EXHIBIT 10.33
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement") is made
and entered into as of April 1, 2003, by and between Xxxxxxx X. Xxxx (the
"Executive") and Novadigm, Inc., a Delaware corporation with a principal place
of business at Xxx Xxxxxxxxxxxxx Xxxx., Xxxxxx, Xxx Xxxxxx 00000 (the
"Company").
RECITALS
A. The Executive and the Company wish to amend and restate in its entirety
the Employment Agreement between the Executive and the Company dated as of April
1, 1997 (the "Original Employment Agreement").
B. Certain capitalized terms used in this Agreement are defined in Section
8 below.
In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of the Executive by the Company, the
parties agree as follows:
1. Duties and Scope of Employment.
(a) Position. Subject to the terms and conditions of this
Agreement, the Company shall continue to employ the Executive in the position of
Vice President, Finance/Chief Financial Officer/Treasurer, as such position was
defined in terms of responsibilities as of the effective date of this Agreement;
provided, however, that the Board of Directors of the Company (the "Board")
shall have the right, at any time prior to the occurrence of a Change of
Control, to revise such responsibilities, subject to the requirements of Section
5 below. The Executive shall continue to devote his full business efforts and
time to the Company and its subsidiaries. The Executive shall comply with and be
bound by the Company's operating policies, procedures and practices from time to
time in effect during his employment. During the term of the Executive's
employment with the Company, the Executive shall devote his full business time,
skill and attention to his duties and responsibilities under this Agreement, and
shall perform them faithfully, diligently and competently, and the Executive
shall use his best efforts to further the business of the Company and its
affiliated entities.
2. Base Compensation. From the date of this Agreement through the
end of the term of this Agreement, the Company shall pay the Executive as
compensation for his services a base salary at the annualized rate of $225,000
(the "Annual Salary"), subject to any increases as the Board shall authorize
from time to time in connection with an annual review. The Annual Salary shall
be paid periodically in accordance with normal Company payroll. The Annual
Salary together with agreed upon bonus (except as provided in Section 6 of this
Agreement) and commission amounts, and any increases in such compensation that
the Board of Directors may grant from time to time, is referred to in this
Agreement as "Base Compensation."
3. Executive Benefits. The Executive shall be eligible to
participate in the employee benefit plans and executive compensation programs
maintained by the Company applicable to other key executives of the Company,
including (without limitation) retirement
plans, savings or profit-sharing plans, stock option, incentive or other bonus
plans, life, disability, health, accident and other insurance programs, paid
vacations, and similar plans or programs, subject in each case to the generally
applicable terms and conditions of the applicable plan or program in question
and to the determination of any committee administering such plan or program. In
addition, the Executive shall continue to be entitled to receive any other
benefits currently received by the Executive, such as automobile and mobile
phone allowance benefits.
4. Agreement Term. The initial term of this Agreement shall be two
years from the date of this Agreement (the "Initial Term"). Thereafter, the term
of this Agreement shall automatically be extended for successive one-year terms
(each a "Renewal Term") unless written notice of intent to terminate by
non-renewal is given by either party to the other at least 120 days prior to the
expiration of the Initial Term or any Renewal Term. A termination of this
Agreement as a result of such non-renewal shall be effective for all purposes,
except that such termination shall not affect the payment or provision of
compensation or benefits, including but not limited to any severance payments,
on account of a termination of employment occurring prior to the effective date
of a termination resulting from non-renewal of this Agreement. If the Executive
continues to be employed by the Company following the timely termination of this
Agreement the Executive shall nevertheless have no further rights arising out of
this Agreement and shall be employed after completion of the term of this
Agreement on an at-will basis.
