business expenses incurred by Employee at the request and on behalf
of Company upon the presentation of appropriate supporting documentation to the
Company.
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SECTION 4. ADDITIONAL EMPLOYMENT BENEFITS.
Company shall provide Employee with the following additional employment
benefits during the term of his employment hereunder:
4.1 MEDICAL INSURANCE. Company shall pay for and shall use its best
efforts to provide Employee and his immediate family with such life, medical,
dental, disability and other insurance benefits as if Employee and his immediate
family were resident in the United Kingdom. All such insurance coverage shall
commence as soon as practicable after the date hereof.
4.2 VACATION. Employee shall receive four (4) weeks of paid vacation time
per 12 month period during the term of his employment hereunder.
4.3 OTHER BENEFITS. Company shall provide Employee with any other
benefits that Company generally provides to its senior executive officers.
SECTION 5. RELOCATION RELATED BENEFITS.
The Company shall provide the Employee with the following benefits and
allowances in connection with Employee's relocation from the United Kingdom to
the metropolitan Atlanta, Georgia area and with Employee's continued ownership
of a residence in the United Kingdom:
5.1 SPECIFIC ALLOWANCES. The Company shall pay or otherwise reimburse
Employee for the following:
(i) The amount of $3,000 for home security expenses in the
United Kingdom;
(ii) the amount of $375 per month for "housesitting" expenses in
the United Kingdom;
(iii) A payment of $900 per year representing an increase in
Employee's homeowner's insurance coverage in the United Kingdom;
(iv) A payment of up to a maximum of $3,000 for the shipping and
transport of Employee's household goods and belongings from the United Kingdom
to the metropolitan Atlanta, Georgia area (and the Company agrees to pay a
similar sum for reshipping such goods and belongings back to the United Kingdom
if such reshipping occurs within sixty (60) days following the termination of
this Agreement);
(v) Provide Employee with a resident housing allowance of up to
$4,000 per month;
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(vi) Provide Employee with a furniture rental allowance of up to
$500 per month;
(vii) Provide Employee with an automobile leasing allowance for
two automobiles at an aggregate total of $700 per month;
(viii) Provide Employee with a private school tuition allowance of
up to $7,000 per full school year during the term hereof; and
(ix) Provide Employee with a tax advisor allowance of up to
$3,000 per year.
In the event that the Company leases a car and/or house for Employee,
rather than Employee's leasing such car and/or house himself, Employee shall
maintain each in good working order, reasonable wear and tear, and shall be
responsible for all maintenance obligations of the lessee under any such lease
(subject, however, to the Company's right, at Employee's cost and expense, to
provide or have provided such maintenance in the event Employee fails within a
timely manner to do so). Upon termination of Employee's employment, Employee
shall deliver all keys to any house or car leased on his behalf, with such house
or car being in sufficient condition for the Company to redeliver such house or
car to the lessor thereof, without penalty or additional expense.
5.2 REASONABLENESS OF ALLOWANCES. The Employee agrees that the payments,
allowances and reimbursements provided in the foregoing Section 5.1 shall be the
maximum for which the Company shall be obligated; and the Employee shall use
reasonable and diligent efforts to minimize the actual obligation of the
Company.
5.3 SPECIFIC TRAVEL ALLOWANCE. The Company shall pay or otherwise
reimburse the Employee for reasonable travel expenses for "business class"
travel for himself, his immediate family and his mother-in-law for three trips
to the United Kingdom during the term hereof; provided, however, that the timing
and duration of any such travel involving the Employee shall be subject to the
commitment by the Employee to his duties and responsibilities to the Company
hereunder.
5.4 UNDERTAKING TO OBTAIN HEALTH INSURANCE COVERAGE. During the term of
this Agreement, in the event Employee's mother-in-law moves to the metropolitan
Atlanta, Georgia area, the Company shall endeavor to have Employee's
mother-in-law included in the Company's health insurance plan with coverage
levels generally available to employees of the Company at the Company's cost and
expense; provided, however, that nothing in this Paragraph 5.4 shall require the
Company to hire Employee's mother-in-law or to obtain any such coverage for her
from any insurer (or to self-insure her coverage) in the event the Company's
primary insurance carrier refuses to cover Employee's mother-in-law; and
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provided further that Employee shall attempt to minimize any Company obligation
by purchasing travelers insurance for his mother-in-law.
5.5 REIMBURSEMENT FOR CERTAIN TAX LIABILITY. In the event Employee incurs
additional tax liability as a result of Employee's intent to remain in the
United States under current Internal Revenue Service regulations, then Company
shall reimburse Executive for such additional tax liability by issuing to
Employee Common Stock of the Company having a value at the date of issuance
equal to the amount of the additional tax liability.
SECTION 6. GRANT OF STOCK OPTIONS. Concurrently herewith the Company
has granted to Employee, and does hereby affirm the grant of, an incentive stock
option to purchase 170,300 shares of the common stock of the Company, par value
$0.01 per share, at the fair market price of $4.50 per share in accordance with
the terms and conditions set forth on Exhibit "A" attached hereto. This option
shall be evidenced by a written stock option agreement in form customarily used
by the Company for its employee stock options.
SECTION 7. RESTRICTIONS.
7.1 OWNERSHIP. All Work Product when and as it is created or conceived,
including all intellectual property rights therein, shall be disclosed to and
owned exclusively by Company. For purposes of this Agreement, "Work Product"
refers to all inventions, discoveries and improvements and all other information
of value or importance concerning the business and actions of Employee while
acting on behalf of Company (but limited to the Company's management
information systems business) including (without limitation) information
concerning software development, customer prospects and accounts, personnel,
marketing and business strategies. Notwithstanding the preceding sentence,
Work Product shall exclude all inventions, discoveries and improvements and all
other information of value or importance concerning the business and actions of
Employee while acting on behalf of parties other than Company, if undertaken
with the consent of the board of directors of the Company. To the greatest
extent possible, any Work Product shall be deemed to be "work made for hire"
(as defined in the Copyright Act, 17 U.S.C.A. Section 101 ET SEQ., as amended)
and owned exclusively by the Company. Employee hereby unconditionally and
irrevocably transfers and assigns to the Company all rights, title and interest
Employee may currently have (or in the future may have) by operation of law or
otherwise in or to any Work Product, including, without limitation, all patents,
copyrights, trademarks, service marks and other intellectual property rights.
Employee agrees to execute and deliver to the Company any transfers,
assignments, documents or other instruments which the Company may deem necessary
or appropriate to vest complete title and ownership of any Work Product, and all
associated rights, exclusively in the Company.
7.2 CONFIDENTIALITY. Employee shall maintain in strict confidence and
shall not use or disclose (except as required to perform Employee's duties under
this Agreement) any "Trade Secrets" or "Confidential Information" of Company,
its affiliates and customers. With respect to the Company's Trade Secrets, this
obligation shall apply during and after the
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term of this Agreement for so long as the pertinent information remains a Trade
Secret, and shall apply whether or not the Trade Secret is in written or
tangible form. With respect to the Company's Confidential Information, this
obligation shall apply during the term of this Agreement and for three (3) years
after its termination. As provided by Georgia statutes, "Trade Secret" shall
mean any information (including, but not limited to, technical or non-technical
data, a formula, a pattern, a compilation, a process, financial data, financial
plans, product plans or a list of actual or potential customers) that: (i)
derives economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use; and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy. In
the case of the Company's business, Company's Trade Secrets include (without
limitation) information regarding software programs, names and addresses of any
customers, sales personnel, account invoices, training and educational manuals,
administrative manuals, prospective customer leads, in whatever form, whether or
not computer or electronically accessible "on-line." As used in this Agreement,
the Company's "Confidential Information" shall refer to valuable, non-public
competitively sensitive data and information relating to the Company's business
or its clients business, other than Trade Secrets, that is not generally known
by or readily available to competitors of the Company; it also includes any
information or data specifically identified as a "Trade Secret" in the
immediately preceding sentence that is determined by a court of competent
jurisdiction not to be a "Trade Secret."
7.3 DELIVERY. Upon the request of Company, and, in any event, upon the
termination of Employee's employment, (1) Employee shall take such steps as
Company may reasonably request in order to transfer, disclose, and give
Company the full benefit of any Work Product remaining in Employee's
possession; and (2) Employee shall deliver to Company all memoranda, notes,
records, drawings, manuals, disks and other documents and media, regardless
of form, that certain Work Product or Trade Secrets. Employee shall not
retain any such materials (whether in original or duplicate form) following
such delivery.
7.4 NON RECRUITMENT. Employee agrees that during his employment by the
Company and for a period of two (2) years following any termination of such
employment, he will not, either directly or indirectly, on his own behalf or in
the service or on behalf of others solicit or attempt to solicit on behalf of
or for the benefit of any entity which competes with the Company (i) any person
employed by the Company, whether or not such employee is a full-time employee or
a temporary employee of the Company and whether or not such employee is pursuant
to a written agreement and whether or not such employment is for a determined
period or is at will, or (ii) any person or entity that is an agent or
independent contractor of the Company in the continental United States; nor will
Employee at any time during such period, either directly or indirectly, induce
or attempt to induce any such agent or independent contractor to terminate,
breach or otherwise fail fully to perform any agency or agreement with the
Company.