5. Severance Benefits.
(a) Involuntary or Constructive Termination in Connection With
a Change of Control. Subject to Section 5(e) of this Agreement, if the
Executive's employment terminates at any time during the period beginning thirty
(30) days before a proposed Change of Control and ending twelve (12) months
after an actual Change of Control as a result of Involuntary or Constructive
Termination other than for Cause, then (1) (A) if such termination occurs before
the first anniversary of the date of this Agreement, the Executive shall be
entitled to receive (i) severance pay in an amount equal to 200% of the
Executive's Annual Salary multiplied by a fraction (x) the numerator of which is
730 minus the number of days elapsed from the date of this Agreement to such
termination, and (y) the denominator of which is 730, plus (ii) any amounts
earned by the Executive but not paid by the Company to the Executive with
respect to any already completed fiscal quarter in the then current fiscal year
("Accrued Bonus"), plus (iii) an amount equal to the bonus (except as provided
in Section 6 of this Agreement) the Executive would have earned had he been
employed by the Company at the end of the fiscal quarter during which the
Executive's employment terminates (such amount to be determined at the end of
such fiscal quarter based on the Company's actual performance for such fiscal
quarter and without regard to any Company practice of withholding payment of
portions of quarterly bonuses pending completion of the fiscal year) multiplied
by a fraction (x) the numerator of which is the number of completed days in that
fiscal quarter prior to the termination of Executive's employment, and (y) the
denominator of which is ninety (90) ("Current Bonus"), and (B) if such
termination occurs on or after the first anniversary of the date of this
Agreement the Executive shall be entitled to receive (i) severance pay in an
amount equal to 100% of the Executive's Annual Salary for the year coinciding
with the year of termination, plus (ii) any Accrued Bonus, plus (iii) any
Current Bonus; (2) for a period of one year following such termination, or
through such longer period as may be provided by the terms of the appropriate
plan, program, practice or policy, the Company shall continue medical, dental,
disability and life
insurance benefits to the Executive and/or the Executive's family on a
substantially equivalent basis to those which would have been provided in
accordance with the medical, dental, disability and life insurance plans,
programs, practices and policies if the Executive's employment had not been
terminated; (3) the Executive shall be entitled to receive any portions of the
Executive's Base Compensation, benefits, reimbursements for expenditures, and
any other amounts earned by or owed to the Executive, or accrued but not paid by
the Company prior to the termination of this Agreement (the "Accrued
Obligations"); (4) except as otherwise provided in Section 5(e) of this
Agreement, the Executive shall be entitled to any payments otherwise available
in accordance with the Company's established employee plans and policies at the
time of termination; and (5) in addition to any portion of the Executive's stock
options that were exercisable immediately prior to such termination, all options
held by the Executive shall accelerate and become exercisable in full.
(b) Voluntary Resignation; Termination For Cause.
Notwithstanding any other provision of this Section 5, if the Executive
voluntarily resigns from the Company (other than as an Involuntary or
Constructive Termination described in subsections 5(a) or 5(d) hereof), or if
the Company terminates the Executive's employment for Cause, then the Executive
shall not be entitled to receive severance or other benefits except for (1)
those (if any) as may then be established under the Company's then existing
benefit plans at the time of such resignation or termination; and (2) any
Accrued Obligations.
(c) Disability; Death. Notwithstanding any other provision of
this Section 5, if the Company terminates the Executive's employment as a result
of the Executive's Disability, or such Executive's employment is terminated due
to the death of the Executive, then (1) the Executive or the Executive's estate,
as the case may be, shall be entitled to receive severance pay in an amount
equal to one-half (1/2) of the Executive's Base Compensation for the year
coinciding with the year of termination, plus any Accrued Bonus, plus any
Current Bonus; (2) in addition to any portion of the Executive's stock options
that were exercisable immediately prior to such termination, all options held by
the Executive and all options that would have vested if the Executive had
remained continuously employed for a period of six (6) months following such
termination (and if any of such options vest on an annual basis, the appropriate
credit shall be given as if the vesting accrued monthly) shall accelerate and
become exercisable , and such options shall remain exercisable for the period
prescribed in Executive's stock option agreements; (3) for a period of six
months following such termination, or through such longer period as may be
provided by the terms of the appropriate plan, program, practice or policy, the
Company shall continue medical, dental, disability and life insurance benefits
to the Executive and/or the Executive's family on a substantially equivalent
basis to those which would have been provided in accordance with the medical,
dental, disability and life insurance plans, programs, practices and policies if
the Executive's employment had not been terminated; (4) the Executive or the
Executive's estate, as the case may be, shall be entitled to any Accrued
Obligations; and (5) the Executive or the Executive's estate, as the case may
be, shall be entitled to receive such other benefits (if any) as may then be
established under the Company's then existing benefit plans at the time of such
Disability or death.
(d) Involuntary or Constructive Termination Without Cause.
Subject to Section 5(e) of this Agreement, if the Executive's employment
terminates as a result of Involuntary or Constructive Termination other than for
Cause, then (1) if such termination occurs
before the first anniversary of the date of this Agreement, the Executive shall
be entitled to receive (A) severance pay in an amount equal to 200% of the
Executive's Annual Salary multiplied by a fraction (x) the numerator of which is
730 minus the number of days elapsed from the date of this Agreement to such
termination, and (y) the denominator of which is 730, plus (B) any Accrued
Bonus, plus (C) any Current Bonus; (2) if such termination occurs on or after
the first anniversary of the date of this Agreement, the Executive shall be
entitled to receive severance pay in an amount equal to 100% of the Executive's
Annual Salary plus any Accrued Bonus plus the Current Bonus; (3) except as
otherwise provided in Section 5(e) of this Agreement, the Executive shall be
entitled to any payments otherwise available in accordance with the Company's
established employee plans and policies at the time of termination; (4) for a
period of one year following such termination, or through such longer period as
may be provided by the terms of the appropriate plan, program, practice or
policy, the Company shall continue medical, dental, disability and life
insurance benefits to the Executive and/or the Executive's family on a
substantially equivalent basis to those which would have been provided in
accordance with the medical, dental, disability and life insurance plans,
programs, practices and policies if the Executive's employment had not been
terminated; and (5) the Executive shall be entitled to any Accrued Obligations.
(e) No Double Benefits. If both Section 5(a) and Section 5(d)
of this Agreement are applicable in a particular instance, then the Executive
will not be entitled to receive severance under both such sections and instead
will be entitled to receive only the greater of the aggregate amount determined
under Section 5(a), on the one hand, and the aggregate amount determined under
Section 5(d), on the other hand. If either Section 5(a) or Section 5(d) of this
Agreement are applicable in a particular instance, then Executive shall not be
entitled to receive severance benefits under the Company's existing "Severance
Plan for Executives," as the same may be revised, supplemented or superseded.
(f) Time and Manner of Payment. Any severance payments to
which the Executive is entitled pursuant to this Section 5, including but not
limited to the Current Bonus and any Accrued Obligations, shall be paid in a
lump sum within thirty (30) days of the Executive's termination.
6. Retention Bonus. Immediately following the expiration of the
Revocation Period (as defined in Section 11(k) of this Agreement), the Executive
will receive a one-time retention bonus in the amount of $450,000 (the
"Retention Bonus"). If the Executive voluntarily resigns from the Company (other
than as an Involuntary or Constructive Termination described in subsections 5(a)
or 5(d) hereof) before the second anniversary of the date of this Agreement then
the Executive shall repay to the Company an amount equal to the amount of the
Retention Bonus less any applicable taxes multiplied by a fraction the numerator
of which is the number of days remaining between such resignation and the second
anniversary of this Agreement and the denominator of which is 730 (the
"Refundable Amount"). The Refundable Amount shall become due and payable within
30 days of the effective date of such resignation (the "Due Date") and any
unpaid amounts shall bear interest from the Due Date at the prime rate,
compounded annually. The Retention Bonus is separate from and shall not be
included in the definitions of the terms "Base Compensation" or "Current Bonus."
7. Reservation of Right to Terminate. The Company reserves the right
to terminate the Executive's employment for any reason, whether or not for
Cause. If the Executive's employment terminates for any reason, including,
without limitation, any termination prior to a Change of Control, the Executive
shall not be entitled to any payments, benefits, damages, awards or compensation
other than (1) as provided by this Agreement; (2) subject to Section 5(e) of
this Agreement, as may otherwise be available in accordance with the Company's
established employee plans and policies at the time of termination, and (3) as
otherwise required by law.