7.5 NAMES AND MARKS. Following the termination of Employee's employment,
Employee shall not, for the benefit of his own or any other person or entity's
business, use
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or display the names, marks, logos or slogans of the Company or its affiliates,
or any name, xxxx, logo or slogan similar thereto, without the prior written
consent of the Company.
7.6 LIMITATION ON SOLICITING CLIENTS. Employee agrees that during his
employment, Employee will not, either directly or indirectly, alone or in
conjunction with any other party, solicit, divert or appropriate or attempt to
solicit, divert or appropriate any "Client" for the purpose of providing the
Client with services or products competitive with those offered by the Company
during the Employment Term. For purposes of this Agreement, "Clients" shall
mean actual clients or actively sought prospective clients of the Company during
the term of Employee's employment by the Company. Employee agrees that for
eighteen (18) months after the last day of his employment, Employee will not,
either directly or indirectly, alone or in conjunction with any other party,
solicit, divert or appropriate or attempt to solicit, divert or appropriate any
Client of the Company for the purpose of providing the Client with services or
products competitive with those offered by the Company during his employment;
provided that the covenant in this sentence shall limit Employee's conduct only
with respect to those Clients with whom Employee had substantial contact
(through direct or supervisory interaction with the Client or the Client's
account) during a period of time up to but no greater than two (2) years prior
to the last day of his employment.
7.7 RELIEF. In the event of any breach or threatened breach by Employee
of any covenant contained in this Section 7, the resulting injuries to
Company would be difficult or impossible to estimate accurately, even though
irreparable injury or damages may result. Accordingly, an award of legal
damages, if without other relief, may be inadequate to protect the Company.
Employee therefore agrees that, in the event of any such breach, Company shall
be entitled to apply to a court of competent jurisdiction to obtain an
injunction to restrain the breach or anticipated breach of any such covenant,
and to obtain any other available legal, equitable, statutory, or contractual
relief. In the event the Company seeks damages from Employee for any breach
of any covenant contained in this Section 7, Employee's liability shall be
limited to the then fair market value of any shares of the Company's capital
stock owned by the Employee ("shares" shall include any shares of the
Company's capital stock to which Employee holds options to purchase and any
shares purchased pursuant to such options, but shall exclude any other shares
purchased by Employee).
7.8 REASONABLENESS OF COVENANTS. Employee recognizes and acknowledges
that the covenants in this Section 7 are reasonable as to time, geographical
coverage and restricted conduct and are necessary to protect Company's business
and Trade Secrets. Employee further acknowledges that (a) Employee has entered
into this Agreement freely as a result of balanced arm's length bargaining and
with the full benefit of qualified counsel of his choosing and (b) Company would
not have engaged Employee without Employee's having agreed to these covenants.
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SECTION 8. MISCELLANEOUS.
8.1 BINDING EFFECT. This Agreement shall inure to the benefit of and
shall be binding upon Employee and Company and its successors and assigns.
Employee may not assign his rights or delegate his obligations hereunder
without the prior written consent of the Company.
8.2 GOVERNING LAWS. Agreement shall be deemed to be made in, and in
all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia.
8.3 HEADINGS. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
8.4 NOTICES. Unless otherwise agreed to in writing by the parties
hereto, all communications provided for hereunder shall be in writing and
shall be deemed to be given when delivered in person or three (3) business
days after being sent by registered or certified mail, postage prepaid,
and:
(a) If to Employee, addressed to:
Xxxxxxxxxxx X. Xxxx
___________________________
___________________________
(b) If to Company, addressed to:
The System Works, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
8.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
8.6 ENTIRE AGREEMENT. This Agreement is intended by the parties
hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the
terms thereof, notwithstanding any representations, statements or
agreements to the contrary heretofore made.
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8.7 MODIFICATIONS: WAIVERS. This Agreement may be modified only by a
written instrument signed by each of the parties hereto. No waiver shall
be effective unless made in writing and signed by the party against whom
enforcement is sought.
8.8 SEVERABILITY. Should any aspect or provisions of this Agreement
prove invalid or unenforceable for any reason, the remainder of the
Agreement shall nonetheless be fully enforced to the fullest extent
permitted by law, regardless of whether the invalid of unenforceable aspect
or provision is facially severable from the remainder of the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE SYSTEM WORKS, INC.
[CORPORATE SEAL] By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Title: For the Board of Directors
-----------------------------
Attest: EMPLOYEE:
By: /s/ Xxxxxx X. Xxxxx
--------------------
Title: Managing Director /s/Xxxxxxxxxxx X. Xxxx
-------------------------------
Xxxxxxxxxxx X. Xxxx
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EXHIBIT "A"
To Employment Agreement Between
Xxxxxxxxxxx X. Xxxx
and
The System Works, Inc.
The following provisions relate to the grant by the Company to
Employee of a stock option to purchase 170,300 shares of the common stock
of the Company.