8. Definitions. The following terms referred to in this Agreement
shall have the following meanings:
(a) Cause. "Cause" shall mean (i) any act of personal
dishonesty taken by the Executive in connection with his responsibilities as an
employee and intended to result in substantial and unlawful personal enrichment
of the Executive, (ii) any act by the Executive which constitutes gross
dereliction of duty or an intentional refusal to perform the duties assigned to
the Executive, (iii) committing a felony or an act of fraud against the Company
or its affiliates, and (iv) acts by the Executive which constitute gross
misconduct, are materially injurious to the Company, are demonstrably willful on
the Executive's part, and which remain uncured after a reasonable amount of time
after there has been delivered to the Executive a written demand of cessation of
such acts from the Company which describes the basis for the Company's belief
that the Executive engaged in or committed such acts. For purposes of this
provision, no act shall be considered "willful" unless it is done by the
Executive (i) deliberately and (ii) in bad faith or without reasonable belief
that Executive's action was in the best interests of the Company. Any act based
upon authority given pursuant to a resolution duly adopted by the Board of
Directors or upon the instructions of the Chairman of the Board or President of
the Company, or based upon the advice of counsel for the Company, shall be
presumed conclusively to be done by the Executive in good faith and in the best
interests of the Company. The burden shall be on the Company to prove the
existence of Cause in the event of a dispute between the Company and the
Executive regarding whether the Executive's employment has been terminated for
Cause.
(b) Change of Control. "Change of Control" shall mean the
occurrence of any of the following events:
(i) Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then outstanding
voting securities; or
(ii) A change in the composition of the Board of
Directors of the Company occurring within a two-year period, as a result of
which fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are directors of the Company as
of the date hereof, or (B) are elected, or nominated for election, to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company); or
(iii) A merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation.
(c) Involuntary or Constructive Termination. "Involuntary or
Constructive Termination" shall mean (i) without the Executive's express written
consent, the assignment to the Executive of any duties inconsistent with the
Executive's position with the Company and responsibilities in effect immediately
prior to such assignment; (ii) without the Executive's express written consent,
the removal of the Executive from the Executive's position as Vice President,
Finance/Chief Financial Officer/Treasurer of the Company; (iii) without the
Executive's express written consent, the reduction of the Executive's duties
with respect to the financial, accounting and treasury functions of the Company
(the "CFO Functions"); (iv) the reduction of the Executive's duties with respect
to functions other than the CFO Functions; provided, however, that if there are
valid business reasons for requesting such a reduction of the Executive's
duties, the Company shall have the right to request Executive's express written
consent, and such consent shall not be unreasonably delayed or withheld by the
Executive; (v) without the Executive's express written consent, a substantial
reduction, without good business reasons, of the facilities and perquisites
available to the Executive immediately prior to such reduction; (vi) a reduction
by the Company in the Base Compensation of the Executive as in effect
immediately prior to such reduction; (vii) a material reduction by the Company
in the kind or level of employee benefits to which the Executive is entitled
immediately prior to such reduction with the result that the Executive's overall
benefits package is significantly reduced; (viii) without the Executive's
express written consent, any relocation of the Executive's job or office more
than 40 miles from the Executive's then current job or office; (ix) any
termination of the Executive's employment by the Company other than for Cause or
as a result of the Executive's death or Disability, or any purported termination
for which the grounds relied upon are not valid; (x) any breach by the Company
of its obligations under this Agreement, including but not limited to any
failure to timely pay salary or benefits; or (xi) the failure of the Company to
obtain the assumption of this Agreement by any successors contemplated in
Section 9 below.
(d) Disability. "Disability" shall mean that the Executive has
been unable to perform his duties under this Agreement as the result of his
incapacity due to physical or mental illness, and such inability, at least 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive's legal representative (such agreement as to
acceptability not to be unreasonably withheld). Termination resulting from
Disability may only be effected after at least 30 days' written notice by the
Company of its intention to terminate the Executive's employment. In the event
that the Executive resumes the performance of substantially all of his duties
hereunder before the termination of his employment becomes effective, the notice
of intent to terminate shall automatically be deemed to have been revoked.