1. Option Price: $4.50 per share
2. Term of Option: 10 years
3. Vesting Provision: Exercisable immediately with respect to 25% of
shares; exercisable with respect to an
additional 25% of shares upon each of the
first three anniversary dates of the option,
so that the option will be exercisable in full
three years from its date.
4. Termination of Employment: No further vesting after termination of
employment; vested portions of option may be
exercised within three months following
termination of employment and within one year
following death; Company may elect to permit
Employee to hold non-vested portions of
option, in whole or in part and/or at modified
vesting terms.
5. Payment upon Exercise: Cash in full.
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT ("Amendment"), made and entered into this 15th day of
December, 1994, by and between XXXXXXXXXXX X. XXXX (hereinafter referred to as
"Employee"), and THE SYSTEM WORKS, INC., a Georgia corporation (hereinafter
referred to as "Company");
WITNESSETH:
WHEREAS, Employee and Company have previously entered into an Employment
Agreement dated the 19th day of July, 1994 (hereinafter referred to as
"Agreement") and desire to amend that Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises
and agreements, contained herein, the parties hereto, intending to be legally
bound, with all terms of the Agreement remaining the same except for the
following terms which are hereby modified as follows:
SECTION 1. TERM.
Section 2.1 of the Agreement is amended to continue Employee's employment
until December 31, 1995.
SECTION 2. ADDITIONAL EMPLOYMENT BENEFITS.
The medical insurance and other benefits provided pursuant to Sections 4.1
and 4.3 of the Agreement shall cease in the event Employee relocates to England
and Employee shall be provided with benefits similar to those offered to other
senior officers of the Company located in England.
SECTION 3. RELOCATION RELATED BENEFITS.
All benefits provided pursuant to Section 5 of the Agreement shall cease in
the event Employee relocates from Atlanta.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
THE SYSTEM WORKS, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Title: Director
------------------------
EMPLOYEE:
/s/ Xxxxxxxxxxx X. Xxxx
------------------------------
Xxxxxxxxxxx X. Xxxx
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT ("Amendment"), made and entered into this 1st day
of December, 1995, by and between XXXXXXXXXXX X. XXXX (hereinafter referred to
as "Employee"), and TSW INTERNATIONAL, INC., a Georgia corporation (hereinafter
referred to as "Company"):
WITNESSETH:
WHEREAS, Employee and Company have previously entered into an
Employment Agreement dated the 19th of July, 1994 (hereinafter referred to as
"Agreement") which was amended on the 15th day of December 1994 and desire to
amend that Agreement a second time;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements, contained herein, the parties hereto, including to be
legally bound, with all terms of the Agreement remaining the same except for the
following terms which are hereby modified as follows:
SECTION 1. TERM.
Section 2.1 of the Agreement is amended to continue Employee's
employment until December 31, 1996.
SECTION 2. ADDITIONAL EMPLOYMENT BENEFITS.
The medical insurance and other benefits provided pursuant to
Sections 4.1 and 4.3 of the Agreement shall cease in the event Employee
relocates to England and Employee shall be provided with benefits similar to
those offered to other senior officers of the Company located in England.
SECTION 3. RELOCATION RELATED BENEFITS.
3.1 All benefits provided pursuant to Section 51.(i), (ii),
(iii), and (viii) plus section 5.4 of the Agreement are hereby deleted.
3.2 Section 5.3 of the Agreement is hereby amended by deleting
the words "his mother-in-law."
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
TSW INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Title: Director and Member of
------------------------
Compensation Committee
EMPLOYEE:
/s/ Xxxxxxxxxxx X. Xxxx
-----------------------------
Xxxxxxxxxxx X. Xxxx
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT ("Amendment"), made and entered into this 4th day
of December, 1996, by and between XXXXXXXXXXX X. XXXX (hereinafter referred to
as "Employee"), and TSW INTERNATIONAL, INC., a Georgia corporation (hereinafter
referred to as "Company"):
WITNESSETH:
WHEREAS, Employee and Company have previously entered into an
Employment Agreement dated the 19th day of July, 1994 (hereinafter referred to
as "Agreement") which was amended on the 15th day of December, 1994 and the 1st
of December, 1995 and desire to amend that Agreement a third time;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements, contained herein, the parties hereto, intending to be
legally bound, with all terms of the Agreement remaining the same except for the
following terms which are hereby modified as follows:
SECTION 1. TERM
Section 2.1 of the Agreement is amended to continue Employee's
employment until December 31, 1997.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
TSW INTERNATIONAL, INC.
By: /s/ Xxxx Xxxxxxx
--------------------------------
Title: CFO
----------------------------
EMPLOYEE:
/s/ Xxxxxxxxxxx X. Xxxx
---------------------------------
Xxxxxxxxxxx X. Xxxx