9. Successors.
(a) Company's Successors. Any successor to the Company
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and assets shall assume the obligations under this Agreement
and agree expressly to perform the obligations under this Agreement in the same
manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this
Agreement, the term "Company" shall include any successor to the Company's
business and assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.
(b) Executive's Successors. The terms of this Agreement and
all rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives, executors,
administrators, successors, heirs, devisees and legatees.
10. Notice.
(a) General. Notices and all other communications contemplated
by this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by U.S. registered or certified
mail, return receipt requested and postage prepaid. In the case of the
Executive, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing, with a copy by first class
mail and facsimile to Xxxxxxxx X. Xxxxxxx, Esq., Xxxxxxxxxx Xxxxxxx PC, 00
Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, facsimile: 973.597.2400. In the
case of the Company, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
Secretary.
(b) Notice of Termination. Any termination by the Company
whether for Cause or without Cause or by the Executive as a result of an
Involuntary or Constructive Termination shall be communicated by a notice of
termination to the other party hereto given in accordance with Section 10(a) of
this Agreement. Such notice shall indicate the specific termination provision in
this Agreement relied upon, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so
indicated, and shall specify the termination date (which shall be not more than
30 days after the giving of such notice). The failure by the Executive to
include in the notice any fact or circumstance which contributes to a showing of
Involuntary or Constructive Termination shall not waive any right of the
Executive hereunder or preclude the Executive from asserting such fact or
circumstance in enforcing his rights hereunder.
11. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Executive shall not be required
to mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner), nor shall any such payment be
reduced by any earnings that the Executive may receive from any other source.
(b) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Executive and by an authorized officer of the
Company (other than the Executive). No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.
(c) Entire Agreement. This Agreement constitutes the entire
agreement between the Company and Executive with respect to the subject matter
hereof and thereof and supersedes all prior agreements and understandings among
the parties with respect thereto, including, without limitation, the Original
Employment Agreement. No addition to or modification of any provision of this
Agreement shall be binding upon any party hereto unless made in writing and
signed by each party hereto.
(d) Choice of Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
New Jersey.
(e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(f) Arbitration. Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration in
Bergen County, New Jersey in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Punitive damages shall not
be awarded.
(g) No Assignment of Benefits. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (g) shall be
void.
(h) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable income and employment
taxes.
(i) Assignment by Company. The Company may assign its rights
under this Agreement to an affiliate, and an affiliate may assign its rights
under this Agreement to another affiliate of the Company or to the Company;
provided, however, that no assignment shall be made if the net worth of the
assignee is less than the net worth of the Company at the time of assignment. In
the case of any such assignment, the term "Company" when used in a section of
this Agreement shall mean the corporation that actually employs the Executive.
(j) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument. Facsimile signatures are
sufficient for purposes of consummating and completing this Agreement.
(k) Revocation Period. Executive has seven (7) days from the
date of execution of this Agreement (the "Revocation Period") in which to revoke
the execution of this Agreement by notifying the Company thereof in writing.
This Agreement will not be effective prior to expiration of the Revocation
Period, and this Agreement and the rights, duties and obligations of the parties
hereto shall become final and binding immediately following the expiration of
the Revocation Period if Executive has not properly exercised such right of
revocation prior to the expiration of the Revocation Period. If Executive
revokes the execution of this Agreement within the Revocation Period then this
Agreement shall be immediately terminated and of no further force or effect, and
the parties shall be returned to their original positions as if this Agreement
had not been entered into. This Agreement will be immediately terminated and of
no further force or effect, and the parties shall be returned to their original
positions as if this Agreement had not been entered into, if Executive elects to
exercise his right of revocation pursuant to Section 16 of the Settlement
Agreement dated as of May 16, 2003 between Executive and the Company.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
COMPANY: NOVADIGM, INC.
By: /s/ Albion X. Xxxxxxxxxx
--------------------------------
Albion X. Xxxxxxxxxx
Chief Executive Officer
EXECUTIVE: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
